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By Peter H. Fletcher

THE ECONOMIC THEORY It will assist in the understanding of the Resource Rent Tax ("RRT") proposals in Australia if the economic theory behind the tax is briefly explained. The idea goes back to the concept of rent put forward by the nineteenth century economist David Ricardo. His analysis was broadly as follows: A tenant who farms land which is just on the margin of economic viability cannot afford to pay his landlord any rent, because the value of the crop produced by such marginal land is equal to the cost of producing the crop, plus the cost of keeping the tenant alive. There is nothing left out of which to pay rent to landlord. A tenant who farms good land can afford to pay his landlord rent -- but the maximum amount of rent that he can be asked to pay is the excess of the value of the crop produced by the good land over the cost of producing the crop and of keeping the tenant alive. Adapting this theory to the taxation of mining projects, modern economists who favour this system of taxation say that a profitable mining (or resource) project produces rent in the Ricardian sense. The amount of the rent is the excess of the profits by the project over the amount of profit which is required to attract the taxpayer to invest in the project in the first place. This explains why the tax is called "Resource Rent Tax". PAPUA NEW GUINEA PRECEDENT Although Papua New Guinea ("PNG") is now independent of Australia, there are still close links between the two countries, and strong similarities between their respective tax regimes. PNG introduced an Additional Profits Tax ("APT") in 1978. In many respects, Australia's RRT proposals follow the precedent set by PNG1s APT. However, in practical terms, not a great deal can be learned at this stage from PNG's experiences since, according to the writer's understanding, no PNG mining project has yet paid any APT. The Bougainville mine is not liable to APT, being subject to tax under its own separate Act, which contains a different formula. Outline of PNG Additional Profits Tax. PNG has two versions of Additional Profits Tax ("APT) - one applying to general mining, the other to petroleum mining. The two versions are very similar. The general mining version is described below. The tax applies on a licence by licence basis. This means that losses on Licence A cannot be offset against profits on Licence B. Expenditure relating to two or more licences, is apportioned "in such manner as the Chief Controller thinks reasonable". Tax is levied on the "accumulated value of net cash receipts" at the rate of (70 - n)% where n=the rate of income tax. The accumulated value of net cash receipts ("av") is calculated as follows: Calculations commence from the first year in which substantial expenditure was incurred on the construction of facilities for the carrying out of mining operations on the licence. For that year the av consists of the total allowable expenditure to date on that lease. For the second year, the av is the av at the end of year one indexed in accordance with the statutory formula set out below, plus the total allowable expenditure in year 2. For year 3, the av is the av at the end of year 2 adjusted by the index factors, plus the total allowable expenditure in year 3. This process is repeated year after year. When the licence starts to earn revenue, the revenue is deducted from total allowable expenditure for that year. If revenue exceeds total allowable

Jan 1, 1985

By Peter J. Franklin

"Short-term mine planning of open pits is an activity that has historically been carried out by hand. Typically, the use of computers has played little part in this type of mine planning. This paper describes the objectives and the procedures involved in short-term mine planning, comments on the type of computer systems available, and describes in detail a computer-aided short-term planning and scheduling system known as STEPS.IntroductionThe mine planning department of any o pen-pit mining operation performs a wide variety of different tasks. However, their primary concern is the preparation of detailed long-and short-term mine plans. These mine plan s will define the long-term operating strategies and definitive everyday working plan s for the ongoing development of the open pit.In this day and age, when operating costs have spiralled upwards due to inflation , and product revenues have decreased due to depressed economies and poor markets, it is vitally important for all aspects of the mining operation, including mine planning, to be efficient and cost effective.There are numerous options available for planning engineers when generating a mine plan. A cost effective mine plan must investigate all these options and select the optimum. When using manual planning techniques, it is often impossible to evaluate all the available options. To do this, and to produce an optimum mine plan, a computer is required.This paper discusses mine planning, with emphasis toward the short-term plan and comments on how the processes may be computerized. It also describes in detail, a computer software system called STEPS, which has been designed as an interactive graphics, computer-aided short -term mine planning and scheduling tool."

