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By Raymond B. Ladoo

Talc is a hydrous magnesium silicate having the chemical formula H2Mg3 (SiO8 ) 4 ; it is often called steatite, soapstone or potstorie, and by the trade names talc clay, agalite, asbestine, and verdolite. The term talc may be used to include all forms of the pure mineral, whereas steatite denotes particularly the massive, compact variety, and soapstone the impure, massive form that often contains only 50 per cent of talc. Merrill 1 says: The name soapstone is given to dark-gray and greenish talcose rocks, which are soft enough to be readily cut with a knife, and which have a pronounced soapy or greasy feeling; hence the name. Such rocks are commonly stated in textbooks to be compact forms .of steatite, or talc, but as the writer has elsewhere pointed out, and as shown by the analyses here given, few of them are even approximately pure forms of this mineral, but all contain varying proportions of chlorite, mica, and tremolite, together with perhaps unaltered residuals of pyroxene, granules of iron ore, iron pyrites, quartz, and, in seams and veins, calcite and magnesian carbonates. When pure, talc is soft, having a hardness of 1, but when impure or when it grades into its varieties, the hardness increases to 3 or 4. Talc ranges in color from pure white and silvery white through gray, green, apple green, gray green to dark green, nlso yellow, brown, or reddish when impure. It is rarely, if ever, found in wellformed crystals, but often occurs in foliated plates or in fibrous aggregates. It is commonly compact or massive or in fine granular aggregates. Several analyses of talc from different regions ·are given in Table 1. Talc has several varieties, the most important of which is Rensselaerite. This variety, found in a small area near Gouverneur, St. La.wrence County, N. Y., is a hard, fibrous, -waxlike mineral having the same chemical composition as talc, but lacking its softness and its peculiar greasy feel. Its hardness and its peculiar fibrous form, even when ground, have made its grinding and separation a separate problem. In addition to the varieties of talc and soapstone, the mineral pyrophyllite or agalmatolite, a hydrous silicate of alumina, with the formula H2Al2 (Si08 ), is also mined and sold as talc. It resembles talc in color, feel, luster, and structure, and may be successfully substituted for true talc for most uses. In this paper it will be considered as one of the commercial forms of talc.

Jan 1, 1923

By G. E. Pralle

INTRODUCTION The decade from 1969 to 1979 saw the crest of a wave of investments by companies and investors, primarily from the major industrial nations, in the metals and minerals industries of the so-called lesser developed countries. This was brought about by two major considerations: 1). The higher ore grades and therefore the higher profit potential of the mineral deposits in the third world countries, and 2). The desire, particularly by the European countries and by Japan, to ensure a safe supply of raw materials not available in their own countries. The decade began with the start of the Toquepala mine in Peru and the major investments in the Bougainville mine in Papua New Guinea and the Ertsberg mine in Indonesia. It ended with the start-up of Southern Peru Copper Company (SPCC) Cuajone mine in Peru and Inco's Soroako mine in Indonesia and the investments in several major alumina or aluminum projects in Australia and Brazil. Concurrent with this huge flow of funds into the mineral resources industry of the developing world was the build-up of a psychological fear in the host countries of exploitation/domination by the foreign investors. This resulted in an increasing trend towards: 1). Nationalization of existing mineral ventures, and 2). Tougher legal/fiscal frameworks for new ones. NATIONALIZATION Nationalization appeared in its earliest form as "Mexicanization" of the petroleum industry in Mexico in the 1930's, followed later by Mexicanization of the mining industry in general. This was enacted with the Mexican Mining Law of 1961 which required that 51% of the equity be owned by Mexican nationals. Later in the decade the equity share for foreign investors was reduced to 33 1/3% for the developers of the Frasch sulphur operations in the Isthumus of Tehuantepec. However, the law was not fully implemented in the copper industry until late 1970 with the purchase of 51% of the ownership in the Cananea Mining Company. The trend toward nationalization of the copper industry progressed to Chile where in 1967 under the Government of Eduardo Frei the major North American copper companies were induced to sell a one-half interest in their Chilean mines to the State. Likewise, in 1970, "Zambianization" took place, when the two major operating companies Roan Selection Trust (Amax) and Zamanglo (Anglo American) were restructured into Roan Consolidated Mines (RCM) and Nchanga Consolidated Mines (NCCM) providing the government with 51% of the equity ownership. Whilst the earlier forms of nationalization in general constituted a fairly priced buy-out (El Teniente, Chile for US$80 million, RCM for US$117.8 million, NCCM for US$178.7 million), the total nationalization of the Chilean mining companies in 1970 under Salvador Allende did not. Later, "Western" countries joined this trend and on October 29, 1973, Mr. Gough Whitlam proclaimed that "overseas capital must continue... in partnership with Australian capital" and "in some special energy cases we have an objective of 100% Australian ownership". In 1974 Mr. Pierre Trudeau stated: "The Liberal Party of Canada sets as an objective that new resources projects in the natural resource field should have at least 50% and preferably 60% Canadian equity ownership". FOREIGN INVESTMENT The situation for the foreign investor in the worldwide resource industry rapidly deteriorated from then on. New features appeared in mineral exploitation and operating agreements, centering not only on local government/local companies ownership but also on increased taxation. The new tax rate (mineral tax, royalty, and income tax) for the semi-government companies NCCM and RCM in Zambia became an effective 73%. Likewise the much publicized and discussed renegotiated Bougainville agreement brought dramatic increases in the total "take" by the PNG Government. More innovative forms of indirect taxation made their appearance and were added to the normal tax burdens of the mineral industry which already

