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By Greg Johnson

Maintenance needs information about assets to optimize availability and production needs information about performance and consumption to maximize output. In considering both these needs together as, ?Asset Optimization?, the information systems that support them are critical. The theory of Asset Optimization derives from the Lean Manufacturing concepts developed by Toyota, but some changes are required to apply this to mining operations. In particular, mining operations require automated systems due to their geographic spread and they need a strong emphasis on capturing under-performance losses as well as delays and stoppages in production. Leading metal miners and coal miners alike have applied these systems to good effect in the last 10 years. The concepts developed initially in minerals processing plants are now being applied to the mines themsleves as well as the mining logistics chain. Production increases of 5?10% are achievable with the right implementation and consideration of the some key lessons learnt in the last 10 years. Putting these lessons into action is one key step in the goal of optimizing asset performance and thus utilizing the resource at lowest cost.

Aug 1, 2013

By J. C. Thornley, H. L. J. Drummond

"Fifty years of wear on the original carbon steel shaft of this hydro turbine necessitated repair operations in 1980. Both austenitic and martensitic stainless steels have been used individually as journal materials in separate trials on an80-inch long and 22-inch diameter radial bearing but neither one nor the other has been successful.The wear and cracking problems of the stainless steels leading to the present abandonment of both classes of stainless steel are described. In particular the dependence of the toughness of type 410 stainless steel on its tempering temperature and the susceptibility of that steel to quench cracking are highlighted because problems have been caused by both of these metallurgical factors.IntroductionAs part of a desire to improve the efficiency of a fifty-year old hydro-electric generating station on the Saint John River, the decision was made to change the journal and bearing material for the shaft bearings, which are stave-type bearings. For the initial fifty years of operation the bearings had been wooden (lignum vitae) and had run on the carbon steel shaft directly. For one of the four unit s at this station the performance of this combination has been truly excellent, and the remaining three sets of bearings had performed well. However there had been shaft wear on the units and the wear had made the shafts somewhat elliptical when a decision was made to install some sort of new journal on to three of the old shafts. [In addition to the wear on the carbon steel journals it was found that one shaft was significantly softer in the bearing area than it was immediately above the bearings (180 Vickers in comparison with 230 to 250 Vickers)] ."

Jan 1, 1985

By Melanie Grob

Two commonly estimated fractal dimensions, called b and D values, represent statistical characteristics in the distribution of magnitude sizes (b) and spatial hypocenter locations (D) of microseismic events, respectively. We postulate that the values of b and D are related to specific stress regimes. Through different case studies of fluid injection into an oil/gas reservoir or geothermal field, we infer that the measured temporal variation in fractal dimension b is most likely due to significant changes in the local stress regime. The fracture dimension D indicates the spatial clustering of events. The distribution of these events can vary with time because of stress perturbations that (re)activate fractures whose direction favours their movement under a specific stress regime. Thus a combined statistical study of these two dimensions can help infer the variations of local stresses in a reservoir.

Jun 1, 2012

By Donald C. Craighead

"Overland conveyor systems to transport bulk materials from mines to processing plants or load-out stations have to be seriously considered as the viable alternative to truck and train haulage systems. With the ever-increasing price of diesel fuel, conveyors with their electrical drives generally prove to be the least costly when operating and maintenance expenses are analyzed for the life of the installation.IntroductionOverland conveyor systems are now considered as one of the viable alternatives which should be closely investigated when a mining company and its engineers initiate studies on methods of transporting raw materials from a mine to a processing plant or rail load-out station.This paper will generalize the overland conveyor and compare it with alternative handling systems. Each installation must be carefully studied to determine the best route, type of foundations river crossings; amount of excavation work for cut and fill, maintenance roads, etc. No two locations are the same nor are the principles of operation of an overland conveyor the same as those of a normal plant or mine belt conveyor. The proper time and effort must be put into the study of the system to evaluate the costs for comparison with other systems.The length of the overland conveyor depends on the layout of the mine and plant and the topography of the terrain between the terminals. Individual lengths may be up to 20 km, and a series of conveyors may extend 100 km or more.Advantages of Overland ConveyorsThe main advantage of overland conveyors is the low operating and maintenance costs which will be realized over its years of operation. Although truck haulage probably will permit lower capital investment during the initial phases of the mine development when the annual capacities have not developed to the design level, their operating and maintenance costs will be considerably higher. When evaluating the total costs per ton of material to be handled during the expected life of the operation and the projected increases for diesel fuel versus electricity, overland conveyor systems will generally prove to be economically more viable."

