Abstract

Nwosu J.I and *Nwankwoala H.O

Optimum determination of cut-off grade and ore reserve of a deposit is critical to a viable operation of an open-pit mine. The controlling variables in the determination of cut-off grade and ore reserve are the price of iron ore concentrate and its production cost. This paper studies the influence of changes in price and production cost of concentrate on cut-off grade and ore reserve determination of Itakpe Iron Ore Deposit, North Central Nigeria. The study utilizes graphical and mathematical models to show the relationship between cut-off grades and ore reserves at Itakpe Mine with changing price-cost ratios. It concludes that management of National Iron Ore Mining Company Limited Itakpe should promptly react to changes in price-cost ratios by lowering cut-off grades with increasing price-cost ratio or by increasing cut-off grade with decreasing price-cost ratio. This will subsequently determine the ore reserve of the deposit.