Application of meta-heuristic optimization algorithm to determine the optimal cutoff grade of open pit mines

Abstract

The optimal cutoff grade leads to maximizing the profit or the net present value (NPV). One of the most important issues in open pit mining is cutoff grade optimization with regard to NPV maximization over the mine life. The most famous method that applied for cutoff grade optimization is the Lane methodology. Mining capacity, concentration plant capacity, and refining plant capacity are the three major parts of the abovementioned methodology and further, more time value of money and ore grade distribution are considered in Lane method. Repeated and cyclic calculations are the most disadvantages of lane methodology and therefore, in this research, the imperialist competitive algorithm (ICA) as a robust meta-heuristic optimization method has been applied to calculate the optimal cutoff grade. The accuracy of calculation was set to 0.001% and also the production of each unit and the NPV have been determined by ICA method. The optimum cutoff grades have been obtained from 0.232 to 0.135% in mine life time and NPV was calculated 37,750 billion Iranian Rials but the range of cutoff grades that calculated by Lane method was from 0.233 to 0.155% and NPV was determined 37,434 billion Iranian Rials. The results of this study showed that the determination of the optimum cutoff grade by the ICA has high accuracy and more speed of calculation in comparison with traditional lane method.