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The basic model for the evaluation of any coal-bearing property is the cash flow projection, the major components of which are operating costs, capital charges, taxation and revenue. A range of cash flow projections can be produced by varying the assumptions which underlie the operating costs, by assuming various forms of capital funding, by making assumptions as to future taxation and by speculating upon the present and future market value of the product. As for any model, the informational inputs and assumptions are vital because, no matter how sophisticated the processing, the informational inputs and assumptions cannot be improved by it. That is to say, the validity of the output (the total evaluation itself) cannot be of greater certainty or significance than that of the inputs. The total evaluation can of course be expressed in a number of ways such as the Discounted Cash Flow (D.C.F.) Rate of Return, the Net Present Value or, the Payback Period. The foregoing statement may seem trite. However, it is necessary to be clear about it so as to avoid unnecessary complication and a preoccupation with techniques as opposed to the informational inputs and assumptions. So far as techniques are concerned, much has been written and said about them during the last decade. Most of us have heard, if not always understood, something about probabilistic models, Monte Carlo simulation, sensitivity and risk analysis to say nothing of inflationary costing and the relative merits of developing cash flows in terms of current or constant money. Those techniques have their value, particularly if they can serve to illuminate conclusions which could not be reached on a simple and even perhaps on an intuitive basis. I am, however, reminded of one major coal mining project in which 20 or more major variables were identified, many cash flow projections were run on the computer and a detailed sensitivity analysis was carried out. The major conclusion reached was that the D.C.F. Rate of Return was predominantly sensitive to variations in selling price and operating cost. Of course, the funding and fiscal elements of a cash flow projection have to be dealt with as rigorously as possible. However, in the development of any coal property, capital requirements and taxation are, in part at any rate, dependent upon the assumed operational parameters. If the latter are misjudged, the whole evaluation process is deeply affected. The same is true of revenue, in the sense that, the positive cash flow is a function of output as well as selling price and again, misjudgements about achievable and maintainable levels of production also deeply affect the final evaluation. I shall try to underline the fundamental influence of the technological factors upon lead times, capital costs, operating costs, taxation, funding and the achievable and maintainable levels of production. In turn, these affect the whole question of coal property evaluation and indeed, the likely success or failure of any coal mining venture. I make no apology therefore that this paper does not set out to discuss the more esoteric aspects of the evaluation process but rather, directs attention towards some of the informational inputs and assumptions which merit clarification and discussion.

Jan 1, 1975

By Corliss R. Kinney

Since the first atomic bomb exploded over Japan, a great deal of speculation has been published about the use of atomic energy instead of coal for the production of power. Atomic energy, in time, may displace coal for this purpose, but atomic energy will not displace coal in supplying chemical raw materials to the rapidly expanding carbon-chemicals market. Modern civilization demands large quantities of carbon compounds and the logical source of many of these is coal. Consequently, many progressive operators are considering the possibilities of the utilization of coal as a chemical raw material as never before. Furthermore, the demand for clean, smokeless, and ashless fuels will continue to increase and the only way to handle coal under those conditions is to take it apart, just as crude petroleum is taken apart. One can readily imagine where the petroleum industry would be now if it had insisted on selling customers only crude oil, perhaps emulsified with a little salt water to correspond to the moisture and mineral matter in raw coal. The time seems to be coming at an accelerated Dace when mine operators will find that competing for a highly selective fuel market by producing a larger tonnage at smaller cost will be less profitable than to increase the value of a smaller tonnage many fold by producing something more valuable to industry and civilization than raw coal. For example, about 750,000 tons of carbon black selling for $50 to $60 per ton was produced in the United States in 1945. This tonnage is insignificant compared with the total production of coal in the United States, but a very tidy tonnage, together with the coal necessary to operate the process, for any mine operator fortunate enough to obtain a method of producing a better carbon black from coal. From the point of view of tonnage, the manufacture of coke of various kinds and its by-products is at present the most important source of carbon chemicals from coal. Nearly 20 per cent of the coal mined in this country is used for this purpose. A large proportion of the coke is used for the production of iron and steel, but even in this operation a considerable part of the coke is used for a chemical purpose; that is, the reduction of the ore to metallic iron. In addition, large quantities of coke are used in manufacturing many important products that find their way into the market. Possibilities of Acetylene One of the important chemicals manufactured from coke is calcium carbide, from which many products are made. One of these is acetylene. This hydrocarbon can also be manufactured from natural gas or from waste oil-refinery gas and these industries will probably offer competition for the manufacture of acetylene. Coke-oven gas can be used for making acetylene and should receive consideration

