The Anatomy of a Mine - Mining and the Environment: From Ore to Metal - page 168

simple in concept, the dei nition of the cutoff grade for a particular mine is challenging and
open to discussion and interpretation.
From the perspective of the host country, which usually retains ownership of an ore
deposit, the cutoff grade should be as low as possible to maximize the amount of miner-
als mined or to achieve maximum resource utilization. From the perspective of the mine
investor, the best cutoff grade is the one that produces the highest return on investment.
This can and does in many cases mean that much of the mineral deposit remains unmined,
either temporarily until prices improve, or permanently if prices never increase sufi ciently
to justify extending or re-opening the mine. Discrepancies in dei ning an appropriate
cutoff grade exist and, to some extent, the environmental assessment of a mine proposal
needs to elaborate the different factors that have inl uenced the dei nition of a particu-
lar cutoff grade. A critical review of a chosen cutoff grade, of course, is well beyond the
scope of the environmental assessment, as well as the expertise of environmental special-
ists. Nevertheless, since the cutoff grade will inl uence the footprint of the mine, the vol-
ume and type of waste produced, and the life of the project, it represents a major factor in
determining the environmental impacts of a mining project.
In general, the cutoff grade will fall when project borrowings have been repaid, and
near the end of a project when many of the project operations have been curtailed.
Recognizing this likelihood, many operators segregate and stockpile low grade mined
material with the intention of processing it after mining has been completed, providing
that this can be done economically. This practice introduces its own uncertainties in envi-
ronmental management. Should the low grade material be managed as waste rock, sub-
ject to whatever management strategies apply, or should it be assumed that the low grade
stockpile will ultimately be processed? This is of particular importance in many suli de
deposits as the low grade stockpile may contain much higher concentrations of potentially
acid-generating materials than the waste rock.

From the perspective of the
mine investor, the best cutoff
grade is the one that produces
the highest return on investment.

CASE 4.2
Effects of Location on Cutoff Grade

Gove

Darwin Weipa

Bauxite, the major ore of aluminium, was discovered in the
Darling Range region of Western Australia more than
50 years ago. However, the average grade of Darling Range
bauxites proved to be much lower than in most other
bauxites mined at the time. Despite aluminium contents
generally up to 20% lower than those in other bauxite
mining areas such as Jamaica, the Darling Range bauxite
mines and associated alumina refi neries emerged as some
of the world's lowest cost producers of alumina. The
main reason for this is the location of the Darling Range
bauxite deposits in a region close to infrastructure includ-
ing ports and towns, and with a skilled workforce located
nearby. The three alumina projects developed by Alcoa
(Kwinana, Pinjarra and Wagerup) together with the Worsley
Alumina Project, established Australia as the world's leading
source of alumina (AAC 2006).

NT

Gladstone

QLD

WA

Brisbane

SA

NSW

Perth

Newcastle
Sydney

ACT

Adelaide

VIC

Melbourne

Bauxite Mines

Portland

Geelong

Alumina Refineries
Alumina Smelters

Bell Bay

TA S