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The underground coal mining industry in Australia has, in the last 30 years, undergone a revolution in production methods, techniques and results probably unparalleled elsewhere in the world. It can lay claim not only to leading the fight against pneumoconiosis and setting high safety standards generally, but has at the same time recorded comparatively high rates of increase in output per man shift. The latter has been achieved as a result of progressively matching the latest in production and underground transportation equipment with significant changes in seam development and extraction techniques and the introduction of stress-relieving extraction methods unique to the world scene. However, the seam recovery factor is still too low. Apart from the overall objectives of maximising production and commercial returns with the greatest safety, there must be a concentration towards maximising seam recovery, particularly in high seams. The search will continue for systems which are more completely continuous mining operations than the present stop-go operations, with longwall having long term potential in this regard, but as yet not sufficiently developed to engender confidence for its more general use. Techniques developed in the last 10 years make the development and extraction of deeper seams, perhaps to 2500 feet or more, feasible with continuous miners as well as longwall. The future will see a greater use of continuous shifts at mines, larger mines with more sophisticated management organisation, extensible belts at the face, better systems of immediate roof support at the face, remote operation of face equipment, greater use of roof bolts and the longer roof cables. With commercial confidence in coal mining now virtually assured to at least the turn of the century, the stage is set for heavy capital development in the industry which will undoubtedly include major research into the whole area of mining methods and equipment. We must ensure that our contribution to such research equitably matches other coal producing countries.

Jan 1, 1975

An account of milling "methods and costs at Mount Isa Mines Limited up to the year 1938 has been published. The present paper outlines the methods since adopted in the milling of lead-zinc ores and presents a description of the equipment now being provided for the milling of copper ore.The programme approved for the mining, milling and smelting of both lead-zinc and copper ores involves the milling 9f 50,000 tons of lead-:-zinc ore and 35,000 tons of copper ore per month.The crushed ores will be delivered to the surface from alternate levels through No. 2 Ore shaft and conveyed to their respective crude ore bins at the crushing plant. The ores will be crushed and milled in separate circuits in common buildings and the tailings will be stored on a common tailings dump. The water services to the two circuits will be separate.LEAD ZINC PLANTCrushing PlantThe crushing plant described in the previous paper was located adjacent to the Urquhart shaft. The crushing plant had grown considerably over the years by the addition of a 4ft. BY-mons shorthead crusher and a set of Traylor 72 in. x 20 in. crushing rolls and, whilst operating satisfactorily, was difficult to maintain and cramped in many places. As a satisfactory layout for the new copper crushing plant could not be made in the vicinity of the, existing plant, it was decided to construct a new plant on the western side of theconcentrator building and provide identical equipment in...

Jan 1, 1953

By Gupta A, Hall ST

The grinding characteristics of quartz which is normally associated with gold bearing ores in Kalgoorlie area was examined in a stainless steel laboratory size ball-mill in the presence of inorganic and organic surface active reagents. The cationic species considered were Fe3+, Cu2+ and Ca2+, and the anions were CO? and S2 as these are normally present during the process of grinding of gold ores in the region. The organic surfactants examined were K-amyl- xanthate, dodecylamine-hydrochloride and the Grinding Aid XFS-4272 manufactured by Dow Chemical The study was primarily based on an examination of the electrokinetic properties of quartz surface in the presence of the grinding reagents. Zeta potential at different reagent additions and pH values in the presence of individual reagents were examined and the corresponding grinding charcteristics determined. A correlation has been indicated between the grinding characteristics, as measured by the -53um size fraction produced, and the surface energy of quartz. It was observed that an

Jan 1, 1978

By G J. Butler

Since 2005 BHP Billiton Iron Ore has been working with the consulting company Runge to implement the software XPAC Advanced Destination Scheduler (ADS) in life-of-mine studies. The Mt Whaleback mine, being the single biggest open cut iron ore mine in the world, presents some special challenges in scheduling. The biggest challenge has been the slow run time and difficulty in targeting all ore and waste requirements. The high waste to ore strip ratio means that much of the cost of mining is tied up in waste dumping. It is therefore very important to schedule waste efficiently. At Mt Whaleback there is an additional challenge of managing two types of waste: inert and environmentally sensitive pyritic material. This paper shows how the XPAC destination scheduler is configured to achieve efficient and repeatable waste scheduling results at the Mt Whaleback mine. It also discusses proposed improvements to the process. The overall ore and waste schedule is configured to target mining parameters, crusher feed and grades. The schedule is run in two stages. The first stage is ore mining. The waste that needs to be mined is locked in a sequence. The second stage is the waste scheduling. The waste destination scheduler uses three inputs: source waste parcels locked in a sequence, a haul road and a waste dump block model. The process involves setting some rules for dump progression and haul path selection. These can be validated. The schedule is then run to target the shortest travel time. The results of scheduling are graphical and numeric and can be transferred into many different formats for reporting. The graphical result shows face positions in time that can be used for detailed dump design. The numeric results are used to estimate truck fleet size, fuel consumption, labour and equipment financials. The process has been successful in reducing the project time line, increasing the ability to do more scenarios and increasing schedule accuracy, transferability and repeatability.