Jan 1, 1947

By Corliss R. Kinney

Since the first atomic bomb exploded over Japan, a great deal of speculation has been published about the use of atomic energy instead of coal for the production of power. Atomic energy, in time, may displace coal for this purpose, but atomic energy will not displace coal in supplying chemical raw materials to the rapidly expanding carbon-chemicals market. Modern civilization demands large quantities of carbon compounds and the logical source of many of these is coal. Consequently, many progressive operators are considering the possibilities of the utilization of coal as a chemical raw material as never before. Furthermore, the demand for clean, smokeless, and ashless fuels will continue to increase and the only way to handle coal under those conditions is to take it apart, just as crude petroleum is taken apart. One can readily imagine where the petroleum industry would be now if it had insisted on selling customers only crude oil, perhaps emulsified with a little salt water to correspond to the moisture and mineral matter in raw coal. The time seems to be coming at an accelerated Dace when mine operators will find that competing for a highly selective fuel market by producing a larger tonnage at smaller cost will be less profitable than to increase the value of a smaller tonnage many fold by producing something more valuable to industry and civilization than raw coal. For example, about 750,000 tons of carbon black selling for $50 to $60 per ton was produced in the United States in 1945. This tonnage is insignificant compared with the total production of coal in the United States, but a very tidy tonnage, together with the coal necessary to operate the process, for any mine operator fortunate enough to obtain a method of producing a better carbon black from coal. From the point of view of tonnage, the manufacture of coke of various kinds and its by-products is at present the most important source of carbon chemicals from coal. Nearly 20 per cent of the coal mined in this country is used for this purpose. A large proportion of the coke is used for the production of iron and steel, but even in this operation a considerable part of the coke is used for a chemical purpose; that is, the reduction of the ore to metallic iron. In addition, large quantities of coke are used in manufacturing many important products that find their way into the market. Possibilities of Acetylene One of the important chemicals manufactured from coke is calcium carbide, from which many products are made. One of these is acetylene. This hydrocarbon can also be manufactured from natural gas or from waste oil-refinery gas and these industries will probably offer competition for the manufacture of acetylene. Coke-oven gas can be used for making acetylene and should receive consideration

Jan 1, 1947

By Charles Jones

Discussion of the paper of CHARLES COLCOCK JONES, presented at the San Francisco meeting, September, 1915, and printed in Bulletin No. 105, September, 1915, pp. 1887 to 1898. D. A. LYON, Salt Lake City, Utah.-For some years I have been interested in the iron-ore deposits of the Pacific Coast, and I feel very much indebted to Mr. Jones for the information he has given us on this subject. I think that we are also very much indebted to him for having presented this paper, as he has given us reliable data in shape of facts and figures, which is just what we need in considering whether or not it would be commercially feasible to attempt to establish an iron and steel industry on the Pacific Coast. Personally, due to lack of market, I do not think it is a commercially feasible proposition at the present time. Mr. Jones states that pig iron can be produced on this coast as cheaply as it can be produced in Pittsburgh. Even. so, what can be done, with it after it is produced? To begin with, iron produced on the. Pacific Coast has to compete with iron produced in China. Last year I had occasion to investigate the subject of the market for iron and, steel on the Pacific slope, and found that it was possible for the producers of Chinese iron to sell it for much less than the price for which iron can be produced in the West, and also for less than eastern pig iron is now sold for, even when shipped through the Panama Canal. I was informed that the agents for Chinese iron had instructions to sell it for $1 or $2 less per ton than that asked for other irons on the market. Of course, I realize that the competition of Chinese iron may not be important, but even if it is not, and even though pig iron ,can be produced at the cost given by Mr. Jones in his paper, I do not see any immediate chance of its being so produced, due to lack of market. C. C. JONES, Los Angeles, Cal.-Mr. Lyon is right. It is a fact that Chinese pig is being sold in San Francisco on some large contracts at $18.50 a ton, while $19 is the usual price. We ought to produce iron. on this coast at $14. Personally I do not think Chinese iron is ever going to be an important factor. It is a bugbear out here now. You are not going to have much Chinese pig iron in .this country. Our little friend Japan is going to absorb everything it can. The price of Chinese pig iron at $18 is about as low as it will ever get. If we can show you that we can produce this iron here at the same price as at Pittsburgh, I. think you will have a good opportunity to compete with anything China or India can ever do. Costs there are very low now. They are going to come up by leaps and bounds in the next few years. The labor cost over there may be very low now, but I. have seen some men from there quite recently

