Dilution affects the cut-off grade by lowering the average grade of mined material due to the inclusion of waste or low-grade rock mixed with ore. This increases the volume of material processed while reducing its overall value, raising mining, processing, and waste management costs. To stay profitable, the cut-off grade must be adjusted upward to account for these added costs(Amedzrovia and Agyeib, 2022).
Research shows that when dilution and related expenses like waste rehabilitation are considered in cut-off grade calculations, the average ore grade drops. This forces an increase in the cut-off grade, which can lead to lower annual processing volumes, reduced metal recovery, and ultimately, a decline in both annual profit and the project’s net present value (NPV).
In some scenarios, applying penalties for waste dumping may reduce cut-off grades slightly to minimize waste classification. However, the overall impact of dilution tends to push cut-off grades higher to offset the economic loss from lower-grade ore. In short, dilution decreases ore quality and increases operating costs, making a higher cut-off grade essential to maintain economic viability(Marcial, 2024).
Dilution isn’t just a physical issue; it’s a financial recalculation! How does the unintentional mixing of waste rock fundamentally impact and raise the operational cut-off grade? Share your insights on managing this costly shift!
References:
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Optimisation of Cut-Off Grade Considering Dilution and Waste Rehabilitation Costs, NIPES Journal of Science and Technology Research 4(2) 2022 pp.246 – 258 pISSN-2682-5821, eISSN-2682-5821, p246-247
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Marcial. (2024, August 9). Optimisation of Cut-Off Grade Considering Dilution and Waste Rehabilitation Costs. Mining Doc. https://www.miningdoc.tech/2024/08/09/optimisation-of-cut-off-grade-considering-dilution-and-waste-rehabilitation-costs/
