Search Documents

By R. R. Hornor, Harry E. Tufft

The purpose of this bulletin is to point out some of the benefits and economies to be derived by selecting, preparing, storing, preserving, and utilizing mine timber more carefully and to give some specific information on certain preservatives and processes suitable for mine timber.

Jan 1, 1925

By William W. Adams

Reports for the calendar year 1923 that have been transmitted to the Bureau of Mines of the Department of the Interior by mine officials of the various coal-producing States show that accidents in and around the coal mines resulted in the death of 2,452 men. The output of coal during the year, as reported to the United States Geo- logical Survey, was 641,476,000 tons; hence the fatality rate per million tons was 3.82 as compared with 4.15 for 1922, a decline of about 8 per cent. The average rate for the decade ending with 1922 was 4.11. This reduction of 8 per cent in the fatal-accident rate per million tons is equivalent to the saving of 210 lives--that is, had the fatality rate of 1922 continued through 1923 the number of lives lost would have been 210 more than they actually were. Not only was there a net reduction in the fatality rate from all causes combined, but each of the main causes of coal-mine fatalities also showed a decline. Falls of roof and coal, which generally account for nearly half of all deaths in coal mines, were responsible for 1,158 fatalities in 1923, which represents a rate of 1.81 per million tons as compared with 1.90 in 1922. (See Table 2.) Haulage accidents underground usually cause about 17 per cent of all fatalities, and the reports for 1923 show that 413 deaths were due to this cause, indi- cating a rate of 0.64 per million tons, as against 0.71 for the previous year. Gas and dust explosions killed 372 men, the fatality rate being 0.58; the rate for 1922 was 0.65. Seventy-five deaths were due to electricity, for which class of accidents the fatality rate per million tons was 0.12 as compared with 0.16 the year before. Powder and other explosives caused 114 deaths, representing a rate of 0.18 as compared with 0.19 for 1922. Of the 2,452 fatal accidents during the year, 2,249 occurred under- ground, 46 in shafts, and 157 on the surface. At bituminous coal mines the number of deaths was 1,943, of which 1,816 were under- ground, 31 in shafts, and 96 on the surface. At the anthracite mines