Jan 12, 1915

By Alistair Frame

INTRODUCTION In April 1988 discussions were about to start with BP on the possibility of buying their- mineral interests, and it took a long time to arrange a deal. I will talk about RTZ without BP Minerals, look at the new RTZ with BP Minerals, discuss the outlook for metal prices, and review the problems in South Africa and develop the case against sanctions on that country. RTZAT THE END OF 1988 Late in 1987, after completing a worldwide review of our strategic thrust, we decided: 1. That the business focus would be to remain a major diversified natural resource group with interests in related industries. 2. To divest non-core and low growth businesses. 3. To develop a logical acquisition plan. 4. To emphasise organic growth and, most importantly, to enhance shareholders' wealth by capital increase and a progressive dividend policy. Subsequently, we concluded that we should sell our oil and gas business and dispose of several assets for which we saw little growth potential. The disposal programme raised some U.S.$ 1,600 million, representing a significant capital gain on our various investments. All transactions were carried out by our small Head Office staff in London, without the help of merchant banks and lawyers, and we were able to safeguard the employment of our staff in all these operations. The most interesting disposal was of our oil and gas interests. Before the 1987 strategic review, we had ambitions to develop our oil and gas interests and to become the leader in the second division of European oil companies. Our interests, which were purely in exploration and production of oil and gas, consisted of the 100% owned RTZ Oil and Gas company, and 29% of LASMO, a publicly quoted U.K. oil and gas company with extensive worldwide interests. LASMO, in turn, owned 25% of Enterprise Oil, one of the more successful of the North Sea oil exploration and production companies. Prior to the end of 1987, our intention was to acquire control of both LASMO and Enterprise. However, when we evaluated the net asset value of these two companies based on our oil price assumptions, which were pessimistic for the next five years or so, we concluded that they were both trading in the market at significant premiums. This, taken with the additional premium required for acquisition and the high cost of exploration, led us to conclude that, since funds could undoubtedly be used to better effect, we should sell our interests. Turning to the other major achievements in 1988, we commissioned, and built up to design levels in a very short period of time, the Morro do Ouro gold mine in Brazil. This mine reached its design output of 100,000 ounces of gold per year within three months of start-up, which was on time and under budget. We are now considering a possible expansion of this property. In South America, Utah International, Mitsubishi and RTZ arranged non-recourse finance, with post completion guarantees, for the giant Escondida Project in Northern Chile. Financing came from a group of banks in Japan, Germany and Finland -- the countries to which most of the concentrates will be sold -- and from the LEC. The average output of the mine for the

Jan 1, 1990

By W. T. Adams

The production of natural abrasives var¬ied in quantity and value compared with 1975. Output of tripoli-type materials and garnet increased in both quantity and value; special silica stone products decreased in quantity and increased in value; the production of emery decreased. The production and value of manufactured abrasive materials increased for all types. [ ]

