{"id":24454,"date":"2026-02-11T19:02:22","date_gmt":"2026-02-11T11:02:22","guid":{"rendered":"https:\/\/unison.ycp.com\/?post_type=articles&#038;p=24454"},"modified":"2026-02-11T19:03:05","modified_gmt":"2026-02-11T11:03:05","slug":"why-the-cutoff-grade-is-a-critical-kpi-for-mine-profitability","status":"publish","type":"articles","link":"https:\/\/stg.unison.ycp.com\/insights\/articles\/why-the-cutoff-grade-is-a-critical-kpi-for-mine-profitability","title":{"rendered":"Why The Cutoff Grade is a Critical KPI for Mine Profitability"},"content":{"rendered":"<p><span data-contrast=\"auto\">The cutoff grade is a critical metric used to\u00a0determine\u00a0the quality of ore extracted, the profitability of the\u00a0mine\u00a0and incentivizes mine plan adherence by operators.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Beyond measuring the volume\/tonnage moved, the cutoff grade ensures that the right ore is moved, at the right time, according to mine plans that\u00a0facilitate\u00a0the profitability of the mine.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">It\u2019s\u00a0human nature to be driven to meet goals through rewards which incentivize our behaviors. However, if the metrics of success are defined too narrowly or\u00a0aren\u2019t\u00a0given clear context, it can result in driving the wrong behaviors \u2013 an extremely costly but common\u00a0misstep\u00a0made by organizations when defining their KPIs.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This happens when mine operators are rewarded primarily based on tons moved or ounces extracted instead of close adherence to a mine plan. If the wrong ore is moved that does not meet cut-off grades, poor blending at the processing plant and costly ore recovery inevitably follow.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">While tonnage moved is a fundamental metric, it\u00a0fails to\u00a0incentivize the larger goal of the mine \u2013 to extract low-cost ounces that meet profitable cut-off grades. In other words, plan attainment is met, but plan adherence (spatial compliance) is lost. This siloed focus on quantity versus quality of ore becomes counterintuitive to the larger goal of\u00a0mine\u00a0profitability. Goodhart\u2019s Law best exemplifies this scenario with the adage \u201cWhen a measure becomes a target, it ceases to be a good measure\u201d.\u00a0It emphasizes the pitfalls of using a single indicator to measure complex outcomes.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Equipment operators are not concerned by product spot price or cutoff grade. Instead, they focus on tons, meters, swings, and cycles per hour. This is perfectly logical given the KPIs and incentives that motivate performance that have been set for them at their organizational level \u2013 such as tonnage moved.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<h2 aria-level=\"2\"><span data-contrast=\"none\">Ensure mine plan adherence with the cutoff grade<\/span><span data-ccp-props=\"{&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335559738&quot;:160,&quot;335559739&quot;:80}\">\u00a0<\/span><\/h2>\n<p><span data-contrast=\"auto\">To ensure quality ore is extracted that meets cut-off grades, mine plan adherence is what matters most. Significant deviations from a mine plan must be vetted by leadership and management through a formal escalation process, ensuring the resulting costs of changes are fully understood and will not negatively\u00a0impact\u00a0the mine\u2019s bottom line. The cutoff grade is integral to mine planning processes, influencing decisions on resource allocation and, ultimately, Net\u00a0Present Value, Life of\u00a0Mine\u00a0and even final reclamation work.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">When departments are incentivized based on KPIs disconnected from larger business goals, teams begin to work in siloes to the detriment of the organization\u2019s mission. YCP\u00a0Unison\u00a0can work with your teams during mine planning to align KPIs to larger goals of your mining company. We specialize in\u00a0facilitating\u00a0the behavior change needed for sustainable success that endures long after a project\u2019s closeout.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The cutoff grade is a critical metric used to\u00a0determine\u00a0the quality of ore extracted, the profitability of the\u00a0mine\u00a0and incentivizes mine plan adherence by operators.\u00a0\u00a0 Beyond measuring the volume\/tonnage moved, the cutoff grade ensures that the right ore is moved, at the right time, according to mine plans that\u00a0facilitate\u00a0the profitability of the mine.\u00a0 It\u2019s\u00a0human nature to be [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":23500,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[],"class_list":["post-24454","articles","type-articles","status-publish","format-standard","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why The Cutoff Grade is a Critical KPI for Mine Profitability | YCP Unison<\/title>\n<meta name=\"description\" content=\"Learn why the cutoff grade is critical for mine resource utilization and why it is such a crucial KPI in assessing mine performance\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" 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