Jan 1, 1923

By ROLLIN THOMAS CHAMBERLIN

The studies herein reported were begun as a part of researches undertaken by the United States Geologü;al Survey looking to the more effcient utilization of the coal in the United States through the reduction of waste in its extnidion, and were continued as part of further researches having regard to the conservation of the fuel resources of this country and to the lessening of injuries and fatalities in coal mining. Among other phases of the general problem to be studied were the origin of the gas whidi escapes into coal mines, its modes of occurrence in the coal and rock strata, and the conditions governing its outflow into the mines. The subject of relative danger from destructive explosions due to gas and coal dust in different mines belonging to different coal fields was to be one of the principal lines of investigation. But this work was barely under way when the series of unusually disastrous explosions in the Naomi, .Monongah, and Darr mines of Pennsylvania and West Virginia, in December, 1907, afforded an exceptional occasion to observe the behavior of explosions on a large scale. Because of the opportunities for study afforded by these terrific explosions, the inquiry originally planned was d ¡verted to the more specific investigation of the conditions in tl10SC mines, and the examinations have been directed toward finding those qualities of gas and dust which were concerned in these explosions. The following discussion, therefore, consists essentially of a report on that subject; but it is far from being exhaustive, and is to be regarded as a preliminary outline of investigations which are still in progress. The first of the three mine explosions mentioned occurred in the Naomi mine of the United Coal Company, near Bellevernon, Pa., on Sunday, December 1, at 7.40 p. m. All the men who were within the mine at the time, fortunately only 34, were killed. Less than a week later there occurred in mines Nos. fì and 8 of the Fairmont Coal Company at Monongah, W. Va., the most disastrous mine explosion yet recorded in the annals of American mining. The mines were comparatively new and well laid out. Mine No.8 had been in operation only about two years and was the pride of the Fairmont Coal Company. Mine No.6 was first opened ahout four years earlier. In order to make it possible, in case of emergency, for either mine to be ventilated by the ventilating system of the other, the two sets of workings were connected underground. The F face heading of mine K o. 6 led direetly into No.2 north heading of No.8 mine. On Friday, Dcccmber 6, at about 10.30 in the morning, an explosion of unusual violcnce swept completely through both mines, pursuing its course throughout the numerous ramifications and bursting out of the two pit mouths, located It miles apart, nearly simultaneously. The slope of mine No.6 was only slightly damaged, but at the mouth of No.8 the destruction was very great. The fan was wrecked, the engine house was demolished, and mine timbers were blown across Monongahela River: As nearly as can be determined, 361 men were killed in the two mines by the explosion. .While the inspection of the Monongah mines was still in progress, on Thursday morning, December 19, at about 11.20, a similar explosion wrecked the Darr mine of the Pittsburgh Coal Company ut Jacobs Creek, Pu.; 238 men lost their lives in this explosion, which in number of casualties is second only to the :Monongah disustcr in the history of American mining. Of ull thc men in the mine at the , time of the explosion, only one mun, who happened to be within 100 feet of the ~iUrface on an old manway in a wet, unexploded portion of the mine, succeeded in escaping alive. The underground investigation of these mines was made in cooperation with Clarence Hall and ""Valter O. Snelling, of the United States Geological Survey, and James ""V. Paul, now of the Survey but at that time chief of the department of mines for vVest Virginia, to all of whom the author is greatly indebted for valuable assistance, suggestions, and advice. Mr. Paul will rcport on the nature of these explosions, the precipitating causes, their destructiveness, and the general cüliditions in these mines following the disasters. The present report is confined essentially to the laboratory examination of some of the explosive materials collected from these mines directly ufter the explosions.

Jan 1, 1911

By Joseph A. Holmes

The investigations carried on at the fuel-testing plant of the United States Geological Survey at St. Louis in 1904-1907 included tests of the steaming and gas-producing qualities of many coals and of the possibilif3 of their improvement by briquetting, together with washing and coking tests and tests of some of the resulting coke in the cupola. These tests were part of a general inquiry into the manner of utilizing most efficiently each of the coals under investigation. The equipment used in the cupola tests of coke, the manner of conducting the tests, and the essential results have been described in publications of the Geological Survey," and only the more important conclusions to be drawn from the tests are mentioned in the following pages. The tests were made to show the fitness of the cokes for foundry purposes, but an incidentlll result was to show foundry men and the coke producers the advisability of studying the conditions of foundry practice. The present bulletin, published by the Bureau of Mines because the analyzing and testing of fuels have been transferred from the Gilological Survey to the Bureau of Mines, briefly reviews the status of the coke industry, some features of practice in the use of coke in the foundry, the probable happenings of a cupola heat, and the reasons for modifying charging practice so that a particular coke can be used to best advantage.