Jan 1, 1982

By Bert Taylor

"The Mining concessions of Quemont Mining Corporation, Limited, are located at 48°16'N latitude, 79°00'W longitude, in Rouyn township, northwestern Quebec. Six hundred and forty acres in area, they lie directly north of, and contiguous to, the Horne mine of Noranda Mines Limited. The north arm of Osisko Lake covers a large area of the southern part of the property. The orebodies lie below the Jake with one body extending through to the bedrock surface.The property was staked in 1922, and was originally known as the Murray Claims. The group attracted interest from numerous exploration companies because of the proximity of the Noranda orebodies.The United Verde Extension Company, of Arizona, optioned the claims in 1926. They sank a shaft to a depth of 235 feet, at a short distance from the Noranda boundary. From a level established at a depth of 215 feet they completed 3000 feet of exploratory driving from which 6000 feet of diamond drilling was done. Only a small body of siliceous gold ore was found before they dropped their ·option.In 1928, The Mining Corporation of Canada purchased a 90 per cent interest in the property. An operating company, later named Quemont Mining Corporation, was formed. An electrical survey was carried out on a portion of the property, followed by deepening of the shaft to 922 feet. Levels were established at 500 and 900 feet, and 4,800 feet of driving and more than 3000 feet of diamond drilling were carried out from them.Geological knowledge at that time recognized that a major break, the Horne Creek fault, lay not far inside the south boundary. Striking north 80 degrees east, the fault dipped south at 85 degrees. The rock on the north side of the fault was massive rhyolite; to the south, meta-diabase and a little rhyolite. A left-handed movement was indicated by a 600-foot offset on a north striking diabase dyke. The small body of siliceous gold ore, referred to previously, was confined to the 215 level."