Jan 1, 1985

By Michael R. Cartwright

The Gold Acres outcrop was located by Lee Lakin in 1922, according to Mr. H. W. Treweek. There was no activity, however, until 1935, when prospect drifts and pits penetrated the deposit. It was then drilled by the Willow Creek Mining Company. Beginning in the late 1930s and continuing to the late 1940s more than 150 churn drill holes were drilled in the Gold Acres area. From this drilling came what is now known as the London Extension pit. Only oxidized ore amenable to cyanide vat leaching was mined during this time. Our records indicated that this period of mining removed some 1.4 Mt (1.5 million st) of ore at an average grade of 0.006 kg/ t (0.2 oz per st). Union Pacific and Newmont Mining Company worked in the area prior to acquisition by the Cortez Joint Venture. Union Pacific drilled a number of core holes in the area. The unoxidized nature of the ore, small tonnage, and low grade undoubtedly prevented mining at this time. From these indications of mineralization shown by previous companies, the Cortez Joint Venture developed and mined 2 Mt (2.4 million st) at 0.005 kg/t (0.15 oz per st) in the Gold Acres pit. This pit is located immediately southwest of the older London Extension pit. Cortez Gold Mines has continued to drill to the west and south of these pits along the downdip continuation of the former ore bodies. The downdip extension is unoxidized and more metallurgically difficult than the normal Carlin type ores, but, more than 2.4 Mt (2.7 million st) have been outlined. It depends now upon the gold price and milling costs to turn this mineralized area into an ore body. A possible lesson to be learned from this deposit is that continued mining success depends upon an ongoing adequately funded exploration-development-metallurgical research program. These three disciplines must always be present to locate the mineralization and to turn this mineralization into ore. [ ]

Jan 1, 1985

By Catherine T. Aimone

A series of experiments have been performed to characterize fragmentation and microcracking in quartz monzonite copper porphyry. The flyer plate impact method was used to generate plane shock waves in rock specimens for impact pressures between 1.6 and 7.3 GPa and impact pulse durations between 1.1 and 7.0 µs. The effects of pressures up to 4.8 GPa and pulse duration on fragment size distributions and microcrack densities were studied. The results show that pressures effect particle sizes to a greater extent at higher pulse durations. However, changes in pressure and pulse duration show little influence on the density of microcracks induced during explosive loading. These results indicate that the nucleation and growth of microcracks in rock subjected to shock waves occur uniformly throughout. A substantial decrease in particle sizes for high pulse durations is attributed to more time allowed for microcracks to grow and coalesce, forming individual particles.

Jan 1, 1985

By Mark R. Pettitt

The results of an extensive research and development program to reduce the noise generated during coal cutting are presented. The characteristics and magnitude of continuous miner coal cutting noise sources are defined. This work consisted of development of a simulated coal ,cam to facilitate above-ground coal cutting tests, noise measurements in a reverberant acoustic chamber during simulated mining operations of a continuous miner (cutting the simulated coal scam), and noise measurements in an underground coal mine during continuous miner operation. In-mine and laboratory test results were in excellent agreement for both A-weighted overall levels as well as A-weighted one-third octave band spectra. Methods to reduce coal cutting noise are presented. These methods take full advantage of the dynamic characteristics of the forces generated during coal cutting. Dynamic cutting force isolation was shown to be a very effective technique. Finally, a continuous miner was equipped with a cutter head that incorporated (among other design factors) cutting force isolation. Successful, lung term, in-mine use of the cutter head demonstrated coal cutting noise at the operator's station of less than 90 dBA and 50% coal, 50% rock cutting of less than 93 dBA.