Jan 1, 1910

By CHARLES L. WRIGHT

Previous work.-The general plan of work outlined for the Government fuel-testing plant erected at the Louisiana Purchase Exposition, at St. Louis, Mo., in 1904, included investigations relative to the briquetting of coals found in the United States. These investigations embraced the possibility of making satisfactory commercial fuels from lignite or low-grade coals which do not stand shipment well; of benefiting culm or slack coals that are wasted or sold at unremunerative prices; and of improving the furnace efficiency or ability to withstand transportation of good coals. This work was begun in 1904 and was continued in 1905, 1906, and 1907 as an essential part of investigations looking to the determination of methods for reducing waste and increasing efficiency in the utilization of the fuel resources in the United States. The initial briquetting tests at St. Louis, which included examination into the behavior of different coals or mixtures of coals in the briquetting press, experimental study of the merits of various substances used as binders, and consideration of the physical properties and resistance to weather and abrasion of the briquets, have been described.a They demonstrated that satisfactory briquets could be made from most coals, and that by briquetting the commercial value of many low-grade coals and lignites could be raised enough to more than cover the cost of manufacture. Norfolk plant.-The briquetting plant of the Geological Survey was moved from St. Louis, Mo., to Norfolk, Va., in 1907, along with the steam boiler and producer-gas equipment of the fuel-testing plant, as the closing out of the affairs of the Louisiana Purchase Exposition and the consequent removal of the buildings from Forest Park made a change of location necessary. Norfolk was selected largely with a view to the testing of coals for naval purposes, and because of facilities in the way of buildings and materials offered by the Jamestown Exposition Company. The work at Norfolk was chiefly devoted to making steaming and briquet tests of coals which reach the Atlantic seaboard at Norfolk and Newport News and are used by the navy and merchant marine. Two briquet machines were installed at the Norfolk plant, one being the English machine used in briquetting tests by the Geological Survey at St. Louis in 1905 and 1906, and the other an American machine. The briquets made at this plant were tested on locomotives of several railroads entering Norfolk and on the United States torpedo boat Buldle in comparison with the run-of-mine coal used in making them. Some of the tests were conducted by the railroads on their own locomotives, but those on the Biddle and on the locomotive of the Seaboard Air Line Railway were carried on by W. T. Ray and Henry Kreisinger, of the United States Geological Survey. Personnel.-Charles T. Malcolmson continued in general charge of the briquetting section after the removal to Norfolk until January 1, 1908. Walter J. Chapman continued in charge of operation of the briquet machines and of the observations reported under the heading "Details of manufacture." Charles L. Wright supervised the installation of the English briquet machine and later in the year continued the physical tests of briquets and the analyses in the chemical laboratory of the section until January 1, 1908, on which date he was placed in general charge of the work of the section. G. E. Ryder and Ralph Galt also continued with the staff, but the former was obliged to resign soon after the plant was in operation on account of ill health; the latter continued with the section as computer until the close of work on December 1, 1908.

Jan 1, 1911

By Joseph D. Davis, GEORGE S. POPE

This bulletin is the fourth of a series a showing the results of the purchase of coal by the Government under specifications. The work of inspecting and analyzing coal delivered on Government contracts was transferred to the Bureau of Mines by an act of Congress effective July 1, 1910. It had been carried on for several years before that date by the technologic branch of the United States Geological Survey. The purchase of coal on the dealer's statement as to quality or on the reputation of the mine or district producing the coal is gradually being discontinued. At present most coal-purchasing contracts make definite provision regarding the desired heating value of a coal and the composition as shown by analysis. The heating value is usually expressed in British thermal units" and the composition specified is that shown by proximate" analysis. The price to be paid for delivered coal is made to depend on whether the analyses and heating-value tests of samples representing the delivery show the quality to be above or below the quality set forth in the contract. Large coal consumers are beginning to appreciate more and more the importance of the cost of power as a factor in the cost of producing a finished article. The endeavor to increase the efficiency and the economical operation of a power plant calls for an intimate knowledge of the quality of the coal being used. The purchase of coal under specifications insures the purchaser getting what he pays for and the coal being of the quality guaranteed. In addition, the analyses and tests of the delivered coal furnish data whereby the power-plant results can be comprehensively studied and a continuous check maintained on the conditions of operation.

