Document Type : Original Research Paper
Authors
Dept. of Mining Engineering, Faculty of Engineering, Tarbiat Modares University, Tehran, Iran
Abstract
This study proposes an integrated optimization framework that simultaneously determines dynamic cut-off grades, stockpile management, and processing route selection to maximize the Net Present Value (NPV) of open-pit mining operations. Building upon Lane’s theory, the framework combines mathematical programming and dynamic optimization to model the complex interactions among mining, processing, and stockpiling decisions throughout the project lifecycle. The model is applied to a synthetic yet realistic benchmark case derived from a porphyry copper deposit, with minor data modifications to ensure confidentiality. Three alternative operating strategies are compared: a fixed cut-off grade policy, a dynamic cut-off grade policy, and a fully integrated dynamic policy incorporating strategic stockpiling. The integrated approach achieves the highest economic performance, yielding an NPV of $638.65 million—representing a 41% improvement over the fixed policy—while extending mine life to six years and increasing copper production to 115,787 tons. Sensitivity analysis confirms the strategy’s resilience to variations in costs and discount rates, as well as its responsiveness to metal price fluctuations, demonstrating its robustness and practical potential for strategic mine planning.
Keywords
- Cut-Off Grade Optimization
- Stockpile Management
- Net Present Value (NPV)
- Lane's Theory
- Dynamic Programming
Main Subjects
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