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By P. S. Roller

P. S. ROLLER,* College Park, Md.-The author introduces the idea of a grind limit, or lower size limit of the particles formed directly by grinding, and this is stipulated to be 0.70 micron. I wonder where all the particles come from that lie between the resolving power of the microscope and 0.7 micron, which are seen under a microscope in examining a sample of grind? There is also introduced the idea of excess fines; this is all right in itself but the author's quantitative definition seems to be virtually impossible to justify, and, moreover, is obscure. Just why E, the excess fines, should be defined as the distance between an F line and a [?] line is hard to follow, and just where the distance should be measured does not appear to be stated, as it should be since the F and [?] lines intersect and the distance between will depend upon where that distance is measured. The basis of the presentation is the relation of log weight against log size that was "discovered" by Schuhmann. While this relation is implied to fit, the only evidence that I can see is a slightly irregular line in Fig. I between 2 per cent and 18 per cent by weight and then a precipitous drop at 18 per cent away from any sort of straight line. Some of the conclusions are rather startling. It is stated that E, the excess fines, remains constant for all the comminution products of any particular material, except that it may decrease for some coarse crusher products. No reason is given for this assertion. One would, on the contrary, expect that excess fines, if such a concept is permissible, would generally vary with different conditions instead of being constant. Again, "as much net energy is required to reduce a ton of quartz to particles of the grind-limit diameter (namely, of course, 0.7 micron) by grinding as is required to melt the quartz," This would require many data to prove, but no proof is given; any considera¬tion would reveal the impossibility of such a result. Still further, ore samples "ground to widely different sizes, and with different circulating loads and different size distributions or product, show the same production of new surface area per revolution of the mill, when this grind limit is used." This statement is confuted by ordinary experience, which teaches that grinding efficiency varies generally with the condition of material. For example, the cushioning effect of fines is widely accepted, while the inefficiency of a ball mill when the feed is too coarse is also well known. R. SCHUHMANN, JR.,* Cambridge, Mass.¬Contrary to Mr. Bond's stand, there is a great deal of miscellaneous experimental evidence that comminution does not stop at around 0.7 micron, nor does it cease consuming energy at that point. Comminution is in fact recognized as an important method of producing colloids.5 Mechanical comminution methods were used by von Weimarn6 to produce colloidal dispersions of a variety of solids, including the minerals chalcocite, galena, hematite, stibnite. Utzino7 gives average particle sizes ranging from 0.02 to 0.09 micron for colloids produced by mechanical comminution of several crystalline solids. Andreasen and Berg8 have ground

Jan 1, 1941

By E. W. Davis

ABOUT a year ago several carloads of magnetite ore from New York state were sent to the Mines Experiment Station at the University of Minnesota for grinding and concentration tests. The flowsheet used minus ½ -in. ore as feed to a 3 by 3-ft. overflow cylindrical ball mill operating at 37 r.p.m. in closed ciruit with a vibrating screen. The screen oversize was returned to the mill for further grinding and the screen undersize was concentrated magnetically. Several different screens, between 8 and 35 mesh, were used and it was desired to determine the capacity of the ball mill operating in closed circuit with each screen. From earlier tests using this flowsheet and equipment, it was known that when comparatively coarse screens were used it was necessary to increase the grinding dilution in the mill beyond that ordinarily used when grinding in closed circuit with classifiers. It was also known that after the circulating load had passed about zoo per cent of the original feed it tended to increase rapidly in amount, and grinding conditions appeared to become unstable. These conditions may be peculiar to this small ball mill but they were very marked in this series of tests. If conditions were not right, the mill would suddenly "go dead," and it was found desirable to operate so that the occasional rattle of balls against the lining of the mill could be detected. As the test proceeded, it was found that the cure for almost any difficulty that developed in the grinding circuit was to add more water to the mill feed. To begin with, the mill was operated at pulp densities of from 60 to 65 per cent solids but gradually it was found that with higher dilutions grinding conditions were more stable and the ball-mill power per ton of screen undersize decreased. Actually, the most satisfactory operating conditions were secured with a pulp density of about 40 per cent solids. The ore was hard but it was possible to grind ½ in. feed so that all would pass an 8-mesh screen with a power expenditure in the ball mill of less than 2 1/2 kw-hr. per ton and with a circulating load of less than 50 per cent. With so high a dilution in the feed to the mill, it was feared that steel wear would be very high. However, the mill was not noisy, and in order to find exactly the grinding conditions, a special test was made at the end of the main series of tests. After the mill had been in operation for several hours and grinding conditions had become balanced, the power to all the equipment was shut off at a given signal. The ball mill made about one revolution after the power was turned off, and just as soon as the mill stopped, a spout was placed at the discharge trunnion and all of the pulp that flowed out of the mill was caught in tanks. The manhole in the mill was then opened and the whole mill charge dumped into other tanks. Both of these products were weighed, dried, and weighed again. The balls were screened out and weighed, and the dry solids were sized. In this way it was possible to determine the nature of the pulp and the ore within the mill under actual grinding conditions.

Jan 1, 1945

By R. C. Troxell, S. C. Sun

EFFORTS to obtain definite quantitative data when employing the currently used bubble pick-up method1,2 as a pre-flotation investigation tool led to the adoption of the magnifying mirror method and the microscopic method modifications. Quantitative data obtained by these two methods were converted into bubble pick-up indices and bubble pick-up coefficients. Rough correlations were established between the calculated indices and the results of contact angle testing as well as actual flotation under the same conditions. The basic steps of the magnifying mirror method are as follows: 1—mixing 200 ml distilled water, sized and cleaned mineral particles of approximately 0.5 g, pH regulator, and flotation reagents in a glass beaker; 2—swirling the mineral particles to the center of the beaker to leave a clear circumference; 3—pressing an air bubble against the mineral particles for about 1 sec, and then moving the mineralized air bubble to the clear part of the beaker; and 4—dropping all the attached mineral particles of the air bubble by tapping the bubble holder, and counting the number of the dropped particles by looking at the magnified image in the mirror positioned beneath the beaker. This method is impractical for mineral particles which are transparent in water or finer than 200 mesh. The microscopic method is essentially similar to the above described magnifying mirror method, with the exception that the mineralized air bubble was drawn up into the bubble holder and subsequently discharged onto an externally placed watch glass, where the number of pick-up particles was counted with the aid of a microscope or hand lens. Drying was necessary when the discharged liquid interfered with the counting. The results of the bubble pick-up tests can be simply expressed in the form of the actual count. However, this can be misleading because the number of pick-up particles varies not only with the size of bubble but also with the size of particles. This short-coming is largely remedied by the use of the bubble pick-up index. as calculated from the following equation: PI = (pn/p) 100 [1] in which PI and pn are respectively the pick-up index and the number of pick-up particles under any test conditions, and p is the maximum number of pick-up particles of the same mineral under optimum flotation conditions, with the same size holder and particle. The bubble pick-up coefficient is a term coined to denote the difference between the bubble pick-up index of mineral particles in a liquid and that of the same mineral-liquid mixture plus a chemical reagent at the same pH value. For example, the difference between the pick-up index of a naturally floatable bituminous coal in a solution of water and kerosene and that of the same coal in water alone is a bubble pick-up coefficient. Compared with the contact angle method, the quantitative bubble pick-up method is inferior in accuracy but superior in sensitivity. Other advantages of the bubble pick-up method are that the apparatus can be easily assembled, the mineral sample is conventionally prepared, and the test procedure is relatively simple. References S. R. B. Cooke: The Flotation of Quartz Using Calcium Ion As Activator, Trans. AIME (1949) 184, p. 306. 'G. A. Last and M. A. Cook: Theory of Collector-Depressant Equilibrium at Mineral Surfaces. Paper presented at St. Louis Meeting, AIME (February, 1951).