Jan 1, 1912

By John A. Davis, David W. Brunton

During the past few years great progress has been made in the United States toward safer, more efficient, and more economical tunneling methods. This advance is partly due, no doubt, to the recent increase in the number of tunnels and adits driven for devel- oping and draining mines and transporting ore. The Bureau of Mines during 1911 and 1912 made a special examination of this phase of mining operations, in connection with an investigation of mining methods and means for preventing accidents. The details especially studied were the provisions for the safety of employees, the kinds of equipment, the methods of driving, and the costs of con- struction. The results and conclusions obtained from that investi- gation are discussed and summarized in this bulletin. Up-to-date information concerning tunneling methods is difficult to obtain. There are few books on the subject; and much of the material they contain, although interesting and of value historically, is now obsolete. The engineering periodicals, it is true, endeavor to keep abreast of the times, and several in nearly every issue present some article bearing upon tunnel work. But the very multiplicity of these articles prevents one from reading them all, and the foreman or superintendent in charge of a tunnel, or the mining engineer designing one, and especially the business man financing the project, has no time for a lengthy search after scattered articles in order to determine the present status of tunnel work. Then, too, knowledge of new methods travels slowly. Valuable inventions and improve- ments in tunneling as well as in all the other industries frequently remain in the notebook of the investigator, or as theses are buried in university libraries, or are published only in journals of small scien- tific societies. New tunneling methods and equipment that are prov- ing safe, efficient, and economical may be totally unknown outside the district in which they originate. This paper, based on a special examination both in the field and in engineering literature, is in- tended to supply data concerning modern and recent tunneling practice in the United States, and to make suggestions that, it is hoped, will result in a saving to the mining industry of energy, capital, and life.

Jan 1, 1916

By A. H. WHITE, PERRY BARKER

In a consideration of the various means whereby more economical and more efficient use may be made of the fuels in the United States, the possibility of obtaining for the production of illuminating gas other and cheaper fuels than the Pennsylvania coals demands attention. For the Government, as well as for private corporations and the householder, there can be no more economical and efficient way of using some coals than through the medium of illuminating gas. In the stove, gas reduces the labor cost of heat production and lessens the drudgery of the kitchen; burned in the Welsbach mantle, it is an excellent and cheap illuminant. In addition, the coke that remains after the gas has been recovered furnishes a smokeless fuel that has about the same heating value as anthracite. Hence any investigations that will indicate how local coals through proper treatment may be substituted for the higher priced and rapidly vanishing Pennsylvania gas coals will bring about lower prices for both gas and coke and will also aid to conserve for use in metallurgical processes the coking coals of Pennsylvania and of ot,her States. The annual drain on the gas-coal resources of this country and the importance of the gas and coke industries are indicated by the fact that 8,390,129 tons of coal were carbonized in retorts in the United States in 1909. The resulting salable products from by-product ovens were 15,791,220,000 cubic feet of coal gas, 6,254,644 tons of coke, and 60,126,000 gallons of tar. The total value of all by-products was about $28,508,637.

Jan 1, 1911

By Frederick W. Horton

The lack of comparable and accurate statistics of coal-mine accidents in the United States as a whole led the Bureau of Mines in 1911 to undertake the collection of such data. The importance of such statistics as a basis for remedial legislation can not be overestimated, moreover they serve to indicate the results of the efforts made by the Federal Government, State mining departments, and mine operators throughout the country to lessen the hazard of coal mining. The mining departments of the leading foreign coal-producing countries have long taken cognizance of the importance of such statistics. In Great Britain, official statistics of coal-mine accidents have been collected and published since 1851, in France since 1853, in Austria since 1875, in Germany since 1852, and in Belgium since 1831. The United States not only leads these countries in the production of coal but the output of its coal mines is greater than those of Great Britain, France, Belgium, Austria, India, Japan, and New South Wales combined. Accordingly, it is proper that there should be some official record of the accidents in this, the greatest mining industry not only in the United States but in the world. It is especially appropriate that this work should have been undertaken by the Bureau of Mines, as, through its investigations of mine accidents in the field, it is constantly in close touch with coalmining conditions throughout the country. Its engineers are not only able to obtain first-hand information as to a great many accidents, but, through their special training and experience, are able to appreciate the significance of the figures reported by the coal-mine operators, thus aiding an intelligent and uniform classification 01 the accidents for the country as a whole. Further, the State mining dnpartments and State mine inspectors of every State in the country having a system of coal-mine inspection are cooperating with the bureau by sending it monthly reports of accidents in the coal mines of their respective States. The receipt of such reports places the bureau in a most advantageous position to publish promptly statistics of these accidents. Although a few years ago accurate statistics of c~al-mine accidents in the United States as a whole were entirely lacking this bureau was able to pubjiish the 1912 statistics within three n:onths after the close of the year and long before corresponding statistics had been issued by the mining departments of the leading foreign coal-producing countries. The cooperative agreement with the State coal-mine inspectors has not only made possible the prompt publication of the statistics, but it has also enabled the bureau to classify the fatalities by months and according to cause, showing the months in which the greatest and the least number of men were killed and from what causessomething that has never before been accomplished for this country.

