Applying Modern Heuristics to Maximising Net Present Value through Cut-off Grade Optimisation

In focusing on open pit mine scheduling, one of the biggest areas that a mining engineer can add value is in the area of cut-off grade optimisation. It is not atypical to add up to an extra 20 per cent in value by bringing forward higher-grade ore and deferring costs into the future.There are many techniques available to maximise net present value (NPV) when applied to open pit mine scheduling. That in itself raises the question of why so many of these techniques exist. The short answer is that none of these techniques are robust. Every time the problem changes, the algorithms also have to change.Instead of trying to make a problem fit the constraints of an existing technique, there is much to be said for usefully hybridising different approaches. This paper describes an innovative approach where evolutionary algorithms are combined with both local search and linear programming. The goal is maximising NPV through optimisation of cut-off grade policy and extraction sequence for an open pit mine. The cut-off/cut-over grade policy produced caters for multiple processing streams and stockpiles.Finally we demonstrate the quality of the algorithm by comparing some results with a well-known mathematical solution.CITATION:Myburgh, C A, Deb, K and Craig, S, 2014. Applying modern heuristics to maximising net present value through cut-off grade optimisation, in Proceedings Orebody Modelling and Strategic Mine Planning Symposium 2014, pp 155–164 (The Australasian Institute of Mining and Metallurgy: Melbourne).