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By Harry H. Power

WORK of the Committee on Education of the Petroleum Division has been under way for approximately-one year. Although some progress has been made, further activities of the Committee are necessary in order to discuss mutual problems more thoroughly by a unified group interested primarily in this field of specialization.

Jan 1, 1944

By Francois Clerf

IRON ORE fields are situated in both the East and West of France (see maps). The eastern deposit is by far the most important from a tonnage point of view, not only in France, but in all Europe. The ores of this region are known as minette, and are situated in the Lorraine ore fields and the Briey plateau. The iron ores of the West are those of Normandy, Anjou and Brittany. Before the war, a large number of important German companies had acquired considerable interests in these western fields and a heavy trade with Westphalia had begun. Recently, however, conditions have changed and some of the mines of Brittany and Anjou are now idle. From a geological point of view, in Anjou and Brittany, a series of synclines extends from the northwest to the southeast, containing a number of seams of varying thickness and generally intercalated in Silurian and sometimes in Devonian formations. The ore is generally a hematite or a magnetite. The composition varies from 48 to 52 per cent of iron and from 8 to 12 per cent of silica. Con¬servative estimates indicate a con¬siderable tonnage of workable ores (150,000,000 metric tons).

Jan 1, 1936

By Eugene McAuliffe

HAVING reached the status of an octogenarian plus, I suddenly decided to take a trip to Great Britain by airplane, before the possibility of hardening of the arteries made such a program too precarious. Of thirty June and July days spent in the islands, five were spent in the south of Ireland, or Eire as the politicians like to call their country. On June 15 I arrived in Glasgow where a day was spent with old friends before moving on to Edinburgh, where the Institution of Mining Engineers was billed to hold its summer session. I had received a cablegram before leaving New York inviting me to attend the sessions which I accepted with avidity, spending three most enjoyable and informative days with old friends and the officers of the Institution, Douglas Hay, president; Ian McDermid, secretary; and members of the council.

Jan 1, 1947

"The mountains of Utah contain one of the largest deposits of high grade bituminous coal in the world. According to the United States Geological Survey, there are 13,130 square miles of land known to contain workable coal, and these extensive fields contain 196,000,000,000 tons of coal. More remarkable than the extent of the coal fields is the thickness of the coal beds. Over three-fourths of the output of coal in Utah is recovered from beds ranging from 8 to 17 feet in thickness, as compared to one-eighth of the output of the entire country from such beds. In 1917, Utah mined one-third of its coal from seams at least 16 feet thick, compared to one-half of one per cent of the total bituminous output of the country from like seams.Coal at Wales, in Sanpete County, and in the vicinity of Coalville, Utah, was, it is reported, the first discovered by white men in the state. Wales claims the distinction of having produced the first coal mined in Utah. Two men, who had been coal miners in Wales, learned of the coal from an old Indian chief who called it ""rock that would burn."" In 1857, the town of Wales was founded and coal mined, and in 1858 some coke was manufactured and hauled by ox team to Salt Lake City. South of Wales is Castle Valley, in Wasatch Plateau field. From 50 to 60 miles of the Old Spanish Trail from Santa Fe, New Mexico, to Monterey, California, lies in Castle Valley. The coal in this field may or may not have been known at the time the trail was used extensively. The first published reference to this coal, however, was made by a party of the Corps of Topographic Engineers in their journal for October 11, 1853.After the completion of the Union Pacific railroad in 1869, mining on a commercial scale was attempted. In 1876 the Utah and Pleasant Valley railroad commenced operations between Scofield, in Carbon county, and Springville, Utah county, and following the year 1878, when the Rio Grande Western railway began construction through the Carbon county field, development increased until in 1900, when large smelters commenced operations in Salt Lake valley and gave coal mining in Utah an impetus that first carried it to an annual output of a million tons. During the past fifteen years many new mines have been opened, and with the construction of the Utah railway, an exclusive coal road, from the properties of the United States Fuel company in Carbon and Emery counties to connect with the Union Pacific system at Provo, the state reached a maximum production of 6,005, l 99 tons in 1920."