Jan 1, 1985

PRESIDENT PRYDE: I am sure we have all listened with interest to the presentation of this subject. Anything that promises economy in coal mining today is welcomed by all of us. We will now have a discussion on this paper. If any of you gentlemen want to ask any questions, you may do so. I think we will develop something of interest and along the lines of economy. That is the first consideration of a coal mining man. MR. H. D. RANDALL: It is an interesting fact that in manufacturing we find the greatest economy results from giving a man the simplest possible act to perform, while there is nothing too complicated for a machine. If we want to put up a set screw we find it cheaper to let one man set it up and the other screw it in. The maximum economy is what we are after. Similarly, one of the points of greatest interest which Mr. Ickis has emphasized, is that this automatic equipment not merely dispenses with a manual operator, but also performs certain functions which the operator cannot do. It provides an inherent protection to the apparatus and service not possible under manual operation. We very rarely have cases of failure with these automatic equipments, .and consequently have the advantage not only of having eliminated the operator's salary, but also his mistakes. We have had a large number of these equipments in use for several years, so that their practicality is now thoroughly proven, and the trend of practice now indicates that the automatic idea will be further extended and will become universal for such classes of service. MR. D. C. McKEEHAN (Union Pacific Coal Company) : My notion of an automatic sub-station is one that does not necessarily require new equipment beyond the control equipment; so that any of you that are interested in it can take up with the manufacturers and find out how much it would cost to change any equipment. The greatest point I think is the fact it eliminates the several nationalities from operating the set, either on day shift or night shift. They can so lock the control as to make it impossible for anyone to start or stop it, except the one who has the authority. Another point I do not believe was brought out very clearly: It would be particularly advantageous to people who buy power, and if you could have several sets in parallel, it would allow you to start the shift with one set and cut in the additional sets as the shift progresses. There are various operations that stop at the end of each shift, and-one or two or three sets can be cut out, leaving the load on one set, providing the size of the copper is sufficient to supply all the points of the mine. Another point I want to bring out: In case you have quite a number of sets distributed along transmission line, the switch trips, the operation restores the service, and you may have several hundred-or in case with us, we would have several thousand-K. V. A. of Motor Generator Sets and Rotaries, that would be starting at once, and the switch would automatically trip out again. MR. RANDALL: Another form of control was described as the so-called supervisory control. This control could be started up so the starting would not be synchronous, but could be spread out over a sequence. MR. McKEEHAN: I think that is rather a theoretical consideration for coal miners. They are standing at the controller ready to shut it off unless there is some selective method of starting various sets- MR. RANDALL: I had in mind this supervisory control, one man, a central operator who would determine which station should start and he would take time enough to have his load come on gradually. He would not permit all the installations to come on simultaneously, but come on in succession: MR. McKEEHAN: You misunderstand me. Suppose we had the main switch at Rock Springs, which supplies several camps, and there are several

