Cut-Off Grade Optimization Using Stochastic Programming in Open-Pit Mining

The determination of cut-off grade involves complicated analysis and calculations, and it has close relations with the knowledge of geology, mining, mineral processing, applied mathematics, economics and management. Traditional methods model the cut-off grade optimization problem as a deterministic one and do not explicitly include information on the cut-off grade distribution within a given ore body. In this paper we modeled the cut-off grade optimization problem as a multistage stochastic programming issue. In the built stochastic programming model, each ore grade in a given ore body is a random variable following a distribution. And a mathematical model for selecting an optimum cut-off grade function was constructed, which aimed at the maximization of total present value of an open pit.