IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v48y2018i4p357-371.html
   My bibliography  Save this article

Optimizing the Cutoff Grade for an Operational Underground Mine

Author

Listed:
  • Barry King

    (Operations Research with Engineering PhD Program, Colorado School of Mines, Golden, Colorado 80401)

  • Alexandra Newman

    (Mechanical Engineering Department, Colorado School of Mines, Golden, Colorado 80401)

Abstract

An important strategic decision for any operational mine is the differentiation between ore and waste material; this differentiation is referred to as the cutoff grade. In underground mining, material classified as ore is extracted, while waste is left in situ. Our mixed-integer programming optimization framework determines the cutoff grades in three different, predetermined zones for a soon-to-be-operational underground mine. We fix all cutoff grades a priori to optimize the periods in which to complete each mining activity to maximize the net present value for this restricted problem. We then use an enumerative optimization framework that relaxes the fixed cutoff-grade assumption and constructs a schedule for each cutoff-grade combination for all three zones. This framework both exploits an underlying mathematical structure and identifies an optimum set of grades that unconditionally maximizes net present value under the existing zone configuration, thereby providing objective, repeatable, and superior solutions, verified by our industry partner, a major gold producer, for large-scale problems in a matter of days; current industry practice would produce solutions with lower net present value and based only on detailed analysis for a single zone, would require six to eight weeks and would preclude scenario analysis.

