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By Dwane K. Johnson

INTRODUCTION The small mining company faces the dilemma of how to finance the development of its properties because it doesn't have the financial resources to pay for the development costs from its own funds and doesn't have the financial strength which will enable it to borrow the money needed for development. However, with a little imagination and the right set of circumstances, a financing can be arranged for the small mining company. This paper is an attempt to describe the fundamental steps on how such financing can be obtained --in other words--what is required to provide ad- equate capital at a low cost for developing and bringing a mining property into production. Innovative financing follows from this. The basic keys for building and maintaining a successful mining company are "the four M's": Management, Market, Mine, and Money. The writer believes their order of importance is as presented and each is a building block required in order to obtain the type of financing that best suits the borrower and lender. MANAGEMENT Management must be experienced, highly organized, realistic, able to take advantage of opportunities and fulfill promises. Mine financing requires a variety of skills and concentration on the part of management. Management should have a thorough understanding derived from experience in geology, construction, mining and metallurgy and environment, marketing, and financial matters. Management must realistically visualize what will be produced at what cost and truly evaluate the risks associated so the proper security can be correctly designed. Since risk cannot be eliminated, the objective of management is to identify the risk which will be present in a given venture and assess the level of that risk which will be acceptable to the firm. Generally the risk which is present is subject to little or no modification. After management identifies and measures the acceptable risk the firm will proceed in a way that it will be least exposed. Management must determine its long-term objectives and strategies within the context of a constantly changing world. This question must be addressed before examining the sorts of risk which affect the development and operation of a specific property. The compilation and interpretation of "hard data" by competent people is good to a point but the experience and instinct of seasoned individuals are the important factors in management choosing a long-term direction for the corporation. The attitude towards risk greatly affects the goals of the corporation. Major risks in a mining project can be placed in four categories: 1. Market - Price, demand, substitution. 2. Costs - Capital, operating, financial. 3. Regulation. 4. Taxation. The feasibility study for a project is the fundamental tool used in the management of risk. Management should employ an experienced team with an established and well-understood set of ground rules for the preparation and assembly of a feasibility study. The necessary degree of realism is built into all levels of the study and if the project is technically feasible, the company's hurdle rate is then used to discount the base-case project cash flow in order to determine its financial viability. Understanding the geological significance of the mineral deposit is critical. There should be strong interplay among the pure regional geologist, the detailed mine geologist, the mining engineer, and the metallurgical engineer. The collaboration among these different disciplines will yield a feasibility study that is more reliable. The essence of this work must be appreciated and understood by the executives planning the financing. It is vital that they thoroughly understand the risks and make the proper risk assessments to cope with our rapidly changing market environment. Projecting future revenue values is paramount and is subject to much estimation. One way to mitigate fluctuations and the risk of falling prices is by selling production for future delivery. MARKET Since mining is a worldwide industry it is mandatory that bankers be aware of what is occurring in the marketplace, both foreign and domestic. The marketing of the production is a very important facet when considering financing for the small

Jan 1, 1987

By C. O. Dale, W. J. Rundle

THE upper Mississippi Valley zinc-lead area was the first major lead-producing section in the United States. The lead ore, found near the surface in crevices, was relatively pure galena that could be smelted directly into lead, at first in log hearth furnaces and later in more efficient blast type furnaces. French Canadian fur traders encouraged the Indians to mine the lead ore and showed them how to smelt it into lead that had a high value for bullets1 Nicholas Perrot found lead ore on the Mississippi River bluffs near the junction of Wisconsin and Illinois and in 1690 established a trading post on the Wisconsin side of the river opposite the present site of Dubuque, Iowa.2 Shortly after 1720 discovery of Mine La Mott in Missouri diverted considerable attention from the Upper Mississippi area. Mining continued on a desultory basis with operations concentrated in the Galena, Illinois-Dubuque, area. In 1740 at least 20 miners were at work in the Fever River area around Galena and are reported to have shipped 2500 70-lb pigs of lead to Kaskaskia in 1741." Julien Dubuque established a mining and smelting operation in 1790 near the city that bears his name and was granted sole right to exploit the mining operations on the lands of the Sauk and the Fox Indians. He is reported to have produced 30,000 70-lb pigs of lead in 1805. Following the death of Dubuque in 1810 the Indians refused to let the white miners enter their lands, and little was done on the Iowa side of the river until the Indians were removed by treaty with the United States government in 1832." Early mining was entirely for lead but as the crevices were followed down, increasing percentages of zinc sulphide and zinc carbonate were encountered and at first discarded. Later a market became available for the zinc ores, and hand jigging devices were made to separate the lead, the zinc, and the rock or waste materials. The first record of zinc production from the area is for 1860. Production of zinc passed that of lead before 1900, reached a peak of 64,000 short tons in 1917, fell off rapidly and continually to about 2000 short tons in 1938, and since 1940 has ranged from 11,000 to 19,000 short tons. Lead has been of considerably less importance since 1900, and at present only about 10 pct as much lead as zinc is produced. Practically all of the zinc ore has come from orebodies that are rather flat and wide with considerable length as compared to width. Most of the early lead came from the crevice type deposit, but present production is from the predominately flat zinc orebodies. The Graham-Snyder orebody, scene of Eagle Picher operations, is practically all zinc with little or no lead being recovered. Marcasite, present in varying amounts, makes production of finished concentrates by gravity separation impractical. Satisfactory lead and zinc concentrates have been produced since flotation was introduced in the area in 1927. An acid recovery plant was operated for about 20 years after World War I, but it has been dismantled, and no recovery of the iron sulphides in the ores of the district is being made at the present time. In June 1950 there were three companies operating mines and mills, Tri-State Zinc Co., Calumet & Hecla Consolidated Copper Co., and Eagle Picher Mining and Smelting Co. The Vinegar Hill Zinc Co. had completed a shaft at a new orebody and had started to develop the mine which will supply the Cuba City mill. The Cuba Mining Co. was holding the Andrews Mine inactive. The Dodgeville Mining Co. was not operating but was exploring for additional reserves. Several small mines were selling ore to the Eagle Picher mill. A general area map is given in Fig. 1. The Eagle Picher Mining and Smelting Co. entered the area in 1946 with an active exploration campaign. Leases on a block basis were secured for the area south from the Wisconsin-Illinois line near

