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By J. E. Sepulveda, R. Morrow

"In full scale mineral grinding operations, the steel balls normally utilized as auxiliary grinding media get to be consumed at different specific rates, as determined by 3 basic mechanisms: abrasion/corrosion (wear), impact ball breakage and impact surface spalling, the latter relating to the removal of rather small pieces of steel coming off the exposed surface of the balls due to repetitive impact with other balls in the charge or the surrounding mill liners. In conventional ball milling applications, the clearly predominant mechanism is gradual wear by abrasion/corrosion. In the case of SAG mills, where the make-up balls may be as large as 6”f diameter, breakage and spalling mechanisms are significant contributors to total ball consumption, although not to the extent of overriding wear mechanisms.Ball wear has been well characterized by the Linear Wear Theory, as presented at the last CMP 2014. Impact breakage has been customarily monitored, at the ball manufacturing site, via Drop Ball Tests (DBT) consisting of repeatedly dropping balls from a standard height and accounting for the number of broken balls and the weight loss (spalling) of the remaining unbroken balls. When properly conducted, DBT’s should provide meaningful indications of the breakage and spalling resistance of large diameter balls. The current publication is focused on the interpretation and projection of DBT results to full industrial scale, taking into account all 3 mechanisms of grinding media consumption in SAG mills.INTRODUCTIONA thorough, quantitative understanding of the independent contribution of all active grinding media consumption mechanisms is of the highest practical relevance, particularly in semiautogenous (SAG) milling operations where ball breakage and spalling can not be ignored or neglected, as it has been normally acceptable for conventional ball milling processes. The high severity impact conditions currently imposed in typical SAG mill environments create serious challenges to the manufacturers and suppliers of large diameter (5”–6”) SAG balls, whose products must be capable of surviving such harsh operational conditions with minimum breakage or spalling."

Jan 1, 2015

By G. O. Rading, B. O. Odera, M. J. Papo, R. Couperthwaite

"Platinum-based alloys are being developed with microstructures similar to nickel-based superalloys for potential high-temperature applications in aggressive environments. Since the chemistries of nickel and platinum are similar, Pt-based alloys can be made with gamma prime ~Pt3Al precipitates in a gamma (Pt) matrix. Currently, the Pt-Al-Cr-Ru system is one of the bases for developing Pt-based alloys, where Al allows the formation of thePt3Al precipitate and also gives protection from the alumina scale formed, Cr provides oxidation resistance and stabilization for the L12~Pt3Al phase, and Ru provides solid solution strengthening in the (Pt) matrix. Four Pt-Al-Cr-Ru-V and two Pt-Al-Cr-Ru-V-Nb alloys were made, with compositions based on a quaternary alloy, ~Pt82:Al12:Cr4:Ru2, which hadpreviously been identified as having optimum properties. Four of the as-cast alloys had the targeted two-phase structure of ~Pt3Al and (Pt), and two were single-phase ~Pt3Al. Vanadium partitioned more to (Pt) than to~Pt3Al. There was an improvement in hardness compared to the quaternary alloys. The best addition of V was ~15 at.%; higher additions resulted in brittle intermetallic phases of the Pt-V system. The effect of Nbcould not be ascertained because of its high losses."