Jan 1, 1985

By Armin C. Supp

Since 1975, about a dozen high capacity flotation plants have been installed in the Ruhr district. Depending on the size of the preparation plants, the design capacity of the flotation section is between 100 - 150 t/h. The flotation units generally comprise rougher and cleaner stages in which 5 to 6 or 4 to 5 agitators respectively are arranged in line. The unit volume allocated to each agitator is up to 16 m3. The type of flotation machines, the design of these plants and their instrumen¬tation and control equipment are described in detail. The run of mine coal in the Ruhr district is characterized by a wide variety of the volatile matter. Generally, a distinction must be made between coals with more than 30 - 35% V.M., which are preferably used in power station, and coal with lower V.M. content, which are preferably used as coke-oven feed. The difference between these coals in respect to grain-size distribution, ash cotent and flotation properties will also be described in detail.

Jan 1, 1985

By Johann Steynberg

The design and construction of a Concentrator based on initial pilot plant work is rarely perfect. Palabora's plant was no exception although the basic objective to produce copper in a safely conservative manner was certainly achieved in a profitable manner. identification of the metallurgical and mechanical deficiencies of the plant through operating experience and a better concept of the minerology of the orebody enabled the development of a more efficient process both in terms of the metallurgical performance and cost effectiveness. To maintain and improve this level of efficiency, continuous inspection and revision of the plant metallurgy and engineering standards is required. In this presentation a few of the investigations and changes are described: 1.0 Alternative methods to restrict and eliminate the detrimental effect of critical size material on the performance of an autogenous mill. 2.0 An analysis of the environmental condi¬tions in Palabora's grinding circuit and the introduction of high chrome balls as grinding media. 3.0 The role of magnetite in the beneficiation process at Palabora. 1.0 Alternative methods to restrict and eliminate the detrimental effect of critical size material on the performance of an autogenous mill.

Jan 1, 1985

By Riley TW

This paper describes a Process Simulation Package for modelling the steady-state operation of a mineral processing plant. There are two levels of input allowed into the package. The first allows simple manipulation of the process models within a defined modular format which enables a wide range of process systems to be simulated. "The second level of input is via a Command file which allows plant models to be defined and changed without reference to the code or the requirement of any recompiling of the programme sources. The Command file interface was designed for use by metallurgists and assumes a sound knowledge of the system being modelled. As such it is an effective tool for metallurgists rather than a user friendly generalised package for the layman.

Jan 1, 1985

By David C. N. Cockburn

INTRODUCTION This paper analyses certain of the financial considerations which will commonly apply in relation to the following questions: - what equity structure or project vehicle should be adopted for the exploration and/or exploitation of a project by more than one unrelated participant? - what vehicle should be adopted by a participant for its participation in a multiparty project? Due to local, politically motivated laws in certain jurisdictions, or due to the overriding requirements of a dominant participant, there may be little choice of the underlying multiparty structure which may be adopted for the exploration, appraisal and/or development phases of a project. Nevertheless, even in such circumstances, attention should be given, at least in the preparation of the related documentation, or in considering methods of participating or funding the project, to certain of the points discussed below. This discussion of financial considerations in the context of the more commonly adopted multiparty structures concentrates primarily on fiscal, financial accounting, financing and funding aspects. TYPES OF PROJECT VEHICLE FOR MULTIPARTY INTERESTS The well known types of vehicle adopted for the participation in a project by more than one participant (assuming that the participants are effectively unrelated) are as follows. Joint Venture (unincorporated joint venture) By far the most commonly adopted structure for mining ventures, a joint venture is usually defined and documented in terms to distinguish it from a partnership for important tax and legal reasons. In essence, this is a contractual association of more than one participant to carry out a specific commercial project or purpose. The relationship between the separate participants and their respective rights, interests, obligations and liabilities are agreed between the participants in one or more contracts (viz Joint Venture Agreements or Joint Operating Agreements together with ancillary documentation). Unlike other project vehicles of participation, in most jurisdictions there is no specific body of law governing joint ventures. The participants thus enjoy contractual freedom to negotiate whatever deal they may wish between themselves. Jointly-Owned Project Company (corporate joint venture) A very familiar vehicle, this is a separate and distinct legal and tax entity incorporated under the company laws of the place of incorporation to undertake specific objects, and granted specific powers, in relation to the Project. Although certain rights, interests and obligations may be circumscribed in the governing corporate instruments by the promoter participants, the corporation laws of the relevant place of incorporation, and the selection of such governing laws (assuming freedom of choice) and future political changes in such corporate laws, should be carefully considered. The use of a company in a multiparty structure may be peripheral to the project itself as a specific purpose vehicle (for example, a joint sales agent or marketing company or a joint borrowing vehicle) or it may form a central function such as in the case of a tolling company which will own the project for legal and taxation purposes and raise financing with the backing of the shareholder participants commonly by the adoption of take-off, throughput and/or user agreements. Partnership This is a legal relationship, subject to the often wide-sweeping restrictions of the relevant local partnership laws, under which the participants have agreed to carry on a business venture together with a view to profit. The effect of the relevant partnership laws, as well as the various types of partnerships and the