Suggested Citation

  • Barry King & Alexandra Newman, 2018. "Optimizing the Cutoff Grade for an Operational Underground Mine," Interfaces, INFORMS, vol. 48(4), pages 357-371, August.
    • Handle: RePEc:inm:orinte:v:48:y:2018:i:4:p:357-371
    DOI: 10.1287/inte.2017.0934
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/inte.2017.0934
    Download Restriction: no
    File URL: https://libkey.io/10.1287/inte.2017.0934?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Renaud Chicoisne & Daniel Espinoza & Marcos Goycoolea & Eduardo Moreno & Enrique Rubio, 2012. "A New Algorithm for the Open-Pit Mine Production Scheduling Problem," Operations Research, INFORMS, vol. 60(3), pages 517-528, June.
    2. Christopher Alford & Marcus Brazil & David H. Lee, 2007. "Optimisation in Underground Mining," International Series in Operations Research & Management Science, in: Andres Weintraub & Carlos Romero & Trond Bjørndal & Rafael Epstein & Jaime Miranda (ed.), Handbook Of Operations Research In Natural Resources, chapter 0, pages 561-577, Springer.
    3. Dónal O’Sullivan & Alexandra Newman, 2014. "Extraction and Backfill Scheduling in a Complex Underground Mine," Interfaces, INFORMS, vol. 44(2), pages 204-221, April.
    4. Martinez, Michael A. & Newman, Alexandra M., 2011. "A solution approach for optimizing long- and short-term production scheduling at LKAB's Kiruna mine," European Journal of Operational Research, Elsevier, vol. 211(1), pages 184-197, May.
    5. Asad, Mohammad Waqar Ali & Dimitrakopoulos, Roussos, 2013. "A heuristic approach to stochastic cutoff grade optimization for open pit mining complexes with multiple processing streams," Resources Policy, Elsevier, vol. 38(4), pages 591-597.
    6. W. Matthew Carlyle & B. Curtis Eaves, 2001. "Underground Planning at Stillwater Mining Company," Interfaces, INFORMS, vol. 31(4), pages 50-60, August.
    7. Alexandra M. Newman & Enrique Rubio & Rodrigo Caro & Andrés Weintraub & Kelly Eurek, 2010. "A Review of Operations Research in Mine Planning," Interfaces, INFORMS, vol. 40(3), pages 222-245, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Panos Markou & Daniel Corsten, 2021. "Financial and Operational Risk Management: Inventory Effects in the Gold Mining Industry," Production and Operations Management, Production and Operations Management Society, vol. 30(12), pages 4635-4655, December.
    2. Akshay Chowdu & Peter Nesbitt & Andrea Brickey & Alexandra M. Newman, 2022. "Operations Research in Underground Mine Planning: A Review," Interfaces, INFORMS, vol. 52(2), pages 109-132, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Akshay Chowdu & Peter Nesbitt & Andrea Brickey & Alexandra M. Newman, 2022. "Operations Research in Underground Mine Planning: A Review," Interfaces, INFORMS, vol. 52(2), pages 109-132, March.
    2. Gonzalo Muñoz & Daniel Espinoza & Marcos Goycoolea & Eduardo Moreno & Maurice Queyranne & Orlando Rivera Letelier, 2018. "A study of the Bienstock–Zuckerberg algorithm: applications in mining and resource constrained project scheduling," Computational Optimization and Applications, Springer, vol. 69(2), pages 501-534, March.
    3. O’Sullivan, Dónal & Newman, Alexandra, 2015. "Optimization-based heuristics for underground mine scheduling," European Journal of Operational Research, Elsevier, vol. 241(1), pages 248-259.
    4. Rafael Epstein & Marcel Goic & Andrés Weintraub & Jaime Catalán & Pablo Santibáñez & Rodolfo Urrutia & Raúl Cancino & Sergio Gaete & Augusto Aguayo & Felipe Caro, 2012. "Optimizing Long-Term Production Plans in Underground and Open-Pit Copper Mines," Operations Research, INFORMS, vol. 60(1), pages 4-17, February.
    5. Cinna Seifi & Marco Schulze & Jürgen Zimmermann, 2021. "Solution procedures for block selection and sequencing in flat-bedded potash underground mines," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 43(2), pages 409-440, June.
    6. King, Barry & Goycoolea, Marcos & Newman, A., 2017. "Optimizing the open pit-to-underground mining transition," European Journal of Operational Research, Elsevier, vol. 257(1), pages 297-309.
    7. Furtado e Faria, Matheus & Dimitrakopoulos, Roussos & Lopes Pinto, Cláudio Lúcio, 2022. "Integrated stochastic optimization of stope design and long-term underground mine production scheduling," Resources Policy, Elsevier, vol. 78(C).
    8. Zhang, Jian & Dimitrakopoulos, Roussos G., 2017. "A dynamic-material-value-based decomposition method for optimizing a mineral value chain with uncertainty," European Journal of Operational Research, Elsevier, vol. 258(2), pages 617-625.
    9. Siyu Tu & Mingtao Jia & Liguan Wang & Shuzhao Feng & Shuang Huang, 2022. "A Multi-Equipment Task Assignment Model for the Horizontal Stripe Pre-Cut Mining Method," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    10. Paithankar, Amol & Chatterjee, Snehamoy & Goodfellow, Ryan & Asad, Mohammad Waqar Ali, 2020. "Simultaneous stochastic optimization of production sequence and dynamic cut-off grades in an open pit mining operation," Resources Policy, Elsevier, vol. 66(C).
    11. Marco Schulze & Julia Rieck & Cinna Seifi & Jürgen Zimmermann, 2016. "Machine scheduling in underground mining: an application in the potash industry," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(2), pages 365-403, March.
    12. Paithankar, Amol & Chatterjee, Snehamoy & Goodfellow, Ryan, 2021. "Open-pit mining complex optimization under uncertainty with integrated cut-off grade based destination policies," Resources Policy, Elsevier, vol. 70(C).
    13. Lorenzo Reus & Mathias Belbèze & Hans Feddersen & Enrique Rubio, 2018. "Extraction Planning Under Capacity Uncertainty at the Chuquicamata Underground Mine," Interfaces, INFORMS, vol. 48(6), pages 543-555, November.
    14. Amina Lamghari & Roussos Dimitrakopoulos & Jacques Ferland, 2015. "A hybrid method based on linear programming and variable neighborhood descent for scheduling production in open-pit mines," Journal of Global Optimization, Springer, vol. 63(3), pages 555-582, November.
    15. Moreno, Eduardo & Rezakhah, Mojtaba & Newman, Alexandra & Ferreira, Felipe, 2017. "Linear models for stockpiling in open-pit mine production scheduling problems," European Journal of Operational Research, Elsevier, vol. 260(1), pages 212-221.
    16. Chung, Joyce & Asad, Mohammad Waqar Ali & Topal, Erkan, 2022. "Timing of transition from open-pit to underground mining: A simultaneous optimisation model for open-pit and underground mine production schedules," Resources Policy, Elsevier, vol. 77(C).
    17. César Flores-Fonseca & Rodrigo Linfati & John Willmer Escobar, 2022. "Exact algorithms for production planning in mining considering the use of stockpiles and sequencing of power shovels in open-pit mines," Operational Research, Springer, vol. 22(3), pages 2529-2553, July.
    18. Zhang, Jian & Nault, Barrie R. & Dimitrakopoulos, Roussos G., 2019. "Optimizing a mineral value chain with market uncertainty using benders decomposition," European Journal of Operational Research, Elsevier, vol. 274(1), pages 227-239.
    19. W. Brian Lambert & Andrea Brickey & Alexandra M. Newman & Kelly Eurek, 2014. "Open-Pit Block-Sequencing Formulations: A Tutorial," Interfaces, INFORMS, vol. 44(2), pages 127-142, April.
    20. Zeng, Lanyan & Liu, Shi Qiang & Kozan, Erhan & Corry, Paul & Masoud, Mahmoud, 2021. "A comprehensive interdisciplinary review of mine supply chain management," Resources Policy, Elsevier, vol. 74(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orinte:v:48:y:2018:i:4:p:357-371. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.