Jan 1, 1954

By G. H. Kennedy, H. E. Criner

CYCLONE thickeners are "hydraulic centrifuges" designed either to produce a maximum practical separation between the water and solids of a feed slurry or to classify the slurry solids according to particle settling rate. The possibilities of utilizing the thickener to "close" plant water circuits have been investigated. Since the thickener becomes an integral part of the plant water circuit when installed, the basic means by which the solids content of all circulating water systems must be controlled is reviewed. All coal not separated from the circulating water by means of dewatering screens or settling devices must be bled from the plant at the same rate as they are being fed or created by degradation. If this were not true, the circulated volume would finally be completely filled with solids. If the rate of bleed is low, the solids concentration in the bleed and circulating water generally will be high. To keep a reasonable circulating water concentration, large amounts of fresh water must be supplied and the bleed rate must be high. These conditions are usually undesirable because of the difficulty in securing fresh water, the loss of large quantities of coal, and the pollution of nearby streams. Thickeners are the primary stage in the separation of the water contained in the bleed from the coal. Since a thickener, when operating with reasonable efficiency, usually cannot be expected to deliver an underflow containing less than 50 pct water, secondary dewatering devices such as a slurry screen or vacuum filter must be used to separate additional water from the bleed. The surface area required by the filter or screen will be nearly proportional to the total water which must be handled, and therefore the thickener becomes necessary to hold down the original cost. The water separated from the coal is then returned to the plant circuit to maintain the water balance and thus becomes the source of fresh water. It is not necessary to return clear water to the plant to maintain control of the circulating water concentration. It is only necessary that the bleed dewatering devices remove coal in all sizes at a rate equal to that at which these sizes are entering the circulating water. However, practically speaking, in order to maintain low solids concentration, it is usually necessary that the thickener have good recovery characteristics on bituminous coals in those sizes down to 400-mesh. The thickener can remove the smaller sizes from the closed-circuit system at the "solids in" rate and prevent their "build up" in the circulating water as shown in Fig. 1. With the portion of the feed water going directly to the underflow, comes the very fine solids not concentrated by the cyclone. All the larger solids are removed from the feed and delivered in a concentrated condition at the underflow. To apply thickeners with some reasonable assurance that operating requirements will be met, it is necessary to know the rate at which solids of all sizes must be removed from the circulating water and to know the thickener characteristics. The required removal rate of fine solids not recovered by other dewatering devices may be estimated from the size distribution and tonnage of the plant feed with a reasonable allowance for degradation in the circulating water system. A more reliable estimate may be secured by sampling the plant bleed water during a constant load period.

Jan 1, 1952

By C. L. T. Edwards

IN the preparation of this paper, the author has drawn upon experience with the operation of a blast furnace on 100 per cent scrap burden, which he believes was the first operation of its kind in the country. It is the writer's further belief that much of the controversy attending discussions of this subject may be obviated by the presentation of a group of facts that should be known by blast-furnace men and open-hearth men alike. The following question has been raised: "Is iron made with scrap in the blast-furnace charge as good iron as that made without scrap-made with straight ore?" This question may be answered in part by the fact that the open-hearth men of the Bethlehem Steel Co. who used pig iron from a blast furnace that operated on 100 per cent steel scrap found no difficulty in the processing of such iron other than that to be expected from the known analysis. OPERATION WITH 100 PER CENT STEEL SCRAP During World War I, there was accumulated at the Bethlehem plant of the Bethlehem Steel Co. some 22,000 tons of alloy-steel turnings and borings. This scrap material was highly corroded and, like alloy-steel turnings of that period, were as a drug on the market. There was also a small tonnage of scale, rich in valuable metal. If this scrap could be worked up into pig iron, it would become readily available for use in the open hearth. In order that the pig iron should contain the maximum percentage of nickel, permission was obtained from the Management to try a 100 per cent scrap operation. Accordingly, a blast furnace was swung over on July 25, 1919; the percentage of steel scrap increased more or less irregularly until July 29, when l00 per cent steel turnings were charged. Except for occasional charges of nickel scale as an "extra," the operation continued uninterruptedly until Aug. 27, when the furnace was swung back to the regular ore-ore and scrap-operation. During this period, the furnace production ranged from a low of 568.60 tons to a maximum of 766.07 tons. At the swing-over from i00 per cent scrap to the regular burden, the charge hung up rather severely. While the latter condition has nothing to do with the object of the paper, a brief discussion of the experience will appear later because of the interest it may have for blast-furnace operators. In Table I, results of the first and last days of the ore charge are shown, July 25 and July 29. The last column shows a summary for the period of maximum scrap charge. The furnace employed had a hearth 16 ft. 0 in., bosh 22 ft. 0 in., stock line 15 ft. 6 in., bell 11 ft. 6 in., batter ¾ in., bosh angle 73° 27' and a Baker-Neuman top, with gas-engine blowers. Analyses Range of Material Charged Gravel: Si02, 64.40 to .7o.54 per cent; A1203,3-52 to 4.58; CaO, 7.27 to 9.49; M90, 5.09 to 6.14; FeO, 1.67 to 3.34, ignition loss, 9.50 to 13.83.