Jan 1, 2015

By Kiyotaka Ohno, Nobushige Yasuoka, Yosuke Hioki

"The diameter of improved columns adopted by the original DJM Method had been 1000 mm, however, in order to comply with the social need for construction cost reduction, the Expanded Dry Jet Mixing (EX-DJM) Method with maximum column diameter expanded to 1300 mm was developed between 1998 and 2001 and has been widely applied since then. From the first application of EX-DJM in January 2002 for a first construction project, the total volume of improved soil has reached 325,000 m3 in 17 projects up to September 2014. Because of the advantages of the EX-DJM such as reduction of construction costs and periods leading to reduction in the number of improved columns, adoption of this method is expected to increase in the future. This paper describes the advantages of the EX-DJM, its construction results and case examples including those applied to restoration projects after the Great East Japan Earthquake, 2011.1. BACKGROUND OF DEVELOPMENTThe Dry Jet Mixing (DJM) Method is a soil stabilization method in which a powdery or granular binder is pneumatically fed into and mixed with soft soil to induce chemical reactions that stabilize and strengthen the soil. It was developed by government - private collaboration in Japan between 1977 and 1979. Up to March 2014, the total volume of soil improved by DJM method reached 33,500,000 m3. The initial diameter of improved columns of the original DJM Method was 1000 mm. In order to comply with the social need for construction cost reduction, the Expanded Dry Jet Mixing (EX-DJM) Method with maximum column diameter 1300 mm was developed between 1998 and 2001.2. ADVANTAGES OF EX-DJMThe construction equipment for the EX-DJM consists of two major parts, which are DJM machine and binder plant are shown in Fig. 1.The construction machine is of double mixing-shaft type with its column diameter expanded to 1200mm or 1300mm. In association with the increase in the column diameter, the binder feeder has also increased its discharge rate by approximately 1.69 times. Same as the increase rate of the area of original diameter 1000mm to diameter 1300mm are shown in Fig. 4."

Jan 1, 2015

One of the seminal pioneering papers in reserve evaluation was published by Danie Krige in 1951. In that paper he introduced the concept of regression techniques in providing better estimates for stope grades and correcting for what later became known as the ‘conditional bias’. In South Africa, the development of this approach led to the phenomenon being dubbed the ‘regression effect’, and regression techniques ultimately formed the basis of simple kriging in Krige’s later papers. In the late 1950s and early 1960s, Georges Matheron (1965) formulated the general theory of ‘regionalized variables’ and included copious discussion on what he termed the ‘volume-variance’ effect. Matheron defined mathematically the reason for, and quantification of, the difference in variability between estimated values and the actual unknown values. In 1983, this author published a paper that combined these two philosophies so that the ‘regression effect’ could be quantified before actual mining block values were available. In 1996 and in some earlier presentations, Krige revisited the regression effect in terms of the conditional bias and suggested two measures that might enable a practitioner of geostatistics to assess the ‘efficiency’ of the kriging estimator in any particular case. In this article, we revisit the trail from ‘regression effect’ to ‘kriging efficiency’ in conceptual terms and endeavour to explain exactly what is measured by these parameters and how to use (or abuse) them in practical cases.

Jan 1, 2015

By Baisheng Nie, Longlong Yang, Tao Yang, Wenjie Jia

"Gas adsorption in coal is an exothermic and physical process. Temperature might change during the dynamical process. In order to get the temperature variation of gas adsorption process, the experiment system which can test the temperature variation and analyze the thermal effect was established. Gas adsorption experiments under different conditions were done by using the test system. The results show that temperature increases during the adsorption process. It is an exothermic reaction process. Also, the temperature variation and the variation gradient increase with the increasing of equilibrium pressure. The temperature variation value is smaller if the experiment temperature is higher. The paper will provide basic experimental data for explaining gas adsorption mechanism better.INTRODUCTIONChina is the largest coal producer in the world while it also has the most serious coal mine disasters. According to the statistics, there are nearly a thousand coal mines in China including more than 110 the key state-owned mines risking to happen coal and gas outburst. Hundreds of coal and gas outburst occur each year which often causes serious casualties and economic losses (State Administration of Work Safety, 2007). With the continuing exploitation of the coal resources, the depth of the Chinese coal mines increases about 100 meters every year which causes the situation of gas accident becoming more and more serious (Xie et al., 2006).At present, the real mechanism of gas adsorption, desorption and the diffusion process in coal and the influence factor of it are not so clear. And because of the limit of prediction method and the technological level caused gas accident prevention theory and technology not so valid."