Jan 1, 1953

By C. O. Dale, W. J. Rundle

THE upper Mississippi Valley zinc-lead area was the first major lead producing section in the United States. The lead ore, found near the surface in crevices, was relatively pure galena that could be smelted directly into lead, at first in log hearth furnaces and later in more efficient blast type furnaces. French Canadian fur traders encouraged the Indians to mine the lead ore and showed them how to smelt it into lead that had a high value for bullets.1 Nicholas Perrot found lead ore on the Mississippi River bluffs near the junction of Wisconsin and Illinois and in 1690 established a trading post on the Wisconsin side of the river opposite the present site of Dubuque, Iowa.2 Shortly after 1720 discovery of Mine La Mott in Missouri diverted considerable attention from the Upper Mississippi area. Mining continued on a desultory basis with operations concentrated in the Galena, Illinois-Dubuque, area. In 1740 at least 20 miners were at work in the Fever River area around Galena and are reported to have shipped 2500 70-lb pigs of lead to Kaskaskia in 1741.3 Julien Dubuque established a mining and smelting operation in 1790 near the city that bears his name 'and was granted sole right to exploit the mining operations on the lands of the Sauk and the Fox Indians. He is reported to have produced 30,000 70-lb pigs of lead in 1805. Following the death of Dubuque in 1810 the Indians refused to let the white miners enter their lands, and little was done on the Iowa side of the river until the Indians were removed by treaty with the United States government in 1832.4 Early mining was entirely for lead but as the crevices were followed down, increasing percentages of zinc sulphide and zinc carbonate were encountered and at first discarded. Later a market became available for the zinc ores, and hand jigging devices were made to separate the lead," the zinc, and the rock or waste materials. The first record of zinc production from -the area is for 1860. Production of zinc passed that of lead before 1900, reached a peak of 64,000 short tons' in 1917, fell off rapidly and continually to about 2000 short tons in 1938, and since 1940 has ranged from 11,000 to 19,000 short tons. Lead has been of considerably less importance since 1900, and at present only about 10 pct as much lead as zinc is produced. Practically all of the zinc ore has come from orebodies that are rather flat and wide with, considerable length as compared to width. Most of the early lead came from the crevice type deposit, but present production is from the predominately flat zinc orebodies. The Graham-Snyder orebody, scene of Eagle Picher operations, is practically all zinc with little or no lead being recovered. Marcasite, present in varying amounts, makes production of finished concentrates by gravity separation impractical. Satisfactory lead and zinc concentrates have been produced since flotation was introduced in the area in 1927. An acid recovery plant was operated for about 20 years after World War I, but it has been dismantled, and no recovery of the iron sulphides in the ores of the district is being made at the present time. In June 1950 there were three companies operating mines and mills, Tri-State Zinc Co., Calumet & Hecla Consolidated Copper Co., and Eagle Picher Mining and Smelting Co. The Vinegar Hill Zinc Co. had completed a shaft at a new orebody and had started to develop the mine which will supply the Cuba City mill. The Cuba Mining Co. was holding the Andrews Mine inactive. The Dodgeville Mining Co. was not operating but was exploring for additional reserves. Several small mines were selling ore to the Eagle Picher mill. A general area map is given in Fig. 1. The Eagle Picher Mining and Smelting Co. entered the area in 1946 with an active exploration campaign. Leases on a block basis were secured for the area south from the Wisconsin-Illinois line near

Jan 1, 1952

By Franklin P. Wood

Unnumbered ages have passed since the time when nature's laboratories were working without the aid of capital or labor unions assisted only by earth's cooling crust and old Sol's rays, to lay the prodigious coal beds of the earth and distil the oils which now furnish the basis for the world's great industries. Strangely enough rays from the same old sun probably somewhat diminished in intensity are still drawing from earth to clouds the water that will run down hill and through man-made devices produce energy to compete with that made with the products created in ages past. So now we find that within the past century vast human industries have grown up around the products of these agencies and here we are today discussing the many problems connected therewith and among the others the subject of this paper, which is essentially the relation of COAL to OIL in industry. The problems involved are those of human relationship and are not fundamentally unsolvable when engineering skill and knowledge is properly applied. The last few years has developed a brand of pessimism that is especially prevalent in the coal industry, at any rate in the west where we come in contact with it. In any general discussion with coal men, a very short time only is required to bring out the feeling or expression that the coal business is on the rocks and the reasons run the gamut of human deviltry. We have heard that in the not far distant past corn was so cheap that the farmers were compelled to burn it and thus deprive the coal mines of their well earned right to sell coal for this purpose. We have heard that the flood of oil is so vast that it was being burned in preference to coal, and to heap insult on injury that the rail- road locomotives were burning oil in order to pull coal away from the mines. We have heard that the union was responsible for all the woes to which the industry is subjected. We have heard that the family tin lizzie is so depleting the family exchequer that coal could not be purchased and if purchased could not be collected for. We have heard that producing mines are so numerous that the profits are a negligible quantity. These are but a few of the reasons assigned for making the coal producers a class of pessimists which is not good for the industry. All these reasons given and all the others must be taken collectively and these are not the cause but the effect of a rapidly changing civilization. An analogy may be found in the experience of many of us in the electric industry a few years ago. You may remember that less than 20 years ago the high efficiency Tungsten electric globe was introduced. It was so much more efficient than the old carbon lamp that only one-third of the current previously required was needed to produce the same illumination. Consternation seized the ranks of electrical men who had little or no vision, for the out- look was that so little current would be sold that everyone would be bankrupt. This limited vision, however, did not prevail, for all engaged in the industry spurred on by necessity, accomplished many of the things that we are now enjoying the fruits of be- cause the electric industry has grown and is growing by leaps and bounds and every highly efficient improvement is greeted with rejoicing. It is well known that when the old type of carbon arc lamp began to be replaced by modern units the manufacturer of carbon rods thought his doom was sealed and yet these same manufacturers have so adjusted them- selves to conditions that the dry battery business of today is of vastly greater volume and profit than was the carbon rod business of the past. Of course, there are industries that should not have survived anyway that have gone down and out to makeway for vastly improved conditions and can