Jan 1, 1925

"The Washoe Smelter is situated about two miles east of the City of Anaconda. The smelter site includes about 240 acres and peculiarly adapts itself in topography to the efficient handling of material. By reason of its being on a hill side it is possible to make the level of delivery of the product of one building the level of the charge floor of the next succeeding one.THE ORES: The ore treated comes principally from the Butte district and is hauled by the Butte, Anaconda & Pacific railway, a distance of twenty-eight miles, in trains of fifty 50-ton bottom-dump cars to the railroad yards at East Anaconda. At this point these trains are• split up according to their destination,—that is, as to whether they go to the concentrator and sampling mill ore bins, or to the storage bins. In each case they are made up into trains of eight or sixteen cars, according to the size of engine to be used, and are carefully weighed before delivery to their respective bills.Some idea of the magnitude of the works may be obtained from the following figures:Amount of ore that can be treated in 24 hours…12,000 tonsLime rock from adjacent quarries…2,300 tonsCoke used…500 tonsCoal for reverberatory use…500 tonsCoal for power use…50 tonsWater, per minute, 35,000 gallons.Men employed in and around Anaconda, 3,000. Monthly payroll for above, $300,000.00."

Jan 1, 1913

By JAMES GAYLE

(Presented at the Washington meeting, May 3, 1905, and simultaneously sent to the Iron and Steel Institute, for presentation at the meeting of that Society in London, May 11, 1905.) IT is to be regretted that the data respecting the use of dry-air blast, which was presented to the Iron and Steel Institute at its meeting in the United States, in October, 1904, should. have been restricted to the period from August 25th to September 9th inclusive, and from September 17th to 30th inclusive. In order to present the paper at all it was found necessary to limit the record of operations to the period above stated. In the discussion of the paper it would appear from the conclusions of some participating therein, that they have been placed at some disadvantage in considering the economies obtained through the use of dry-air blast, by reason of the data covering such a short period. It is the purpose of this communication to present in detail the record of operations of the Isabella Furnaces from November, 1904, to March, 1905, inclusive, as shown by the furnace-records. The month of October, 1904, is not included, as the furnace using dry-air blast was stopped several times for repairs, and while the record was a very good one considering these interruptions, yet it was not a continuous one. The record for Furnace No. 1 using dry-air blast, and the comparison with Furnace No. 3 using natural air for the month of November, 1904, is set forth in Table I. By a reference to my former paper it will be noted that the month of November is the beginning in this country of the winter period, when the atmosphere decreases rapidly in humidity. The month of October being the transition month in the autumn and April in the spring, and furnaces using natural air approach more closely, from November on, to the conditions obtained by the use of dry-air blast. The data given in

Jul 1, 1905

By Arthur Notman

IN VIEW of the wide publicity given to the charges by the Couzens Committee of the United States Senate of discrimination by the Bureau of Internal Revenue in favor of the copper companies, it becomes a matter of interest to consider the basis for these charges. The point to be determined is whether they rest on a foundation of fact or are purely and simply matters of opinion. The whole question boils down to the purpose of the Tax Law as applied to mines, which is to afford the same protection to them as provided for all other taxpayers, namely: that they were to be allowed to pay back as depletion to their owners the values of their properties as they existed or were estimated to exist on May 1, 1913, free from tax. To determine these valuations it was? necessary to select from a wide range of possibilities a set of values for a number of essential factors.