Jan 1, 2007

The mineralogy, maero- and micro-textures of Thackaringa ore are simple and have many counterparts among base metal-quartz-siderite vein type deposits elsewhere.The ore consists predominantly of galena, sphalerlte, chalcopyrite, tetrahedrite, and arsenopyrite in a quartz and siderite gangue. Silver minerals, as such, appear to be lacking and silver values are no higher than in other sulphide ores of this type. These features contrast very markedly with those of the A.B.H. Consols Lode which appears to have emanated from the north end of the Broken Hill Main Lode Horizon during high grade regional metamorphism. The Consols Lode has been regarded as of Thackaringa type, and both are regarded as possibly arising from the remobilization of Main Lode Horizon ore. Whilst this may yet prove to be so it appears that the marked differences in mineral composition between the Consols and the Thackaringa types, would require somewhat different modes of regeneration.Thackaringa ore, as well as A.B.H. Consols ore, on this basis, would necessitate the development of a metahydrothermal ore fluid to account for their present apparently hydrothermal (or pseudo-hydrothermal) constitution...

Jan 1, 1967

By Rixon LK, Walton KP

Evidence will be presented to show that borescope inspection of mine roofs is one of the most useful techniques available for stability assessments. ACIRL currently has four borescopes, comprising two fibre-optic units of 2.7 m and 4.5 m length and two optical rod units (introscopes) 6 m and 8 m in length. (The 8 m unit is not yet fully operational because of modifications needed to meet safety regulations). Using the fibre-optic units, photographs of hole walls or ends can be taken to record features. Roof lithology and crack patterns can be observed in roof holes from 25 - 60 mm in diameter. Several crack parameters are useful: type, location in the roof with respect to height and lithological boundaries, presence of individuals or zones containing crack clusters and the estimated amount of dilation. These data are readily computer- plotted to form "borescope logs". Provided that the holes remain open, a hole or group of holes can be re-surveyed at intervals to monitor crack development across or along a roadway, for example with respect to an advancing blind-ended roadway face.

Jan 1, 1986

By J Araya, O Leiva

The mine evaluation process, composed of the designing, planning and valuation of a mine project, is, among other variables, based on an estimated orebody model. However, as the information from the drill holes is limited, it is impossible to know with certainty the mineral content in each block within the estimated block model. Consequently, uncertainty about the value of metal grades, or other geological attributes, arises because of the lack of information at unsampled locations. This is one of the reasons why, in any mine operation, there will always exist a divergence between estimated and real values. Cut-off grade optimisation is the process used to determine the operating mining strategy (long-term production scheduling) that will maximise the total profit value (normally referred as the net present value (NPV)) of a mine operation. This is done by defining a dynamic cut-off grade policy which is constrained by the production capacity of the mining, mill and refining.Real options is a type of contract, written on real assets such as mining, oil and other natural resource industries, that gives you the right but not the obligation to exercise the contract. It is based on operational and managerial flexibility, which allow mine decision makers to react to either good or bad operational and economic events in the future. But, what do geostatistics and cut-off grade optimisation have to do with the application of real options in a mine project evaluation process? The objective of this paper is to answer the previous question by showing how geostatistics combined with cut-off grade optimisation are key tools for corporate/managerial decision makers, which allow them not only to analyse the resource/reserves of their projects, but also to generate operational strategies that can maximise project value by minimising the downside risk due to ore tonnes and grade uncertainties, while achieving operational and physical constraints such as mining and processing capacities. A real copper grade open pit mine project is used as a case study.