Jan 1, 1925

By A. L. Jones

The subject assigned to me of "The Power" Problem of the Mine" is so broad that I have decided to confine myself to the question of the power supply itself, rather than the application of electricity throughout the property. We will look over certain economic aspects of the problem, particularly in the way it affects the mine manager or executive and his attitude toward the power plant. The accepted method of power application to the mine is by electric power, and the experience of each of you is that the job is never complete as you are always undertaking some further electrification which necessitates the stiffing up the power house to care for the additional load. The mine executive, then, is wrestling almost continuously with the problem of his power plant. Either it is overloaded and must be enlarged and rebuilt; or its operating costs are excessive; or it breaks down and limits coal output; or some one wants to sell new and improved machinery, until the manager almost hates the thought of such a restless part of his property. If he purchases power, every day new uses for it seems to be found. In many ways this unrest is due to short-sighted policy toward the problem, and the tendency when the problem of extension has to be met, to dispose of it in the cheapest way and without thought as to where the future is leading. The day when each opening had its own boiler plant, steam hoist, steam driven fans, steam pumps, steam loaders, etc., seems to be far behind us. The recognized method of power distribution today is by electric power, except for rather limited applications of compressed air; most of which is electrically compressed. During fifteen years contact with mines of Colorado and Wyoming the writer has seen nearly every mine power house double or triple in capacity or abandoned in favor of purchased power, worn. out and inefficient machinery thrown out, isolated boiler plants dropped, seam pumping at great depth changed to electric drive, all resulting in greatly reduced labor and fuel costs. Power costs, which in such isolated plants were considered normal, would be unthinkable today. One property where the main power supply was by compressed air from steam driven com¬pressors used under boilers 8.35 per cent of all the coal mined. The cost of power was 12 1/2 cents per ton of coal mined. Another property of four openings, each with its own boiler plant and usual equipment of hoists, pumps, etc., had a power cost of 10.3 cents for each ton mined; and these were days when you did not get very high prices for coal. Another property operating two mines mostly by steam used 11.1 per cent of the coal output under their own boilers and the power cost was 19.45 cents for each ton mined. Each of these properties is now electrified and power costs are from 3 to 4 cents per ton, and the fuel burned runs from 1 to 2 per cent of the output. With the broadening market and high prices for slack coal and the high prices for labor in boiler and engine rooms, the cost of steam is reaching a high figure, and efforts must be made to keep this down, by more efficient steam production and by utilizing this steam in better machinery which will increase the work done by each pound of steam. It must not be overlooked either, that the plant which is very wasteful of fuel is usually a pretty old one and one far from reliable. In a general way the more efficient the plant, the greater its reliability. Ample and reliable power supply means ability to get out coal when there is a market. The increasing use of purchased power is largely due to changing conditions which are tending constantly to push up the cost of power, unless the most efficient machinery is used and large scale production possible. The

Jan 1, 1923

By J. M. Dean, R. L. Grayson

Introduction With the continued downward pressure on coal selling prices, mine management must make its operations as efficient as possible. The problem is the same one throughout the mineral industries, streamlining operations to maintain competitive min¬ing costs (Born, 1991). There has been a great deal of research into better using production manpower. But the story is different for operations support personnel. Traditionally, planning man¬power requirements are done annually, with modifications to the operating plan occurring generally quarterly. On the other hand, the demands on manpower are often dynamic, being responsive to changing productivity levels, mine conditions (including water influx, bad roof, poor floor) and unanticipated project requirements (responses to machine breakdowns or a new section setup requirement because of a drop in coal quality in another area). Such changes may impact the manpower structure significantly. At times they may cause serious labor relations problems concurrently. Realignments and the generation of instability in the workforce because of active job switching (bidding) are a result. Most responses by coal operators are reactive rather than proactive, a situation that could be mollified by more accu¬rate and detailed planning of predictable manpower require¬ments. A manpower planning tool is needed that takes into consideration such things as changing productivity levels and conditions as manhour requirements for different work areas are planned, rather than blindly allocated through traditional staffing modes. Mine Management Support System The Mine Management Support System (MMSS) is an integrated decision support system that was developed using Sun Microsystems hardware according to the contract be¬tween the US Bureau of Mines and West Virginia University. The software used in the development of MMSS included X¬ windows (Scheitler and Gettys, 1986) for the user interfaces, LASER (Raman, 1985; Hayhurst, 1990) for the expert sys¬tem and graphics components, and the C language for general programming requirements. Sun DOS was used to allow the use of IBM-compatible applications software on the Sun networks. Sun OS is the operating system. It can be viewed as an enhanced version of UNIX. One of the components of MMSS that was developed to address the many specific objectives outlined in Grayson et al. (1990) is the work scheduling system. MMSS accom¬plishes work scheduling by using a mathematical (goal) programming approach to minimize the amount of switching of workers from their regular jobs to perform other jobs (Grayson and Nutter, 1991). Manpower support program The main objective of MANSUPP is to plan a detailed manpower structure for a mine by incorporating a production schedule, condition-modified work standards and manage¬ment preferences to predict required manhours for various support activities, for example, belt moves. This is accom¬plished by gathering and processing planning information the same way a mine planner would. The program is menu¬driven with the selection of a particular menu item locating the user in the appropriate area within the spreadsheet to review/add information. All of the interactions between productivity, section conditions and management prefer¬ences and their effect on the amount of support work required must be considered. Information regarding the productivity of a particular section, the geometry of the section, work standards for individual activities and section conditions must all be gath¬ered for input into the program. In the initial stages of development, it was decided that the program be developed in an environment that mine planners were familiar with in order to accommodate the use of the program. Lotus 1-2-3 or a compatible (Quattro Pro) met this environmental need. Other reasons included ease of calculation due to built-in functions, powerful command language and macro capabili¬ties. Each of the major components of the program defined are summarized. Production schedule This area allows the user to input a production schedule for the entire mine over 12 periods. Space has been provided for five sections, advance or retreat, and two longwall sections. There are several calculations occurring in this area that do not apply to the determination of manpower, but serve as an aid in production planning. Section description The section description area of the spreadsheet is shown in Table 1. The first three items are calculated in the production schedule area of the worksheet and then transferred to this location. The remaining information is input by the user to be used in later calculations.

