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By S Vianna, K Caldwell, R Silva, T Olson, D Bell

Studies to enhance the FLSmidth forced air machine through changes in the design, showed important improvements through changes in the number of Rotor blades, stator designs, rotor air distribution and other designs features. The main outcomes from this study highlighted that increasing the number of rotor blades increased the selectivity while decreasing power requirements while stators with slots have better results in terms of recovery, flotation efficiency and selectivity than without slots.Also the rotor air distribution makes a difference in the design when comparing different distribution criteria whilst keeping all features of shape and number of blades etc constant. At the most efficient rotor air distribution design, copper recovery reached one of the highest values while keeping good selectivity. The possible explanation for that is the increase in the pump capacity indicated by the increase in the specific power.It was seen as significant that reduction in specific power for some designs tested compared with the then current standard design had an average of 30% less power consumption.As a result, FLSmidth was able to identify new designs that decreased power and improved recovery, as well as, identifying some designs that specifically improved fine and/or coarse particle recovery.CITATION:Silva, R, Caldwell, K, Bell, D, Olson, T and Vianna, S, 2013. FLSmidth flotation developments - Dorr Oliver machines, in Proceedings MetPlant 2013 , pp 413-430 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 15, 2013

By S M. Stewart

Building and Maintaining Community Relationships   In mining terms, the town of Waihi is distinctive with the Martha mine situated right in the heart of the town. MarthaÆs central location and other mining activity nearby means there is an increased community focus on the happenings at the mine and the effects and impacts of mining. While WaihiÆs proximity to the mine is unique, all mines have a community context that they operate within.   Issues of proximity simply heighten awareness and emphasise the need for building and maintaining good community relationships. In the three years we have been working alongside the Waihi community, we have worked together with concerned and supportive residents, representatives of Newmont Waihi Gold and representatives of Hauraki District Council, to develop a collaborative framework for addressing the economic, social, environmental, cultural and spiritual wellbeing of the people of Waihi. This could not have occurred without the genuine commitment of all participants.   This collaborative focus has resulted in some tangible progress in Waihi which, in part, stems from people taking an interest in the town because the town is taking an interest in itself. As we have worked and learned within the process of building and maintaining a collaborative and sustainable community environment, we have tried to adhere to a philosophy and a set of basic principles. We believe that this approach, combined with a teachable skill set, helped to create the opportunity to develop a truly collaborative community environment which continues to grow. Our paper will describe this philosophy, these principles and the skill set that we have applied.   The application of the process in Waihi has resulted in a series of outcomes unique to Waihi. These outcomes include formation of the Waihi Community Vision committee, the Vision Waihi Trust and the subgroups set up to further the interests of particular groups, for the collective benefit of all the community.   Based on our experience of other situations, and on the way the Waihi process has developed, we believe that the identified principles and skills can be transported and used in other cultures and contexts. While the resultant outcomes may differ, the underlying principles will still apply. Progress will come from creating a sustainable environment within which the community (including residents, industry and regulatory authority) can determine its own internal relationships and the vibrant growing sense it has of itself.

Jan 1, 2006

By J Light

Since 2019, the mine planning team at Olympic Dam has been establishing and maturing a shift from deterministic to probabilistic scheduling techniques. This paper outlines this journey undertaken by the mine planning team, key learnings from implementation and further work required to increase the level of planning maturity. Olympic Dam (OD) is a highly variable, polymetallic orebody with a vertically integrated value chain from operations to final product. The processing plant has a tight set of quality constraints which are managed through timing of stopes from varying parts of the orebody. Value is eroded for the operation when forecasted quality of the mine feed encounters disruptions from unplanned changes to the timing of stope starts. As production has moved from the historic Northern Mining Area into the more geologically complex Southern Mining Area, average stope size has reduced, resulting in increased mining fronts required to meet production targets. This has created a problem of increased schedule complexity and difficulties in identifying and communicating resource priorities within a large set of individual stope critical paths. The problem was approached by considering each stope as an individual project constructed by teams working across multiple projects at any one time. The operation could then be considered a multi-project environment with shared resources and enables the application of Critical Chain Project Management (CCPM) to the mine plan. Key to CCPM is the addition of time buffers to protect the critical path of a project form upstream or downstream processes. Implementation of time buffers protects the stope start date against compliance to plan variance. The monitoring of each time buffer consumption, as a proportion of total construction activities completed enables proactive prioritisation of resources. This resulted in an increase in the number of stopes starting in accordance with the mine plan, simplified communication of priorities to all levels of the operation, increased compliance to plan and a clear measure of schedule risk during planning routines.