Jan 1, 1978

ShouSteel Mining Ltd., a subsidiary of ShouSteel (Group) Co., was founded in 1959 and is located in QianAn City in Hebei Province, China. ShouSteel?s pelletizing plant uses iron ore as a raw material combined with limestone, dolostone, or olivine, with bentonite as a binder. After mixing the raw materials and forming them into small, spherical balls, ShouSteel then fires pellets in kilns for hardening. The company sells the finished pellets as raw materials for blast furnaces used to produce industrial metals such as iron. ShouSteel?s handling capacity is approximately 24.5 Mt/a (27 million stpy) of ore. The company?s production capacity is 3.2 Mt/a (3.5 million stpy) of oxide pellets and 560 Mt (650 million st) of sinters. Until recently, ShouSteel Mining had not replaced its electronic scales in its series of ingredient chambers. Because of the wear and tear on these older scales, the weighing system began to encounter regular problems. The company experienced a high failure rate from the integrator, an unstable signal, weak anti-interference ability and low accuracy. ShouSteel also found that spare parts required during repairs were consistently high in cost and that system calibration was becoming increasingly frequent.

Jan 1, 2012

By Philip Morey

Large scale surface coal mining will be required to fill future energy demand in the United States. In realization of this long-term commitment to coal resources, the U.S. Energy Re-search and Development Administration sponsored a study to determine the costs and problems of large-scale surface coal mining. As a result of this study a series of computer models were developed that can be used by government and industry to: 1) facilitate mine design and equipment selection, 2) provide detailed analyses of mining and processing costs. Two types of models were developed: detailed simulation models, which provide detailed information on mining systems and equipment to assist in mine design and equipment selection1 and broad models, which provide a first-order evaluation of deposits and new ventures for an entire mining complex. The complete model series permits examination of surface coal mining under a variety of terrain conditions. Six different mining methods were analyzed and documented during the overall project: 1) Area stripping with draglines, 2) Area stripping with draglines, extended bench, 3) Contour stripping with draglines, 4) Area stripping with shovels (loaders) and trucks, 5) Mountain top removal with shovels (loaders) and trucks, 6) Multiple dipping seam mining with shovels (loaders) and trucks. Each major operation in the coal mining pro-cess is represented in these models so that the best methods and equipment may be selected and 50 that the impact of such selection will be reflected in estimates of capital investment, operating costs, and coal price. Individual models allow the user to separately analyze overburden removal, overburden drilling and blasting, coal drilling and blasting, coal loading and hauling, coal preparation and handling, land reclamation, and premining, facilities, and administrative expenses. Because it is impossible to cover all the models in this paper, only the detailed simulation models representative of the technique "area stripping with draglines," are described. The Fort Union Strippable Coal Resource Region, one of eight test cases, is used as an example to describe the models.

Jan 1, 1978

By Joseph A. DeCarlo

THE TOTAL VALUE of sales of coal-chemical materials in the 10-year period 1948-57 increased 34 percent or at an average annual rate of approximately 3.5 percent. According to the Chemical Industry Facts Book, third edition, 1957, published by Manufacturing Chemists' Association, Inc., the production of industrial chemicals since 1939 "has grown at au average rate of about 10 percent" a year (p. 7). The rapid growth of the chemical industry increased requirements of chemical raw materials at a faster pace than could be supplied by coal carboniza¬tion, and view sources of supply became necessary. The petroleum industry in the past decade increased tremendously the flow of chemical raw materials to the chemical industry through the processing of crude petroleum and natural gas. Whereas coal carbonization supplied most of the raw materials for manufacturing synthetic organic chemicals before World War 11, coke ovens supplied only about 40 percent of the total used in 1957. Although the proportion of chemical raw materials supplied to the chemical industry by coke-oven operators declined, this source of supply is large and important to our economy. In 1957, the value of coal-chemical materials sold, including surplus gas used by producing companies, totaled $358 million, compared with $267 million in 1948. Major factors that contributed to this gain were (1) increased production of all coal chemicals and (2) higher prices for tax and light-oil products. Gains in output of coal chemicals resulted principally from expansion in carbonizing capacity of coke plants owned and operated by the iron and steel industry, as yields of the basic coal¬-chemical materials (tar, ammonia, light oil, and gas) varied only slightly during the 10 years under review.