Jan 1, 1996

By Peter V. Avotins

During last year's AIME meeting in New Orleans, Deepak Malhotra and I were discussing some of the topics that would be presented in this Symposium. It seemed appropriate that along with papers on specific reagent and flocculant types, we should address research management aspects of new product development. This development is a long, arduous task that requires a significant technical and fiscal commitment by the chemical company and potential users. A flow chart depicting the research process is shown in Figure 1. The sequence of events are plotted on an undefined time line. Our experience has shown that it takes 3-5 years to complete a typical reagent development project. A new project starts with an idea of how to do something better. The ideas range from relatively simple product modifications to opportunities created by technological change. An example of this is the use of flocculants in tailings operations to close the water recycle loop. The change was brought about by the need to conserve water and comply with environmental statutes. The result was the development and wide-spread use of synthetic polymers to help in solid-liquid separation. More recently the ups and downs of oil prices have led to development of coal water slurries as an alternative to fuel oil. The slurries contain high levels of chemicals (up to 3%) to insure proper stability and burn characteristics. There are technical changes under way right now that may lead to ideas for other new products. One exciting source of new technology is the ability to manipulate genetic material of microbes to select for specific capabilities. This has evolved by leaps and bounds over the past 5 years. Biologically assisted leaching and removal of wastewater impurities are two possible end uses. I'm sure that there are many others. The ideas can originate anywhere and are often half-baked at first, but to lead to new products they must be refined to provide project definition and eventually a research plan. A chemical ,development project cannot be started without approval to commit the company's resources. The internal selling job is often very difficult. The company must see clear financial benefits in order to launch efforts that may not pay off for many years. It is critical to project the total market, profitability, eventual market share, and timing of introduction of the new product. There is much uncertainty in this and the research manager is often skating on thin ice to retain his credibility. Once we obtain support from upper management, the research team is assembled to start the project. The teams generally consist of organic chemists, research metallurgists, and technicians. They have access to analytical scientists and technicians for surface and analytical chemistry. The projects are often augmented by help from university staff and consultants. This is particularly true where there is a need to develop fundamental understanding of the technology in addition to synthesis of chemicals. The project now proceeds along two lines. First, there is an emphasis on understanding the prior art. Extensive literature and patent searches are undertaken to provide research leads and to keep from "reinventing the wheel" and infringing on someone else's patent. The scientists and technologists are qualified to conduct computer-assisted library searches. This process usually uncovers 80-90% of the relevant information. The remainder is very much harder to get and requires the help of professional library search staff with scientific backgrounds. Along with literature searching, the team begins synthesis of new compounds. These are screened by use of techniques such as microflotation or filtration in a Buchner funnel. The scientists are looking for the direction of response as they modify structural features . Inevitably, a large number of candidates reach the next stage, a laboratory bench test. At this point it is possible to set up a research plan and use project management techniques to monitor progress. The bench tests are conducted in larger equipment, usually requiring 100-1000 grams of test substrate. Typical laboratory flotation tests are run in Denver or Wemco cells.

Jan 1, 1986

By W. M. Phillips

Processing kaolin clays from the sedimentary deposits of Georgia and South Carolina is described in this article. While the major processing steps are touched on briefly, emphasis is given to the dewater-ing of the clay-water slurries (slips) formed in the processing of kaolin clays. The dewatering steps discussed include gravity settling, centrifugal dewatering, vacuum filtration and thermal drying. Particular attention is given to vacuum filtration and the variables affecting filtration of these kaolin clays. Kaolin consists essentially of the mineral kaolinite, which is a hydrated aluminum silicate (Al2O3 . 2SiO,). Commercial deposits of kaolin occur in several areas of the U. S., but approximately 90% of the kaolin produced in this country comes from Georgia and South Carolina. These deposits are of sedimentary nature and occur in a geological fall line in the Tuscaloosa formation at elevations between 300 and 450 ft above sea level. Over two million tons of kaolin clays are used by industry in the U. S. each year. A big percentage of this tonnage is used in the paper industry for coatings in making glossy and high quality grades of printing papers. In addition, large tonnages are used as pigments; as fillers for rubber, plastic and fertilizers; and in ceramics. Properties of kaolin that make it widely used in the above applications are its particle size fineness, natural whiteness, chemical stability and non-abrasiveness. In addition to these desirable properties, it is relatively inexpensive. The finer coating grades of clays range in price from $15 to $28 per ton while the coarser filler grades sell within a range of $7 to $13.50 per ton. Pure kaolin particles are small hexagonal flat platelets. Above the 2-p size, the particles usually consist of stacks of plates, while below the 2-p particle size they occur as individual flat, hexagonal plates. Since these individual platelet particles provide the most desirable coating and flow characteristics, major importance is given to particle size fractions of 2 p and smaller. Generally, coating grade clays are those with all particles smaller than 15 p and at least 70% of the particles less than 2p. These coating grades also have 50% or more of the particles smaller than 1 µ in size. The extremely fine grades of coating clay currently being produced approach the range of 100% smaller than 2p. The filler grades of kaolin have 100% of the particles passing 325 mesh but have less than 70% of their particles below the 2-p range. Fig. 1 is a schematic representation of the major processing steps involved in preparing kaolin clays for marketing. MINING All kaolin mining is open pit. The ratio of overburden to clay will average 3:1, but this ratio can, of course, be much higher depending upon the grade of the clay and the size of the deposit. Most of the commercially mineable deposits occur from 20 to 120 ft below the ground surface. Both draglines and pans are used in removing the overburden and mining the clay deposit itself. After mining, the most common method of transporting the clay to the processing plant is by blunging or re pulp-