Jan 1, 1941

By J. H. Henderson, R. J. Wygal, J. Naar

Experimental work is reported which shows that consolidated rocks and unconsolidated porous media exhibit different imbibition flow behavior. At a given saturation the imbibition nonwetting permeabilities for a rock are smaller than the drainage permeabilities. The contrary happens for unconsolidated aggregates — imbibition nonwetting permeabilities are larger than drainage ones. A similar difference is observed for the wetting phase. Imbibition permeabilities are larger than drainage ones for a consolidated rock but smaller than drainage permeabilities for an unconsolidated medium. The results of these differences are examined for two cases. 1. Flooding Efficiency — Craig's1 scheme for the computation of production history of a five-spot water flood is shown to agree extremely well with experimental results obtained when using a system packed with glass spheres if imbibition relative permeability curves are used. 2. Alcohol-Slug Displacement — Published theory 2 on oil displacement by alcohol slugs has been questioned despite the apparent agreement between predicted and observed results. The present work suggests that, if imbibition relative permeability curves characteristic of the unconsolidated media used in the early experiments had been available to make the predictions, the inadequacy of the theory would have been immediately evident. The experimental work shows that poorly consolidated formations tend to behave like unconsolidated media. Finally, it is shown that the difference in imbibition behavior is directly related to pore-size distribution and cementation. PART 1 — THE FLOW BEHAVIOR OF UNCONSOLIDATED AGGREGATES Experiments on scaled models of field reservoirs are useful for studying new displacement processes which are incompletely understood. Even when a mathematical description is possible, the solution might be difficult and complex. An answer obtained from a scaled model is extremely valuable in such cases. A great amount of work$-5 therefore, has been devoted to the derivation of scaling laws. Similarity groups have been defined which assume (1) that the relative Permeability curves of the prototype and the model are the same whether the displacement is an imbibition or a drainage process and (2) that there is a linear relationship between the capillary pressure of the model and the prototype. For practical reasons (simplicity in the preparation of models, duration of the experiments, etc.), the porous media of laboratory models are usually unconsolidated packs of sand or glass particles. Hence, unless the capillary and flow characteristics of unconsolidated and consolidated systems are identical, the model data are applicable only to unconsolidated formations. The usefulness of scaled-model studies may then be seriouslyrestricted since most oil-bearing sands are consolidated. Perkins and Collins6 suggested the use of model and prototype curves normalized with respect to both relative permeability and saturation to improve compliance with scaling criteria. Even this technique does not give a satisfactory model-prototype match. This paper reports an observation of two-phase flow in unconsolidated sands which shows that, for most displacements, "scaling" in the strict sense of the word is not even qualitatively feasible with a sand model. It provides, however, a firm foundation for testing a theory by matching it with observed performance of laboratory-size models. EXPERIMENTAL AS a part of a basic study of packed aggregates, the relative permeability of glass-spheres and sand-grain packs was measured with capillary control. The fluids were oil and air' The spheres were packed in plastic cylinders 1-in. in diameter;

By C. L. T. Edwards

In the preparation of this paper, the author has drawn upon experience with the operation of a blast furnace on Ioo per cent scrap burden, which he believes was the first operation of its kind in the country. It is the writer's further belief that much of the controversy attending discussions of this subject may be obviated by the presentation of a group of facts that should be known by blast-furnace men and open-hearth men alike. The following question has been raised: "Is iron made with scrap in the blastfurnace charge as good iron as that made without scrap—made with straight ore?" This question may he answered in part by the fact that the open-hearth men of the Bethlehem Steel Co. who used pig iron from a blast furnace that operated on Ioo per cent steel scrap found no difficulty in the processing of such iron other than that to be expected from the known analysis. Operation with ioo PeR Cent Steel Scrap During World War I, there was accumulated at the Bethlehem plant of the Bethlehem Steel Co. some 22,000 tons of alloy-steel turnings and borings. This scrap material was highly corroded and, like alloy-steel turnings of that period, were as a drug on the market. There was also a small tonnage of scale, rich in valuable metal. If this scrap could be worked up into pig iron, it would become readily available for use in the open hearth. In order that the pig iron should contain the maximum percentage of nickel, permission was obtained from the Management to try a Ioo per cent scrap operation. Accordingly, a blast furnace was swung over on July 25, 1919; the percentage of steel scrap increased more or less irregularly until July 29, when Ioo per cent steel turnings were charged. Except for occasional charges of nickel scale as an "cxtra," the operation continued uninterruptedly until Aug. 27, when the furnace was swung back to the regular ore—ore and scrap—operation. During this period, the furnace production ranged from a low of 568.60 tons to a maximum of 766.07 tons. At the swing-over from Ioo per cent scrap to the regular burden, the charge I hung up rather severely. While the latter condition has nothing to do with the object of the paper, a brief discussion of the experience will appear later because of the interest it may have for blast-furnace operators. In Table I, results of the first and last days of the ore charge are shown, July 25 and July 29. The last column shows a summary for the period of maximum scrap ' charge. The furnace employed had a hearth 16 ft. o in., bosh 22 ft. o in., stock line 15 ft. 6 in., bell 11 ft. 6 in., batter in., bosh angle 73' 27' and a Balrer-Neuman top, with gas-engine blowers. Analyses Range of material charged Gravel: SiO2, 64.40 to 70.54 per cent; A1203, 3.52 to 4.58; CaO, 7.27 to 9.49; MgO, 5.09 to 6.14; FeO, 1.67 to 3.34, ignition loss, 9.50 to 13.83. I

Jan 1, 1942

By Howland Bancroft

AMERICAN investment in foreign mining interests today faces its greatest task. U. S. dollars must make possible the. steady procurement of the minerals our defense effort consumes in huge quantities. The two most vital factors involved in foreign procurement are time and the continued good will of the nations from which minerals are purchased. The Point IV program was formulated to care for the second item, but it has failed to do the job. Its lack of success has not been from intent or from basic failure in formula. Foreign Investment, Four Eras Foreign mineral development, in so far as participation by private capital from the United States is concerned, may be divided into four main chronological categories: First: The period prior to the first World War when people, capital and products moved with relative freedom across international boundaries, and London was the recognized mining seat of the world. By the end of 1919 the United States direct investments abroad amounted to $3.9 billion of which some $900 million were in mining and smelting and $600 million in petroleum. Investment climate throughout most of the world was excellent. Second: The period between the end of World War I, when the international economy had been shaken from its foundations, and the beginning of the great depression of the 1930's, which still further disrupted the world economy. By that time the world mining center had moved across the sea and the United States direct investments abroad had increased to $7.7 billion of which mining and smelting accounted for $1.2 billion and petroleum for $1.1 billion. Investment climate was good in most parts of the world. Third: The period of the depression of the 1930's and the beginning of World War II during which foreign trade was still further disorganized and the international economy collapsed. Nazi barter agreements were initiated in many parts of the world, and Soviet propaganda commenced to make its, influence felt in many countries. During this period United States direct investments abroad decreased to $7.3 billion. Mining and smelting investments during the same period decreased some $200 million, though direct investments in foreign petroleum areas increased an equal amount. Investment climate became less and less hospitable in all parts of the world affected by economic nationalism. Fourth: The period since the beginning of World War II during which total direct investments abroad increased from $7.3 to $13.7 billion. Of this sum, at the beginning of 1950 investment in foreign mining and smelting is reported to have been $1.2 billion-back to where it was in 1929, and in petroleum to have reached $3.7 billion. Investment climate remained favorable in the countries respecting contractual obligations and fair in their treatment of invested capital. [ ] As noted above, the relative freedom of passage across international boundaries by people, capital and products ended with World War I and the situation remains unchanged in a greater part of the world. While this same war upset international economy, the depression of the 1930's caused the collapse of world trade, and exports from all countries fell to an alarmingly low figure. Some countries almost ceased to export. Chile, for example, reported a drop of 88 pct in exports. Countries with