Jan 1, 1913

By N. H. Darton

This report presents the results of an investigation begun by the Government in the summer of 1907, the investigation being started under the immediate supervision of Dr. J. A. Holmes and continued under him as director after it was transferred to the Bureau of Mines in 1910, the field studies being completed in the spring of 1912. The purpose of the investigation was to obtain information on the origin of the inflammable gases in coal and the conditions under which they occur. It was especially intended to ascertain whether there was any relation between the occurrence of gas and the structural or other geologic features of the coal beds. To this end many months were spent in mines and much time was devoted to the examination of mine maps, bore-hole records, and other data made available by the kindness of various coal companies. Two fields of work were selected-one in the northern anthracite basin of Pennsylvania, where the beds are considerably flexed, and the other in the southern part of the bituminous coal field of Illinois, where the beds lie nearly horizontal. In order to take advantage of results of previous investigations of the same general subject, an extended examination was made of reports of various investigators in Europe and America. A digest of the information obtained from these publications is included in the first part of this report, which constitutes an introduction to the discussion of the conditions governing the occurrence of inflammable gas in coal beds.

Jan 1, 1915

By J. W. Thompson

CONSTRUCTION OF STATUTE-SALE BY ENTRYMAN. The timber and stone act (20 Stat., 89) does not forbid an entryman from alienating his interest in his claim; but the act makes illegal any prior agreement by which the entryman acts for another in the purchase. Worden v. United States, 204Fed., 1, p. 4, April, 1913. ASSUMPTION OF DEBT BY GRANTEE-LIABILITY TO CREDITOR OF GRANTOR. A grantee of a mine who agrees to pay the grantor's debts in part payment of the purchase price of the mines becomes to that extent the principal debtor, and the grantor becomes the surety, and the grantor's creditor may in equity enforce his claim against the grantee of the mine, and the grantor in such a case is not a necessary party. Silver King Coalition Mines Co. v. Silver King Consolidated Mining Co., 204Fed., 166, p. 169, April, 1913. RIGHT OF COTENANT TO MINE AND SELL. A cotentant in exclusive possession' of mining property who extracts and sells ore is entitled to charge against the proceeds of the sale the reasonable and necessary expense of its extraction and marketing, as in such case the cotenant is not a trespasser.

Jan 1, 1914

By J. W. Thompson

This work is a codification and annotation of the Congressional enactments relating to minerals, mineral lands, and mining. It covers every enactment of Congress from the original ordinance of 1785 to the present time, as well as all sections of the Revised Statutes of the United States relating to these subjects. These laws are grouped according to their general subject matter, and are arranged thereunder in numerical or chronological order. Many of the mining statutes include matter not pertinent to the subject, and only those parts of such acts are quoted as will properly show their relation to minerals and mineral lands and indicate how they should be construed. Some mining acts have been repealed or have become obsolete, and others have become incorporated substantially in sections of the Re- vised Statutes; but these are retained in order to show the changes made, and the constructions placed thereon by the courts are given as aids in construing the new or repealing acts. The annotations consist of legal propositions abstracted from the decisions of the various courts and executive officers of the Govern- ment that have interpreted the sections and statutes so codified. These legal propositions are arranged under the different sections and acts with appropriate headings, titles, and subtitles, in logical order, exhibiting the present status of each particular section or act and its application to the subject of mines and mineral lands. The annotations do not purport to be abstracts of decisions on the sub- stantive law of mines and mining generally, but are limited strictly to the interpretation placed on a given section or act definitely re- ferred to by a court or executive officer by the number of the section of the Revised Statutes or the volume and page of the Statutes at Large in which the Congressional enactment is found. It may be observed that the legal propositions stated are not always pertinent to the particular section or act under which they are classed and of which they purport to give a construction. The arrangement, however, is not an arbitrary one, but is so made for the reason that the courts or officers in the construction of a particular section or act definitely referred to by number or volume and page incorporated in the decision matter not strictly pertinent to the par- ticular section or act so designated. This statement applies especially to the interpretations placed on the sections of the Revised Statutes. The decisions abstracted for the purpose of this work are those of the United States Supreme Court, 234 volumes; the various Federal courts, 214 volumes; the decisions of the Department of the Interior