Jan 1, 1949

By Y. X. Li, L. R. Xiao, S. Gong, S. S. He

Porous copper and porous copper based alloys with controllable pore structure have been manufactured successfully by sintering evaporation process. This process consisted of mixing copper or copper based alloys with NaCl powders, hot pressing and final high-temperature sintering to evaporate the filler material of NaCl powders. NaCl was eliminated completely during vacuum sintering, and strong metallurgical bonding in the walls was achieved. The pores’ structural parameter (pore size, shape, and direction) and porosity can be controlled effectively. These porous copper and porous copper based alloys with controllable pore structure have great potential in many fields. Including heat dissipating materials, heat absorbing materials, chemical catalyst carriers, electromagnetic shielding materials, filtering materials, damping materials, silencing materials, battery electrode materials. INTRODUCTION The development of porous materials began in the 1960s. The research of activated carbon with high specific surface area made porous materials enter the stage of material research (Belyakov et al., 2008; Ferey et al., 2008). With the rapid development of science and technology, porous materials play an important role in material research, and gradually become an indispensable part of the material research field (Wu et al., 2012). The research of porous materials has gradually extended to metal, ceramics, plastics and glass and other fields. It has been successfully applied in many fields, such as functional materials, industrial production, aviation, medical materials, biochemistry and electronics, which fully shows that porous materials have considerable development prospects. Porous silicon, plastic porous materials and glass porous materials are the most widely used in the field of non-metallic porous materials (Capelle et al., 2012). Compared with non-metallic porous materials, metal porous materials have developed rapidly in the late 1980s and become new materials with good mechanical properties and excellent physical properties. Porous metal materials have many advantages, such as large specific surface, small specific gravity, good silencing effect, high stiffness, high electromagnetic shielding performance, good shock absorption performance, etc (Li et al., 1999; Ferey et al., 2008). Among its many applications, metal porous materials can be used as both functional materials and structural materials. In some cases, metal porous materials have dual functions and structures. It is a multi-purpose engineering material with excellent performance. At present, porous copper, porous aluminium and porous nickel are the most concerned materials (Chen et al., 2002; Yang et al., 2017; Liu et al., 2018). The preparation methods of porous copper and copper-based alloys mainly include self-propagating high temperature synthesis (SHS), capsule-free hot isostatic pressing (CF-HIP), spark plasma sintering (SPS) (Kvanin et al., 2008; Takahashi et al., 2008; Zhang et al., 2014). However, these methods can not accurately control pore structure parameters (including pore size, shape, orientation, distribution, etc.). In porous materials, pore structure plays an important role in the overall performance of materials. In order to control pore structure parameters accurately and optimize material performance, it is necessary to explore and develop new preparation technology. In this paper, the sintering evaporation process (SEP) was introduced for the preparation of porous copper and copper-based alloys. The core process of the preparation method is hot pressing and evaporative desalination. Hot pressing can make the pore orientation consistent. Evaporative desalination can ensure the complete removal of NaCl in the form of vapor in a short time, thus eliminating the corrosion of residual NaCl on the matrix metal (Gong et al., 2011).

Jan 1, 2019

By Y. M. Shneerson, E. E. Zhmarin, E. M. Vigdorchik

One of the Gipronickel Institute activities is research and development of customized leaching technologies. The work is performed in several steps. Leaching kinetics are studied on a lab-scale according to a special procedure. Experimental data are processed using mathematical models of batch and continuous processes. Reliability of kinetic data and preliminary calculations is verified experimentally in laboratory reactors of various capacities. If necessary, certain parameters of the mathematical model are adjusted after pilot plant tests in continuous mode ( 4-reactor train, each with 25 L capacity). The specified kinetic characteristics along with the mathematical model are used for further development of industrial leaching technology.

Jan 1, 2005

By A. J. Neale, B. C. Flintoff

"A review of the dynamic rod mill-ball mill grinding circuit simulator developed at the University of Alberta, highlighting the modular structure and open-ended design, demonstrates the ease with which classical feedback control strategies can be designed and implemented. Various open loop simulations are presented to demonstrate the highly interactive nature of the grinding circuit and to indicate where potential control problems may be encountered. Closed loop simulations are examined, beginning with the basic SISO classical feedback control of circuit product size. Further improvement in the grinding circuit performance in the presence of various disturbances is realized through the application of a classical MIMO feedback controller. As an example of advanced (multivariable) control, static decoupling is implemented and shown to provide additional improvement in overall circuit performance.INTRODUCTIONIt has long been recognized in the processing industries that a dynamic process simulator is an indispensable tool in the design and evaluation of automatic control schemes. In mineral processing the lack of these simulators is felt to have been a major hindrance to the widespread implementation of effective process control systems. In particular dynamic simulation is a necessary precursor to any study of modern (as opposed to classical) process control methods. This paper discusses the development of a dynamic simulator that can be used to study various feedback control strategies. The simulation software provides a powerful educational tool for those individuals interested in grinding circuit control."

Jan 1, 1988

By Mihaita Matei

An adaptive approach to control the deformation in tube hydroforming process is presented. This requires: the use of an existing non-linear FE software (ABAQUS) that incorporates a user material model (VUMAT), the development and implementation of an adaptive control strategy to coordinate the internal pressure and the axial load so as to prevent fracture and wrinkling failures (knowledge-base controller) and the application of the developed adaptive simulation approach for finding the optimal loading path required to hydroform a defect-free part with as uniform thickness distribution as possible (user's load subroutine (VDLOAD). In order to validate the approach, the case of conical hydroforming and the case of bending followed by hydroforming component is discussed.