Jan 1, 1952

By G. F. Sager, B. J. Nelson

Magnesium alloy forgings offer higher and more uniform mechanical properties than heat treated magnesium alloy castings and are used principally for light weight parts that may be stressed in fatigue or subject to impact loads, or where space limitations do not permit the use of the necessarily bulkier magnesium alloy castings. Compositions and Properties of Magnesium Forging Alloys The nominal compositions and properties of the principal commercial magnesium forging alloys are given in Table 1. The two that are most commonly used are AMC58S and AM65S. The former has the highest strength and is, therefore, employed for heavy duty applications. However, the forging of this alloy and of AMC57S ordinarily requires the use of slow speed hydraulic presses. The forging alloy AM65S combines good, although somewhat lower, mechanical properties with excellent forging characteristics. This alloy can be forged on hammers, upsetters, rolls, and mechanical presses, as well as on hydraulic presses. These characteristics make it particularly useful for many applications. Manganese Segregation in AM65S The alloy AM65S contains 5 pct tin, 3 1/2 pct aluminum, and a small amount of manganese, the manganese being added to insure satisfactory resistance to corrosion. Some manganese segregation was occasionally encountered in this alloy. In many applications, such segregation is of no particular consequence, but when forgings are acid dipped prior to the application of various chemical coatings, the segregated particles of manganese constituent may stand in relief. The resultant surface roughening may impair appearance and is undesirable in forgings employed in the textile industry, where very smooth surfaces are essential to avoid the catching and breaking of fine threads. An effort was therefore made to determine the cause of manganese segregation in this alloy and find a method for its elimination. Radiographic examination of a series of cast ingot sections and extruded samples of the AM65S type having manganese contents ranging from zero to about 0.7 pct revealed no appreciable manganese segregation when the manganese was less than about 0.4 pct. A small amount was observed with a manganese content of 0.46 pct and considerable with manganese contents of 0.6 pct or higher. Attempts to eliminate the manganese segregation by variations in the melting and casting conditions were unsuccessful and it soon became apparent that the trouble was attributable to the fact that the manganese contents that caused segregation were in excess of the amounts that would remain in solution at temperatures encountered in the melting and/or casting operations prior to the complete solidification of the ingots. A knowledge of the amounts of manganese that would be soluble in molten alloys of the AM65S type at various temperatures was obviously desirable. The liquid solubilities of manganese in binary Mg-Mn alloys and in Mg-Al-Mn and Mg-Zn-Mn alloys have been determined by Tiner and others,* but no data on the solubility of manganese in molten magnesium alloys containing tin and aluminum are given in the literature. For this reason, an investigation to determine the solubility of manganese in a magnesium alloy containing 5 pct tin and 3.5 pct aluminum (AM65S type) was undertaken.

Jan 1, 1950

By Raymond B. Ladoo

Wollastonite is a calcium metasilicate, with the formula CaSiO3; containing theoretically 48.3 pct CaO and 51.7 pct Si02. It is one of many natural and synthetic silicates with varying CaO/SiO2 ratios, with and without water of crystallization. While it is a very common mineral, deposits of sufficient size and purity to be of commercial interest are unusual. There is only one producer (1958) of wollastonite for industrial use in the United States, Godfrey L. Cabot, Inc. at Willsboro, New York. There has been a small production of surface material for ornamental use from near Blythe, California. Carload tests have been made on California wollastonite for making mineral wool and a commercial plant for this purpose was projected in 1957. Properties Wollastonite is monoclinic and commonly occurs in masses or aggregates of bladed or needle-like crystals. It has a perfect cleavage parallel to the long prismatic axis. It is rather brittle and some types grind easily to a very finely fibrous product, but other types, due to interlacing of fibers, are tough and difficult to grind. Mobs hardness is 4.5 to 5; specific gravity 2.8-2.9; index of refraction 1.616 to 1.631; melting point 1,512°C. Color when pure is a brilliant white, but when less pure it may be gray or brown. Luster is vitreous, transparent to translucent. Common mineral associates are garnet (several varieties), diopside, calcite and quartz. The nature of the mineral impurities determines to a large degree the commercial value of a deposit. At Willsboro, New York, the impurities consist chiefly of iron garnet and iron diopside which are both magnetic and so are easily removable by magnetic separation, yielding a nearly theoretically pure product. Some deposits in California contain calcite and quartz which cannot be removed cheaply, thus limiting market possibilities. Occurrence Wollastonite is a contact metamorphic mineral occurring in most places within or associated with impure limestones. The deposits at Willsboro, New York1,2,3,5 consist of two or more beds dipping 15-50°E and striking NW-SE. The main bed, 30 to 70 ft thick, may be traced on the surface for at least 2 ½ miles. In this belt, the Pre-Cambrian Grenville limestone has been injected and partially replaced by the more liquid portions of an anorthositic magma. Buddington and Whitcomb3 have described the rock as "Mixed gneisses, pyroxenite and garnetiferous gneisses and skarns." Prospecting revealed the wollastonite at ten different places in the belt, overlain in most places by a garnet rock. Diamond drilling has proven several million tons with probable reserves around 15 million tons. Interbedded with the wollastonite are beds of garnet from a few inches to several feet in thickness. In the wollastonite ore itself the chief and almost only associated minerals are garnet (mostly almandite but some andradite and grossularite) with small amounts of green hedenbergite. Inasmuch as the almandite and diopside are magnetic they are easily separated from the wollastonite in high intensity magnetic separators. If grossularite should occur in quantity other means of separation would be needed. Wollastonite has been reported at 35 localities in California12 but only those in the Big Maria and Little Maria Mountains, 16 to 20 miles north of Blythe, Riverside County, are