Jan 1, 2015

By S. M. Rupprecht

"SynopsisThis paper is intended to document recent personal thoughts, opinions, and debate around the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (the SAMREC Code) (2009) and its current usage by Competent Persons. Admittedly, some debates are as old as the SAMREC Code itself and have been ‘parked’ as no consensus could be reached by members of the SAMREC Working Group.Some of the more critical issues currently under examination are the definition of Competent Person and the potential registration of Competent Persons, the current re-write of the Code, and the introduction of reporting of Exploration Results, Mineral Resources, and Mineral Reserves on an ‘If not – why not’ basis, noncompliance with the Code and discipline, the role of the Johannesburg Stock Exchange Readers Panel, and the valuation of mineral assets based on scoping studies.IntroductionThis paper is intended as a personal memoir of recent thoughts and debate around the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (the SAMREC Code) (2009) (‘the Code’). Admittedly, some debates, such as reporting of Mineral Reserves inclusive or exclusive of the Mineral Resource, are as old as the SAMREC Code itself and have been ‘parked’ as no consensus could be reached by members of the South African Mineral Resource Committee (SAMREC) Working Group. The author, who has been involved with the SAMREC Working Group since 2007, offers observations in his personal capacity as a professional mining engineer with the intent of getting practitioners to contemplate the influence of the Code on the mineral industry. Current practices in the compilation and reporting of Exploration Results, Mineral Resources, and Mineral Reserves are often deficient in adhering to the Code and a conscious effort must be made by the mining sector to improve the standard of public reporting, in particular Competent Person Reports (CPRs) and Public Reports issued by listed mineral exploration and mining companies."

Jan 1, 2015

"Gravity concentration remains the main separation method for fine iron ore and is used extensively for treating various minerals. Gravity concentration methods separate minerals of different specific gravity by their relative movement in response to gravity and one or more other forces, the latter often being the resistance to motion offered by a viscous fluid, such as water or air (Wills, 2006).Spirals concentrators are one of the gravity concentration equipment used for beneficiation of minerals. Spirals are typically used for processing of fine minerals (-1mm) size fraction. The main operating variables for a spiral concentrator are the feed rate, the solids concentration, the wash water addition and the position of the cutters or splitters used to separate the tailings, middling and concentrate streams (Sadeghi, Bazin & Renaud, 2014).The aim of this study is to investigate the effect of feed rate, solids concentration and wash water on grade and recovery on iron ore material. The Multotec SC20HC/7 WW spiral was used for the experimental test work. The spiral was tested at varying solids concentration and feed rate. The wash water rate was also varied to establish the best washing rate. The splitter positions were kept constant. Optimization of these variables is expected to provide optimum conditions for a good compromise between grade and recovery.INTRODUCTIONSpiral concentrators are simple low energy consuming devices that separate minerals mainly on the basis of density. Spirals are widely used in mineral processing as a method for preconcentration and have proven to be metallurgically efficient and cost effective.Spirals have a wide application, they are used in iron ore processing, coal, gold, chromites, mineral sands, glass sands, and in soil cleaning.Separation on a spiral is achieved through a combination of forces that act on particles as they move down the trough of the spiral. The main forces known to act on the particle on a spiral are the gravitational forces, centrifugal force, hydrodynamic drag, and lift and friction forces (Kapur & Meloy, 1998). Apart from the forces acting on a spiral, the properties of the slurry flowing on a spiral including, solids concentration, feed rate and wash water also plays an important role in the separation on the spiral.The relationship between separation efficiency and feed rate was shown to be linear, with a decrease in efficiency at higher flow rates. Previous work on flow profile by Holland - Batt (1990) indicated that any increase in the feed rate to a spiral results in a greater part of the additional flow volume reporting to the outside of the trough. The flow on the outside of the trough becomes energized and consequence to that the heavy particles find it hard to settle and escape this region to the inner region. This effect has a high impact on recovery of heavy minerals, since any increase in volumetric flow on the spiral is not made available for recovery in the inner region of the spiral."