Jan 1, 1915

By Albert H. Fay

This glossary is publi~hed- by the Bureau of Mines as a contribution' to the mining literature in the belief that it will fill a long-felt need. It contains about 20,000 terms; these include both technical and purely local terms related to metal mining, coal mining, quarrying, petroleum, and natural gas, and metallurgical works; names of useful, important, and common minerals and rocks; an<lgeological terms. It presents in one comprehensive volume the available standard, technical terms relating to the mining and mineral industry, as well as provincialisms that have been or are now in use in English-speaking countries. The glossary also includes many terms relating to ceramics and the clay industry, glass making, foundry practice, railway and building construction, electrical installation and power-plant equipment, and chemical terms relating to metallurgical practice. Complete lists of terms for' each of these allied industries are beyond the scope of this glossary. Paleontological terms, although closely associated with geology, are far removed from mining and metallurgical operations, and for this reason have been omitted. In a compilation of this magnitude, it is difficult, within a reasonable time to verify all definitions as to the latest usage. Much verifying was done and it is hoped that the best and latest definitions have been used. Reference to the publications cited will enable the reader to determine approximately the period when the definition was used. Definitions in use by engineers of high national or international reputation are given first preference. When definitions from different sources are the same, credit is given to the earlier author as being the original or nearest to the original source. Immediately following each term the name of the locality wherein the word is presumed to have originated or is widely used is given, where such information is available. The name of the author or source from which the definition was obtained follows the definition, and serves as a key to the publications listed. The terms selected from the various glossaries and publications examined have been compared with the Webster,

Jan 1, 1920

By J. A. Holmes, EDWARD C. FRANKLIN, RALPH A. GOULD

The commission may be permitted to express its earnest hope that the litigation which comes to an end with the findings and recom- mendations herein set forth will be considered by both parties to the action as definitely and equitably decided. The commission trusts that its work will show the value of the commission form of settlement and that its work will serve as a prece- dent to be followed in disputes relative to technical subjects. If the work of the commission is productive of a tendency on the part of technical litigants to avoid the use of the courts for the settlement of disputes it will not have been done in vain. Such tendency will surely grow and ultimately such differences will be arbitrated by technically trained men without recourse to the courts of law. Appended to the report of the findings of the commission are to be found the detailed reports covering the several lines of inquiry and investigation carried on by the commission and upon which its findings are based, and also a detailed statement of the fiscal affairs of the commission. A word of explanation is necessary in regard to the fiscal statement. While each party to the litigation has agreed to bear one-half of the expense of the investigations of the commission, it will be noted that the Selby Smelting & Lead Co. is credited with $21,000, while Solano County is credited with but $6,000. In order that the investigations of the commission might go forward without interruption the Selby Smelting & Lead Co. has generously supplied funds at the times they were needed. This assistance has been

