A New Algorithm for Solving Lane’s Model for Cut Off Grade Optimization

   In open-pit mining operations, one of the first decisions that must be made in production planning stage, after completing pit limits design, is to determine processing plant cut-off grade. In order to maximize economic payoffs of operations, choosing optimum value of cut-off grade is of considerable importance. Using Lane's model is one of the most common methods for doing this task. This model is based on Operations Research (OR). Its objective function is maximizing difference between cash-flow and opportunity cost, and its functional constraints are mining capacity, processing plant capacity and market demand. Finally, this model is converted to a model with two decision variables namely (cut- off grade) and (time required for processing 1 ton of in- pit materials). Since formulating objective function and constraints of model as mathematical sentences is usually impossible, for solving it graphical or heuristic methods have to be used. Lane has developed a heuristic method for solving his model. In this article a new heuristic method for solving Lane's model has been developed. Then by solving an illustrative example in two methods and comparing their results, has been showed that the result of this method is better than result of Lane's algorithm.