Jan 1, 1985

By B. C. Darst

Developments in the agricultural use of potassium (K) have been based solely on the essential role K plays in crop production. Crop plants cannot complete their normal life cycle if K is deficient or absent. In fact, no essential plant nutrient other than nitrogen is required in greater quantities. Table 1 shows the amounts of K some crops take up from the soil. Although the exact functions of K in the plant are not well known, its primary role seems to be tied to plant metabolism. Potassium is vital to the process of photosynthesis. When K is deficient, photosynthesis declines, but respiration increases. These two K-deficient conditions. . . reduced photosynthesis and increased respiration ... lower the plant's carbohydrate supply, the end result being poor agronomic crop production. Potassium is also essential to several other plant functions, including the following: 1) Protein synthesis. 2) Water use efficiency, through the influence of K on stomata opening and closing, to maintain the turgidity in plant leaf cells. 3) Translocation of heavy metals such as iron and zinc. 4) Ionic balance. 5) Control of enzyme reactions within plants.

Jan 1, 1985

By P. G. Keohane, J. S. Drake

"Cominco's Polaris Mine is a lead-zinc underground operation that began commercial production in early 1982. The mine site is located on Little Cornwallis Island in the Canadian Arctic at a latitude of 75°23'N and at a longitude of 96°55'W. The nearest settlement, Resolute Bay, some 100 kilometres southeasterly from the mine, is accessed from the mine by light aircraft. The mine site can be accessed by sea during the six-week ice-free period each year. During this time all major operating supplies are brought to the mine and the lead and zinc concentrate products are shipped out to market.GeologyThe Polaris orebody lies near the top of the Thumb Mountain Formation of Ordovician age. This formation is a relatively homogeneous section of thin to medium bedded limestones which are brecciated and dolomitized in the area around the orebody. The deposit is described as a Mississippi Valley-type orebody. Ore minerals are sphalerite and galena with the waste being predominantly dolomite with calcite and marcasite. The ore is quite porous with voids being generally filled with ice as the mineralized zone lies entirely within permafrost. Reserves consist of about twenty million tonnes of ore grading 3.8% Pb and 14.3% Zn with a further three million tonnes of inferred ore at a slightly lower grade.The orebody strikes in a north-south direction with the hangingwall dipping at about twenty degrees to the east. It is generally conformable with the stratigraphy. The footwall in the western portion of the orebody, the Panhandle, lies about 10 to 30 metres below the hangingwall. To the east the footwall drops sharply, creating an orebody height of up to 110 metres in what is referred to as the Keel Zone. The Panhandle Zone has typically 80 - 110 metres of cover above the hangingwall , About 25% of the reserves are in the Panhandle Zone, the remainder being in the Keel Zone. Figure I illustrates a plan view of the orebody relative to other surface facilities on the property and Figure 2 illustrates a simplified section through the Panhandle and Keel Zones."