Jan 1, 1963

By W. R. Bull, J. R. Roos

A method is described whereby the true financial value of each constituent of each concentrate can be calculated. Each value is then compared with what this value would be in a perfect separation. The difference in each case represents the loss incurred by each aspect of an inefficient separation. The relative magnitudes of these losses indicate those avenues of plant investigation and research that offer the highest potential reward. The metallurgical efficiency of a concentration operation is difficult to express because there are two criteria of performance, namely, grade and recovery. Neither of these alone gives any indication of the effectiveness of an operation and, if they are combined in some formula, it must be empirical and unreliable because of many external factors. Since milling is an operation performed as one step in the most profitable overall method of producing a metal or other end product, the main objective of mill operation should be to make a maximum contribution to this maximum profit. When concentrates are sold to custom smelters, the income from the operation, and the costs, may be calculated. When concentrates are further processed by another division of the same company, and there is no formal financial relationship between, say, the milling and smelting divisions of the company, the mill superintendent's job is less well defined. But even so, if the mill superintendent works as though he were selling his concentrates, and uses reasonable, if fictitious, conditions of sale, then he can get a good indication of the effectiveness of his operation by calculating his "Economic Recovery". ECONOMIC RECOVERY This is a method used as a basis of operation by several mills and has been described in the literature. Very briefly, the "standard" of operation is taken as that of a mill separating the ore into perfectly pure concentrates with 100% recovery of each mineral in its respective concentrate. For example, a 4%Pb, 4% Zn ore (galena and sphalerite), would provide a lead concentrate weighing 4.62% of the feed and assaying 86.6% Pb and a zinc concentrate weighing 5.97% of the feed and assaying 67.1 % zinc. These perfect concentrates are (hypothetically) shipped to the appropriate smelters, freight and treatment charges and payments calculated, and the net return obtained. This is the optimum financial return for the operation of the mill and is used as the standard. Now the return for the actual, real-life, mill operation is calculated in the same way, and the ratio of the two is termed the Economic Recovery. Many additions and modifications may be made in any particular case. For example, if the zinc mineral is marmatite, the optimum grade of the zinc concentrate may be set lower than 67.1%. If silver is present, it will be recovered 100% in the lead concentrate in the perfect operation. Similarly, cadmium will be recovered 100% with the sphalerite. Mr. Weiss' paper' mentions a case where, because of extremely fine intergrowth between the valuable mineral, chalcocite, and pyrite, the optimum grade of copper concentrate was taken as 45% Cu instead of the theoretical 80%. Each operation will present its own possibilities in this way.

Jan 1, 1970

By Eugene T. Sheridan

The Bureau of Mines annually canvasses the peat producers in the United states and publishes economic data on the peat industry, based upon reports submitted by producers. This publication lists all producers that reported commercial production to the Bureau for 1960 and presents data on individual plants. The companies named herein represent virtually all commercial producers, although a few small companies may not have been canvassed as the industry has many small operations that operate intermittently. Output of the various companies listed ranged from a few tons to more than 50,000 tons. Peat is included in the Bureau's annual surveys of the mineral industries because peat is classified as a mineral fuel. Although none is used for fuel in the United States, peat is a potential source of energy and ranks as one of our large mineral resources. The domestic peat industry sells peat, chiefly, for use as a soil amendment for general soil-improvement purposes. During the past decade the industry has expanded rapidly with operations increasing from 45 in 1947-494/ to 115 in 1960. Output during this period has more than tripled, increasing from 131,782 short tons to 470,889 short tons.

Jan 1, 1961

By Fernando A. Buttazzoni, Jorge C. Munita

INTRODUCTION To provide a background for discussing long-range financial and operational planning in the mining industry, we would like to begin by describing the role of planning in Codelco. Having taken part in Codelco's planning process since its inception in 1976, we believe that useful conclusions may be drawn for the experience we shall relate. Although Codelco is a state-owned copper producer with an important role in the Chilean economy, and is consequently very much at the core of national economic planning, the following discussion is not related to government planning but to planning in an operationally and commercially autonomous business concern with all the characteristics of a private enterprise. The only way in which Codelco differs from private business is that its financial successes or failures have a more direct impact on the countryls ability to participate in international trade, to meet its international financial commitments and to achieve economic and social growth. Thus, what follows is a presentation of the conceptual features of the planning process at Codelco and a description of the current state of planning in the company. It is understood that certain conceptual components are basic to any formal strategic planning process, and that the components of Codelco's planning process are therefore generally applicable in similar companies. First, the mission and scope of operation of the company must be defined, and goals must be set to achieve leadership in the business activities in which it engages. Having set this framework, the company must constantly scrutinize those internal elements and conditions that are essential to fulfill its mission and achieve leadership. In Codelco this means considering the actions which can best serve to define future capacities, taking into account declining ore grades and determining optimal production levels; watching over the productivity and skills of its labor force, and; keeping abreast of technological developments in non-ferrous mining and processing. If the company is proficient in these three areas, it will be cost efficient and there- fore competitive. Codelco must also watch over the business environment in which it operates. The company sells concentrate, blister and fire-refined copper, wirebar, cathodes and wire rod and must study the behavior of the market to attune its product mix to the demand existing for these various commodities in the international market and the copper consuming industries in general. By examining the internal and external environment in which the company conducts its production and commercial operations, it is able to diagnose its strengths and weaknesses, to identify the hazards it must overcome to stay ahead in the copper trade, and to take full advantage of business opportunities as they arise. CHARACTERISTICS OF CODELCO-CHILE Although our subject is Codelco, readers should keep in mind that there are many other copper producing operations in Chile, all in the private sector, and many valuable deposits that may be exploited in the future. Codelco is the only public sector copper producer, although there is one other state enterprise that operates smelting and refining facilities principally to serve a large number of very small producers of copper concentrate. In the mid-19801s, Codelco is the largest copper mining company of the world and the largest producer and exporter of copper with yearly sales totalling close to US$ 1.8 billion in 1983. Moreover, it is a highly profitable copper company at a time when the world copper industry as a whole has reported losses for several years. Codelco-Chile is a fairly new organization. The history of the four mining operations it manages is much longer: El Teniente was opened in 1912, Chuquicamata in 1915, Salavador in 1959 -- with installations of the old Potrerillos mine dating from 1927 -- and Andina in 1970. Having had separate owners, the management systems of the