Jan 1, 2011

By Luis Bergh, Juan Olivares, Juan Durán, Juan Yianatos

"In the last decades heuristic approaches based on logic rules have been one favored tool to control flotation units and plants on top of distributed control systems. Fundamental knowledge on flotation processes, expressed in reliable models, and programs to assure the quality of the information, contained in available measurements, are still insufficient to develop robust predictive control strategies. In this paper the idea of using simplified models, when a known disturbance is coming into the process, is explored. As a first approach, the set points of the froth depth and air flow rate controllers are estimated based on this model. Since these target predictions are only approximate, a conventional feedback expert system, based on logic rules, continues the task of calculating the set points of the distributed controllers, in order to decrease the gap between actual and desirable metallurgical targets. This combined actions permitted a fast response of the process to change the operation of the circuit when a measured disturbance is detected. This control system was implemented and experimentally evaluated in a pilot rougher flotation circuit, with three pneumatic cells, with froth depth and air flow rate controllers in each cell. Since the circuit is operated for the air-water system, a phenomenological model, with parameters estimated from industrial data, is fed on-line with real operating variables and virtual values, characterizing the feed (grades, solids%, particle size distribution), in order to predict the metallurgical targets (recovery and concentrate grade). Several cases are discussed showing the benefits of this control system and the possible improvements to work on. INTRODUCTIONToday, large size mechanical flotation cells of 100 to 300 m3 are used in rougher operation in different flotation industrial plants, in Chile and worldwide. However, in spite of the advances in fundamental research and the notable growing in equipment size, with more complete instrumentation systems, there are still a lack of reliable data for industrial flotation modeling and simulation to advance in better control systems design."

Jan 1, 2016

By L. H. Thorleifson

Demand for both gem and industrial diamonds is very strong. Synthetic production supplies industrial uses, but synthetic gems remain inferior and expensive, so the large gem market is supplied by mining. Several major mines have been depleted, and the market is receptive to new sources of high quality gems. Canada's Precambrian terrane, extending across the Canadian Shield and under the Phanerozoic cover of the Plains and Hudson Bay, has excellent potential for diamonds, but exploration conditions are difficult due to recent glaciation. Early world exploration relying on recognition of diamond in alluvial sediments was adequate to launch pre-1900 production from India, Brazil, and Africa. Exploration success in Canada, as was the case in Russia and other more recently discovered sources, however, had to await large investments in effort supported by advanced science and technology. Canadian exploration in many ways is similar to that in other regions, relying on analysis of tectonics, indicator minerals, geophysical surveys, and multiple stages of drilling and sampling. Very different from other regions, however, is Canada's surficial environment, in which recent glaciation has caused fresh indicator minerals to be transported hundreds of km. Exploration accelerated in Canada after 1960, first in Ontario and the Arctic Islands, then in Saskatchewan in 1988, and most importantly after the Chuck Fipke - Stew Blusson discovery at Lac de Gras, Northwest Territories, in 1991 that led to the billion-dollar BHP - Dia Met Ekati Mine that opened in 1998. In 2003, production from Ekati is expected to be supplemented by that from the similar and nearby Diavik Mine of Rio Tinto and Aber, currently under construction. These mines will bring Canadian output to over 10% of world supply, and will position Canada with Botswana and Russia as world leaders in production of high quality gem diamonds. There could be other mines as well, as sites across the Arctic and in the south from Alberta to Québec are being explored by an array of companies, including De Beers, other majors, and several juniors.