Jan 1, 1925

By Warren B. Weeks

The year 1940 saw an increase of 20 per cent in oil production over the previous year—compared with a 16 per cent increase the previous year. In all, 25,790,380 bbl. were produced, an increase of 4,414,150 bbl, over 1939 and the largest production figure for south Arkansas since 1928. The older settled production continued to decline. Magnolia accounted for most of the increase, with aid from the other recent deep fields. During the year, 169 wells were drilled, 79 fewer than in the previous year. Of 131 wells drilled in proven fields, 18 were dry. Three of the 38 wildcats were pool openers. The drilling depth record was increased from 9028 to 9550 feet. Trend of Prospecting For the first time since 1936, the search for oil in the deep Smackover limestone slackened perceptibly; g dry wildcats ended in Smackover, 2 in. the underlying Eagle Mills; 7 penetrated Paleozoic beds, while 9 ended in Hosston, 2 in Glen Rose, 2 in Paluxy and 4 in Gulf. Geology The wells listed in Table 2 either resulted in the discovery of new oil pools or, because of their depth or location, afforded impor-tant stratigraphic or structural informa-tion. Fig. I is a general columnar and stratigraphic section showing the relation-ship of the strata within the Comanche series. The nomenclature shown was ac-cepted by the Shreveport Geological Society. It was subsequently published by Imlay,l who indicated probable correlations with other areas and presented evidence for the possible Jurassic age of the under-lying Cotton Valley and Smackover formations. New Fields Pouke.—On June 10, 1940, the Louark Producing Co. completed its No. I Sturgis, sec. I, T. 17 S., R. 27 W., in central Miller County, producing between 3583 and 3607 ft. in the upper part of the Paluxy forma-tion. The well flowed I00 bbl. of 3r.4' gravity oil per day through Ns-in. tubing choke. This discovery resulted from seismograph work. Six other wells were drilled in the area, none of which found production in the original sand. One of these wells is producing from a sand 50 ft. deeper in the section. The others were abandoned. No further development is in prospect. Production is from lenticular sands of the upper Paluxy; 45,556 bbl. had been pro-duced by the end of 1940. There is structural closure against a fault to the northwest. McKanzie.—The Atlantic Refining Com-pany's No. I Bodcaw Lumber Co., sec. 29, T. 17 S., R. 23 W., eastern central La-fayette County, was completed June 8, 1940, as the eighth and farthest west of the Smackover (Reynolds o6lite) limestone pools. The well flowed 10 bbl. an hour of 58.6' gravity distillate through an 1 1/64 Ma-in. tubing choke, with a gas-oil ratio of 8400:I.

Jan 1, 1941

By Warren B. Weeks

The year 1940 saw an increase of 20 per cent in oil production over the previous year—compared with a 16 per cent increase the previous year. In all, 25,790,380 bbl. were produced, an increase of 4,414,150 bbl, over 1939 and the largest production figure for south Arkansas since 1928. The older settled production continued to decline. Magnolia accounted for most of the increase, with aid from the other recent deep fields. During the year, 169 wells were drilled, 79 fewer than in the previous year. Of 131 wells drilled in proven fields, 18 were dry. Three of the 38 wildcats were pool openers. The drilling depth record was increased from 9028 to 9550 feet. Trend of Prospecting For the first time since 1936, the search for oil in the deep Smackover limestone slackened perceptibly; g dry wildcats ended in Smackover, 2 in. the underlying Eagle Mills; 7 penetrated Paleozoic beds, while 9 ended in Hosston, 2 in Glen Rose, 2 in Paluxy and 4 in Gulf. Geology The wells listed in Table 2 either resulted in the discovery of new oil pools or, because of their depth or location, afforded impor-tant stratigraphic or structural informa-tion. Fig. I is a general columnar and stratigraphic section showing the relation-ship of the strata within the Comanche series. The nomenclature shown was ac-cepted by the Shreveport Geological Society. It was subsequently published by Imlay,l who indicated probable correlations with other areas and presented evidence for the possible Jurassic age of the under-lying Cotton Valley and Smackover formations. New Fields Pouke.—On June 10, 1940, the Louark Producing Co. completed its No. I Sturgis, sec. I, T. 17 S., R. 27 W., in central Miller County, producing between 3583 and 3607 ft. in the upper part of the Paluxy forma-tion. The well flowed I00 bbl. of 3r.4' gravity oil per day through Ns-in. tubing choke. This discovery resulted from seismograph work. Six other wells were drilled in the area, none of which found production in the original sand. One of these wells is producing from a sand 50 ft. deeper in the section. The others were abandoned. No further development is in prospect. Production is from lenticular sands of the upper Paluxy; 45,556 bbl. had been pro-duced by the end of 1940. There is structural closure against a fault to the northwest. McKanzie.—The Atlantic Refining Com-pany's No. I Bodcaw Lumber Co., sec. 29, T. 17 S., R. 23 W., eastern central La-fayette County, was completed June 8, 1940, as the eighth and farthest west of the Smackover (Reynolds o6lite) limestone pools. The well flowed 10 bbl. an hour of 58.6' gravity distillate through an 1 1/64 Ma-in. tubing choke, with a gas-oil ratio of 8400:I.