Jan 1, 1960

By M. E. Learmont, R. J. Lipp, I. Iwasaki

In the selective flocculation of iron ores, the concentration of alkaline earth ions in pulp solutions plays a critical role. Sodium silicate, alone or with sodium tripolyphosphate, has been used as a dispersant. When Ca+ + concentration exceeds 15 to 20 ppm, however, only a strong complexing agent, such as ethylenediaminetetraacetate (EDTA) was found to be effective (Heerema, Lipp, and Iwasaki, 1979). Some iron ores release Ca+ + in excess of 20 ppm. With ores that contain gypsum, the Ca+ + concentration may reach several hundred ppm. The purpose of this investigation was to compare the effectiveness of EDTA with nitrilotriacetate (NTA) in countering the adverse effects of Ca+ +, particularly at high Ca+ + concentrations. Emphasis was placed on the use of NTA since it is more cost-effective than EDTA. It is also used in detergents in some countries (Malaiyandi, Williams, and O'Grady, 1979). NTA, like EDTA, forms a soluble complex with Ca+ + with a 1:1 molar ratio. Its structure and the value of log Kca are given below together with EDTA (Shibata, 1963). [ ] For experimental materials, an equal weight mixture of Lac Jeannine hematite and a high-purity quartzite from Thompson, MN, both ground to - 30 µm (- 560 mesh) was used. Selective flocculation test conditions and procedures were identical to those used in previous investigations (Heerema, Lipp, and Iwasaki, 1979). The optimum level of starch addition for the above mixture was determined to be at 300 g/t (0.6 lb per st). Initially, a series of selective flocculation tests were performed on the mixture pulped with 10-3M CaC12 (40 ppm Ca + +) at pH 11. With no NTA present, flocculation of the entire suspension resulted. The selectivities achieved in tests with 90, 100, and 150% of the stoichiometric amount of NTA were virtually identical to each other and also to the selectivity of separation obtained in the absence of Ca+ + Such an observation could have been expected since Ca+ + concentrations up to a few ppm may be tolerated in selective flocculation (Krishnan and Iwasaki, 1982). A similar series of tests were performed at 10-2M CaC12 (400 ppm Ca+ +). The results are shown in Fig. 1 as grade¬recovery curves. For comparison, the results obtained in the absence of Ca++ are included. At 90% of the stoichiometric amount of NTA, a large enough concentration of uncomplexed Ca+ + was left in solution to cause indiscriminate flocculation. Note in this figure that NTA is capable of countering the adverse effect of Ca+ + even at this high concentration when it is used in excess of stoichiometric amounts. The free Ca+ + concentrations at 100 and 150% are calculated to be 2.5 and 0 ppm, respectively. [ ] The relative effectiveness of NTA and EDTA was then compared at 100% of the stoichiometric amount using 10-2M and 10-3M CaCI2 (Fig. 2). EDTA appears to be slightly more effective than NTA. The free Ca++ of 0.02 ppm in 10-2M CaC12 with EDTA compared to 2.5 ppm free Ca+ + with NTA might account for the difference. As evident, prohibitively high additions of EDTA and NTA were required to complex high concentrations of calcium ion. The use of both of these agents would result in the accumulation of complexed Ca+ + in recycle water.

Jan 1, 1985

By John K. Hammes

INTRODUCTION This introductory paper presents a description and definition of what the finance function is and what it specifically means for the mining industry. In its simplest terms, finance is, "management of money matters". As an area within the discipline of business administration it draws heavily on the related fields of economics and accounting, and to a lesser extent on marketing and production. MINING FINANCE DEFINED In preparing to write about what finance means to the mining industry, I asked a number of mining people the question, "What does mining finance mean to you?" Most responded that mining finance was "How a company borrowed money for mine development", and perhaps half those questioned included "raising equity" in the definition. It is not surprising that the mining industry concept of finance is the providing of funds needed for the objectives of the business, for that was once a view shared by authorities in the field of business administration. Further, it is certainly the area where much of the emphasis has been placed in the past ten to fifteen years as the industry struggled with the development of more remote and more refractory or lower-grade orebodies while profitability and internal cash flow were below expectations. No wonder project finance became such a popular topic. Twenty years ago it is probable that the emphasis would have been on mine valuation, for that subject was the area of finance then most often examined in industry publications. Papers concerning the pros and cons of payback, internal rate of return, and discounted cash flow appeared regularly. Let's examine the following situations, each the result of a financial decision: - Funding the exploration program in a developing country was accomplished by buying the next six-months budget needs in local currency. One week later the currency devalued 30 percent. If the purchase had been delayed or the local currency borrowed short term, a substantial saving would have been made in funding the program. - A major mining company borrows heavily to finance both expansion of its primary mining business and its entry into several new industry segments. When markets for all of the commodities it produces turn down for a prolonged period, there is concern over the adequacy of cashflow to cover debt service in addition to other company needs. The company's financial officers, however, had arranged very large committed credit facilities from numerous financial institutions which assured the availability of funds for several years. This enabled the company to implement a strategy to conserve cash, sell assets and survive until conditions improved. Further, short term suppliers of credit also were comfortable with the assurance that longer term credit was there to support them. -A medium size mining company financed several mines independently with limited obligations on the part of the parent company. The company decided to refinance the operations under one agreement. More flexible terms, lower interest cost and a longer tenor financing were achieved in return for assuming the risk as a direct obligor. - The exploration and development group of a large mining company proposes to develop a new mine in a country in which the company does not presently operate. When the investment is rejected they are advised that one reason was that the reinvestment assumption inherent in the discounted