May 1, 2001

By H. Houali

Corrosion is an electrochemical process that causes degradation and deterioration of various steel works (pipelines, drains, cisterns) whether they are buried, immersed, or not. Worldwide, we estimate that corrosion destroys a quarter of the annual production of steel at a rate of 5 tons per second. Several techniques are used to protect against corrosion. Among these processes, Cathodic protection, which is regarded as the best technique to assure the protection of steel, works against this phenomenon. This is achieved either by a system of reactive anodes, or by the technique of impressed current protection or other techniques. Before any installation of cathodic protection, a preliminary study and pre-evaluation of certain parameters must be made. In the present work, we will present an example of dimensioning of an installation of cathodic protection by imposed current of a pipeline using solar energy, where we discuss the following items: ? Evolutions of the potential as well as current along the pipeline and their respective expressions deduced from the laws known as telegraphists; ? Range of protection (potential of protection along the pipeline); ? Influence of the isolation resistance of the coating on the range of protection; Effect of the aging of the coating and its influence on the current of protection

Jan 1, 2005

By C. -K. Fang, T. H. Chuang

"Temperature effects on the erosion of the 6063 aluminum alloy were investigated. Erosion experiments were performed by sandblasting silicon carbide particles of 80 grit size. The target volume loss, and worn depths of the eroded material were investigated at different temperatures. It was found that the temperature had only a minor impact on the peak attack angle. The effect of temperature on erosion damage depended on the relative humidity (RH) of the environment. IntroductionThe synergy of wind and sand or dust may result in the erosion of materials. However, the severity of erosion damage in different areas and in different seasons might be varied, depending on environmental variables such as temperature and humidity. As a result, determining the effect of environmental variables on erosion damage is important in selecting or ranking materials for their suitable applications in diverse areas.The relationship between erosion wastage and temperature is governed by many factors including temperature dependent properties of the material (strength, ductility, toughness, and dynamic hardness, etc.), mechanical erosion characteristics, the rate of oxidation, and the mechanical properties of oxides. Although the effect of temperature on erosion has been studied for engineering materials (Smeltzer et al., 1970; Gat and Tabakoff, 1978; 1980; Levy et al., 1986; Levy and Man, 1986; Chinnadurai and Bahadur, 1995; Howard and Ball, 1997; Colclough and Yeomans, 1997; Suckling and Allen, 1997), published literature dealing with aluminum alloy is rather limited."

Jan 1, 2000

By L. Becze, B. Pierre, S. Di Carlo, G. P. Demopoulos

From January to June 2007, the autoclave production at the Kidd Metallurgical Site was severely affected as a result of plugged discharge lines and extensive precipitation/crystallization of sulphates that caused massive scaling in different autoclave compartments. Work was performed at McGill University to understand the root causes. The crystallization of zinc and ferrous sulphate salts was investigated in terms of solubility measurements. Scale samples were characterized using chemical and mineralogical-spectroscopic analysis. In this paper, following a description of the Kidd zinc pressure leach operation, highlights from this investigation are presented and solutions used to overcome the problem are outlined.

Jan 1, 2008

By D. B. Langford, R. Hart

"This paper presents an overview of the state-of-the-art in industrial and utility power metering and control systems with particular emphasis on Digital Power Meters and Power Demand Controllers.IntroductionModern micro-processor technology, combined with very fast, high accuracy analog to digital converters, is rapidly allowing economical, digital power instrumentation systems to replace the traditional electro-mechanical meters and equipment previously used for instrumentation, control and protection in industrial power systems. Consequently, instrumentation and Supervisory, Control and Data Acquisition (SCADA) systems that were only practical for the very large utility or user are now available to smaller utilities and users. The information available includes sequence of event recording, trend logging, energy management cost allocation and automated load control, among others. The heart of any power monitoring system is the Digital Instrumentation Package (DIP) . These ""DIP's"" include Digital Power Meters (DPM's) and Power Demand Controllers (PDC's) as well as other specialized instrumentation packages such as Mini RTU's."

