An Optimum Algorithm for Cut-off Grade Calculation Using Multistage Stochastic Programming

Cut-off grade is one of the very important technical and economic parameters, which affects the economic and social efficiency in a mine enterprise. It is also the basis of the deposits technical economy evaluation, feasibility study, mining planning and design and the foundation of the decision-making in mining investment. Thereby, cut-off grade optimization is one of the core contents and therefore the key parameter in mine mining, management and decision. The optimized determination of cut-off grade in mine mining involves complex analysis and scientific calculation, which is tightly related to economic management, ore dressing, mining, geology, applied mathematics and computer knowledge subjects. In this paper, we modeled the cut-off grade optimization problem as a multistage stochastic programming issue. In the proposed 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. Experimental results show that the proposed algorithm for cut-off grade optimization is efficiency.