Jan 1, 1924

By R. R. Sayers

The increasing use of hydrogen fluoride (annual consumption now exceeds 500,000 pounds (1)4/) directly and its occurrence as a byproduct of the utilization of fluorine compounds in the mineral industries, especially in metallurgical processes and in the refining of petroleum products, has aroused interest in its toxicity, and a brief review of the literature, with special reference to the hazard of poisoning in the mineral industries, seems to be opportune. Recently, residents in the vicinity of aluminum plants have been complaining of injury to livestock and vegetation as well as to their own health from the gases discharged into the air during operation of the plants, hydrofluoric acid gas apparently being the offender. The comparatively recent utilization of hydrofluoric acid in the alkylation process for the production of high-octane gasoline has raised the question of the hazard of poisoning in the petroleum Industry. In addition, the use of fluorine-containing refrigerants has extended the potential al exposure outside of industry (2).

Jan 1, 1945

By Edward O. Reinbold

The paper presents the results of a study which involved collection and analysis of airborne pollutant concentration data in two producing underground room and pillar metal mines which use diesel powered equipment in the area near the face. The results include the concentrations of CO2, CO, NO, NO2 and respirable particulate matter measured with the latest portable instruments, and the carbon and hydrogen contents of the particulate matter samples determined by combusting them in a Elemental Analyzer. The carbon and hydrogen contents are used to estimate the amount of diesel particulate matter in the mine ambient air. The short term grab sample concentration data, although not suitable for determining compliance with ACGIH Threshold Limit Values (TLVs), are related to the TLVs so that they may be compared conveniently. Lognormal frequency distributions and the arithmetic mean of the concentration measurement data are used to compare different mine situations. Conclusions are drawn as to which pollutants are most important to control under actual mine production conditions.

Jan 1, 1979

By D. J. H. Walker, W. H. Gibson

The inclination of any pit wall composed of stacks of benches is limited by the overall quality and structural complexity of the rock mass in which the slope is situated. For a bench stack angle that satisfies the stability criteria, various combinations of bench height, bench face angle and berm width can be used in the slope design. The bench face angle and berm width geometries must be chosen to fit the bench stack angle but must provide a berm that will be capable of catching the volume of failed wedge material from the bench faces above. Other considerations for bench height and berm width are equipment size, ore selectivity and blasting design. This paper studies the effects of different slope configurations on slope performance as it relates to wedge stability, volume of rock safely contained on berms, and rockfall. Optimisation of the geometry is carried out based on the need to minimise the volume of failed material which limits the effectiveness of the berm. This will reduce the number of rocks that can continue to fall further, reaching geotechnical safety berms or pit ramps, that put safety of personnel and equipment at risk. For general study it is most effective to investigate and compare the performances of each of a wide range of geometrical combinations of bench height, bench face angles and berm widths that fit a variety of different bench stack angles. These analyses were conducted for a predetermined bench stack height and three different bench stack angles.

Jan 1, 2006

By V. B. Dale

This paper is one of a series covering the mineral resources of the Nation. It briefly describes most of the known tungsten deposits of New Mexico. Most of the descriptions are from field examinations by the senior author. Reported tungsten occurrences that were not visited are listed below: Colfax County: Occurrences of ferberite in thin veins in Willow Creek near Elizabethtown.4/ Dona Ana County: Small, low-grade occurrences of scheelite near the summit of the Organ Mountains about 15 miles east of Las Cruces. Hidalgo County: Scheelite reported in the Daisy mine 7 miles southeast of Hachita. Ores are carbonates containing copper, gold, silver, and bismuth.5/

Jan 1, 1959

By J. R. Thoenen

In June 1929 the Bureau of Mines issued a 13-page information circular entitled "Mineral Wool," which was one of the first publications to present to the public Rome technical aspects of the mineral-wool industry. Since then several articles on the subject have appeared in the technical press as well as in publications of State organizations. Inquiries for information on mineral wool have continued to be received by the Bureau of Mines in large number, and in 1935 it was decided to make a field survey of the plants then producing and to collect therefrom technical data to be compiled in a paper for nubile distribution. With the cooperation of the industry, this survey was made, and Information Circular 6984, Mineral Wool, was published in January 1930. The issue was exhausted after a few months, and requests for copies continued to come to the Bureau. As opportunity arose, further field studies were made in American as well as Canadian plants. The present circular contains the essential information in Information Circular 6994 together with date from later field studies.

