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By T. R. Ellis

The valuation of mineral properties in the U.S. is only partially regulated. The regulations which have jurisdiction or impact appear to have such mainly as a consequence of unintended fallout, since the regulations were designed for other purposes. Court case history can also be important. The combined results are a mixture of bad and good, with important lessons to be learned. Since 1981, the Securities and Exchange Commission has prohibited U.S. listed companies from reporting quantitative estimates of mineralization and the value of mineralization, other than proven and probable reserves. This results in the minerals appraiser (valuator) working with a shortage of data in his everyday work, both on the subject property and in sales analysis. Between 1989 and 1995, all 50 states and essentially all federal agencies adopted the Uniform Standards of Professional Appraisal Practice (USPAP) for real property appraisals (valuations). The major national appraisal societies also require their members to abide by USPAP. A significant portion of minerals appraisals must now follow these standards. This paper will discuss the content of USPAP. It provides a very good framework for the valuation of a minerals property or a mine, both as real property and as a business. However, the credentialing standards for real property appraisers are now prohibitive for minerals appraisers.

Mar 1, 2002

By R. Horn

The financial performance of the mining industry, measured by return on equity and capital employed, has been inadequate for many years. Consequently, mining companies are not valued highly by stock markets. Among the more important causes for the decline in the sector are the conservative working practices and reluctance to adapt to change or to develop new technology, although some relatively recent developments such as SX-EW copper and heap leach gold have made a significant impact on the cost base of these metals. The subsidiary business of metals exploration suffers from the same problems as the rest of the industry. The rate of discovery of ore deposits has been falling over many years and since the late 1990s, there has been a sharp reduction in global exploration activity that, if it continues, will further reduce the global supply of new ore reserves. New technological developments, particularly in geophysics and different operational practices may help reverse this trend. Statistical methods for evaluating the risk of ore reserve estimates will also improve the economic return on new mining ventures. The science of ore geology has potential to reduce exploration risk, but modern ore genetic theory has not contributed greatly to recent discoveries. The junior exploration market has almost ceased, but a new style of technically specialized efficient small exploration company has emerged which, in alliances with major companies, may be the vehicle for future global exploration. Exploration in virgin terrains has a higher risk discounted potential for the discovery of very large orebodies than that in known mining districts but mining companies have little financial incentive for this high risk exploration because of the very long lead time to production. Alliances of two or more companies reduce the risk in both the exploration for and development of major new mining projects. If new orebodies are not found, then metal prices will inevitably rise in the long term. Governments of industrial countries, particularly those with a significant mining industry such as Canada, should therefore provide assistance to exploration in order to maintain their existing industry and prevent a metals shortage from developing in the future with its consequent impact on the world economy and increased environmental damage as large lowgrade orebodies are developed to supply an expanding market.

Jan 1, 2002

By J. I. Schoenherr, G. Schubert, F. Demczenko

The currently known and used plastics and rubber recycling or sorting processes cannot be applied efficiently and economically due to large amounts of fine bulky materials (<3 mm). These wastes are mostly given to specialized landfill sites. Starting out from classical and traditional beneficiation processes a new research project was initiated to work on certain new ways to efficiently separate plastic material mixes. First basic results show that the use of new and improved thermal beneficiation methods is a great implementation in the field of plastics separation. The results can be further increased by a suitable combination with other methods as well. This leads to high-quality and almost pure separated plastics and rubber products, easy to sell on recycling product markets.

Jan 1, 2002

By Tim O’Neil

Upbeat, surprisingly so, might describe the mood at the2002 SME Annual Meeting and Exhibit in Phoenix, AZ. More than 4,000 mineral professionals gathered for three days of education, networking and product perusal. The Annual Meeting featured the theme, “Minerals for the Future@ SME” at the Feb. 25-27 gathering. Meeting attendance reached 4,039along with 479 exhibit booths show-casing 325 companies. Exhibitors found a good mix of industry types:37% from mining, 19% from processing, 20% from manufacturing and 28% from environment, education and government.