Jan 1, 1985

By Roscoe C. Clark

A study of the effect of various corrosive waters on five different types of cements indicated that those cements containing less than 5 per cent tricalcium aluminate were the most resistant to corrosion. INTRODUCTION Oil field experience indicates that some formation waters are excessively corrosive to some cements. A study has been made to determine the most corrosive waters and the relative resistance of various types of cement to these corrosive waters. PROCEDURE This study of the corrosion of cement was limited to an evaluation of the effect of various corrosive waters on five different types of cements. A determination was made of the types of cements which offer the greatest resistance to corrosion and of the chemical contents of waters found to be the most destructive to cements. The laboratory tests were conducted by immersing small cylinders of 20 samples of set cement in various corrosive waters. The initial mixing of most of the cement slurries was done using Tulsa tap water as the mixing water; however, a few of the slurries were mixed using a sulfate water as the mixing water. When the 20 samples had been immersed for a period of nine months, they were removed from their corrosive baths, inspected and photographed. The field tests were conducted by placing ten cement specimens, each contained in a screen wire thimble, in the gas anchors of insert pumps in wells in six different fields. The specimens were observed whenever it was necessary to pull the pumps and were returned to the 1aboratory when deterioration had reached a serious state. EXPERIMENTAL RESULTS In both the field and laboratory tests the resistance of the different cements to corrosion was determined by the condition of the samples and the number of samples of each that were in good condition at the end of the immersion period. Table I lists the various cements tested in the order of their resistance to corrosion with the most resistant at the top and the least resistance at the bottom. An analysis of Table I reveals that the upper half of the table predominates in slow set and sulphate resisting cement.: (low 3CAO.A12O3 content) while in the lower half the port-land and high early strength cements are in the majority. Of the last two the high early strength cements appear to offer less resistance to sulfate water corrosion. An investigation of the composition of the cements listed in Table I indicated that as a general rule the cements containing less than five per cent tricalcium aluminate will exhibit the greatest resistance to corrosion. The destructive action of various corrosive waters was compared by listing the waters in the order of those containing the largest number of samples that failed completely. These ratings are presented in Table II with the most corrosive waters listed first and the least corrosive last. Figs. 1 and 2 show the end views of cement samples which had been immersed in the baths of five per cent MgSO, water and the five per cent Na2SO4 water respectively in the laboratory. These .pictures are representative of the results obtained and present a pictorial evaluation of the corrosive resistance of various types of cements.

Jan 1, 1950

By J. P. Martin, A. H. Geisler, J. H. Crede, E. Both

The investigation of a 50 pct Co alloy was undertaken to determine whether there was any direct correlation between the structure and properties of Co-Fe alloys which were given various magnetic heat treatments. The magnetic anisotropy and texture of the 0.002-in. cold-reduced 98 pct material tend to decrease and change in nature with increasing temperature of the recrystallization anneal. Annealing samples in a magnetic field had little effect on either the magnetic properties or texture. However, cooling them in a magnetic field greatly improved their magnetic properties. THE beneficial influence of a magnetic field applied during the heat treatment of certain soft magnetic materials has been known for a long time. Early work showed that the presence of a magnetic field of a few oersteds during the heat treatment of Fe-Ni alloys will cause a large increase in maximum permeability. A pronounced increase in the residual induction which is produced by the magnetic anneal causes the hysteresis loop to approach the shape of a rectangle. Such results are beneficial since the desired properties are high permeability, high induction at maximum permeability, high residual induction, and low coercive force. More recently Libsch and coworkers1 studied the effect of magnetic annealing on the hysteresis properties of a series of Co-Fe alloys prepared from powders. They observed good response for the 35 and 50 pct Co alloys but little response for the 42 pct Co alloy. They pointed out that this was somewhat surprising since the 42 pct alloy has a high linear magnetostriction and zero crystal anisotropy and similar conditions in Fe-Ni alloys give excellent response to magnetic annealing. They found optimum properties to be at the 50 pct composition with residual induction, Br = 19,000 gauss and coercive force, Hc = 0.68 oersteds after the magnetic anneal. Before the magnetic anneal these values were B, = 12,600 gauss and Hc = 1.15 oersteds. The optimum treatment consisted of cooling from above the y-a transformation temperature to 900°C in a field of 20 oersteds, holding 11/2 hr at 900°C, then cooling at a rate of 20° to 25°C per min in the field to below 230°C. Cooling rate mainly affected coercive force with the value decreasing from 1.09 to 0.88 oersteds as the rate was increased from 3° to 48°C per min. Cooling from 1020" to 900°C in a field followed by further cooling to 230°C without the field gave properties decidedly inferior to those for samples annealed with the field applied throughout the cooling. They concluded that to get the best properties the samples must be cooled in a field to a threshold temperature above which the alloy is plastic enough to be affected by magnetostriction. In this respect the holding temperature must be high enough so that the alloy exhibits good plasticity to permit the optimum orienting of magnetic domains by relaxation of magnetostriction. In contrast, the holding time was of less significance for there was little improvement when the time exceeded 1/2 hr. The improvement in properties effected by magnetic annealing has usually been attributed to the establishment of a domain texture caused by the "freezing in" of magnetic strains. On the other hand, Smoluchowski and Turner2,3 apparently found that a magnetic field applied during recrystallization could alter the crystal texture. If this effect is real, improved properties would also be expected when

Jan 1, 1954

By G. C. Weaver, G. T. Harley

Beds or lenses of potash and magnesium salts are found in a thick salt section (Salado) overlain by Rustler Red Beds in several members of which water is present and from one of which the rehery process water used by International is obtained. Most of the holes drilled are less than 1000 ft. deep, but some wildcat holes have exceeded 3- ft. cable or rotary tools are used to drill down to the salt. when samples of water are desired the cable rig is used, but when this is not necessary, and where caving material is present, the rotary rig has an advantage. The rotary rig has a further advantage in that only one machine is required to drill and core the entire hole, whereas the cable rig must be moved off to make way for the core drill. Casing is placed in the upper section of the hole as required to shut off water, and a 5 3/16 in. string is set in the top of the salt before coring starts. With the rotary rig drilling is often carried to the salt with no casing, as drilling mud seals off caving ground and water-bearing strata, and a string of 4-in. line pipe or 4-in. flush-joint casing is landed on top of salt. Several types of gasoline-powered core rigs have been used in the field and all recover a 2 1/2-in. core. More recently the Sullivan Model 37 rotary rig has been tried, and a Sullivan Model N has been adapted to use a rotary bit in the upper section. Core is recovered in 20 ft. sections with a double-tube core barrel, and the bit used is a bottom-discharge type set with diamonds. The drilling fluid must be a saturated brine to prevent solution and etching of the minerals present. Blowouts are apt to Occur from nitrogen gas trapped under the several polybalite beds, and some have been strong enough to blow the tools out of the hole. Core recovery is practically loo per cent. All holes are plugged after drilling, with cement through the salt section and opposite each water horizon* and mud through the remainder of the hole. Cores are carefully logged and preserved, and in sections containing potash and magnesium minerals they are quartered and analyzed. The correlation of Ore beds between drill holes is briefly described. Introduction Beds Or lenses of potash and magnesium salts are found at varying depths in a thick deposit of salt (Salado formation) in what is known as the Permian Basin, in southeast New Mexico and West Texas. The Salado formation is Composed chiefly of common salt (halite) with numerous beds of anhydrite, polyhalite, and the soluble potash minerals carnallite, sylvite and langbeinite. Many other minerals are present in small amounts but their Presence has no bearing On the coring technique. Before starting to core the salt section it is necessary to penetrate 300 to 600 ft. of unconformably overlying Permian sediments (Rustler formation) which are composed of red and gray clay, sand, anhydrite, dolomitic limestone and occasional lenses of salt. The upper part of the formation is predominantly anhydrite, and the lower part predominantly clastic. A thin bed of dolomitic limestone, known