Jan 1, 1985

By M. W. Von Bernewitz

Fay's glossary3/ of terms contains the following definition of "black sand": Heavy grains of various minerals which have a dark color and. are usually found accompanying gold in alluvial deposits, for example, magnetite, chromite, ilmenite, cassiterite, tourmaline, and others. The Bureau of Mines is issuing this report in answer to the many inquiries from individuals and firms as to how they may treat or sell the heavy black sands that accumulate in the sluice boxes of beach and river placering and to warn such individuals and firms against becoming too enthusiastic over the chances of striking it rich. For a half century or longer much money, energy, and time have been wasted in devising, building, and trying numerous machines to recover gold and platinum, also gem stones, from sand that generally has not been worth the effort. Volumes have been written on the subject, and thousands of letters of inquiry have been received by agencies of the State and Federal Governments. The demand for information has been so great that all of the Bureau's publications dealing wholly or partly with black sands are out of print. They are listed at the end of this report.

Jan 1, 1938

By James M. Barker

Marketing is the linchpin of the industrial-mineral (IM) industry. Without markets and consumers for IM products, all other associated IM activities are superfluous. The simple existence of an IM deposit does not mean that it can be exploited. A dynamic interaction between exploration (geology), mining, processing, transport, marketing, sales, and consumers is required for profits. Geology dictates the existence of a deposit, but markets dictate its development, and transportation provides the connection. This is true to such an extent that marketing commonly is called the exploration phase of IMs. Marketing is strategic and includes long-range market-development and planning activities, whereas selling is tactical and more focused on day-to-day consumer interactions. Each will help the other when properly done. Many producers of IMs have failed because of inadequate marketing skill, information, and practice. Over many years at the Montana Bureau of Mines, the many developers seeking technical assistance to find an IM deposit, but who had no marketing plan, always failed. In contrast, the few who sought assistance first on marketing, with the IM deposit to be found later, always succeeded (Richard Berg, personal communication, 1998). Marketing has many facets helped by geologists who must be aware of what marketing is attempting to do. A geologist needs to understand many aspects of IMs: location (deposits, plants, consumers), processing (specifications), transportation (truck, rail, barge, ship), competition (local, regional, national, international), substitutes, pricing, and new developments and market forces of all kinds. Some needed skills are not taught formally to geologists, so well-rounded self-education and on-the-job training are the way a geologist normally enters into IM marketing. The IM geologist generally is associated with marketing either by helping to prepare a market study or by acting on the results of one. Preparing a market study is a two-part process. The first part is relatively simple but requires a time-consuming collation of data into an IM survey (mostly past-and present-oriented). The more difficult and much more important second part entails expanding the IM survey into a market evaluation (mainly future-oriented) that emphasizes forecasting, timing, location, and specific products. A market evaluation generally boils down to formulating the right questions to ask of the right persons. One very good question to ask is, "What could be the market for this specific IM?" while thinking for yourself without excessive recourse to gossip, rumors, promoters, developers, or (at times) IM experts. The evaluation must prove that market potential exists and suggests a marketing plan. Effective marketing is an ongoing process, with the initial marketing plan modified over time, using wide and continuous input to avoid tunnel vision. Industrial-mineral markets are based either on commodity (lower-priced, basic-processing) minerals or specialty (higher-priced, value-added) minerals. IM marketing methods are either product-driven (commodity minerals), a more traditional approach, or market-driven (specialty minerals), but these are neither mutually exclusive nor is one always better than the other. Focusing too much on specialty minerals can lead to problems. A blend of commodity products with specialty products commonly lowers risk and enhances long-term profits. The highest profits occur in specialty minerals at the cost of higher risk and complexity and require intelligent marketing, versatile technical services, and creative research and development. Industrial minerals are best served by an industrial-marketing approach rather than a consumer approach. Modern industrial marketing emphasizes the consumer using the "marketing concept." The marketing concept focuses all management and operational activities on total consumer management and satisfaction similar to the total quality management approaches to excellence.

Jan 1, 1999

By Alan H. Goode

Glass wool meeting requirements for commercial use was made from glassy fractions of urban solid wastes by the Bureau of Mines. This research was a part of the Bureau's program to develop building products and other usable materials from reclaimed urban waste materials. Mixes of molten glass were fiberized into glass wool during laboratory studies by impingement of a jet of compressed air on a stream of the molten glass. The principal test variable studied was composition of the melt; this was varied by adding dolomite and alumina to obtain molten glass with the handling characteristics required for producing final wool products of the desired composition and physical characteristics. When no charge is made for the waste glass and approximately $75 per ton can be obtained for the wool product, an interest rate of return on investment after taxes of about 12 percent can be obtained. If a charge of $5 per ton is required for the waste glass, a selling price of about $78 per ton would be necessary to obtain a l2-percent-interest rate of return on investment after taxes.