Jan 1, 2002

By F. M. C. C. Vieira

There are many uncertainties that a mine designer should consider when selecting an optimal layout. Even though the inherent variability in the design parameters indicates that single-values are not representative of mining conditions, risk estimators such as ERR are often used without considering their statistical distributions. A probabilistic methodology has been developed to assess the influence of the extraction sequence and layout geometry on the rockburst risk associated with four ultra-deep mining layouts. The statistical distributions of incremental energy release rates and excess shear stresses at face elements are used as indirect estimators of rockburst risk in stopes, and the statistical distribution of the rock condition factor (RCF) is used as an indirect estimator of rockburst risk in tunnels and service excavations.

Jan 1, 2002

By T. R. Ellis

The vast majority of valuations produced for mineral properties using the net present value method provide an estimate of investment value or use value. Such an estimate can be a long way from the price that the property would actually sell for if placed on the market. Indicators from the market need to be used to validate or modify the net present value calculation if market value is being appraised. The comparable sales and replacement cost methods used in the appraisal of urban buildings generally fail when used in the appraisal of mineral properties. Other methods of sales analysis are introduced. Guidelines for what a minerals appraisal report should contain are presented.

Jan 1, 2002

By L. M. Gould

"Syncrude Canada operates the largest oil sands crude oil production facility in the world and produces over 13% of Canada’s total oil requirements. To achieve this, Syncrude mines the oil sands in open pits, extracts the raw oil known as bitumen from the sand using water-based processes and upgrades it into sweet light crude oil by fluid coking, hydroprocessing, hydrotreating and reblending. The final product, Syncrude Sweet Blend (SSB), is sent by pipeline to three Edmonton area refineries and then to pipeline terminals which ship the SSB to refineries in Canada and the United States.As parts of the Mildred Lake base mine reached their economic life, they were replaced with new facilities at the Aurora Satellite mine. Aurora is situated on Oilsand Leases 10, 12 and 34, 35 km northeast of the Mildred Lake facility (Fig. 1).In 2000, the first hydrotransport low-energy extraction production train started up at Aurora. A second production train is scheduled for start-up in 2003. Open pit mining at Aurora occurs using two hydraulic shovels, two cable shovels, and trucks ranging from 320-ton to 380-ton payload capacities (Fig. 2).Once the oil sands is excavated, the trucks dump the ore into a crusher designed to break up the big lumps of oil sands and rock at peak rates of 11 000 t/hr. The ore is then transferred by conveyor to a surge pile and then to a mixing box which combines the oil sands with hot water. Following bitumen separation in the primary separation vessel, froth is delivered to Mildred Lake for processing via the intersite pipeline (Fig. 3).The goal of this paper is to illustrate how high precision shovel GPS (HPGPS) is being used at the Aurora mine to aid in mine planning. This can be accomplished by first describing the function of the mine planning department, describing the Aurora orebody, and finally explaining how the HPGPS system functions and how it is employed at Aurora.The short range mine planning department ensures a steady supply of ore is delivered to the plant at the desired grade in a sequenced and economical manner. This is done by creating a mine plan that consists of shovel dig locations that require the shovels to mine in a specified area at a specified elevation."

Jan 1, 2002

By Paul Hosford, Tim Haldane

"The paper describes the fast-track development of the project from feasibility study through to detailed design and construction, highlighting the process adaptations for handling sticky ore and water management in a tropical environment, and subsequent commissioning and operating experience of the mine. The paper discusses the geological setting, the environmental and socioeconomic considerations in developing and operating a mining operation in an underdeveloped country and the logistical challenges involved in bringing a large capital investment into Central America.INTRODUCTIONGlamis Gold Ltd. acquired the San Martin project in Honduras as a result of its merger with Mar-West Resources in late 1998. Despite the prevailing low gold price environment at the time of acquisition, Glamis anticipated rapid development of the San Martin project due to the quality of the deposit and other positive factors.Following favorable exploration and permitting activities in the first half of 1999, Glamis prepared a Feasibility study. In October 1999, Glamis decided to proceed with the development of the project and selected Hatch to provide the engineering, procurement and construction management services for the project. The San Martin project was in full-scale commercial operation approximately 14 months after the receipt of Board approval, and by July 2001 the San Martin project was operating at approximately 150% of its feasibility design capacity."