Jan 1, 1941

By Arthur Bell

(San Francisco Meeting, September, 1915) . PRIOR to 1908 the oil production in the State of California, had been almost entirely a heavy fuel, oil, with a high flash point, hut changed within a-short period to a large percentage of refining oil with a low flash, by reason of the coming in of the Santa Maria field, the Midway field, and the increased production of the Fullerton field. This is clearly shown in the following tabulation of California's production: Year Barrels . Below -20° Be, Above 20° Be,, Per Cent_ Per Cent. 1905 48,307,000 90 10 1910 77,698,000 SO 20 1912 90,075,000 6o 31 1914 10:3,600,000 47 53 The bringing in of these high percentage's of light oil with their dangerous low flash and the increasing demand for the refined products necessitated the devising of some cheap and efficient means of quickly separating the lighter elements either in the field or at the main distributing points; also it became necessary to remove the excessive percentage of water which many of the light oils carried in emulsion.

Jan 9, 1915

By F. S. Norcross

DEVELOPMENT of the manganese deposits of Cuba is a matter of importance not only to those involved in this industry on the Island but to the United States steel industry and to our Nation as a whole. For years our domestic resources of manganese have been wholly inadequate, but the recent Cuban development points the way toward solution of this strategic mineral problem.

Jan 1, 1939

By F. P. Donohue

The observations and data presented in this paper are the result of extensive study of flowing wells, most of which were in the Maracaibo Lake Basin of Venezuela. The Lago Petroleum Corpn. had extensive production in this area, gas-oil ratios were low, and the problem was to determine whether by careful handling of the wells with respect to flowing conditions and by conserving the gas, the oil production of the wells could be maintained by natural flow until it had declined to a rate which could be handled with an ordinary working barrel, thereby avoiding the high cost of gas-lift equipment installation in the lake bed. The problem was complicated by the nature of the wells themselves. Production is from soft, comparatively unconsolidated sands, necessitating screen pipe in all wells. It was not only necessary to keep the wells flowing but to keep them flowing without heading, as the release of pressure upon making a head brought large quantities of sand into the wells, sanding them up or possibly cutting out the screen pipe. In furtherance of the plan of keeping wells flowing as long as possible, each well was equipped with a casinghead and tubinghead recording pressure gage, and an oil and gas separator set. About one-half of the wells were equipped with gas meters. All wells were tubed before bringing into production. Frequently individual gages were taken on each well. A large scale chart was plotted for each well, showing daily oil production, gas production, gas-oil ratio, tubinghead pressure and casinghead pressure. Any deviation from the normal was immediately checked and the condition remedied if possible. Theory of Flowing Wells Based upon considerable study of these records, it is believed that the flow of a well actuated by gas is mainly a problem in velocity, a certain minimum velocity in the flow string being necessary for the gas to carry the oil. If this minimum velocity is not obtained the oil drops back and the well heads or goes dead. The point of minimum velocity is of course at the bottom of the tubing, where the gas is under the highest pressure and therefore occupies the least volume. Some years ago when the success of the gas-lift at Seminole was so pronounced, there was considerable broadcasting of the statement that