Jan 1, 1972

By Edward Hanrahan

September 1981 I'm here today to report on a revolution -- a revolution in the way the Federal Government looks at energy. I'm not talking about a simple change in the relative emphasis on sources -- such as more recognition for coal and nuclear power, with less rhetoric about "soft- technology." Nor am I describing a mere change in focus -- from the demand side to the supply side. And I am not referring exclusively to our obvious goal of budget cuts. No, I'm here to discuss a fundamental change in Federal direction -- one that started as soon as President Reagan was inaugurated, and one that is articulated in the National Energy Policy Plan he sent to Congress in July. That brief policy document was backed up by three volumes of supporting data; but I think I can catch it's flavor for you in just three phrases: * First, various energy forms complete with each other and complement one another. * Second, fair competition among them (which includes honest pricing) will give us the best "energy mix." • And, finally there may be ligitimate arguments about where Federal responsibility in regard to energy spills over into Federal interference; but it's about time we drew the distinction -- and eliminated the latter. This Administration's national energy policy is quite different from any we have had in recent years. It is tuned to human nature and changing times. We are seeking the best practical solutions in the energy -a lot better than the ones we have been offered before, but still something less than perfection. One way we do that is by counting on a fully informed public to guide it's own destiny. And, instead of treating energy as an isolated entity, we recognize it as part of the overall economy. The President's Program for Economic Recovery is as much a factor in energy policy as the specific actions of the Department of Energy. One striking difference from the past energy policy 1s that this policy plan does not say: "In 1985 we will -produce so many hundreds of millions of tons of coal: . . . or . . . "By the end of this century the Nation will be deriving X percent of it's electricity from wind generators." Unfortunately, targets like these are what many people have come to expect from the Federal Government -- and what they think of as energy policy, whether the figures hold up in the long run or not. But . . . think about it! Nether the Department of Energy nor any other part of the Federal Government produces coal, or mines uranium, or manufactures solar collectors. There are only a few sections of the country where the Federal Government generates and sells electricity. So it does not take any great insight to recognize that the amount of energy we will produce or consume as a Nation In the future depends on many factors beyond direct government action. And those future totals cannot be predicted precisely, anyway -- by the Government or by anybody else. According to our way of thinking, the choices should be up to the people. When the free market works within a healthy economy, individuals express their preferences in the marketplace -- adjusting the balance of all energy factors continually in a way that no computer could be programmed to reflect perfectly. So, instead of having the Government issue a rigid set of numerical goals, our main concern simply is that there be enough energy. We want the Nation itself to decide how much that should be, what form it should take, and how that energy should reach consumers. The marketplace decides. Considering the recent past, this is indeed a revolutionary idea. It has some pitfalls, and we won't reach this ideal of free choice overnight. But that is where we are headed. And I'll offer some evidence in a few minutes that the policy has already started working. First, let me give you some of it's highlights: 1) Nobody who appreciates the philosophical underpinnings of this Administration will be surprised that the energy policy shows faith In domestic energy production and the supply side of the economy; but it also recognizes the important role of energy conservation -- the wise and efficient use of energy resources.

Jan 1, 1982

By Anthony Tuke

Members of the Society of Mining Engineers may well regard it as rather unusual that a paper on this subject is being presented by someone whose first taste of mining came at the age of 60 or so - someone who last heard of cathodes and anodes in 1938. On the other hand, the title does refer to the financing of a mine and at least I can claim to have spent all my business life since the war until 1981 in the world of banking, though this inevitably means that I have been used to looking at these and other problems through what you might regard as the wrong end of the telescope. The lending of money, and more particularly the provision of finance for commerce and industry, is the central job of a banker and I have been involved in this in various ways over many years, but regrettably only very marginally in the world of mining. As you will see from what follows, the rather specialised form of finance which RTZ required was, to my regret, not provided by the British banking community since the great majority of the finance came from American banks and, to a lesser extent, from German banks. I am most indebted to Mr. Roy Wright for a great deal of the nuts and bolts in this paper. He was one of the three central figures in the growth and expansion of RTZ during the 1950's and 1960's and was right at the centre of the negotiations with bankers, with governments and with many others. The going, as you will see, was far from easy. The essential basis for the financing of each of the RTZ group's mining projects was a firm long-term sales contract for sufficient of the output of the particular mine to produce the cash flow necessary to service the loans. Wherever possible, loans were raised in the same currency as the sales contracts were made. Each sales contract was designed to give the customer the product he wanted with a long-term assurance of supply and at the same time to give the bankers the protection they required. Thus the marketing concept and the financing concept for a particular mine formed one overall plan, and talks with the customers and the bankers were conducted in parallel until a satisfactory marketing/financial package was agreed in principle. Preliminary talks were begun soon after the discovery of a potentially viable orebody. As confidence about a discovery increased, customers were persuaded to enter into contingent sales contracts before the very detailed and costly business of the economic and technical feasibility study of the mine was launched; such a study might cost 10% or more of the estimated total capital cost. At the same time provisional understandings were reached with the bankers. The contingent sales contracts usually gave a period of grace of eighteen months to two years, during which time the decision whether or not to continue with the mine had to be made. This decision rested mainly on the result of the feasibility study and also on coming to a firm agreement with the bankers. If all went well and the mine went ahead, then the contingent sales contracts became firm, but they fell away if the decision was negative. The Company was fortunate that during the whole period when its major mines were being developed, world trade was increasing rapidly and Japan was becoming a dominant industrial power. The Japanese supported many of the mines, including Hamersley Iron Ore, Lornex Copper, Bougainville Copper to name a few, with the basic long-term sales contracts that enabled their development. The Germans supported Palabora and to a lesser extent Bougainville. The mines were financed as individual projects generally with a loan/equity ratio of about 65/35, without legal recourse to RTZ for the loans. RTZ was, however, responsible for providing any capital overruns required to bring the mines into commercial operations. Nevertheless, the RTZ management regarded itself as morally responsible to the lenders because, Palabora aside, the sales contracts had either a fixed selling price (like Hamersley), an indexed price (like the Elliot Lake Uranium Mines and Mary Kathleen), or a floor price (as in Lornex, Bougainville and Rossing). Thus the Company believed that any financial failure would have been due to poor management or technical

Jan 1, 1985

By Thomas A. Phillips

The Bureau of Mines presents an economic evaluation of its leach- electrolysis process for recovering lead from galena concentrate. In this process, galena concentrate is leached at 200° F with a ferric chloride-brine solution to extract lead while leaving sulfur in the residue, which is discarded. The solution after leaching is concentrated and cooled to 100° F by vacuum evaporation to crystallize lead chloride from which metallic lead and chlorine are produced by fused-salt electrolysis. Chlorine is used to regenerate the spent leach solution before it is recycled. A cost estimate was prepared for a plant capable of producing 300 tons per day of lead, 330 days per year. The fixed capital cost on a third-quarter 1977 basis Fs $27,500,000, and the estimated operating cost without a charge for the concentrate is 4.9 cents per pound of lead product. Assuming a selling price for corroding-grade lead of 31 cents per pound and a charge for the concentrate of $332 per ton, the interest rate of return on investment after taxes is 16 percent. The leach-electrolysis process, therefore, appears to be economically attractive under the assumed market conditions.