Sep 26, 2011

By E Whiteman, L Reyneke, H Horsch

Heavy mineral sand deposits are a source for the economically important element titanium, which is contained in minerals such as ilmenite and rutile. In heavy mineral deposits ilmenite displays various degrees of alteration. Natural weathering of ilmenite involves the removal of Fe and thus results in an increase in the Ti-content. Minerals such as pseudorutile, ferropseudobrookite, anatase and the ill-defined mineral aggregate leucoxene, which consists mainly of various amounts of remnant ilmenite, pseudorutile, ferropseudobrookite and anatase, are typical replacement products of ilmenite. Ferropseudobrookite occurs as a recrystallised, optically and chemically distinct mineral phase. Textural relationships suggest a diversity of physicochemical conditions including weathering and metamorphism that led to the formation of complex mineral assemblages and textures. In the heavy minerals industry the alteration products of ilmenite are generally referred to as æaltered ilmeniteÆ and/or leucoxene. The distinction between æaltered ilmeniteÆ and leucoxene is not consequently defined and is very much dependent on economic factors and specific mining operations (ie determined by deposit specific mineral assemblages). Generally the term leucoxene is used in the heavy minerals industry as a collective description for ilmenite alteration products with TiO2-components ranging from 65 - 95 per cent. A detailed comparative mineralogical investigation including microscopic, SEM and QEMSCAN« techniques show that it is possible to identify and quantify the replacement products of ilmenite on a micron scale. QEMSCAN« generated particle maps were graphically compared with photomicrographs taken by applying reflective light microscopy. The resulting information can be integrated over the entire sample with respect to composition, absolute and relative mineral abundances, grain sizes, volumes, densities, textural relationships and liberation potentials. This provides a powerful tool for a first appraisal of the physicochemical behaviour of bulk samples and individual particles during metallurgical processing.

Jan 1, 2008

Queensland hosts vast deposits of brown and black coal, significant accumulations ranging in age from Permian to early Tertiary. The great diversity of coal resources in the State to some extent reflects the proximity of Queensland to plate-marginal tectonic processes through much of the Phanerozoic eon. Coal is contained within sedimentary basin fills of four fundamental types; 1. extensional, 2. foreland, 3. strike-slip, and 4. intracratonic. Thick (10 m+) though laterally restricted coal bodies are characteristic of extensional and strike-slip basins, whereas coals of more modest thickness but much greater lateral extent are typical of foreland and intracratonic basins.

Jan 1, 1991

By R Farnf, M Pegden, S Hosein, T White

A number of theoretical papers have been published outlining the use of electronic detonators to limit peak particle vibrations levels, but few empirical studies have been undertaken and even fewer examples have been published of the use of such technology in the aggregates industry. This paper gives a summary of the research work carried out at two limestone quarries in the North of England, where a series of blasts were used to compare and contrast the use of electronic and non-electric detonators. The majority of blasts were carried out using the same burden, spacing and decked charge weight loadings. A methodology was established that could be used to reduce the peak particle velocities (PPVs) at two or more specific locations by using single-hole blast vibration signatures in conjunction with specific electronic detonator timing intervals. The initial study concluded that this was only possible if single-hole signature blasts were periodically recorded to establish the shape of the correct vibration envelopes as properties were approached. These wave envelopes could then be used as the basis for choosing the specific electronic detonator timing intervals to give the lowest PPV for the properties or locations concerned. This methodology was then used in the second study to access a large volume of aggregates adjacent to a working railway tunnel. The financial benefit for the company was to convert these additional tonnages of rock from being a resource to an exploitable reserve. The project involved careful blast design and the instrumentation of a number of boreholes to enable the results of blast monitoring exercises to be compared with predicted PPV results. The iterative process involved the vibration results being uploaded into æBlast LogÆ (an expert blasting database system developed by the Blasting and Environmental Research Group at the University of Leeds) and analysed to produce predictions ready for the next blast.

Jan 1, 2007

Before proceeding I wish to say that the excellent diagrams by which my paper is illustrated are the work of Mr. C. H. Barnes, Constructing Engineer of the Kalgurli Gold Mines Limited, and I am also much indebted to Mr. F. A. Moss, manager of the mine and for the privilege piIling information not previously made public.The limited time at my disposal has coolled to, curtail the scope of my paper to a few practices in ore treatment which are being worked on the Kalgurli Mine, but which I believe are of more than ordinary interest to thp~e Goncerned in modern treatment of gold ores. As an introduction to my subject it is, necessary that I should give a brief outline of the process by whiGh the gold is won from the complex sulpho-telluride ore of the Kalguili mine.My business is not to enter into any discussion as to the relative merits of the two rival sulpho-telluride ore treatment processes at work on the Kalgoorlie field, viz, the treatment of the unroasted ore after shining by solutions of bromocyanide, as against the treatment of the ore-after roasting by solutions of potassium or sodium cyanide either in filter presses or percolating sand vats. Even if reliable costs and percentages of extractions were obtainable in each case, it would not constitute an infallible basis of comparison, as the larger plants would necessarily have an advantage in cost per ton as against the small plants, and the other conditions obtaining are in many Cases dissimilar.