Jan 1, 1959

By Oliver Bowles

Limestone, including dolomite, is the most widely used of all rocks - nearly 300 million tons annually in the United States alone. It occurs in some form in every State and is produced in thousands of localities. Because of its attractiveness, substantiality, and durability it is employed extensively as a building stone. In crushed and broken form it is used for concrete aggregate and railroad ballast and in highway construction, metallurgy, agriculture, and a host of chemical and industrial processes. This paper proposes to furnish general information on the origin and occurrence of limestone and dolomite, chief production centers, major uses, and methods of quarrying and preparing stone for market. Footnote references will guide the reader to sources of more complete information.

Jan 1, 1956

By Paul Wellman

A computer program is presented that may be used to calculate the bare equipment cost of the major processing units for any hot potassium carbonate gas purification system. The program is designed such that, with only minor modifications, it could be used with a variety of computer systems.

Jan 1, 1968

By T. A. Rickard

The writing that is effective is woven with a fine texture into an agreeable pattern; it is free from knots, loose threads, and stray fluff. The instrument that weaves this literary fabric, whether it produce a homely sock or a lordly tapestry, a simple story or a learned 'Itreatise, is a disciplined intelligence, as sure as a steel needle, as precise as a swift loom. The simile breaks down at this point, for the product of the pen is instinct with the human spirit and therefore transcends in beauty anything made by a mere machine. If words are to be woven into eloquent meaning, they must be well knit. Upon the relation of words to each other and of groups of words to other groups, known as phrases, clauses, and sentences, depends the success of writing as a means of trans¬mitting thought from man' to man. To be understood beyond question, you should know not only what your words denote but how to build your sentences; you must not only choose your words aright but construct your sentences properly. A sentence is a combination of words that makes complete sense; it says something about something. ' A clause is a subordinate sentence or a sentence within a sentence. A phrase is a group of words without a predicate; it makes sense, but not complete sense. For example: I shall wait for a few minutes before I go home: The whole statement is a sentence; "I shall wait" and "before I go home" are clauses; "for a few minutes" is an adverbial phrase. The orderly arranging of words and of combinations of words is called `syntax'; and from the original Greek form, ouvaeis (suntaxis), is derived the Greek name for an editor,

Jan 1, 1931

By Alvin Kaufman

Increased exploration in Alaska has resulted in many requests to the Bureau of Mines for facts about the mineral resources and mining conditions in the Territory. This report presents information about the minerals of Southeastern Alaska and the factors that affect development of a mining industry in that area. Southeastern Alaska is a narrow coastal strip of rugged mountains and many islands. The climate is mild, with an average annual temperature of 40° and heavy rainfall. Geologically, the region is favorable for deposition of ore; geographic-ally, it is difficult to prospect and to develop, except along areas immediately adjacent to the coastline.