Jan 1, 1978

By E. Topanelian

In recent years considerable progress has been made in the development and application of mathematical techniques for the solution of certain problems involving economic "strategies". Such a problem might involve, for example, the scheduling of shipments of a commodity from a number of sources to a number of destinations. The object would be to schedule the shipments in a manner so as to satisfy the destination requirements and at the same time minimize the transportation costs. The solution to such a problem is not necessarily intuitively obvious. The "obvious" solution is frequently far from optimum. If the shipments are to be made from, for example, only two sources to four destinations, the optimum schedule is readily found. However, if shipments are to be made from, say, 10 sources to several hundred destinations, even a competent and experienced scheduler may spend considerable time in finding a reasonable answer. Even then he is not sure that he has the optimum solution. Furthermore, he has no way of knowing how far from optimum the answer is. Consequently, he does not know whether he should accept this solution or seek a better one. Prior to the advent of large high-speed digital computers, little more could be done with such problems because of their great size and multiplicity of possible solutions. A problem involving 20 sources and 50 destinations would require choosing, from a very large number of possible combinations, the optimum combination of 1,000 variables. The best one could do was to utilize intuition, extrapolation from past experience, and other non-exact approaches. With a high-speed computer, however, such problems can be solved providing a reasonable computational procedure (or algorithm) can be utilized. The purpose of this paper is to describe such a procedure (linear programming) and to apply this procedure to a production scheduling problem. THE RESERVOIR PROBLEM A simple reservoir model is used throughout this analysis to illustrate the use of linear programming. Even the simplest reservoir behavior problem is nonlinear in both space and time, but if the geometry is fixed for a particular study and the time variable is quantized, the resultant system may be described by linear constraints on the variable production rates. Crude oil is available from five separate sources and is delivered to a pipeline. Sources 1, 2, 3 and 4 are ideal reservoirs and therefore are subjected to reservoir flow restrictions. Source 5 is labeled "Outside Source" and crude oil from this source is assumed to be available in unlimited quantities without considering reservoir conditions. The general problem is to determine the schedule of crude oil production from five sources which, over an eight-year period and subject to certain restrictions, will result in maximum profit. "Profit" is defined to encompass all economic factors and expenses involved in producing and selling crude oil to a pipeline facility. Such economic factors are lumped to the extent that the term represents the dollars profit from one barrel of crude oil from any of the five sources entering the pipeline system. Table 1 presents the assumed profit per barrel for oil from any of the five sources over each of the four time periods. In this chart the eight years is broken into four equal intervals of two years. The selection of four time periods of two years each and the values representing the potential profit are completely arbitrary selections for the purpose of illustrating this idealized reservoir problem. In any practical application of this work a careful economic study would have to be made in order to estimate potential unit profits for time periods as far in the future as eight years. In this particular study it is assumed that all of the potential unit profits (C) are known and fixed before the production schedule is attempted. For each reservoir arbitrary values are assigned for

By Stephen D. Smith

The following tables summarize data on crude nonfuel mineral production for the United States, its island possessions, and the Commonwealth of Puerto Rico. Although crude mineral production may be measured at any of several stages of extraction and processing, the stage of measurement used in these tables is what is termed "mine output." It usually refers to minerals or ores in the form in which they are first extracted from the ground, but customarily includes the output from auxiliary processing at or near the mines. Because of inadequacies in the statistics available, some series deviate from the foregoing definition. For copper, gold, lead, silver, tin, and zinc, the quantities are recorded on a mine basis (as the recoverable content of ore sold or treated). However, the values assigned to these quantities are based on the average selling price of refined metal, not the mine value. Mercury is measured as recovered metal and valued at the average New York price for the metal. The values shown are in current dollars, with no adjustments made to compensate for changes in the purchasing power of the dollar.

Jan 1, 1995

By Prescott Greene

AVAILABLE MACHINES Machines discussed in this section include only rubber tire mounted kerf cutting machines of a self¬propelled electrically powered design. Such machines handle bars up to 4.6 m (15 ft) in length, cutting kerfs of from 115 to 191 mm (4.5 to 7.5 in.). The basic design concept of all machines currently in production is very similar. The chassis features dual driving wheels on the cutter-bar end, fixed directly to the main frame. The steering wheels on the outby end of the frame are articulated in some manner to keep all four wheels on the floor over uneven bottom. Machine power for tramming, and all other functions except powering the cutting chain, is furnished from a pump motor that drives the specific pump or pumps required by a given machine. The cutter chain is driven through a mechanical drive train from a separate electric motor having no duty other than driving the chain. The general arrangement of a cutting machine is shown in Fig. 1; two types of machines, with their specifications are shown in Figs. 2 through 5. A hydraulically powered cable normally is included to eliminate the need for manual cable handling and make this a one-man machine. A bug duster, though optional, is needed for most applications. The bug duster is an hydraulically driven scroll conveyor located directly behind the cutter chain drive sprocket. Its function is to move the cuttings away from the sprocket to prevent them from packing up in this area and consuming a lot of machine power to further pulverize them. Available machines vary from models 610 mm (24 in.) high that can cut horizontally only from 203 mm (8 in.) below ground line to 229 mm (9 in.) above, to machines 1143 mm (45 in.) high that can cut in any plane from 178 mm (7 in.) below the ground line to 3.7 m (12 ft) above it. Most currently manufactured machines fall in the 17 200 to 20 400 kg (38,000 to 45,000 lb) weight range, but can be dis¬assembled for underground installation where weight and size are a problem. Maximum teardown results in all pieces having a weight of 5400 kg (12,000 lb) or less and a size allowing passage through a 1.2 x 2.1-m (4x7-ft) opening. Further reduction in either size or weight of the parts becomes a serious problem. Machines currently being manufactured are avail¬able for use with power supplies of 250 v dc; 500 v dc; 440, 550, or 950 v ac (60 Hz). Also available are machines for use on 415, 500, and 950 v 50 Hz. De¬signs to allow operation on other voltages of either 50 or 60 Hz can be made available without any serious problems. As of September 1977, a typical medium-seam ma¬chine without the extra options needed for unusual conditions, but fully equipped to operate, was selling for about $185,000. CAPABILITIES Materials That Can Be Cut The problem of deciding before a machine is put on the job whether it can work effectively is an old one that has never been completely solved and probably

Jan 1, 1982