Jan 1, 1985

Aid mine operators as well as mine inspectors in making quick but sufficiently accurate measurements of the rock dust content of coal/rock dust mixtures. The Problem Past research has shown that accumulations of volatile coal dust in underground coal mines can be rendered non-explosive by dilution with chemically inert rock dust (usually limestone). Consequently, rock dusting is required by law in U.S. underground coal mines. However, mine officials and inspectors have no quick and reliable means to determine whether enough rock dust has been applied to achieve a mixture that is in compliance with the law. Even the compliance tests used by the Mine Safety and Health Administration (MSHA) are slow and involved. MSHA assures that a mine has been rock dusted adequately by collecting samples from rock dusted areas of the mine and sending the samples to a laboratory for analyses of the inert-dust content. The analyses may not be completed for more than two weeks, during which time the mine in question might be inadequately protected against coal dust explosions. To solve this problem, the Bureau of Mines devised a quick, simple and reliable device that can immediately determine the rock-dust content of a mixture of coal and rock dust.

Jan 1, 1985

In line with mining operations throughout Australia, Western Mining Corporation Limiter' is striving to increase productivity by intro-ducing mechanized mining techniques wherever possible. Kambalda Nickel Operations' (K.N.O.) largest operating nickel mine, Long Shaft, is currently introducing mechanized cut and fill methods which must provide flexibility to cater for an orebody that variesconsiderably in width, both along the strike and up dip.This has resulted in modifications to the previous approach to primary level develop-ment, and intermediate stope development, and in the type of development and production equipment being employed. Electric-hydraulic diesel jumbos and diesel loaders have now been mated with conventional rail equipment and production airtrack machines are being utilized.The transition to mechanized methods is in its preliminary phase and is being monitored closely to ensure any productivity gains are not offset by a substantial drop in mine grade. The precise method ofmechanized mining has not been finalized and selective methods will be used, according to the ore width and ground conditions, which vary throughout the mine.

Jan 1, 1985

By Brian D. Bornhold

A comprehensive multi-disciplinary marine geological survey of northwestern Graham Island, Queen Charlotte Islands, British Columbia, Canada was conducted by Offshore Survey and Positioning Services Ltd. of Vancouver, B.C. on behalf of the Geological Survey of Canada; Energy, Mines & Resources Canada, Pacific Geoscience Centre, Sidney, B.C. Canada during October 1984 and July 1985. The aim of the survey was to map both the surficial geology and geomorphology in order to identify and evaluate the nature of the nearshore sedimentation and recent tectonics including stability (slumps and scarps) seafloor faults (frequency and displacements) and both the classification and consistency of soil type boundaries and properties. Data was acquired by utilizing conventional indirect applied marine geophysical techniques including side scan sonar, precision echo sounding and complimentary soil sampling. During October 1984 a total of 320 line kilometres of data including 180 soil samples were acquired. During July 1985 a total of 300 line kilometres of data were acquired including 150 soil samples.

Jan 1, 1985

By D. S. Choi

Coal is expected to become an increasingly important source of energy in the future. Coal production has already increased from about 650 million tons in 2975 to about 875 million tons in 1984 (Wilkinson, 1985). The declining trend of labor productivity in the early seventies was a source of concern for Consolidation Coal Company (Consol). To improve productivity, a gradual change from room-and-pillar mining to longwall mining has been taking place within Consol. Consol produces 45 million tons of coal annually with about 70 percent of the production coming from underground mines. Consol introduced longwall mining in the early seventies and currently operates about 20 longwall faces. The longwall faces are in mines in the Appalachian region in the States of West Virginia, Pennsylvania, and Ohio. The successful operation of longwall faces has contributed to a recovery of productivity and to an improvement of mine safety.