Jan 1, 2015

By E. Pizarro, A. Videla, G. Compan

One of the main problems related to mining investment decisions is the use of accurate prediction models. Metallurgical recovery is a major source of variability, and in this regard, the Chuquicamata processing plant recovery was modelled as a function of geomining-metallurgical data and ore characteristics obtained from a historical database. In particular, the dataset gathered contains information related to feed grades, ore hardness, particle size, mineralogy, pH, and flotation reagents. A systemic approach was applied to fit a multivariate regression model representing the copper recovery in the plant. The systemic approach consists of an initial projection of the characteristic grinding product size (P80), based upon energy consumption at the particle size reduction step, followed by a flotation recovery model. The model allows for an improvement in the investment decision process by predicting performance and risk. The final geometallurgical model uses eight operational variables and is a significant improvement over conventional prediction models. A validation was performed using a recent data-set, and this showed a high correlation coefficient with a low mean absolute error, which reveals that the geometallurgical model is able to predict, with acceptable accuracy, the actual copper recovery in the plant.

Jan 1, 2015

By Michal Topolnicki

"Discussed is the use of wet Deep Soil Mixing, generally executed with single mixing tools 0.8 to 1.6m in diameter, employed in the foundation of viaduct supports. The applications involve economical patterns of ground improvement, covering in average about 40% of the foundation area or less, which contribute to the competitiveness of DSM solutions when compared to traditional piling. The focus is on selected aspects of the geotechnical design, applicable for geo-composite systems in which the interaction between the stabilised and the native soil should also be considered. Evaluation of settlement can be carried out with simplified methods, accounting for punching effects, or with more advanced FE models in case foundation tilt or differential settlements become important. Potential bending of DSM columns should be considered when evaluating column stresses, especially when dealing with deep deposits of soft soil and/or foundations loaded with overturning moments and/or high horizontal forces. Statistical evaluation of UCS data using lognormal distribution is recommended, and a new classification system for DSM application is proposed. Field investigations and monitoring data from completed projects are also presented.INTRODUCTIONThe first applications of wet Deep Soil Mixing in foundation of road viaducts constructed across and along the newly built A2-highway in Poland took place in 2002. Following detailed analyses, it was concluded that 39 viaducts, originally designed to rest upon large diameter piles in order to reduce excessive settlement of individual supports, could also be founded directly on the ground improved with DSM columns, fulfilling all relevant requirements of serviceability and ultimate limit states (SLS and ULS, respectively). It was also noticed that shorter construction times and lower costs of ground improvement with DSM contributed to substantial economical savings as compared to classical piling. Since then, more than 250 road and railway viaducts have been successfully founded on DSM treated ground in Poland, and wet soil mixing is now seen as a reliable and widely accepted technology for this purpose. These applications, together with a parallel use of wet DSM for foundation of buildings, industrial halls and wind turbines, have drawn international attention to the state of practice of wet DSM in Poland for foundation of engineering objects. What follows is an attempt to summarise experience gained during planning and execution of DSM works for foundation of the majority of road and railway viaducts constructed in the last 13 years, with emphasis on selected design aspects and evaluation of collected data and observed performance.The design process of DSM treatment is iterative, as described e.g. in Annex B of EN 14679, and typically involves two main steps, i.e., the selection of the design strength of cemented soil, called soil-mix design, and the adoption of suitable column pattern, referred to as geotechnical design. Soil-mix design was initially based on purposely arranged simple laboratory tests, involving mixing of soil specimen with different cement types and dosages and subsequent strength testing. However, with a growing number of completed projects the accumulated field strength data of different stabilised soils have been more and more frequently used, reducing the need for preceding laboratory testing of soil-mix to special projects only. Information on cement factors utilised in Poland and the range of recommended compressive strengths for different stabilised soils, as well as on mixing tools and characteristics of the wet method applied, can be found in Topolnicki (2008). Consequently, soil-mix design is not further discussed herein. Selected aspects of the geotechnical design are the main focus."