Jan 1, 1991

By W. Almdal

"To compete in the ever expanding global market, companies must continuously improve. Benchmarking, a tool that can help determine where the best areas for improvement are, is more than comparing measures, it is comparing how business is carried out and how decisions are made. The key to success is in integrating benchmarking results into the organization, so that those most affected by the results own them and are empowered to use them as a positive change agent. This is a necessary step to achieving substantive change to practices and achieving optimum performance improvement. IntroductionBenchmarking is a powerful tool that can assist in the continuous goal of improvement. Benchmarking is more than comparing productivity rates or unit costs, it is seeking out best practices and assimilating them into a business to provide a positive change agent.Benchmarking is a continuous process - is time consuming, labour intensive, and requires a lot of discipline. There are no easy answers and no easy solutions, just a lot of work. The results, however, are nothing short of spectacular. More and more companies are adopting benchmarking practices because it is a key tool of the learning organization and will become part of the way business is done, part of the way it is managed. Business must change to stay ahead or to get ahead and benchmarking can accelerate the process of business change. Improvements in an organization can happen faster and more effectively with a benchmarking approach."

Jan 1, 1994

"HPGRs operate in a wide array of applications in mining and minerals. These range from relatively coarse crushing of copper and gold ores at one end of the spectrum to the processing of fine iron ore pellet feed and fine industrial mineral products at the other. Traditionally these circuits involve the treatment of relatively moist materials in pre-grinding circuits; using single stage HPGRs in open circuit or as a closed circuit operation with screening or partial product recycle. More recently, HPGR is increasingly deployed in dry grinding in combination with air classification. The high throughput demonstrated by larger HPGRs has stretched the application towards coarser size reduction duties for a number of new projects. At the same time, the basic principle of inter-particle crushing for generating a product with a high fines proportion gives ground to investigate applying the technology further towards finished product duties. The advantages that HPGR brings are clear. Multi Stage grinding enables energy efficient size reduction across more of the comminution circuit. Primary HPGR serves for a coarse grinding duty, whereas a secondary HPGR is geared towards generating a fine product for downstream processing or even a finished product. This publication summarizes some of the features of staged HPGR circuits and discusses some examples of operating and projected applications.INTRODUCTION In most HPGR applications, the grinding units are used as a single process stage, either in open circuit, such as for pebble crushing [Rose 2002, Westermeyer 2000, Van der Meer 2015] or in closed circuit with classification [Van der Meer 2009, 2012] or product recycling [Van der Meer 2010]. Where a higher plant capacity is required, the HPGRs are commonly installed in multiple lines in a parallel arrangement [Parker 2005, Koski 201, Vanderbeek 2006]. HPGRs can take a wide range of feed size distributions, and grind this down to a product with a high fines content. In general view, there is a limit on the size reduction range that even an HPGR can provide. Grinding down from a very coarse ore (e.g. 70-100 mm) to a very fine product (e.g. 100 microns range) is stretching the ability of a single stage HPGR circuit. Fine grinding generally requires a classification stage that returns the classifier oversize to the head of the HPGR circuit. From one point of view, it can be demonstrated that when recycling a large proportion of fines and middlings back to the HPGR feed results in an effective feed with an overrepresentation of middlings and fines, which will eventually reduce the grinding efficiency and consequently result in an increased recirculation mass flow [Van der Meer 2014]. From another point of view the large recycling mass puts a strain or even a limit on the capacity of present-day conveyor capacity."

Jan 1, 2018

By O. Lashkari

Swirled Enthalpy Equilibration Device (SEED) is a new patented Slurry-on-Demand, SoD, processing route. The semi-solid slug preparation is carried out by off-center swirling of aluminum melt in a metallic mould. As part of the current research program on the semi¬solid processing of aluminum alloys, the morphological evolution of 356 aluminum foundry alloy microstructure is reported here. Semi-solid slugs were prepared using two different pouring temperatures of 645°C and 695°C respectively. Morphological evolution of the semi-solid microstructure was characterized using image analysis through measuring of primary a-Al particle size, number density, aspect ratio and sphericity. The possible relationships between microstructural features and process parameters were also investigated. The current report covers the effect of pouring temperature on the morphology of primary a-Al dendrites and attempts are made to explain the differences between the predicted percentage primary a-Al phase and those of the actual values in the as-cast slugs.