Jan 1, 1939

By Javier Enrique Basurco Cayllahua

In this work, a gram-positive bacteria was used as biosorbent to elucidate the aluminum load capacity under different conditions related to metallurgical and chemical plants. The sorption data followed the Langmuir, Freundlich, Dubinin-Radushkevich isotherms. In order to determine the best isotherm fit, three error analysis methods were used to assess the data: correlation coefficient (R2), residual root mean square error (RMSE) and Chi-square test. The error analysis established that the Dubinin-Radushkevich model fits better the aluminum biosorption data. The maximum sorption capacity was found to be 41.59 mg.g-1. The maximum removal of aluminum was 95% at pH around 5. The experimental kinetics data was evaluated considering two models (pseudo-second order and pseudo-first order). This study indicated that the R. opacus is an environmental friendly biosorbent.

Jan 1, 2009

By J. R. Thoenen

In Progress Rerort 1,4/ a number of facto were demonstrated and conclusions drawn from experimental tests and records made during commercial blasting operations at a number of quarries. For example, the tests showed (1) that vibrations received on outcrops were of comparatively

Jan 1, 1938

Wildcat strikes in the Appalachian coal fields, primarily in West Virginia, have resulted in an estimated 4.5 million ton loss in coal production during July and through the first week in August. Since then, the strike intensified further, and on August 9, nearly all of West Virginia's 60,000 miners were off the job with another 10,000 miners on strike in eastern Kentucky. The Bureau of Mines estimates that West Virginia's coal output is currently (8/9) eight million tons below last year when the state produced 108 million tons. West Virginia, the Nation's second largest coal producer of coal behind Kentucky, has not failed to mine over 100 million tons a year since 1938. At the end of the second week in August, nearly all coal miners in West Virginia remained out. The strike is a protest against a cutback in union health and retirement benefits. An announcement June 23 about the United Mine Worker's health and retirement fund precipitated the strike, Fund directors said that because of inflation and production losses caused by earlier wildcat strikes and the severe winter, miners would have to pay the first $250 of hospital costs and 40 percent of doctor bills, up to $500 a year. Previously, the funds paid all hospital and doctor bills. According to the West Virginia Coal Association each day of the strike in West Virginia results in a loss of coal production of 500,000 tons, a loss of $3.8 million in miners wages and $1 million in contributions to the UMWA's health and retirement fund.

Jan 1, 1977

By Gary A. Kingston

This examination of Pacific Northwest (Idaho, Montana, Ore on, and Washington) ferrous scrap-industry opera ions, principally those in Oregon and Washington, points out factors influencing the supply and consumption of scrap materials, such as the complete dependence of steel ingot producers in these States on scrap as a metal raw material and the sizable quantity of scrap exported from Seattle and Portland to Japan. The pattern of the industry is presented as a movement of materials from their diverse sources to the consuming market. The geographic locations of the consuming industries in relation to the area generating scrap materials and the movement pattern of the supply from source to destination strongly influences the cost of the commodity. The best measure of the scrap supply available in an area is experience in terms of how much scrap was withdrawn at a given price. Scrap availability is not finite, because the return of materials as scrap is secular and influenced by constantly varying market conditions. Steel ingot producers use 75 percent of the approximate 500,000 tons of scrap consumed in Oregon and Washington; steel foundries take 15 percent of the total; and iron foundries, ferroalloy plants, and other miscellaneous consumers utilize the remainder. Also, from 1955 to 1960 an average of about 200,000 tons has been exported annually from Oregon and Washington. The foreign exports are supplemented by lesser .shipments to other steel producing States, principally in the western United States. From 1955 to 1960 the preferred and higher value heavy melting scrap grades accounted for about 60 percent of total withdrawals which varied between 600,000 and 950,000 tons annually. Total scrap withdrawals from Oregon and Washington are projected to 1.8 million tons by 1985, 60 percent (1.1 million tons) of which will be heavy melting grades. No. 1 heavy melting scrap is most attractive to scrap consumers at $35 per ton or less. Price-supply relationships compared with projected scrap requirements indicate future prices possibly over $35 per ton. High prices over a long period could motivate the Pacific Northwest scrap consumers to produce steel from iron ore. However, technologic changes taking place at integrated steel plants could reduce scrap withdrawals from the Pacific Northwest, which might keep the scrap price sufficiently attractive to obviate production of competitive iron products by the Pacific Northwest scrap consumers.

