Optimization of Final Pit Limit with Regard to Effect of Commodity Price (Case Study: Se-Chahun Iron Ore Mine, Iran)

Abstract

According to the ore grade reduction and increasing the depth of the ore deposit, final pit limit optimization and long term mine production planning to the optimal pit limit (OPL) determination in large open pit mines has globally become of a high importance. Nowadays, companies have focused their activities on maximizing the profitability and minimizing the undesirable effects of final product cost swings in order to access the whole minable reserves. In this research, a study has been done on the metal price fluctuations, particularly iron ore in the anomaly XI of Se-chahun iron mine of Iran during 2012 to 2016. The unfavorable impact caused by the 67.5% concentrate price decline and its side effects on final pit limit and amount of the mineable ore reserve has been analyzed. Scenario comparison that has been done on both northern and southern pit during 2012 to 2016 shows that the pit final depth has been shortened 50 and 40 meters for northern and southern sides, respectively. Comprehensive studies in plan economic assessment shows that by reducing the amount of proved and possible reserve within pit efficient span, the annual mining capacity will scale down from 3.4 million tons to 2-2.5 million tons and the amount of final product will also decrease as a result of the recovery reduction which has a certain strong impact on project profitability.