Jan 1, 1915

By Nathaniel Herz

PARTING of bullion before shipment to the mint had been considered by the Homestake Mining Co. at various times, but had never been attempted before 1933, be- cause the margin of profit appeared to be too small to warrant the complications in refining. When the gold standard was abandoned by the United States in the spring of 1933, however, parting of the bullion was decided upon. The method selected was the Miller or chlorine process, which consists of the passing of gaseous chlorine into a bath of molten bullion, converting all metals other than gold into chlorides, and remov-

Jan 1, 1935

Maps To Accompany Bulletin 494

Jan 1, 1950

By W. V. Mutler

Present day capital costs are analysed for a 2 000 metric tonne per day (MTPD) pyrite burning plant and compared with a sulphur burning plant of the same capacity. Power, raw material and steam production rates are then compared for the two facility types. A sensitivity analysis is conducted to highlight the impact changing sulphur, pyrite, capital and operating costs have on the relative economics of these feeds. Technological improvement effects on capital cost and energy recovery are also discussed. Besides the steam produced from the burning of pure sulphur or pyrite, plants using an advanced form of heat recovery can produce up to 10 bar steam using heat from acid formation. The quantity depends on the overall water balance which is influenced by such factors as gas strength and product acid concentration. Modern materials and innovative process design also improve the ability to increase the high pressure steam from the roaster boiler in pyrite plants above the traditional 1.25 kg of superheated steam per kg of acid produced.

Jan 1, 2009

Burr Mineral Resource has: ?Grade / Thickness / Tonnage ?Dry Caprock ?Low Carnallite ?Low Clay / Insolubles ?Flat & Continuous Deposit ?Proper depth

May 1, 2009

By Jason N. Scott

CFA piling is a ?blind? construction process that relies heavily on the rig instrumentation to produce sound piles. If the data measured and recorded during construction can be made available to engineers and managers within hours after construction then there are many economic and quality control benefits that can be realised. A state of the art CFA instrumentation and data management process has been developed in the UK. The key components of the instrumentation, GSM data service and the central database are described. Many benefits to the business have been realised and, where possible, these are quantified.

Jan 1, 2006

By Thomas D. Kaufmann

Introduction Mining has always been sensitive to the fluctuating income of downstream customer industries. The industry is now becoming more vulnerable to booms and busts as economic pulsations increase and demand for mining products shows little or no long-term growth. As the general economy has become more cyclical in the last decade, the capital-intensive primary industries have become more aware that timing as well as preparation of survival plans are vital in investment decisions. Strangely, however, some of us have not yet included the business cycle in our feasibility studies. Cyclic prices and volumes and fluctuations in profits and cash flows do not fit our linear models. The increased cyclical nature of our economy is recent and poorly understood. Forecasting peaks and troughs is still more an art than a science. Nevertheless, avoiding business cycle parameters can lead to error in value estimation and contingency planning of new projects. Metal and Mineral Industries More than half the iron and steel, aluminum, copper, lead, zinc, manganese, tin, nickel, molybdenum, cobalt, and chrome that we mine, smelt, upgrade, and recycle goes to construction, transportation, capital goods, and consumer durable industries. All are cyclical. Their products are consumed slowly, so replacement can be postponed in recessions. Purchases of such goods are usually financed by debt, and their customers are sensitive to highly cyclical changes in interest rates. During prosperous periods, people tend to buy capital goods despite high interest rates. Upstream industries also tend to be whipsawed by inventory cycles. With high interest rates and good transportation, downstream fabricators can lighten their inventories during recessions. They know that upstream suppliers can deliver supplies and raw materials immediately, And, with the advent of electronic accounting, the fabricator with timely inventory information can afford to hold fewer contingency stocks. Likewise, when recovery returns, inventories surge back through industry pipelines, accelerating demands on primary supplies. The price elasticity of most primary products is low. Their share of the value of finished products of the industries they supply is generally small. The 60 kg (130 lb) of aluminum in a car is vital. But whether it costs $80 or $130 will not visibly influence the demand for an automobile. With low elasticities of demand, the primary producer is hit with decreases (or increases) in prices and in sales volume, during recessions as well as recoveries.

Jan 6, 1984