Jan 1, 2002

By Simon Wright, Roland Heersink

In the past, the center of most companies&apos; e-initiatives has been on reduction of indirect costs, such as selling and procurement. Recently, e-commerce has moved its attention from back-office functions into manufacturing, in order to significantly reduce direct operating costs. This paper describes many of the Web-Powered Manufacturing initiatives being employed across various industries, and relates them to similar opportunities being started within the mining and mineral-processing sector. The following opportunities are enabled by Web-Powered Manufacturing: • Collaboration with outside experts to extend their pool of resources • Management of remote and distributed operations • Tie-in of small operations to a larger operation • Monitoring a position in a JV operated by a partner • Managing a plant located in someone else&apos;s facility • Having a chemical supplier manage his inventory in a customer&apos;s tanks • Having an equipment supplier remotely troubleshoot his equipment installed in a customer&apos;s site • Having an additive supplier provide remote pro-active. guidance in optimization of a customer&apos;s operation • Having software suppliers take responsibility for the results of their applications • Outsourcing software and systems support by providing remote access Details of one of these opportunities are described in this article, and the benefits captured using this approach and the technologies necessary to make them a reality are emphasized.

Jan 1, 2002

By H. O. Seigel, J. C. Gingerich, E. O. Köstlin

"To satisfy their continuing need to replenish or expand their ore reserves, mining companies are faced with the dilemma of arriving at a proper balance between the dual avenues of discovery through in-house exploration and of acquisition of properties that are relatively proven or are even in production. The returns from exploration activities may be spectacular, but are unpredictable. The allure of an acquisition lies in its promise of quick and risk-reduced addition to reserves. However, it is historically clear that quantum increments in shareholders’ values have arisen primarily through major exploration discoveries, rather than through major late-stage acquisitions. Late-stage acquisitions can prove highly profitable, sometimes based upon the planned use of superior mining or metallurgical technology, but more often occur as the result of unexpected windfalls. At the other extreme, they can become expensive failures through inadequate due diligence, or unforeseeable factors.Citing numerous case histories and industry statistics, it is concluded that a judicious combination of both exploration activity and the acquisition of prospects is the most advantageous strategy for adding new ore reserves. A skilled exploration staff is essential for success, be it through exploration discoveries or through opportunistic acquisitions, preferably at their early stages. In the future, it is anticipated that there will be fewer opportunities for acquisition because of reduced funding for junior exploration companies, leading to increased competition and higher costs for fewer properties, both in the advanced exploration and mining stages."

Jan 1, 2002

Production sharing and cost apportionment in joint ventures is commonplace in Australasia today and elsewhere. It is a recognised convention that, with the exception of a free carry situation, joint venture participants usually share the proceeds of the joint venture in direct proportion to their respective participating interest, after having first paid its respective cash calls, in advance, to cover the projectÆs ongoing operating and capital cost requirements.In surface mines, the parties simply pay their way and take their proceeds in this manner. In underground mines, the situation is no different, though treatment of capital, depreciation and tax may differ between the parties. A common feature in many cases is the creation of a joint venture entity to conduct the business. This entity then collects cash from the parties, banks it, employs the staff, runs the operation, provides reports and pays out the proceeds. This convention appears to be relatively simple in application. In practice, it has been known to be complicated in the situation where the participants take their product at the mine gate and undertake their own marketing and selling arrangements. A more complex situation presents itself where the joint venture tenement boundary with an unrelated third party straddles an economic deposit. In this scenario, both the joint venture parties and the third party may wish to mine the deposit, sharing some infrastructure and costs, yet taking their own product as it is produced. A case study outlining such a situation is presented in the paper, outlining firstly how the major cost categories were identified and treated for cost apportionment purposes. Secondly, a mechanism for the equitable apportionment of product is suggested. Finally, issues such as timing and cost reporting are dealt with, together with a checklist of points which should be considered when a similar situation might arise in the future.