Jan 1, 1958

By William J. Potter, Roger N. Pyle

Introduction The primary ingredient for survival of mining companies during a recessionary period is to be innovative and resourceful in the structuring and financing of operations. Over the past decade, many mining companies have had to retrench and restructure their operations and to redeploy their assets just to survive. During the same period, traditional sources of financing for mining companies -- commercial banks, subsidized export credit loans and long term straight debt financing in the public markets -- became less available and more expensive. Meanwhile, new markets and new financing instruments provided new alternatives for mining companies. Those companies which exploited these alternatives greatly enhanced their capacity for survival and even for profitability. This article considers the strategies adopted by some companies to adapt to changes in this recessionary environment; the inadequacy of traditional sources of financing; certain of the new financing instruments, structures and markets which have become available; and how several mining companies have utilized these new instruments, structures and financial markets to improve their competitive positions. THE IMPACT OF RECESSION ON MINING COMPANIES AND TRADITIONAL FINANCING SOURCES In its 1983 year-end article "The New Economic Order" Mining Journal characterized many of the large private sector mining companies with operations in the industrialized countries as being "gripped between the jaws of high working costs and stagnating metal commodity prices." The article went on to characterize the Canadian mining industry in particular as being "in the difficult position of having to seek to sell the bulk of its output in a world market characterized by over-capacity, where production costs were determined by internal political and economic factors while prices were set by external competitive forces of supply and demand." Miners of a wide range of commodities in the industrialized countries have come to realize that their domestic mineral resources are in many cases no longer competitive with global sources of supply. To compete and survive they would have to rely on their technical and financial expertise in mineral exploration and development and in mining and processing. Strategies For Survival Global competition has compelled management in the extractive industries to improve their worldwide cost position. This is the only means whereby a mining company can differentiate its product and attain a substantial competitive advantage. During the past decade, for example, ASARCO Inc. and Inco Ltd. chopped their payrolls, postponed expansion plans and otherwise retrenched. ASARCO reduced its capital expenditures and cash requirements for operations in 1984 to a level almost equal to its internally generated cash. The company's finances were also strengthened by increasing total lines of credit from outside sources, by selling common stock, and by reducing annual pension funding through a change in actuarial assumptions. Other companies returned to their traditional organizational structure where they had a demonstrated competitive strength. Consolidated Gold Fields, for instance, resumed its operation as a mining finance house. Its capital investment programs are now devoted solely to resource development. In mid-1984, at a time of firming zinc prices, Union Miniere S.A. used the opportunity to integrate its smelting capacity and to direct investment to certain subsidiaries at the expense of less viable operations. Smaller corporations realized that it was not enough just to be the low-cost producer. For example, Drummond Coal Company in Alabama, which dominates its regional market due to its low-costs, has also developed a world-wide trading capability and has placed incremental tonnage from its own mines as well as brokered coal produced by others, thereby minimizing capital risk. In Canada, Campbell Resources has exploited difficult times by acquiring assets cheaply. In the process it improved its capacity to withstand cyclical economic swings by diversifying from solely a copper and gold producer to a company based upon asbestos, coal, copper, gold and natural gas.

Jan 1, 1985

By Tap Pryor

A very small nation with large seabed resources requires a strategy. The simplest approach is to duplicate every step taken by the United Nations (UN), in its own leasing programme. In addition, the smaller nations must sell itself and its competitive offering. It is one thing just to await applicants and/ or tenders, another to work to make the leasing seem like a very good idea. This cap be achieved through publications, correspondence, meetings (such as the Underwater Mining Institute, but especially through pro-active planning, seeking the ideal technologies in both harvesting and processing. The ideal would be some combination that could begin quickly and on a small scale. It must be within the UN environmental guidelines. To meet the "quick and small criteria," simple harvesting and physical processing methods must be given the highest priority. Once these are satisfied, then marketing studies can be completed. There is, of course, a market for every element but only careful engineering and cost analysis will determine accessibility. What is required is a stepwise approach, gaining greater and greater credibility at each step. In fact, much planning can be done for very low cost. In the Cook Islands, the first crucial step was the East-West Center publication which pulled together all facts in one volume and which found the local resource to be richer in significant ways than Clarion-Clipperton. Most seem to believe that it could be many years before full production is possible, but this has been conventional wisdom for so long that it has taken on the suspicious aura of myth. Is it real? Have all possible recent technologies such as robotics and physical processing been taken into account? Either way, it is essential that a comprehensive approach be taken so that all factors from resource to market are considered as inter-related until a single business plan emerges. When that is in hand and when its profitability and risk levels are found to be credible, adequate investment funds are available.

Jan 1, 1994

The STATE MINERAL SUMMARIES publication provides estimated data and summaries of mineral activities at the State level for 1989. Most of the estimates are based on nine months data. These summaries have been prepared in cooperation with State geological surveys or related agencies. Individual State summaries are published separately as State Mineral Industry Surveys and copies can be obtained from the appropriate State Activities field office.