Jan 1, 1930

By AIME AIME

THE following Officers, Directors, and guests were present: Herbert Hoover, A. R. Ledoux, Henry S. Drinker, Edwin Ludlow, Samuel A. Taylor, Charles F: Rand, William M. Corse, Arthur S.. Dwight, Glen H. Clevenger, L. W. Francis, F. G. Cottrell, Bradley Stoughton, Percy E. Barbour, E. P. Mathewson, Dorsey A. Lyon, Archibald Douglas, A. D. Flinn, RobertLinton, James F. Kemp, William Y. Westervelt, J. W. Richards, W. L. Saunders, George Otis Smith, Thomas T. Read, J..C. Murray, Ralph Arnold. A Committee on Mine Equipment was appointed composed as follows: Graham Bright, chairman, William Kelly, Howard N. Eavenson, R. E. Hobart, and S. P. Rumsey. B. D. Saklatwalla was added to the Committee on Miscellaneous Metals and W. Spencer Hutchinson was added to the Committee on Mining Geology. A revised budget for 1921 was approved. A petition duly signed to amend Section 1., of Article III of the Constitution, increasing the initiation fees from ten dollars to twenty dollars, was approved by the Board.

Jan 1, 1920

By W. J. Tait, A. E. Craig, E. P. McCurdy

C. M. Marquard—The problem of the automatic control of a grinding-classification circuit is not nearly as simple as has been indicated and it cannot be universally solved through the application of this device. The sound emanating from a ball mill such as the metallic clink of the balls against the liners can at times be misleading. The fact that the sound level due to the balls hitting the liners may be at a minimum does not necessarily mean that the mill is properly loaded. I have in mind an ore we treat that has a soft talcy gangue. The soft fluffy nature of this material makes the sound from the ball mill a most misleading parameter that is worthless as a means for controlling the amount of ore fed to the mill. In every milling plant there are transportation lags due to the time it takes the ore to travel from the mill bins to the ball mill. In many plants there may be several different transportation lags due to varying distances of bins from ball mill. These transportation lags can most seriously affect the operation of a controller. It has been found that under many circumstances the transportation lags can be so bad as to cause the controller to hunt seriously. Hunting can and in many cases does become so serious as to render automatic control impossible because of the surges it causes. While it is possible to compensate for this type of lag, this apparatus does not lend itself readily to accomplish the required compensation. Further, if there are groups of bins at various distances from the ball mill, compensation for one may not be sufficient or may be too great for another. Each milling plant presents a separate problem. The apparatus as presently described does not appear sufficiently flexible to accomplish this. It should be noted that the load on the classifier rakes is determined by measuring the current input to the rake drive motor. Variations in line voltage will

Jan 1, 1951

By E. P. McCurdy, W. J. Tait, A. E. Craig

C. M. Marquard—The problem of the automatic control of a grinding-classification circuit is not nearly as simple as has been indicated and it cannot be universally solved through the application of this device. The sound emanating from a ball mill such as the metallic clink of the balls against the liners can at times be misleading. The fact that the sound level due to the balls hitting the liners may be at a minimum does not necessarily mean that the mill is properly loaded. I have in mind an ore we treat that has a soft talcy gangue. The soft fluffy nature of this material makes the sound from the ball mill a most misleading parameter that is worthless as a means for controlling the amount of ore fed to the mill. In every milling plant there are transportation lags due to the time it takes the ore to travel from the mill bins to the ball mill. In many plants there may be several different transportation lags due to varying distances of bins from ball mill. These transportation lags can most seriously affect the operation of a controller. It has been found that under many circumstances the transportation lags can be so bad as to cause the controller to hunt seriously. Hunting can and in many cases does become so serious as to render automatic control impossible because of the surges it causes. While it is possible to compensate for this type of lag, this apparatus does not lend itself readily to accomplish the required compensation. Further, if there are groups of bins at various distances from the ball mill, compensation for one may not be sufficient or may be too great for another. Each milling plant presents a separate problem. The apparatus as presently described does not appear sufficiently flexible to accomplish this. It should be noted that the load on the classifier rakes is determined by measuring the current input to the rake drive motor. Variations in line voltage will

