Increasing Profitability in Strategic Mine Planning with K-MINE

Maximizing Profitability Through Strategic Mine Planning

In this video, we explore how K-MINE empowers mining professionals to enhance profitability at the strategic planning stage—without major capital expenditures. By analyzing and optimizing planning parameters, it’s possible to extend open-pit mine life and significantly increase the Net Present Value (NPV).

Establishing the Economic Model

We begin with a practical example where processing costs and recovery factors are calculated based on ore quality. The initial lower cut-off grade is set at 12%. During optimization, the target price adjustment factor is aligned with scenario number 13, achieving a marginal profit rate of 45%.

Under these parameters, the total ore within the final pit shell is 46.3 million tonnes, with a projected mine life of 10 years and an NPV of approximately 1,500 million monetary units.

Analyzing Profit Drivers with K-MINE

K-MINE’s integrated sensitivity analysis tools identify which parameters have the greatest influence on project profitability. The results show that excavation cost and transportation cost are the most impactful. Even small reductions in these areas lead to proportional improvements in economic outcomes.

When focusing on final product-related parameters, the product price and recovery factor appear most influential. However, these are difficult to control—price depends on market demand, while recovery improvement requires large-scale investments.

Cut-Off Grade Optimization: A Practical Lever for Profitability

After excluding dominant factors, the analysis highlights the cut-off grade as a key variable for optimization. Reducing it can meaningfully improve profitability by increasing the volume of processable ore.

According to the analysis, lowering the cut-off grade by 20% yields optimal results. This adjustment is simple to implement if the processing plant can handle the additional material. It allows for higher throughput and better long-term utilization of available resources—without increasing operational risk.

Scenario Comparison: Quantifying the Gains

To evaluate the effect, a new scenario is created in K-MINE. By reducing the cut-off grade by 3 percentage points (to 12%), the pit geometry remains unchanged, but ore within it increases to 67.2 million tonnes—21 million more than before.

This extension increases the mine life from 10 to 14 years and raises NPV to nearly 1,800 million, representing an additional 300 million in value creation.

Conclusion: Strategic Insights Without Capital Investment

This case clearly shows that K-MINE enables mining companies to achieve higher profitability through data-driven decision-making and scenario analysis. No exploration costs, no additional investments—just smarter planning.

The essence of strategic mine planning lies in identifying hidden opportunities, testing scenarios, and making informed decisions that enhance both operational efficiency and financial performance.