Mar 29, 2023

By Harrison AT, Smart RM

Backfill systems using unconventional cementitious hinders have been successfully used in relatively deep and hard rock tabular mines for longwall, scattered stoping and shaft pillar removals. Two unconventional cementitious systems are discussed: 1. A ground granulated blast furnace slag (GGBS) with an activator containing lime. This has been used with a total tailings 'stable' slurry at a relatively low dosage of less than seven per cent, by mass, based on dry solids. The room and pillar stopes supported with this fill were up to 20 in high and the tailings were relatively high in pyrite. .\ GGBS binder plus a silicate based activator and gelling agent that virtually eliminated all water drainage (and hence post filling shnnkage). The system used a slurry, but the addition of the ;iutivator created a final placed product that had the behaviour of a paste. The system has been successfully used for almost ten years in the following applications: ò sloping widths (mining heights) above 1.6 in; and ò shaft pillar removals in seismically active areas at the end of the life of the shafts. \This paper discusses the technical merits and costs of the systems and compares them to other fill systems (including true paste systems).

Jan 1, 1998

Vertical retreat open stoping (VROS) is a variation of sublevel open stoping (SLOS) that has been introduced at Cannington to minimise the influence of subvertical geological structures during stope extraction. The first application of VROS is described, where structures within the stope resulted in a change in firing sequence and the extraction of two complete sublevels in a single blast. The use of electronic detonators is critical to the success of VROS and their application is described. Numerous benefits of using VROS have been identified and are described. To date, eight stopes have been successfully mined using VROS. In addition to the first application of VROS, two further case studies are described.

Jan 1, 2005

By G F. Johansen

The erratic and localised occurrence of economic gold grades is a common feature of high-nugget effect gold veins. The nugget effect is a consequence of small-scale geologically controlled enrichment, and the inclusion or exclusion of sparse gold particles because of the sampling process. Such deposits do not always contain visible or coarse gold, and can be characterised by fine gold particles. Economic grade accumulations are generally contained within discrete oreshoots, which are surrounded by barren to low-grade material. Problems are often encountered where small sample types (eg drill core or channel samples) often vastly understate in situ grade, due to their general inability to intersect rare gold particles. As a result, the definition of grade and its distribution is often challenging, and leads to substantial resource uncertainty. Proxies, or indicators for grade, can help the geologist gain a better understanding of grade distribution and grade potential. These are based upon geological (eg mineralogical, textural, etc) and/or geochemical (eg specific elemental ratios, fluid inclusion compositions, elemental correlations, etc) criteria. The paper discusses the use and application of such proxies through three case studies.

Jan 1, 2004

By A Dunne, R Kruger, H Coleman, P G. Laurens

External and internal challenges in mining are increasing the difficulty and complexity of operating mines. The external mining environment has a big impact on mining operations and is driving the focus on safety, sustainable mining, green issues, profitability and productivity. There is a very high emphasis on ‘reducing cost to improve’, lower mining and beneficiation costs by eliminating waste/inefficiencies (reduce people, use less consumables, multiskilling, etc). The internal mining environment is getting tougher to operate in, with the deposits being more difficult to mine, more difficult to manage due to external pressure along with issues associated with maintaining quality, etc.Technological and environmental developments too numerous to mention, mean that cost control models, reduction in human resource numbers, as well as other drastic measures to curtail expenditure and increase profitability have become part of everyday business. The capability to manage the mining environment in a systemic manner has been lacking and this increases the pressure for performance on those individuals operating and managing mines.Working smarter has become crucial to ensure that businesses optimise the use of their resources, become more safety conscious, more productive and remain cost-effective, while recognising the importance of sustainable mining now and in the future. The logic of determining and managing to the capability of the mining value chain will be examined and the underlying assumptions or beliefs guiding behaviour and decision-making will be highlighted.In order to identify the obstacles in the mining value chain that hinder achievement of its full potential, the following questions have to be asked:What are the factors that influence the performance of a mining value chain?What is the design capacity of the mine?How can the inherent flow and value capacity of a mine be determined?What types of solutions will allow a mine to operate at its inherent flow and value capacity?This article will discuss the way we plan, measure, assess and manage the mine value chain, by addressing the following factors:balanced capacity versus flow and value capacity designthe use of averagingoptimising individual components in a value chain versus optimising the whole value chain.Optimising flow and value through the mining value chain is one of the three pillars of Mineral Resource Throughput Management (MR™). MR™ is an entrenched and academically supported philosophy that has been successfully applied in the past decade in various mines throughout the world by EXXPLEO, a mining and beneficiation consulting company. EXXPLEO has partnered with HCL (a global IT company) to embed the MR™ philosophy, methodology and toolsets into a formal software product called Synchronised Digital Mining (SDM). The SDM system will provide mining companies with a sustainable platform to effectively apply the MR™ principles and toolsets effectively across all operations targeting increased productivity, efficiency and profitability without having to train operations and management staff into expert MR™ practitioners to successfully achieve the desired results.CITATION:Dunne, A, Laurens, P G, Kruger, R and Coleman, H, 2015. Optimising flow in the mining value chain, in Proceedings Iron Ore 2015, pp 437–442 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 13, 2015