Jan 1, 1951

By JAMES J. PURDY

The great majority of stokers used in residential heating installations are of the clinkering type. Because of inherent characteristics of the under- feed combustion process as it occurs in these small stokers, and because of the wide range of operating conditions encountered in residential heating schedules, not all bituminous coals can be used successfully in residential underfeed units. The problem of providing consumer satisfaction has been attacked by the joint efforts of the stoker manufacturers and the coal industry; the stoker manufacturers have been concerned with improving their product to permit the use of a wider range of coals, and coal operators have made every effort to market selected and better prepared coals. In view of the wide range of physical characteristics and chemical properties of bituminous coals, the problems are real and are receiving increased attention.

Jan 1, 1949

By John D. MacFadyen

Subject paper unfortunately has some serious flaws negating the usefulness of the paper. The authors claim that sulfur is the major source of production problems in cement kilns. This is not the case. Sulfur is not a problem as long as the mole ratio of sulfur to alkali oxides is less than, or equal to, 1. This is attributed to the sulfur preferentially combining with the alkali oxides and not acting as a clogging agent due to the nature of the pre-heater vessels. Where the mole ratio exceeds 1, many methods are avail- able to eliminate or reduce the clogging problems such as using the preheater bypass or a precalciner with up to 100% kiln gas bypass. In non-preheater kilns, the presence of sulfates is hardly ever a problem anyhow. Thus, the level of sulfur in the fuel and raw material that might cause problems is not a fixed amount, but is predictable. The purpose of the paper is to discuss the economics of conversion of kilns in the Indonesian and Phillippine cement industries from oil firing to coal firing. This economic analysis has very little to do with the sulfur levels. Thus, the section of the paper on sulfates is actually rather meaningless. The economic analysis is also rather meaningless because the authors have failed to follow accepted economic analysis procedures by including interest charges. They have fallen into the trap of confusing financing with economic evaluation. When the accepted methods of economic evaluation are used, the return on investment increases to about 35%. In conclusion, the paper is not a meaningful contribution, and sadly, quite erroneous.

Jan 1, 1983

By J. J. Thomas

THIS investigation was undertaken to determine, if possible, the relation between static and dynamic tensile tests as measured by the work required to break test specimens slowly, in a tensile testing machine, and rapidly, by means of a falling weight. It was hoped that the investigation would throw some light on the role played by ductility under different rates of application of load. FIG. 1.-STRESS-STRAIN DIAGRAM. In problems of design, it is usually assumed that the moduli of elasticity of all steels are equal; viz., about 30,000,000. The stress-strain diagram within the elastic limit is a straight line, as shown in Fig. 1, where OA is the curve of a hard steel and OB that of a soft steel. If the modulus of elasticity is constant, as assumed, the slope of the line OC

