The effect of price changes on optimum cut-off grade of different open-pit mines

سال انتشار: 1391
نوع سند: مقاله ژورنالی
زبان: انگلیسی
مشاهده: 436

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تاریخ نمایه سازی: 13 مرداد 1394

چکیده مقاله:

Maximizing economic earnings is the most common goal in cut-off grade optimization of open-pit mining operations. When this is the case, the price of the product has a critical effect on optimum value of cut-off grade. This paper investigates the relationship between optimum cut-off grade and price to maximize total cash flow and net percent value (NPV) of operation. In order to visualize this relationship, two hypothetical mines were employed. To determine the optimum value of cut-off grade in different cases, two nonlinear programming models were formulated, and then, all models were solved using Solver in Excel. The results show that the optimum cut-off grade would always be a descending function of price when we intend to maximize total cash flow. On the other hand, this function may be descending or ascending when we intend to maximize NPV. This result also reveals that both maximum cash flow and maximum NPV always increase and decrease, respectively when the price of product increases or decreases.


A.A Khodayari

PhD in Industrial Management College of Engineering, University of Tehran

A Jafarnejad

PhD in Industrial Management Faculty of Management, University of Tehran, Iran