By F Diaz, G Hovestadt, B Friedrich, D Latacz, M Sommerfeld

The metallurgical sector significantly contributes to the global carbon footprint and encounters the challenge of developing more sustainable production methods. This study introduces novel approaches aimed at reducing CO2 emissions within the industrial sector, some of which have been developed up to the demonstration scale. In two case studies, urban waste from the agricultural sector (corn, olives, coconut etc) and waste electrical or electronic equipment (WEEE) recycling residues (shredder light fractions (SLF)) were subjected to thermal treatment. The resulting materials were then used as substitutes for conventional fossil-based reducing agents in both the copper and ferroalloy industries. Furthermore, hydrogen was employed at different scales to assess its efficacy as a reducing agent for recovering metal oxides from fayalitic copper slags. Our findings reveal promising prospects and defined specific challenges for the integration of these alternative reducing agents in the industry. The synergistic use of pyrolysed SLF, bio-coke, and hydrogen presents a viable pathway to significantly diminish CO2 emissions while simultaneously improving the sustainability of the metallurgical sector.

Jun 19, 2024

New ZealandÆs share of global greenhouse gas emissions, at about one fifth of one per cent, is very small. But the profile of those emissions is unique among OECD countries; more than half come from methane and nitrous oxide associated with livestock agriculture. Consequently, fulfilling its obligations under the Kyoto Protocol is potentially quite onerous for New Zealand.In this paper we use a single region, static general equilibrium model to assess the implications for New Zealand of various climate change policy options. The energy and agriculture sectors are modeled in a detailed manner to enable realistic simulations to be carried out.Choosing an optimal set of policies is made more difficult by the fact that New Zealand relies heavily on emission intensive sectors for much of its export earnings. For example, one emission intensive sector alone, dairy, accounts for over 20 per cent of all merchandise exports. Avoiding carbon leakage is therefore an important consideration in selecting appropriate greenhouse policies.Our analysis shows the degree of sectoral adjustment required is substantial. In addition, the total costs depend on the uncertain level of variables such as the global carbon price and the level of afforestation activities in New Zealand, ie the rate of new forest planting.

Jan 1, 2002

By A J. Burchell

The introduction reviews the tunnelling carried out in Singapore since the early 1980s. Between 1983 and 1990, Phases 1 and 2 of the mass rapid transit system were constructed. These included some 20 km of bored and cut and cover tunnels together with 18 underground stations. Some particular points of interest in this massive project are briefly commented upon. Reference is also made to other underground or underwater schemes undertaken during this period such as the proposed large caverns project and the submerged tunnel to Pulau Seraya. A description of the subsurface works, now under construction in Singapore, follows. This includes an all underground North-East railway line 20 km long with 16 stations. At a budget of US$ 3 billion, this is a major civil engineering undertaking. Another project is the extension of the railway to Changi Airport which involves 3.5 km of twin tube tunnelling together with a major underground station which is fully integrated into the airport terminals. An on-going program of further major railway extensions over the next 10 to 15 years is in place and an outline is given of some of the most important underground sectors. Other proposed projects such as the underground roads system and the deep level sewers are briefly described. Together they demonstrate the very significant volume of underground construction scheduled for the next century in Singapore.

Jan 1, 1999

By Morgan B. D

Since the mid 1950s, limonite deposits of a new type have been found in the northwest of Western Australia. The deposits consist of extensive fossil valley fillings up to several hundred feet in depth, of medium to high grade limonite, frequently containing limonitized fossil wood, and of Mesozoic or Tertiary age. The distribution of the deposits is closely linked with hilly outcrops of Archaean and Proterozoic jaspilite in the headwaters of the old valleys, from which the iron has been derived by leaching, and presumably re-precipitated by a process not unlike that which operates in forming bog iron deposits. Due to the relative resistance of tlie limonite to erosion, the rejuvenation of streams in the area in recent times has left limonitic remnants as mesas up to· several hundred feet above the levels of the present creeks, the courses of which generally are adjacent to or within a few miles of those of the old limonite filled valleys.The Robe River limonite deposits are the largest of this type known and can be traced for approximately 130 miles along the old stream, over 30 sq. miles of limonite remnants remaining at the present time.The present quantity of limonite in this system alone is probably in excess of 5,000,000,000 tons, and the original quantity must have exceeded four times this tonnage when allowance is made for erosion.Some thousands of millions of tons of this material contain in excess of 54 per cent Fe, with approximately 10 per cent combined water. The chief impurities are SiO2 and Al2O3, and minor elements are not present in objectionable amounts. A portion of these deposits was extensively tested by The Broken Hill Proprietary Company Limited (the B.H.P. Co. Ltd.) during 1962-1964. Most of the data presented in this paper are based on the work done on these deposits which are typical of those discussed. The overall problem of the origin of the limonite is discussed. It is apparent that the limonite originates from the jaspilitesof Archaean and Proterozoic age which form the highlands at the upstream ends of the deposits. The iron oxide has been chemically and/or mechanically derived from these jaspilites and deposited by one or more of the following mechanisms.A.-Chemical-sedimentary mainly by biological agenciesB.-Replacement of fluviatile sediments by iron-charged watersC.-Clastic sedimentary processesD.-Lateritization of fluviatile sediments.These various mechanisms are discussed; the authors favour machanismA.Manuscript received' at The Institute, 14th July, 1964.