Jan 1, 1948

By John Griffen

This paper records over twenty years' experience with the use of the Rheolaveur system in the United States, showing its ability to meet changing conditions caused by the dirtier mine output of present-day mechanical mining methods. Data are given on size ranges handled, number and capacity of units installed, maintenance experience, and operating results on two-product and three-product separations. IT is not the purpose of this paper to discuss the principles employed in the Rheolaveur system of fine-coal cleaning as these have been fully covered in the technical literature of the Institute."2 Rather, our purpose will be to record the highlights of over 20 years' experience in the United States with Rheolaveur fine-coal launders, which will indicate their capabilities and costs of cleaning and their adaptability to meet the changing conditions caused by present-day mechanical mining methods. Rheolaveur fine-coal launders are used in the United States to treat a wide variety of size ranges of fine coal, the coarsest being 1/2 in. to 0 and the finest about 1/8 in. to 0. In Europe feeds as coarse as 5/8 in. and as small as 1/2 mm (28-mesh) to 0 are being cleaned. The size ranges usually handled in this country are 3/8 to 1/4-in. round to 0. Thirty five units with a combined hourly feed capacity of 3200 tph have been installed in the United States. Individual units are cleaning as little as 25 tph, while others are cleaning as much as 200 tph. Rheolaveur fine-coal launders offer cleaning units of high capacity and are outstanding in requiring a minimum of building space per ton of input. Experience has shown that maintenance costs are low. Several installations were made in the Pittsburgh district from 1928 to 1930, and since that time operation has been largely two shifts per day. Minor repairs to liner plates and Rheo boxes have been required during the intervening years, but no major replacement of launders was required until 1947 and 1948. At one of these plants, launders operated for 17 years before they were replaced and during that period over 26,000,000 tons of —5/16-in. coal were cleaned. The effect of the much dirtier raw coal produced by mechanical loading of the Pittsburgh seam is shown by the following tests. The data in table I summarize the performance of a Rheo fine-coal unit when cleaning hand-loaded raw coal. The —4-in. raw coal fed to the cleaning plant analyzed only 8.16 pct ash and 1.31 pct sulphur and contained 4.6 pct sink, 1.55 sp gr. Two years later, in 1945, mechanically-loaded coal from the same mine was cleaned in the same plant. The feed, —4 in., then analyzed 20.10 pct ash and 1.53 pct sulphur and contained 20.2 pct sink, 1.55 sp gr. The performance of the Rheo fine-coal unit when cleaning this coal is given in table 11. It will be noted that the +48-mesh coal is cleaned almost as thoroughly as in table I. The large amount of high-ash slimes produced from the dirtier feed are responsible for the higher ash of —--48-mesh washed coal in table 11. In this plant the Rheo fine-coal unit did not get the full load of refuse resulting from mechanical

Jan 1, 1951

By P. S. Roller

P. S. ROLLER,* College Park, Md.-The author introduces the idea of a grind limit, or lower size limit of the particles formed directly by grinding, and this is stipulated to be 0.70 micron. I wonder where all the particles come from that lie between the resolving power of the microscope and 0.7 micron, which are seen under a microscope in examining a sample of grind? There is also introduced the idea of excess fines; this is all right in itself but the author's quantitative definition seems to be virtually impossible to justify, and, moreover, is obscure. Just why E, the excess fines, should be defined as the distance between an F line and a y line is hard to follow, and just where the distance should be measured does not appear to be stated, as it should be since the F and y lines intersect and the distance between will depend upon where that distance is measured. The basis of the presentation is the relation of log weight against log size that was "discovered" by Schuhmann. While this relation is implied to fit, the only evidence that I can see is a slightly irregular line in Fig. I between 2 per cent and 18 per cent by weight and then a precipitous drop at 18 per cent away from any sort of straight line. Some of the conclusions are rather startling, It is stated that E, the excess fines, remains constant for all the comminution products of any particular material, except that it may decrease for some coarse crusher products. No reason is given for this assertion. One would, on the contrary, expect that excess fines, if such a concept is permissible, would generally vary with different conditions instead of being constant. Again, "as much net energy is required to reduce a ton of quartz to particles of the grind-limit diameter (namely, of course, 0.7 micron) by grinding as is required to melt the quartz." This would require many data to prove, but no proof is given; any consideration would reveal the impossibility of such a result. Still further, ore samples "ground to widely different sizes, and with different circulating loads and different size distributions or product, show the same production of new surface area per revolution of the mill, when this grind limit is used." This statement is confuted by ordinary experience, which teaches that grinding efficiency varies generally with the condition of material. For example, the cushioning effect of fines is widely accepted, while the inefficiency of a ball mill when the feed is too coarse is also well known. R. SCHUHMANN, JR.,* Cambridge, Mass.-Contrary to Mr. Bond's stand, there is a great deal of miscellaneous experimental evidence that comminution does not stop at around 0.7 micron, nor does it cease consuming energy at that point. Comminution is in fact recognized as an important method of producing colloids.5 Mechanical comminution methods were used by von Weimarn6 to produce colloidal dispersions of a variety of solids, including the minerals chalcocite, galena, hematite, stibnite. Utzino7 gives average particle sizes ranging from 0.02 to 0.09 micron for colloids produced by mechanical comminution of several crystal-line solids. Andreasen and Berg8 have ground