Jan 1, 1964

To develop a conceptual design for an automated longwall mining system, one should know what has been done, what is being done today and what is being planned for tomorrow. The bibliography referenced and discussed in this report provides a good source for that knowledge. To scientifically determine where attention should be focused to up-grade a system, the system must be quantized as far as possible. The Mechanization Profile of Appendix A-I is discussed in this report and has been used to analyze and determine the degree of mechanization currently in use and/or described in the literature for all three major elements of the long-wall system, namely, Winning, Roof Support and Haulage. The charted profiles make it self-evident where attention and design effort is needed to remove human operators from the face of the mine.

Jan 1, 1975

A concise country-by-country summary of the mineral industry of Africa is presented. Reserves, resources, role of the country in the world mineral supply, and developments in the mineral industries are reviewed. The data on each country are accompanied by a map showing mineral location and transportation facilities.

Jan 1, 1976

The low production rates associated with the underground metal mining industry have received considerable attention during the last decade. A number of significant technological advancements, in the form of new equipment, have taken place to improve the economics of ore production. Unfortunately, an extremely important factor in the equation -- the operator protection and safety -- continues to receive a low priority. The underground metal mining industry has one of the poorest industrial safety records in the United States. Equipment operators are constantly being placed in hazardous situations. Even one fatality is one too many. All of us bear the responsibility to eliminate it. This project is one of the important steps currently being undertaken by the U.S. Bureau of Mines to improve the operational safety of seven major pieces of ore handling equipment commonly used in underground metal and non-metal mines. The objectives of this study are; (a) to identify the existing hazards associated with the operation of the specific equipment, and (b) to recommend practical solutions that will minimize these hazards and reduce operator injuries. These recommendations are to be in the areas of equipment design improvements, additional operator protection and warning devices, equipment operating procedures and any modifications to the existing safety regulations.

Jan 1, 1975

By C. Arthur Carlson

"It now becomes my privilege and duty to call to order this fifty-first meeting of the Rocky Mountain Coal Mining Institute. "I bid you a hearty welcome and I know by your attendance at these meetings you will gain a great deal of valuable information, as well as have a wonderful time. "We have been very ably represented by Mr. John H. Emrick as General Chairman, assisted by our good friend Mr. Fred W. Whiteside, our secretary and treasurer. I know they have worked very hard in selecting the various committees, who in turn - by the looks of our program have gone all out to prepare material that should be of great interest to us. I trust we will be attentive to the subjects presented and freely enter into the discussions, also relating our problems and experiences. I am sure this will prove both profitable and beneficial to all present. "The main purpose of these conventions is to become acquainted with each other, renew old acquaintances, talk over our problems, and have a little fun and relaxation from our every day routine. "Let us not forget the manufacturers, the distributors, the operators, or the press because it is through their splendid support that this organization is successful. "Since our last meeting we have gained many new members, whom we especially welcome. We are sorry to have lost a few. I am mindful, at this time, of two very good members from my home state who have passed away, Walter Wetzel, a former president of this institute, and Lee Alger, at the time of his death, Vice-President from Utah. We also lost very recently our assistant Secretary-Treasurer, Everret Davis. These men contributed a great deal to the institute and the coal industry in general. I am sure they are greatly missed by all who knew them."

