How does the concentration of a valuable mineral affect the value of ore?

The concentration of a valuable mineral within an ore, often referred to as its grade, is a primary determinant of the value and economic viability of a mineral deposit. Generally, the more concentrated the valuable mineral, the more valuable the deposit, as higher grades typically yield greater revenue relative to the costs of extraction and mineral processing.12

Economic viability is defined by several critical thresholds related to concentration:

• Break-even grade: The concentration level where the costs of mining and processing exactly equal the revenue generated.1
• Mine/Mill cutoff grade: The minimum concentration required to make mining or processing a mineral profitable.1

If a deposit's concentration falls below these levels, it is considered waste rather than ore. However, concentration is not the sole factor; the value of ore is also heavily influenced by extraction costs, market prices, and the ease of separating the mineral from gangue. For instance, if extraction costs rise—such as when transitioning from open-pit to underground mining—a higher mineral concentration is required to maintain profitability.123