Jan 1, 2002

By S O. Hille

Modern remote mining operations in Australia are more commonly trending towards fly-in/fly-out (FIFO) sites. This trend is driven by numerous factors including increased business centralisation, reduction in operating costs, and a desire to live in coastal cities that offer closer family networks and a greater diversity of facilities. Consequently, the resource development industry has had to adapt. When WMCÆs Mount Keith Nickel Operation commenced operations in 1994, it was developed as FIFO for its entire workforce. Since then, there have been several permutations of rosters within a 21 day compressed work cycle including the 14/7 cycle. This paper discusses a case study of the change in management process to the 9/5 work cycle focusing on minimising fatigue in the workplace. It includes the discussion of the business case, employee reaction and the practical application. The impact of the best practice change after 18 months is discussed.

Jan 1, 2002

By T. R. Ellis

"The valuation of mineral properties in the U.S. is only partially regulated. The regulations which have jurisdiction or impact appear to have such mainly as a consequence of unintended fallout, since the regulations were designed for other purposes. Court case history can also be important. The combined results are a mixture of bad and good, with important lessons to be learned.Since 1981, the Securities and ExchangeCommission has prohibited U.S. listed companies from reporting quantitative estimates of mineralization and the value of mineralization, other than proven and probable reserves. This results in the minerals appraiser (valuator) working with a shortage of data in his everyday work, both on the subject property and in sales analysis.Between 1989 and 1995, all 50 states and essentially all federal agencies adopted the Uniform Standards of Professional Appraisal Practice (USPAP) for real property appraisals (valuations). The major national appraisal societies also require their members to abide by USPAP. A significant portion of minerals appraisals must now follow these standards. This paper will discuss the content of USPAP. It provides a very good framework for the valuation of a minerals property or a mine, both as real property and as a business. However, the credentialing standards for real property appraisers are now prohibitive for minerals appraisers."

Jan 1, 2002

By Steve Kral

For an industry that provides more than half of the nation’s energy needs, the U.S. coal industry still attracts negative publicity. However, the nation’s energy appetite continues to increase. And political leaders and the public are beginning to understand that alternative fuels will not be enough to keep up with that appetite. Does that mean the nation will now embrace the coal industry? No, according to speakers at the Rocky Mountain Coal Mining Institute (RMCMI) meeting. The industry still needs to sell the public on coal’s advantages over other fuels. And the industry must continue to develop technology that will allow coal to meet and exceed strict clean air and clean water regulations.

Jan 1, 2002

By Greg Sheppard, Eduardo Nebot

Australian researchers have developed new technologies aimed at improving safety and productivity at openpit mines. A data acquisition and feedback system for electric rope shovels has been shown to substantially reduce cycle times and decrease excessive machine duty caused by stalls. This data acquisition system was developed by the Cooperative Research Center for Mining Technology and Equipment (CMTE). It has been tested on a P&H 4100A shovel at Coal & Allied’s Hunter Valley operations and a P&H 4100XPB at BHP Billiton Mitsubishi Alliance’s Goonyella Riverside Mine in Central Queensland. In addition, CMTE member P&H Mine Pro Services has used the technology to acquire field data from a P&H 4100XPBrope shovel at RAG’s Belle Ayr Mine in Wyoming’s Powder River Basin.

Jan 1, 2002

By Graham Davey

"Ultrafine grinding of minerals has been in wide spread use in the industrial mineral field for over 30 years. Within the last 10 years the metalliferous industry has shown interest in the ability to produce ultrafine particles, as chemical, physio-chemical and physical separation processes have advanced to be able to treat ultrafine metalliferous particles. Also as the primary mineral deposits are depleted, new more difficult deposits must be mined. Existing operations are also looking to maximize economic return from existing deposits, requiring new thinking and technologies.The recent development of industrially proven and cost efficient technologies for ultrafine grinding has opened up another processing option for the treatment of finegrained metalliferous and refractory gold ores. The current commercial designs are variations of stirred mills used in the industrial minerals sector for the past 30 years. For the purposes of this paper ultrafine grinding is considered to be P80 of less than 15 microns.Attrition milling to fine grind sizes presents some challenging issues relating to scale-up including the dearth of information on the quantitative impact of feed and operating conditions, as well as the precise and accurate measurement of particle size distributions. Two examples from recent installations will be analyzed including Thalanga Copper and Century Zinc Mines. Both have diverse grind size targets for the SMD, yet both have realized significant metallurgical gains."