Jan 1, 1903

By Nye P. B, Fisher N. H

At the second Empire Mining and Metallurgical Congress held in 1927, the Empire Council of Mining and Metallurgical Institutions was formed and it was proposed that the Council take steps to prepare a "Review of the Mineral Resources and Industries of the Empire." At the third congress in 1930, it was resolved that the proposal to institute the review should be submitted to the Imperial Conference held in 1930. This was done, and the Minerals Committee, of the Imperial Economic Committee compiled, an interimreport which was based on statistics of imports and exports, and did not consider resources and consumption.In 1942 the Institution of Mining and Metallurgy, London, wrote to the Empire Council and stated that it was desirable that the Council should be in a position to take part in decisions affecting the future of the mining and metallurgical industries. The Council communicated with the constituent Institutions regarding the nominations of two members then in England. Subsequently the Mining, Geological and Metallurgical ,Institute of India prepared a review of the mineral resources and industries of India and their post-war development, and the Empire Council forwarded a copy to the Australasian Institute of Mining and Metallurgy and asked if that Institute would submit a review on simjIar lines for Australia. The Australasian Institute arranged that the Australian review should be prepared by...

Jan 1, 1946

Since I first enrolled to study Mining Engineering, the idea of working with big machinery and explosives has always appealed to me. After a few courses at uni, combined with vacation work and a number of presentations at the New LeadersÆ Conferences I had attended, I began to realise that the explosives side seemed to have more appeal than the others. As I look back on the past two and a half years that I have spent with Orica Australia Pty Ltd as part of their graduate program, I would have never imagined the dynamics of explosives in mining. This I put down to the ever changing and rapid development in technology converting blasting techniques into a defined predictable science. The opportunities I have been given have delivered all the appeals from when I first started my study. As a result of my entry into a profession that uses explosives to deliver broken rock in a range of mining and construction projects, through the use of advanced blasting technology and products, my experiences have been wide and varied. These experiences have included the use of OricaÆs i-konÖ detonator technology and blast design software to allow for blasting operations to occur in a range of environmentally sensitive quarrying and construction projects throughout New Zealand, to the implementation of various Orica blast based services aimed at improving dragline dig performance and reducing coal loss thus improve overall mine sustainability in the coal mines of Central Queensland, to the advanced utilisation of Orica explosive products and technology in a number of the worlds largest copper mines in Chile. I have witnessed first hand the blasting technology available within Orica Mining Services to both deliver fundamental changes in mining results and in turn kick off my career with a bang.

Jan 1, 2009

By P Gnnther, A M. van Niekerk

Coal mining operations in the Upper Olifants River Catchment in the Mpumalanga Province of South Africa are challenged with the increasing production of excess mine water that cannot be fully managed by existing practices of pollution control at source, recycling, and reuse on mining sites, storage and limited release to the natural water course. In contrast to this, the Olifants River Catchment is experiencing water stress and insufficient water is available to satisfy all water quantity and quality requirements for future industrial and municipal growth. It is estimated that the catchment has a deficit of 192 million m3 per annum if the reserve water requirements are taken into account. The future increased water requirements can be met by water transferred to the Olifants River Catchment from adjacent catchments. The cost of transferred water is likely to be substantially higher than the current cost of water supplied to local municipalities, commerce and industry. BHP Billiton and Anglo Coal Corporation are working together to jointly implement water management strategies that will contribute to the achievement of in-stream and dam water quality and aquatic objectives for the catchment. Consideration is now being given to the treatment and beneficial use of excess mine water. This will inaugurate a new era for the coal mining industry in South Africa, in which a pollution threat to the water resources in the Upper Olifants River Catchment is converted into a water source for beneficial use. Three potential mine water reclamation and reuse schemes have been identified and this paper details the technical, institutional, legal and financial considerations in the implementation of these schemes.