Jan 1, 1985

By Keith L. Harris

The performance of the world economy improved significantly in 1984. Real world output!/ grew 4.3% (compared with 2.6% in 19831, the highest since the 4.4% increase recorded in 1978 (table 1). The output of industrial nations rose 4.9%, while that of the developing nations rose 3.7%. The United States and Japan had the largest increases in output of the major industrial nations, with respective increases of 6.8% and 5.8% (table 2). The components of real output with the most significant growth in the industrial countries were gross fixed investment (9.2%), consumer expenditure (3.1%), and public consumption (2.5%) (table 1). Industrial output, as measured by industrial production indices, has returned to about the 1980 level for most of the major industrial nations (table 2). Exceptions to this were industrial production in Japan and the United States; Japan's industrial production rose steadily throughout the 5-yr period and is now more than 16% above the 1980 level, and the industrial production index for the United States reached 11 1.2 (1980=100.0). Real total domestic demand grew at 8.7% in the United States, more than double the rate of Japan, which, at 4.0%, had the second-largest growth. Average demand for all industrial countries was up 5.1%. During 1984 the U.S. dollar showed great strength on international markets, contributing to large current-dollar negative net exports of goods and services and even larger negative net exports of the merchandise sector. While growing U.S. imports helped spread the benefits of the recovery, they also led to a widening of current account imbalances and growing trade tensions throughout the world.3/, 4/

Jan 1, 1985

By C. R. Peterson

A cutter vibration monitoring system is described which would map seam strata non-uniformities to permit guidance within the seam. An extremely simple and rugged transducer is used which is compatible with conventional cutters and cutter replacement practices, and believed to be suited to the mining environment. Laboratory tests show that the system can detect bedding planes in otherwise homogeneous material. A data display system which would employ the human operator's natural pattern recognition skill and judgement will be developed, Intended for remote control applications in general, the system is of direct interest for today's continuous excavators in coal or in any other machine excavated bedded deposit.

Jan 1, 1985

By Brian F. Taylor

The Mexican fluorspar industry is faced with and will face serious problems, some of their own making and others beyond their control. However, they still offer the most secure source of fluorspar for North American' consumers. Since 1975, even in light of declining markets, they have, increased then production capabilities' as shown in Table #1. In analyzing Table #1, we note that Compania Miners Rio Colorado has closed down due to their ore reserves being exhausted. Fluorita de Rio Verde expanded their acid grade fluorspar capacity in anticipation of additional North American business. Campania Miners Las Cuevas presumably increased capacity to meet their North American contractual commitments and to supply their own hydrofluoric acid plant (Fluorex) at Juarez, Mexico. Historically, the Mexican fluorspar industry has relied on the United States as the mainstay for their sales. As shown in Tables #2 and #3, the Mexican share of the United States market has moderately decreased. However, as noted in Table #4 the volume loss is substantial as explained below.

Jan 1, 1985

A modular computer-based monitoring system for mines is dis-cussed. The system consists of the following modules : production moni-toring system HADES, methane monitoring system CMC, seismoacoustic and seismometric systems SAK and SYLOK, communication systems. The system enables one to compose flexible,` economic structures according to the specification of a mine. Application of microcomputer-based monitoring and control systems in coal preparation plants also is discussed.

Jan 1, 1985

By Herbst JA

During the last decade, it has been established that conventional mineral-processing control strategies based on classical control theory result in significant increases in plant throughput and operating-cost saving. The proper education and training of personnel using dynamic simulators of the principal unit operations is vital for proper design and maintenance of control systems. Severe multivariable interactions and numerous constraints on both manipulated and state variables in grinding/classifica-tion and flotation systems can be studied using time domain analysis with proper dynamic simulators. Two interactive programs are described, and the basis of each simulator and its structure are discussed. Two examples concerned with choosing, tuning, and decoupl-ing of manipulated and controlled variables for a grinding/classification circuit (DYNA-MILL II) and for a rougher flotation circuit (DYNAFLOAT II) are presented. The way in which these dynamic simulators can be used for the design of model-based control strate-gies is also outlined. A brief description of the use of these dynamic simulators for screening alternative strategies and circuit optimization is given.

Jan 1, 1985