Jan 1, 1990

By David R. Wilburn

The U.S. Bureau of Mines investigated the resources, costs, capacities, market relationships, and short-and long-term supply of bauxite, alumina, and aluminum. The 45 evaluated mines and deposits in 14 market economy countries (MEC's) have a demonstrated resource of 8.4 billion mt of bauxite and an aluminum content of approximately 2.1 billion mt. Developed world bauxite resources and existing primary aluminum smelting and refining capacity are sufficient to satisfy demand through at least 1995, when additional properties (with higher cost levels) would need to be developed to satisfy future demand levels. It is anticipated that new alumina or aluminum production most likely would occur in developing regions with large bauxite potential, low-cost energy sources, and a close proximity to refining and/or smelting capacity. An increase in aluminum recycling capacity would help meet future demand increases. A series of network model supply analyses was performed for the period 1988 through 2000. Based on announced future production levels and assuming demand grows at the level outlined in the analyses, model results indicate there is sufficient material available to meet demand until 1998, where-upon an aluminum shortfall is projected. Additional analyses investigated the effect of a reduced growth rate of demand and regional production variations in Venezuela on the international aluminum industry.

Jan 1, 1993

By Steve Karl

President Reagan may be "a nice guy," but he is "misinformed, misdirected, and misadvised," when the subject is the state of the US copper industry, according to Sen. Dennis DeConcini (D-AZ). DeConcini took the opportunity as keynote speaker at the Arizona Conference AIME in Tucson to fire a few salvos at the Reagan Administration's industrial policies. "American copper used to stand above the rest of the world," he said. Now 21,000 copper workers, about half of the total, are out of work due to less expensive foreign imports. "Those 21,000 are real people, not statistics," he said. US production has been cut to one-third of its capacity, he said. And the Administration shows no signs of changing its position to favor US copper protection. "Third world copper towns are booming," he continued, "while ours are dying." Regardless of profits and despite oversupply, Chile continues to produce, he said. And, while US mines continue to close, "the International Monetary Fund (IMF) is handing more than $1 billion to six copper producing countries." President Reagan wanted $8.6 billion from the IMF. "I'm damn mad about it," DeConcini said. "For the life of me, I can't understand how this Administration can stand by while this industry is brought to its knees." Last year, the International Trade Commission ruled that imports were injuring domestic copper and recommended relief. The President, DeConcini said, vetoed those recommendations. DeConcini softened his tough talk a bit saying the President's image makes it difficult for people to not like him or stand up to him. "How can anyone stand up to President Reagan?" he asked. "He's such a nice guy. But it's time someone did. He's just misinformed, misdirected, and misadvised. We must take real action and we must have a president who understands this." DeConcini said he has introduced legislation aimed at helping domestic copper. It would limit copper imports to 385 kt/a (425,000 stpy). Imports now stand at about 635 kt/a (700,000 stpy). The bill would also impose a $0.33/kg ($0.15-per lb) duty on foreign copper. DeConcini called the duty a sort of "environmental equalizer" because that is the amount domestic producers must spend on pollution control devices. Foreign competitors do not have such controls, he said. "I face people who are damn mad that this country is being pushed around," he concluded. "It's time we stand up and say we can be competitive. If they (foreign countries) put an import duty on our stuff, we will do the same. It's time this country stopped being the nice guy." As if to underscore domestic copper's desperate situation described by the Senator, Duval Corp. announced about the same time as the meeting that it has nearly closed its eastside office in Tucson. Staff has been reduced from 120 to four. Spokesman Dean Lynch said the four will consist of President A. Everett Smith, a secretary, a person in environmental affairs, and another in purchasing. Duval is also selling an office and a laboratory in Tucson. Pennzoil Co., Duval's parent, has been trying to sell the company for more than a year. It began dismantling Duval in November 1984. Pennzoil took over its subsidiary's profitable sulfur operation in Texas, sold the New Mexico potash facility, and spun off gold interests in Nevada, forming Battle Mountain Gold. Northwest Mining Association - Spokane Rock Jenkins, Associate Editor The true role of minerals needs to be realized by both the policy makers and the people of the US, according to Robert Dale Wilson, director of the Office of Strategic Resources, US Commerce Department. In addition, a re-thinking of the theory of free trade and competitive advantage is necessary. Wilson made his remarks in December at the opening luncheon of the 91st Annual Convention of the Northwest Mining, Association in Spokane, WA. At a later press conference, Wilson said one of the mining industry's main problems is that its presence in Washington has been reduced in the past few years. Part of this can be seen by events within the American Mining Congress (AMC), he said. "The problem with AMC," Wilson said, "is that in 1981, when Reagan came in, no problems were seen for mining and a lot of their (AMC's) lobbyists were let go." He