Jan 1, 2006

By T Goswami, M Edmondson

Henry Walker Eltin (HWE) are the mining contractors for Gloucester Coal at Stratford mine, which is in an environmentally sensitive area in the Avon Valley, NSW, Australia. Normal blasting at Stratford is done in a æstand upÆ or æbox cutÆ mode to suit the truck and shovel operations. Recently an opportunity of doing a throw blast became available when part of a ramp had to be blasted to accommodate changes to the pit design while not damaging the remainder of the ramp. The objective was to maximise throw into the void in order to minimise excavation costs by reducing the amount of overburden to be moved by the excavation fleet. It was necessary that the best result be achieved while staying within the vibration and airblast limits at a neighbouring property and nearby township. Both objectives were achieved through the application of OricaÆs knowledge of blast design, modelling and i-konTM electronic detonators. The i-kon system was used because of its known benefits in cast blasting and environmental control. The i-kon system provides the blaster with much greater accuracy, control and the flexibility to tailor blast designs. It has been found previously to enhance blast throw and provide cleaner high walls (Brent, 2002). The blast was a success, producing a muckpile with a high degree of looseness and consistent fragmentation, with an average throw to final spoil position of 37.5 per cent. This was achieved without any environmental exceedance. In addition, high speed filming showed that the coal edge had remained largely in place, indicating minimal coal loss. The results exceeded the expectations of HWE Stratford and the overall cost savings to HWE Stratford from this blast were recognised to be substantial. Further throw blasting opportunities at Stratford have been followed using the i-kon system to maximise benefits.

Jan 1, 2003

By A D. Paktunc

The surface reactivity of underwater deposited, high-sulfide copper mine tailings was evaluated under fresh and saline water cover conditions by measuring the surface and pore water quality as a function of time. The experiments were conducted in aquarium type lysimeters having a shallow, well-aerated water cover up to approximately 0.25 m over the tailings. Natural lake water was used for the fresh water cover and seawater for the saline water cover scenarios. The tailings showed significant surface reactivity and oxidation under both fresh and saline water cover conditions. The surface water quickly became moderately to highly acidic, and surface oxidation of the tailings resulted in increased dissolution and release of sulfates, iron (total), calcium, magnesium, aluminium, manganese, copper, nickel, zinc, lead, cobalt and silicon to the water covers. A moderate to slightly increased loss of total sulfides, including pyrite, chalcopyrite and sphalerite, occurred in the tailings surface layer to a very shallow depth. In comparison to the fresh water cover, the complete acidification of the saline water cover was delayed by approximately 30 - 40 days because of its additional available alkalinity. Whereas the rate of surface water acidification and release of aluminium and silicon were moderately reduced under saline water cover conditions in comparison to those for the fresh water cover, the release of calcium, magnesium, iron (total), copper, nickel, lead, zinc, sodium and potassium were enhanced. The mass transfer fluxes for dissolved copper, nickel lead, zinc and iron (total) from the tailings substrate to the surface water cover following surface water acidification were higher by 50 per cent or more in the saline water cover than those in the fresh water cover. This release was also reflected in moderate loss of pyrite, chalcopyrite and sphalerite in the very shallow upper surface layer of the tailings at the tailings-water interface, although the loss of pyrite in the surface layer was less pronounced. In both cases, the dissolution of aluminosilicate minerals moderated, to a certain extent, pH and acidity in the water cover.

Jan 1, 2003

By T J. Orr

The changing demographics of the mining industry make successful passing of knowledge and skills to the next generation critical. Training methods and technologies are being developed to meet this need. Twenty years ago classroom training was largely a one-way transfer of knowledge through instructor lectures. In contrast, instructors today can use virtual reality technologies to guide trainees as they fully participate in learning experiences. Trainees can interact with the virtual work environment, co-workers, and equipment without being exposed to workplace hazards. The speed of advancement in mine safety, health, and production training shows no sign of slowing in the next 20 years. Researchers at the National Institute for Occupational Safety and Health have studied and participated in the evolution of miner training. A look at training materials they have created in the past and those they are currently developing reveals changes in methods and technologies over time and also key characteristics which have remained constant. Possibilities for the future can be discussed in the framework of an implementation of virtual reality in new miner training sessions. The example computer-based training package teaches new miners to read mine maps and provides opportunity to practice navigation skills in a virtual mine. With this æserious gameÆ, trainees experience the look and feel of moving through an underground coal mine while in the safety of their classroom. During field-testing in 2007, trainees and instructors responded very favourably to this new way of learning. The software was usable by mine trainers with even limited computer expertise and could be installed on the affordable computers they were using for their more traditional slide presentations. The Underground Coal Mine Map Reading TrainingÆs foundation on past successful development strategies and its acceptance by todayÆs instructors and trainees provide valuable lessons for developing training materials, strategies, and technologies for miningÆs future.