Jan 1, 1955

By James L. Poole

INTRODUCTION Companies in the mining industry are subjected at times to currency exchange rate risks and interest rate risks. The former occurs any time a firm deals in more than one currency. The latter occurs anytime a firm is financing itself with borrowings that have a floating interest rate (although a fixed rate can be a problem at times). FOREIGN EXCHANGE RISKS There are two general reasons why exchange rate risks (FX risk) can occur: First, a firm may be building a mine or plant in another country where financing for the plan is denominated in funds other than the country hosting the plant. For example, if a Canadian firm is building a smelter in another country which is being financed with Canadian dollars, the C$100 million for labor, which must be paid in the local currency, has subjected the firm to a C$100 million FX exposure risk. If after the cost estimates were made the local currency appreciates 30% against the Canadian dollar, the cost of labor has increased to C$130 million. (Of course, the local currency could also devalue during this period making the labor cost component less than estimated.) The other reason exchange rate risk arises is due to the fact that the costs of production in one country producing minerals may be incurred in one currency while the production is sold in another currency, such as coal being exported from Canada to Japan under contracts denominated in Yen. In this example, the Canadian firm is exporting coal to Japan and being paid in yen in 30 days at a contract price of 100 Y per ton. Furthermore, assume that the mining firm anticipates a depreciation of the yen against the Canadian dollar of 5% in the next 30 days. Therefore, the mining firm stands to lose 5% of the value of its shipment in a month's time not including carrying costs. In both cases, the mining company risks an adverse change in the exchange rate, that is, the currency the company holds may decrease in value relative to the other currency. There are a number of ways to mitigate the exposure to foreign exchange which can be utilized by the mining company. Optimally, a company should try to match all their inflows and all their outflows in the same currency. For example, if a Canadian firm has mining costs and debt service costs both denominated in Canadian dollars then 100% of their receipts would need to be in Canadian dollars. If a Canadian firm has 70% of its cash outflows in Canadian dollars and 30% of its cash outflow in American dollars in the form of a loan amortization then their receipts would need to be 70% in Canadian dollars and 30% in U.S. dollars. This general principle of matching cash receipts and cash costs in the same currency works fine in a perfect world but what of the real world when these cannot be matched? In actual practice, however, the financial markets have developed a number of ways in which foreign exchange risks can he managed or reduced. FORWARD MARKETS One method is to use the forward markets which are made on a world-wide basis by the commerical banks for foreign exchange. If a firm wanted to lock in the current exchange rate for the receipt of a foreign currency at some point in the future, they could do so by contracting on the forward market with a bank selling that foreign currency at the current rate at the future date. For example, assume that a Canadian firm is exporting coal to Japan which would pay yen in 90 days. If a firm wanted to lock in today's exchange rate they could contract with a bank to sell on the forward market yen in 90 days. When the yen was received the contract would be executed by selling the yen to the bank and receiving the previously agreed upon number of Canadian dollars. Generally speaking, the forward market can be used to sell forward about 12 months. The costs of selling (or buying) forward