Jan 1, 2015

By Gennaro Di Lauro, Laura Meraviglia, Demostenes Efstratiadis, Danilo Coppe

This paper presentation regards the European Union’s project “I.C.E.A. - Identification Colors of Explosives and Blasting Accessories (Agreement number – HOME/2010/ISEC/AG/071 – 30 – CE – 0447240/00-11), submitted under the call for proposal “ISEC 2010 ACTION GRANT” of the “Prevention and Fight against Crime” Program of European Commission. The main objective of the project is to simplify counter-terrorism security measures and the procedures for visual identification of blasting devices.

Jan 1, 2015

By B. J. Kloppers, J. V. Z. Visser, C. J. Horn

"The long-term plan (LTP) in a mineral resource company is defined by the quality of the mineral resource and represents the result of a series of trade-offs to fulfil internal organizational as well as external business and legislative requirements, ensuring ultimate delivery on the defined organizational strategy.The LTP should as a whole align to a coherent and well-defined organizational strategy, working towards a clearly defined objective while still allowing a tactical response to short-term requirements of the organization. The ability to respond tactically to changes in environment, like the unprecedented five-month strike in 2014 on the platinum belt following the 2012 Marikana incident, is a measure of the flexibility of the plan given the agreed strategy.This paper describes the Lonmin process of linking company strategy with long-term planning, tactical planning, and the execution of the plan through an annual planning cycle to maximize organizational flexibility. This flexibility enables mining companies to respond to the many internal and external forces that impact on both strategy formulation and delivery of results that meet shareholder expectations."

Jan 1, 2015

By M. Michael, A. Felber

"Mining activities, especially underground mining operations, create great demands on utilized haulage means which cover a variety of different horizontal and vertical distances. In the course of the continuous optimization of the haulage process, the application of textile machine elements, in particular synthetic fiber ropes, offers new opportunities. Therefore the current level of knowledge needs to be improved based on extensive analyses. For the estimation of the scope of these analyses, different fields of application and occurring environmental influences which have an impact on synthetic fiber ropes during their use in underground mining have to be evaluated. The Chair Underground Mining Methods of the TU Bergakademie Freiberg works on a scientific project concerning the use of synthetic fiber ropes in underground mining operations. This paper focuses on the potential application of synthetic fiber ropes in haulage systems in underground mining and exposes critical influences as an outcome of the working environment. These first investigations are the basis for the development of an appropriate experimental series. SYNTHETIC FIBER ROPES FOR UNDERGROUND MINING OPERATIONS The main idea is to optimize underground haulage means to develop even more economic systems. The new and lightweight design of single machine elements seems to be the first step to accomplish this goal. An example is the lightweight design of shaft hoisting ropes. The commonly used steel wire ropes are very heavy and are endangered to snap due to their own weight when reaching a distinguishing length. Thus they may not or only conditionally be used for deep mining operations utilizing shaft haulage. Ropes made of high-tech synthetic fibers weigh only an eighth of steel wire ropes while displaying the same tensile strength. This relation is shown in Figure 1, based on the comparison of fiber strength and density. This could offer new opportunities for deep mining operations, which are anticipated by many mining companies. /1/"

Jan 1, 2015

By S. R. Dindarloo

Although blasting is one of the most widely used methods for rock fragmentation, it has a major disadvantage in that it causes adjacent ground vibrations. Excessive ground vibrations can cause a wide range of problems, from nearby residents complaining to ecological damage. Prediction of blast-induced ground vibration is essential for evaluating and controlling the many adverse consequences of surface blasting. Since there are several effective variables with highly nonlinear interactions, no comprehensive model of blast-induced vibrations is available. In this study, the support vector machine (SMV) algorithm was employed for prediction of the peak particle velocity (PPV) induced by blasting at a surface mine. Twelve input variables in three categories of rock mass, blast pattern, and explosives were used for prediction of the PPV at different distances from the blast face. The results of 100 experiments were used for model-building, and 20 for testing. A high coefficient of determination with low mean absolute percentage error (MAPE) was achieved, which demonstrates the suitability of the algorithm in this case. The very high accuracy of prediction and fast computation are the two major advantages of the method. Although the case study was for a large surface mining operation, the methodology is applicable to all other surface blasting projects that involve a similar procedure.