Jan 1, 2008

By M J. Saynor, W D. Erskine an, D R. Moliere

The Jabiluka uranium mine was constructed in the Ngarradj catchment, a right bank tributary of Magela Creek in the Northern Territory. The Jabiluka Mineral Lease is adjacent to Kakadu National Park, near an area listed as Wetlands of International Importance under the Ramsar Convention and recognised under the World Heritage Convention. In the late dry season of 1998 and prior to the 1998 - 1999 wet season, a stream-monitoring program was implemented in the Ngarradj catchment to collect baseline data on sediment transport within the catchment to assess and proactively manage associated impacts caused by mining at Jabiluka. Stream suspended mud concentration, stream discharge and rainfall data were collected for four wet seasons (1998 - 2002) giving an almost continuous data set. The stream system has high natural variability dependent on rainfall intensity and subsequent discharge and pre-wet season fire distribution and intensity. In general, mud concentration is elevated at the commencement of the wet season until about February. This is caused by first-flush removal of surface material detached during the dry season by agents such as bioturbation (including anthropogenic activity), wind erosion and surface desiccation. Water quality trigger values downstream of the mine were derived using upstream percentiles and the before-after-control-impact, paired site design. Both analyses showed no observable impact from mine construction in 1998 or during the study period. However, the impacts of dry season fires could be clearly detected. The data set provides good baseline information for future assessment at Jabiluka and demonstrates the need to view measured parameter values on a catchment-wide basis with knowledge of rainfall, discharge and fire distribution.

Jan 1, 2004

As this district is so far distant from the other mining centres and its mode of approach so circuitous, I am afraid that many residents of other portions of the Commonwealth never think of paying this" Australia's Silver City" a visit, to learn personally the many and various lessons everywhere available, and to become familiar with the really wonderful and interesting features and deposits (which pature has so lavishly bestowed in the mineralogical world) yet seemed to almost ignore or overlook when disposing of topogr,aphical beauties of landscape and vegetation) unless professional or business duties require their presence here. So it is to those whose life is necessarily spent in other parts of the States where they answer their call of duty, and yet feel an interest, either for business or other reasons, that my paper is specially addressed and prepared, and for that reason I witl endeavour to make my remarks more of an explanatory than a dictatorial nature. I feel sure that there. are many members of our Institute who are much more familiar, and have had many more years' experience in the various methods of timbering, filling, and ore extraction, etc., than myself, but I hope that over I6 years' experience in connection with mines and engineering works, the last six of which have been spent in Broken Hill, where, I have been very closely connected.

Jan 1, 1903

Resource rent tax is a form of taxation or royalty, which only become effective at such a time as a pre-determined rate of return has been achieved by an operation. The offshore petroleum industry in Australia is already subject to RRT as is the Roxby Downs (Olympic Dam) Mine in South Australia. Both the mining and petroleum taxation regimes in Papua New Guinea include a resource rent tax component called Additional Profits Tax (APT). The implications of the current form of Additional Profits Tax for shareholder cash returns are that the tax burden on the operation may suddenly increase at some stage in the life of the mine, if and when the threshold level of profitability for the tax to be triggered is exceeded. From that point in time onwards the cash return to the shareholders on the capital invested is greatly diminished. For mining companies in Papua New Guinea, the effective tax rate increases from 35% to 57.75% as a result of the onset of Additional Profits Tax. This tax rate penalty is so severe that there appears to be merit in considering the concept of managing profitability through time rather than purely maximising annual pre-tax profits as is currently the case in most mining operations. This would have the benefit of deferring or perhaps preventing altogether the onset of the tax. One possible method for the effective management of profitability is through the control of average mining grade by cutoff grade manipulation. Traditional cutoff grade theory has usually considered taxation as a direct cost at a fixed or variable percentage of annual profits. As a result of this most analyses are conducted on a pre-tax basis. If tax is included in analyses it is usually present as a time independent function of gross profit. Additional Profits Tax is both time and rate of return dependent and therefore not adequately accommodated by currently accepted cutoff grade theory. A review has been made of the effects of resource rent taxes on both the investment decision-making process as well as possible development and mining strategies which may be employed by mining companies faced with Additional Profits Tax. The review includes examples based on the structure of Additional Profits Tax which is levied in Papua New Guinea.

Jan 1, 1997