Jan 1, 1985

Introduction Surface mining is a business, and the objective of most businesses is to make as much money as possible within certain responsible constraints. Businesses normally measure their potential to make money by estimating the discounted cash flow rate of return on new projects or the net present value for ongoing projects. These estimators of profitability are calculated using the following well-known equation: [ ] where i is the year, n is the total number of years, A, is the after tax net cash generation in year I, r is the discount rate and NPV is the net present value. In its simplest form, when the value of r makes the NPV equal to zero, the discounted cash flow-rate of return (DCF-ROR) is defined. The maximum economically recoverable reserve is identified at the point where the NPV or DCF-ROR is at a maximum. Depending on the measure used (DCF-ROR or discount rate) for calculating the NPV, the definition of recoverable reserve will be different for exactly the same deposit. Maximization of the measure of profitability and the economically recoverable reserves should not be separated from the mining method and sequence of exploiting the reserve. The surface mining methods may involve multiple-pass development of the resource, mining to the ultimate limit in one pass or a combination of the two methods with backfill. Multiple-pass development When planning a multiple-pass mining operation, it is important to determine the width of pit expansions that are appropriate for a specific situation. Production personnel typically want wide, open work areas where operations can be set up to run at peak efficiency. While this is understandable, the trade-off between highly efficient production operations and an overinvestment in stripping should be carefully weighed. As long as safety is not compromised, a few cents per bank cubic yard increase in operating cost due to lower productivity by working in more confined spaces may well be offset by a decrease in the overall short-term stripping requirements. A mini study on productivity and cost should help quantify this cost before deciding on minimum phasing requirements. The bigger challenge associated with establishing smaller work areas is securing operations and management buy-in to marginally lower productivity when reporting results. When cost reduction is the important management goal and everyone is focusing on unit costs, one sometimes loses sight of the goal of total cost management and, even more importantly, maximum profitability. The first pit should be defined by the first grouping of recoverable mineral that has the highest after-tax unit value and forms a feasible mining unit. The assumed mining of the first pit should be followed by the assumed mining of the second most profitable practical pit or pit expansion. If this process of grouping and sequencing is followed until the profitability approaches zero, the general sequence required to extract the maximum economically recoverable reserve is identified. The curve in Fig. 1 is constructed for a rate of production, R, and a quality management strategy, Q, by calculating the NPV for a series of sequences, with each sequence assuming that the operations are terminated on successively lower profit pits. These values are plotted to form the curve in Fig. 1. If the operation ceases on a pit that has too high of a profit, opportunity is lost, and the NPV is lower than the maximum. The NPV curve peaks and starts to decline before the zero-profit pit is assumed mined. This occurs because the money invested in advanced stripping would have made more money invested at the discount rate than by mining the next pit expansion. Therefore, the maximum economically recoverable reserve is defined by the pit limit corresponding to the maximum NPV. There may be an opportunity to refine the definition of the "ultimate pit" around the maximum-value point. The precise definition of the ultimate pit early in the mine life may or may not be important today, depending on how far off in the future these limits will be reached. By the time an operation must decide on its last increment of economically recoverable reserve. much of the

Jan 1, 2000

By E. D. Attanasi, M. W. Bultman, J. H. DeYoung

The 1987 recovery in the US mining industry permitted modest increases in exploration expenditures that year (Fig. 1). Favorable market conditions apparently allowed the gains to be sus¬tained in 1988. There was great uncer¬tainty early in the year as to whether world and US economic growth would be a casualty of the October 1987 worldwide stock market crash. By nearly all measures, the performance of the US minerals industry was strong¬. A weak US dollar and the strong growth of worldwide capital spending resulted in in¬creased US exports of con¬sumer and producer durable items as well as strong domes¬tic demand for metals. In fact, 1988 US steel industry exports reached levels not attained since the mid-1970s. It was re¬ported that steel industry labor productivity is now roughly twice the 1981 level. Among metals with signifi¬cant average nominal price increases in 1988 over 1987 levels were copper (43%), alu¬minum (52%0), and zinc (44%). Even though domestic copper production has grown since 1984 by 30% in mining and 24% in refining, em¬ployment in mining and milling is 4% below the 1984 level. Domestic unit costs are reported in the range of $1.10 to $1.33/kg (50 to 60 cents per lb). The US base metals industry is proba¬bly in its best cash position in many years. However, there has not been a large increase in exploration expendi¬tures. This is due mostly to the percep¬tion that worldwide capacity can easily be increased. Industry reports do show that "low cost" copper producers have been buying reserves from weaker com¬panies. The 1987 Society of Economic Ge¬ologists (SEG) survey of exploration activity indicated that 95 cents out of every exploration dollar spent by US and Canadian firms was for base and precious metals (Economic Geology, January 1989). Press reports, though, make it clear that most of that spending was targeted for precious metals. US claim staking data (Fig. 2) rein¬forces this suspicion. The apparent lag in new claim filings in Alaska and phe¬nomenal growth in filings in the lower 48 states suggests that exploration is directed at relatively low risk targets. In the conterminous 48, more than 40% of the new claims were made in Nevada, indicating an emphasis on gold (although even Nevada had some base metals exploration). Even with a price decline during 1988, the difference between the gold price and average global "cash" production cost of $7.30/g ($227 per oz) still leaves room for an attractive return (Northern Miner, 1988). Exploration plans and results Metals Economics Group (Halifax) indicated in its 1988 exploration survey that exploration expenditures by US and South African firms would be at about 1987 levels. It also reported that Canadian and Australian firms were ex¬pected to reduce their exploration spend¬ing significantly. Firms in both coun¬tries were caught in changes in tax laws. In Canada, the Mining Ex¬ploration Depletion Allow¬ance (MEDA) once permitted generous tax write-offs to in¬dividuals investing in miner¬als exploration. It was to be replaced in January 1989 with the Canadian Exploration In¬centives Program (CEIP). Although structured and ad¬ministered differently than MEDA, CEIP can provide an equivalent or possibly greater financial incentive for min¬eral exploration, for junior mining companies. In 1987, it is estimated that junior com¬panies accounted for two¬-thirds of the off-property (or grass roots) exploration ex¬penditures in Canada. Australia will revoke the tax exemption for gold in 1990. Australian operators, therfore, were expected to concentrate efforts on speeding up pro¬duction during 1988 and 1989. In 1988, Chile and Mali announced special efforts to attract gold explora¬tion by foreign companies. The Cana¬dian government continues to express concern about the write-off (and drawdown) of base metal reserves. Falconbridge did announce a new initiative to identify additional base metal reserves in the Sudbury district. Discoveries Gold deposits dominated discoveries