Jan 1, 2015

By Zach Ellis, Dusty Fisher

Lightning is a major concern in the explosives industry. The enormous amount of energy delivered to the Earth from a single bolt of lightning is more than capable of detonating explosives. Although explosives incidents caused by lightning strikes are rare, lightning is of great concern to blasting professionals who spend many hours working on or near loaded blast patterns.

Jan 1, 2015

By Matthew K. Coy, Paul N. Worsey

The work described in this paper comprised the master’s thesis work of the primary author and was conducted at the Missouri S&T experimental mine. The objective was to determine if rubber tractor treads could be used as an alternative material for blasting mats. These treads are made from steel cable and vulcanized rubber and are very tough. However, once they reach the end of their life on mobile equipment, they are destined for a landfill, or dump site, because they are too tough to recycle. A potential alternative use for them is as blasting mats. Several discarded treads were obtained from Kolb Grading in St. Louis.

Jan 1, 2015

By D. Fenn, A. du Kanda, D. Dukhan

"SynopsisGibb Consulting Services was contracted by Eskom Line Engineering Services to conduct an investigation to determine the absolute displacement to date and infer the current rate of displacement of unsurveyed colliery backfill.At the test site, where a 400 kV power line is to be constructed, neither the surface nor the backfill material had been monitored and it was not possible to state whether the surface will be subject to future settlement that may compromise surface infrastructure. Therefore indirect methods of estimating current and future displacements needed to be found to act as a proxy for a comprehensive long-term settlement monitoring exercise and provide a reasonable estimate for the settlement that has occurred in the decades of mining.The innovative solution was to recover essentially undisturbed core from backfill using a sonic drill rig and use the measured dry density values from the samples as a proxy for the rate and absolute displacement in the backfill.The success in obtaining an essentially undisturbed backfill core and the clear relationship of the backfill density with age and depth allowed the conclusion to be issued that the power line infrastructure can be constructed over the backfill; with a warning that once the water table recovers after mining ceases some collapse settlement may occur.With this method, the amount of settlement can be predicted and, if proven conclusively, provides a way to confidently release huge areas of currently waste ground for future surface infrastructural development.IntroductionIn coal mining, it is normal mining practice to backfill the newly mined-out voids with the excavated waste rock and soils. As there is no requirement for the mining companies to uniformly compact the spoil or accurately monitor surface or inter-backfill displacement, these backfilled voids are prone to differential compaction and consolidation settlement. They are therefore avoided as sites for future surface infrastructure work, especially for linear structures such as roads, railways, and power lines."

Jan 1, 2015

By Q. Cheng

This paper introduces the multi fractal interpolation method (MIM)developed for handling singularities in data analysis and for data interpolation. The MIM is a new moving average model for spatial mapping and interpolation. The model decomposes the raw data into two components: singular and nonsingular components. The former can be characterized by a localized singularity index that quantifies the scaling invariance property of measures from a multifractal point of view. The latter is a smooth component that can be estimated using ordinary kriging or other moving average models. The local singularity index characterizes the concave/convex properties of the neighbourhood values. The paper utilizes a binomial multiplicative cascade model todemonstrate the generation of one- and two-dimensional data with multi-scale singularities which can be modelled by asymmetrical multifractal distribution. It then introduces a generalized moving average mathematical model for analysing and interpolating data with singularities. Finally, it is demonstrated by a one-dimensional case study of de Wijs’ data from a profile in a zinc mine, that incorporation of spatial association and singularity can improve the interpolation result, especially for observed values with significant singularities.