Jan 1, 1986

By G. P. Larson

We define a specialized mineral market as follows: Specialized markets occur where a low volume of a given mineral is used to convey a large benefit to a specific product. Sales of these value added minerals to small markets generally require a different marketing approach than bulk or commodity markets for traditional minerals. Specialized markets are differentiated by several characteristics as listed in Table 1. [Table 1-Characteristics of Specialized Markets 1. Long-term sample evaluation 2. Small volume markets 3. Highly controlled properties 4. Customized specifications 5. Technical selling effort] Many of the specialized markets require long term evaluations before sales can be made. This can vary greatly depending on the type of industry and ultimate end-use of the final product. In some cases, complete evaluations may take from several weeks to years. Length of sample evaluation has no relationship to size of market. That is, the total market may be quite small or fairly large (e.g. from a few hundred pounds to a few million pounds). Uniformity of value added minerals from lot to lot is an extremely important characteristic for these markets. Variations that are of no consequence to one industry (or application) cannot be tolerated in another. This has led to customized specifications and test procedures for specific markets and applications. Because of the greater uniformity and customized specifications, the need for greater technical selling effort is required. This is particularly true in the initial developmental phases and contacts as well as in maintaining the account after the initial order. A small entrepreneurial organization can be used to advantage to achieve goals of sales and profit to these types of markets. The large commodity or bulk producer's sales and marketing organizations are not ordinarily equipped to give the necessary service or technical assistance to the specialized markets. The organization usually required for this type of marketing is given in Table 2. [Table 2- Specialized Marketing Organization Requirements 1. Flexible approach to technical and marketing problems 2. Versatile background in a broad range of industries 3. Laboratory backup when necessary 4. Marketing expertise 5. Technically competent management] In developing specialized markets, a flexible approach to both technical and marketing problems is necessary in understanding the needs and requirements of the industry and the applications involved. This flexibility is also helpful in adapting existing products to new market areas. Having knowledge of a range of industries as broad as possible can be very helpful. It often happens that a product developed in one area or industry can lead to its application in a different area with excellent results. Laboratory assistance for a wide range of tests and test procedures is an important asset in any development program for specialized markets. Laboratories can also assist in competitive evaluations. Marketing expertise and a management with some degree of technical understanding are necessary in to assign proper cost/ benefit ratios to a proposed new product or application of existing products. This is important since the total market volume can be small and the time required for initial contact to first sale can often be lengthy. Also, management's technical and marketing expertise is required in evaluating all possible options that can be considered viable when an application is presented. Once an organization of this type is in place, it is then possible to determine the needs of the marketplace, including when various minerals might have to be customized to fill those needs. There are generally two methods of marketing, as noted in Table 3. [Table 3- Method of Marketing 1. Product Driven -Develop a product with certain desirable properties and try to find a market to utilize those properties. 2. Market Driven -Know market well enough that when a need arises, it is possible to identify a product that will satisfy the need.] These approaches are not mutually exclusive and can be used at the same time. Marketing a value added mineral generally requires the "market driven" approach. Hence, the importance of a knowledgeable management as outlined above. To determine where needs and opportunities exist, several approaches can be used. Table4 lists some of the methods employed.

Jan 1, 1993

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