Jan 2, 1921

By L. H. Wolfe, J. O. Thieme

The tensile and shear strengths of frozen soil and the compressive strengths of ice and frozen soil were measured These tests showed that the strength of ice and of frozen soil increased as the temperature was decreased. A method is presented for the measurement of thermal conductivity and specific heat of earth and ice. Using the parameters thermal conductivity, specific heat and density, the thermal diffusivity was calculated. Results of thermal property tests establish water as the major variable contributing to thermal property values. INTRODUCTION During the last few years, a considerable interest has developed in underground storage of cryogenic liquids such as liquid natural gas. Because of its economy and safety, underground storage is being used. Before underground caverns could be seriously considered, however, the strength and thermal characteristics of the soil had to be obtained. Methods are presented herein for measuring tensile, compressive and shear strengths, specific heats and thermal conductivities. The tests were performed on two soils at temperatures from ambient to -195C. Because it is difficult to find data in the literature that pertain to a particular soil, ice was used to evaluate some of the experimental procedures. Some of our ice data are compared to the published values. PHYSICAI, PROPERTIES SOIL SELECTION AND SAMPLE PREPARATIONS The physical and thermal tests were performed on recompacted samples of two typical soils that might be encountered in underground caverns: a gray, fire clay that had been pulverized and mixed with water into a pliable mud; and a brown, sandy silt that was dug from a dry river bank and subsequent1y mixed with tap water. The moisture content of the test specimens was 17 to 22 per cent (based on the wet weight of the soil). This amount of water nearly saturated the silt, but the clay was well below the saturation point. The soils are partially described by the sieve analyses (Fig. 1) which show the particle size distribution of the coarser than 44 micron portion of the soils. The curves also show that approximately 75 per cent of the clay and 20 per cent of the silt are finer than 44 microns. The particle size seems to affect some of the physical properties, and the finer than 44 micron portion is important in the thermal conductivity test. Physical specimens were cut with a bandsaw from frozen blocks of the soil. The specimens were then sanded and kept frozen until after they were tested. They were stored at the approximate test temperature for several hours. Then, to equilibrate the samples to the test temperature, they were stored at the temperature at least an hour before they were tested. TEST EQUIPMENT An Instron, which is a constant speed gear-driven instrument, applied force to the samples and drew stress-strain plots of the test. All of the samples were strained at 0.02 in./min. All of the physical tests were conducted in a temperature cabinet that controlled the temperature to 1C. TENSILE STRENGTH Briquette or "dog-bone" shaped tensile specimens were pulled with suitably shaped jaws. This shape of specimen, which is usually used for tensile tests of concrete, is satisfactory for testing frozen soils except that the samples tend to

Jan 1, 1965

By Herbert D. Drechsler

The objective of this paper is to identify the components of income above that necessary to keep a mine in production and relate those components to the profits of a mining firm. This is a discussion of "Economic Rent". Economic rent is the payment to the factors of production -- capital, labour, entreprenuer and the owner of the mineral deposit -- above the minimum necessary to keep all of these factors cooperating in the production of minerals from a particular deposit. THE SOURCE OF ECONOMIC RENT IN THE MINING INDUSTRY In the mining business each mine has a unique cost of production unrelated to any other mine. The cost of production is developed from many factors such as the technical characteristics of the deposit: depth of deposit, depth of overburden, areal extent, and type of deposit. Furthermore, there are locational factors which also alter cost of production. For example, identical mineral deposits located in Zambia or in the southwest U.S.A. would have different capital and operating costs. These differences occur because of different qualities of labour, ease of acquisition of operating supplies or investment capital and other similar factors. To explain the source of rent, we shall use ideas developed by Alfred Marshall and Kenneth Boulding. Suppose a meteorite with special qualities exploded over earth and sent showers of small meteorites to the ground in various places. At some point in time, people learned of the special qualities of these meteorites and a demand arose and one mine was started. Suppose further that the cost of production to produce these meteorites was different for each deposit. Probably the lowest unit cost mine would commence production because if a higher unit cost mine started-up, eventually someone would discover a deposit that had a lower unit cost of production. The lower unit cost mine would take over the market and the high unit cost mine would cease production. The cost curve for the first mine would look like the following Figure 1. [ ] The output for the first mine is on the horizontal axis with the cost per ton on the vertical axis. The curve labelled AC I is the average total cost of production over the range of possible production that could occur at the property. The total costs are composed of variable costs, which are dependent on output and fixed costs, which are dependent on time. For example, the cost of operating supplies would be a variable cost and normal profit would be a fixed cost.1 The opportunity cost of the investment would also be part of the fixed costs. In our example, all factors of production, are receiving the minimum necessary payment that will keep the mine operating. The average total cost curve is U-shaped because at zero output, the meteorite mine has no variable costs, only fixed costs which, on a unit basis, obviously are very high. To produce a small output of meteorites, the mining firm adds

Jan 1, 1985