Jan 1, 2015

"As part of a series describing the nickel operations of Vale Canada (formerly known as Inco), this paper focuses on the 1973 to current operations of the Copper Cliff nickel refinery in Ontario, Canada. The process used there employs the formation of Ni tetracarbonyl at high CO (gas) pressure and its subsequent decomposition at somewhat elevated temperatures to produce highly pure Ni pellets and powders. Personal sampling of workplace aerosol dusts is reported, with information on specific Ni compounds in the aerosols.RÉSUMÉ Dans le cadre de la série d’articles décrivant les opérations de nickel chez Vale Canada (anciennement Inco), le présent article cible les opérations de 1973 à ce jour à l’affinerie de nickel de Copper Cliff en Ontario, Canada. Le procédé utilisé à cette usine est la formation de tétracarbonylnickel sous une pression élevée de CO (gaz) et sa décomposition subséquente à des températures plutôt élevées pour produire des granules et des poudres de Ni pur. Un échantillonnage par l’auteur des poussières en aérosol est présenté ainsi que de l’information sur les composés spécifiques de Ni dans les aérosols."

Jan 1, 2015

By M. du Plessis, D. F. Malan

"The aim of any mine design is to ensure that the excavations remain stable for the period they will be in use. Various pillar systems are used to ensure that underground stopes remain stable and that mining activities do not affect the surface infrastructure through either surface subsidence or seismicity. Intermediate-depth platinum mines make use of in-stope pillars designed to fail while the pillars are being cut at the mining face. The pillar stress exceeds the loading capacity and the pillars crush as a result. The aim of the paper is to provide an overview of in-stope crush pillars. This will include the application, behaviour, function, mechanism, impact, and design of a crush pillar system."

Jan 1, 2015

By C. Hutton

"SynopsisThe last commodities supercycle (2003 to 2011) was characterized by a belief in volume at any cost, where absolute output was deliberately prioritized over productivity considerations. This practice fuelled overoptimistic forecasting and planning, which in turn contributed to the economic crisis that followed. The sudden collapse of commodity prices has resulted in mining companies scrambling to find the right balance between optimizing current operations and preserving sufficient flexibility to grasp future opportunities. The runaway costs of building and operating mines have almost squeezed out profit margins, while lower ore grades are inflating production costs. Mining companies therefore need to look at the business with fresh eyes, and develop strategies to attract equity capital as traditional approaches are simply not working anymore. This is especially so in the context of a dwindling investor base that continues to demand greater returns, despite a significantly lower appetite for risk. This paper revisits the micro-economic concepts and demonstrates how pressure from shareholders to prioritize output contributed to spiralling costs and value destruction. Practical techniques are described to model cost curves to optimize a Mineral Resource endowment and address the need to rightbalance a business and preserve agility.IntroductionHenry Lazenby (2014) for the Mining Weekly writes, ‘Bruised and battered, the global mining industry today is undergoing a sea change. Practices and policies that might have worked wonders in the past are not as relevant today, and new approaches to running profitable mining operations need to be found.’ One significant practice the mining industry had during the last commodities supercycle (2003 to 2011) was chasing volume at any cost; absolute output was deliberately prioritized over productivity considerations (Goldsmith, 2013). Lazenby contends that in the face of falling and volatile commodity prices, many mining majors ‘across all commodity groups are currently grappling with sagging profits and low company valuations. This is often regarded as the result of the were in pursuit of growing their output at all costs in a high commodity price environment.’ Lee Hodgkinson, KPMG’s Canadian mining industry leader and quoted by Lazenby, says that ‘mining companies are now trying to find the right balance between optimizing current operations and preserving their agility to grasp future opportunities. The runaway costs of building and operating mines have almost squeezed out profit margins [whilst] lower grades of ore are inflating production costs. Mining companies need to look at the business with fresh eyes, and develop strategies to attract equity capital as it seems clear that some of the traditional approaches to the mining business are simply not working anymore."

Jan 1, 2015