Jan 1, 1941

By W. D. Brown

Newell1 has shown that hydrogen is removed from steel in a vacuum at a temperature of 500° to 900° C. within 136 hr. Holm and Thompson2 also state that, especially when the hydrogen is high, the results obtained by extraction at 800°C. agree with those obtained by vacuum fusion. In this laboratory, an apparatus was designed (Oct. 1940) and used wherein the piece of steel was heated at 100°F. in a Torricellian vacuum (Fig. I). This vacuum was produced by raising and lowering a "leveling bottle or bulb" containing mercury. Extensive tests were made with this apparatus. The weakness of the procedure was the possibility of leakage of air into the tube around the rubber stopper at the bottom. The present plan is to raise and lower the mercury by applying vacuum from a mechanical pump, to the top of the tube and then to a bottle of mercury in which the bottom of the tube is immersed. The Apparatus The extraction is made in a Pyrex tube A, I in. i.d. It is drawn down at the top at N and an 8-mm. i.d. tube is welded on it. To this a Pyrex stopcock E, 4-mm. bore, is welded. The tube between N and E is preferably 8 in. long and is graduated in milliliters. The total length of A to the stopcock is 28 inches. Heat is supplied by a split-tube furnace. 0 in. long by 6 in. in diameter, hinged on the side. A short pyrometer couple P is inserted through the walls of the furnace. In use this is standardized by comparison with a standard couple in a I-in. tube, just opposite this short couple. In the I-in. tube A a glass rod R, flattened at one end, supports the sample S and the length of R is so adjusted that the sample is in proper place. (It may float in the mercury.) The tube A is inserted in a large rubber stopper to fit the bottle B and extends nearly to the bottom. It is so placed that the handle of the stopcock faces the operator. In this stopper also is a short tube D bent at right angles for the application of vacuum. Also in this stopper is an 8-mm. tube C reaching nearly to the bottom; this is bent so as to miss the heater and again bent to bring it in line with and as near as possible to the upper and reduced part of tube A. On this tube C is welded a 4-mm.-bore stopcock H. In order that the two tubes may be as near as possible, the handle of stopcock H faces the back, or is the reverse of stopcock E. The total height of II above the bottom is 28 in. As explained later, this is the pressure-measuring tube C. The bottle B is about half full of mercury. The mercury must cover the ends of A and C by about I in. when they are evacuated. By tees T and rubber tubing RT the tubes A, C and D, the latter through the three-way stopcock M, are connected to the vacuum pump. A sheet of asbestos at K prevents the stopcocks E and H from becoming so hot that they leak. A good grade of vacuum lubricant prevents leakage of E and H. In order to measure the pressure of the

Jan 1, 1945

By E. W. Davis

About a year ago several carloads of magnetite ore from New York state were sent to the Mines Experiment Station at the University of Minnesota for grinding and concentration tests. The flowsheet used minus ½-in. ore as feed to a 3 by 3-ft. overflow cylindrical ball mill operating at 37 r.p.m. in closed ciruit with a vibrating screen. The screen oversize was returned to the mill for further grinding and the screen undersize was concentrated magnetically. Several different screens, between 8 and 35 mesh, were used and it was desired to determine the capacity of the ball mill operating in closed circuit with each screen. From earlier tests using this flowsheet and equipment, it was known that when comparatively coarse screens were used it was necessary to increase the grinding dilution in the mill beyond that ordinarily used when grinding in closed circuit with classifiers. It was also known that after the circulating load had passed about 100 per cent of the original feed it tended to increase rapidly in amount, and grinding conditions appeared to become unstable. These conditions may be peculiar to this small ball mill but they were very marked in this series of tests. If conditions were not right, the mill would suddenly "go dead," and it was found desirable to operate so that the occasional rattle of balls against the lining of the mill could be detected. As the test proceeded, it was found that the cure for almost any difficulty that developed in the grinding circuit was to add more water to the mill feed. To begin with, the mill was operated at pulp densities of from 60 to 65 per cent solids but gradually it was found that with higher dilutions grinding conditions were more stable and the ball-mill power per ton of screen undersize decreased. Actually, the most satisfactory operating conditions were secured with a pulp density of about 40 per cent solids. The ore was hard but it was possible to grind ½-in. feed so that all would pass an 8-mesh screen with a power expenditure in the ball mill of less than 2½ kw-hr. per ton and with a circulating load of less than 50 per cent. With so high a dilution in the feed to the mill, it was feared that steel wear would be very high. However, the mill was not noisy, and in order to find exactly the grinding conditions, a special test was made at the end of the main series of tests. After the mill had been in operation for several hours and grinding conditions had become balanced, the power to all the equipment was shut off at a given signal. The ball mill made about one revolution after the power was turned off, and just as soon as the mill stopped, a spout was placed at the discharge trunnion and all of the pulp that flowed out of the mill was caught in tanks. The manhole in the mill was then opened and the whole mill charge dumped into other tanks. Both of these products were weighed, dried, and weighed again. The balls were screened out and weighed, and the dry solids were sized. In this way it was possible to determine the nature of the pulp and the ore within the mill under actual grinding conditions.

Jan 1, 1947

By William P. Lohden

INTRODUCTION It is recognized that, for a variety of reasons, some companies in the mineral industry today are by no means cash-rich and, in fact, are reporting a growing proportion of long-term debt in their capital structures. A review of recent balance sheets of small, medium-size, and some larger companies, indicates that a fair number still have substantial positions in cash equivalents such as U.S. government issues and other short-term money market instruments. In part, this paper concerns itself with companies which have sufficient cash and equivalents and/or cash generation to internally finance mining projects or expansions but which, for some reason, choose to borrow funds. Misconceptions which appear to frequently underlie so-called "leveraging" decisions are explored in this paper. Also considered arc' those circumstances under which any company, including one that is cash rich, should consider borrowing for a project in an amount beyond what would otherwise be necessary based upon its internal financing ability. I do not attempt to cover the raising of equity capital in public markets in this paper. OVERALL RETURN ON INVESTABLE CASH If you approach an individual with an investment which can be financed from savings, or by borrowing at a rate higher than one is earning on savings, that individual will quickly tell you that to pay interest at a rate higher than is being earned on savings would reduce overall income. Assuming that additional investment opportunities are not currently being considered, the individual concludes that a draw-down on savings, leaving a cushion for contingencies suited to individual circumstances, is the correct financial decision. For reasons discussed later, the simple mathematical logic leading to this conclusion tends to become obscured at the corporate level. When Leveraged Studies Are Inappropriate or Premature Surprisingly, I have heard of a number of companies that could afford to finance an investment solely with internal funds, which have made DCFROR (i.e. discounted-cash-flow rate-of-return) studies not only on a 100% equity basis but also on a leveraged basis. Certainly, a leveraged study would be appropriate if additional projects were competing for more capital than was available internally. Often, however, other projects are not far enough along to warrant a leveraged study and there is some danger that a project may be undertaken because it has an estimated acceptable rate of return, on a leveraged basis, that is not ultimately earned because some of the other projects are postponed or abandoned and borrowing is less than expected. For the above reasons, until it has been determined that (1) borrowing is a reasonable certainty for a particular project and (2) the timing and amount to be borrowed has been determined within a reasonable range of accuracy, I believe it is inappropriate and misleading to calculate DCFROR for a project other than on a 100% equity basis. Even when there are several projects currently competing for funds and borrowing will be required to finance one or more of them, using the common yardstick of calculating DCFROR on a 100% equity basis is a safer method to initially evaluate and compare the attractiveness of the projects. Many companies, whether they would have to borrow or not, will reject projects that on a 100% equity basis do not meet their minimum rate of return standards. Some companies which have to borrow will undertake a project provided the project's DCFROR on a leveraged basis meets its minimum return standards. The danger of this approach is that even moderate shrinkages of estimated cash flows could plunge return below

Jan 1, 1985