Jan 1, 2004

By M. Rafieazad, P. Fathi, X. Duan, M. Mohammadi, A. M. Nasiri

"Direct metal laser sintering (DMLS) is a metal additive manufacturing technology that creates highly complex components by fusing metal powder into a solid part. In this study, the impact of surface roughness on corrosion resistivity of AlSi10Mg_200C alloy manufactured through DMLS was investigated. The as-printed DMLS-AlSi10Mg _200C alloy was subjected to various surface finishing processes including grinding and sandblasting. The corrosion performance of the surfaces was then evaluated using potentiodynamic polarization testing and electrochemical impedance spectroscopy (EIS) in a 3.5 wt.% NaCl solution to mimic seawater environment. Surface characterization and corrosion morphology of the samples were assessed by Scanning Electron Microscopy (SEM) and Energy Dispersive X-ray (EDX) spectroscopy. The results of this study show that the surface finishing process and the resultant surface roughness has a significant impact on the corrosion resistivity of the DMLS-AlSi10Mg_200C alloy in the seawater environment.INTRODUCTION Direct Metal Laser Sintering (DMLS), also known as Selective Laser Melting (SLM) (Sames, List, Pannala, Dehoff, & Babu, 2016), Laser Beam Melting (LBM), or Laser Metal Fusion (LMF) (Herzog, Seyda, Wycisk, & Emmelmann, 2016), is an additive manufacturing process that utilizes a precise, high-power laser to micro-join powdered metals and alloys layer by layer to form almost fully dense and functional components in three dimensions from the 3D computer-aided design (CAD) data. Complex geometries not possible with conventional manufacturing processes can be readily manufactured with high accuracy using the DMLS process with no need to time-consuming tooling."

Jan 1, 2018

By Brian Hall

For some years, the mining industry has been consistently delivering returns below the market average. One of the causes is a disconnect between what is perceived to drive value creation by many industry analysts and senior corporate executives, and what actually drives the intrinsic value of mining operations. The perverse effect is that strategies that should increase value are perceived to have the potential to drive share prices down, and vice versa. This paper challenges common perceptions of what drives a mining company?s value. Anecdotal evidence suggests that the key drivers of value in the market, and hence in many boardrooms, are such things as increasing the reserves and production rate, and reducing unit operating cost. However, while the quoted reserves may satisfy ore reserves reporting code requirements to be economic, this does not imply that they are optimal. Often, a proportion of the quoted reserve reduces the potential value of the operation. Metal price increases, increased production rates, and operating cost reductions are all seen as conditions or actions that can improve value, and lead to cutoff grade reductions, thereby increasing ore reserves. However, modern cutoff theory and studies conducted by the author and his colleagues show clearly that, while breakeven cutoff grades will fall in these circumstances, optimum cutoffs may be much less volatile, and may even increase. Results from case studies indicate that value is maximised by right-sizing, not maximising, the production capacities, and by optimising the cutoff strategy. Values of many existing underground mining operations can be increased significantly by a substantial cutoff grade increase. Also, an increase in downside risk, and hence reduced returns, can occur using typical life-of-mine planning strategies if prices received are lower than predicted. Since this is often the case, low industry returns may be a direct result of typical strategic mine planning processes. Relatively simple cost-effective techniques are available to provide senior decision makers with information needed to assess the tradeoffs between their many conflicting corporate goals, and the balance between risk and reward. Often this information is not being generated at all. If it is, decisions affecting the value of the company are occurring by default at relatively low levels within the hierarchy, with senior executives apparently unaware of them or their potential impact. The paper concludes that without a re-evaluation of the way mining projects are valued, to demand proven value optimisation from mining plans by boards and mining analysts, the industry will continue to deliver below average returns.

May 1, 2003