Jan 1, 1989

By Donald W. Gentry

Introduction The mining industry is perhaps best characterized by the numerous and abnormally high risks associated with the business of mining and by its most basic assets - ore deposits, people and technology. At the most fundamental level, it is the quality and effective utilization of these basic assets that determine a mining company's ability to compete efficiently in the international market place. The gold industry has received much attention in recent years and especially in recent months, for good reason. This commodity serves as an excellent platform for the subsequent discussion of these three basic assets and their role in mining's future. Facets of the gold industry The fate of this noble metal in recent times illustrates some of the various risks associated with the mining industry and the importance of high-quality assets, whether they be ore deposits, people or technologies. The following comments pertaining to the gold industry help place proper focus on subsequent discussions. All monetary amounts given are in US dollars. Throughout 1997, falling gold prices broke record after record: first hitting three-year lows, then a 12-year low in July and finally an 18-year low at year's end. From Jan. 1 through Dec. 31, 1997, the price of gold fell by more than $2.57/g ($80/oz), or some 22%. The decline in gold-mining profitability and stock prices was even more dramatic. At the beginning of 1997, the 20 largest gold producers in North America had a market capitalization of approximately $44.5 billion. At year's end, this market cap had fallen to $26.2 billion, a reduction of 41%. The total market cap of all the world's gold companies fell from $71 billion to $46 billion, a 35% drop (Serwer, 1998). Analyses suggest that, at a spot gold price of $9.65/g ($300/oz), only one, or possibly two, North American gold-producing companies can make money when break-even or "total costs of production" are considered. While strong hedge positions mitigate this situation in the short term, clearly, this is an industry in desperate straits. For example, write-downs for North American producers in 1997 were approximately $2.5 billion. Speculative short positions in 1997 were near historical record highs and generally exceeded long positions by factors of 9:1 or 10:1. Much of this is driven by some US commercial banks, hedge fund managers and commodity speculators who can significantly move gold prices sharply over short periods of time by selling gold they do not own in the expectation they can buy it back at a lower price before they have to deliver. These signifcant short positions are likely to continue as long as central banks are willing to sell or loan gold to financial institutions that in turn make the gold available to speculators who hope to capitalize on price fluctuations. The Far East accounts for approximately 26% of the annual demand for gold. Including India, the region accounts for 43% of total demand. More than 85% of the physical demand for gold is for investment jewelry in Asia and the Middle East. This demand is extraordinarily price sensitive. The fairly recent turmoil in Asian markets and economies, combined with currency devaluations throughout the region, have made gold more expensive (30% to 50% in local currencies) for those peoples most likely to treat gold as a safe investment haven. Higher interest rates also have reduced the amount of money they have to spend on consumer goods such as jewelry. All of these recent Asian events are deflationary in nature. Deflation, if coincident with rising unemployment, could result in significant dishoarding of gold. There is one key fact to remember when analyzing

Jan 1, 1999