Jan 1, 2002

By P. N. Saavedra, E. A. Salamanca

"The maintenance strategies in the mining industry are changing from operative and periodic inspection strategies to a condition-based, predictive maintenance strategy centred in vibration analysis plus complementary techniques. Condition monitoring can also help to improve availability by being able to pinpoint and diagnose problems on operating machinery at an early stage. This reduces unscheduled downtime and production losses.However, in mining, for shovels operating in transient modes, with variable load and/or speed, the FFT (Fast Fourier Transform) standard approach is not directly applicable for analysis. This work illustrates how spectral order analysis and new transforms, called time-frequency transforms (TFT), allow us to monitor the shovel when it is working. Some practical examples showing the application of these analysis techniques to occasional vibrations measured on hoist and crowd transmission of a shovel are also presented. It is shown that at present, it is possible to carry out the vibration monitoring in the mining shovel while it is working, therefore avoiding the high cost of a loss of production which can occurr in traditional monitoring, where the measurement is taken while the shovel is out of production."

Jan 1, 2002

The profitability of individual ore blocks can be classed as clearly profitable, clearly not profitable, and those in between which are by nature quite sensitive to their major cost and revenue drivers. It is often the case that the most effort goes into the least profitable ore blocks to ensure that these will in fact not generate a loss. In these cases a cut-off grade policy is often not sufficiently live to separate individual sources given the volatility of financial markets and individual circumstances of some sources particularly in remnant operations such as Mount Isa MinesÆ Lead Mine. Standard sensitivity analysis can determine which factors stope profitability is most sensitive to. However, this does not usually indicate the likelihood of any input change, nor the combined effect of multiple inputs changing. The author attempted to modify the Lead Stream financial model that determines cash margin by inserting probability distribution functions and then using Monte Carlo simulations to determine the probability of any particular ore block making a profit. This effectively demonstrates the combined effect of varying a number of inputs simultaneously to provide a probability of making a profit. The limitations of this analysis lie in the accuracy that individual probability distributions can be specified. Attempts to generate valid functions from first principles have proved difficult for a number of reasons and these are discussed along with some practical alternatives.

Jan 1, 2002

By Mario Aiezza

This paper outlines the results of a relationship developed during the design and construction of the foundations for the Gallery Towers project in Melbourne. Both the builder and the piling contractor were determined to arrive at a satisfactory foundation solution to the problems encountered at the site. The scope of piling work was to provide load-bearing piles under the building columns, some of which were located within a retention system that also required a piling solution. Geological conditions were variable and challenging. The site area was small and located adjacent to the National Arts Centre in the developed Southbank area, a high density office area. This presented logistical problems in limiting construction traffic on site and also demanding minimal noise and vibration emanating from piling activities. The piling contractor, Vibro-Pile, and the builder, Walter Construction Group, faced the challenges presented with a refreshing cooperative attitude that was beneficial to both companies. Commercial issues rising from design and construction problems were first put apart in order to allow the respective technical department of each company to work with minimum constraints to achieve the most cost effective solution. In the process usual adversarial attitudes resulting in loss of time and money was avoided. A number of issues were addressed successfully at minimum cost and time during this contract. Despite the difficulties encountered, the job was completed on time and with negligible claims for extras, resulting in the development of a strong mutual respect between both companies.

Jan 1, 2002

With the dawning of a new century came the beginning of a new era in the coal industry. Instead of the traditional practice of only buying and selling produced coal in the United States, a coal futures market was established. The New York Mercantile Exchange began trading coal futures in July 2001. But, even in this new era, many of the old is-sues that have beset the coal industry still remain, as was evident in2001. Coal production increased to are cord level during 2001, according to preliminary data from the US Energy Information Administration(EIA). Production in 2001 rose by4% to 1.01 Gt (1.12 billion st), compared with 2000 (Table 1). This barely surpassed the previous record level of 1 Gt (1.11 billion st)set in 1998. Coal consumption remained unchanged. The additional production was used to replenish the depleted stockpiles that had resulted after two years of declining coal production and increasing coal consumption.

Jan 1, 2002