Jan 1, 1964

By J Taylor, A Dubowik

To increase the efficiency and improve the quality of diamond drilling at Olympic Dam, mine geologists have adapted and modified common practices in order to overcome the challenges imposed by such a unique environment. Mine geologists have to take into account both the complex geology during the diamond drill hole design phase, as well as incorporating diamond drilling into the larger-scale scheduling process already employed at Olympic Dam. This study seeks to explore how such modifications have evolved over time.The geology of Olympic Dam influences the design process of diamond drill holes, particularly due to the variation of lithology and alteration, as well as the presence of magnetite and major structures within the orebody. Exclusion zones are used to manage interactions with existing and planned mining activities, and their size is dependent upon the geology of the area. Specific deviation checks are used to monitor the deviation of diamond drill holes with respect to these?zones.The highly interactive environment of Olympic Dam requires unique planning for diamond drilling, resulting in the production and implementation of both long- and short-term schedules. Long-term schedules are targeted at determining drilling locations and ensuring drilling is completed prior to stope planning, while short-term schedules aid in enabling access to ensure timely set-up of drill sites. Estimated drilling rates, determined by expected lithologies and historical data, feed into the short-term schedule to assist in managing the operation and minimising the downtime of diamond drill rigs. A mine geologist is appointed as a diamond drill coordinator to organise and manage diamond drilling at a scheduling and operational level, streamlining the entire process.Analysis of historical data shows a strong correlation between implementation of the aforementioned practices and improved drilling rates. This study shows the importance of adapting universal tasks to particular environments and circumstances. Mine geologists at Olympic Dam continue to acquire knowledge to further improve the modified drilling practices as operational requirements, production pressures and economic factors change.CITATION:Taylor, J and Dubowik, A, 2014. The evolution of diamond drilling practices at Olympic Dam, in Proceedings Ninth International Mining Geology Conference 2014 , pp 271–280 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 18, 2014

By A Goldstone, T Maton

The Golden Cross Mine is located on the North Island of New Zealand, at the base of the Coromandel Peninsula, approximately 8 km northwest of Waihi. The project is operated as a Joint Venture with Coeur Gold New Zealand holding 800/0 and Viking Mining Limited with a 20% interest. The past open-pit and underground gold and silver producer has been in the reclamation phase of the operation for approximately 2.5 years and is now nearing completion. Although rehabilitation of the site is a regulatory requirement, the Closure Plan has been enhanced by the ongoing commitment of the Joint Venture to establish a sustainable land use for the site by commissioning engineered facilities designed to last for perpetuity. The Joint Venture identified six significant design features that were key to successful rehabilitation. These were the controlled placement of acid generating waste rock into engineered disposal sites; the design and placement of sealing layers over the waste rock disposal sites; the design and construction of diversion drains; the establishment and management of vegetation to protect the oxygen diffusion layer; a partial capping of the tailings to accelerate consolidation adjacent to the tailings dam embankment, and the implementation of a cyanide recovery circuit to recycle cyanide from the tailings prior to disposal. Another key to success for the project involved genuine consultation with all parties participating in the planning, evaluation, and consenting of the closure process at Golden Cross. The local and regulatory community has been widely represented in the Joint Venture's operating and closure plans throughout the history of the mine. Participants include: Regional and District Councillors and staff members, professional peer reviewers, environmental groups, local residents of the valley, and Iwi. This overall commitment to the project has resulted in a world-class rehabilitation program for the first modern metal-mine closure in New Zealand and we believe that collectively, the work done at Golden Cross is helping to set a standard for the success of future programs within the extractive industry.

Jan 1, 2000

By G Caddy, M Middleton, S Kerec, R Keil, J Tsalapatis

Arrium’s OneSteel Whyalla Steelworks in South Australia is a fully integrated plant which operates a single blast furnace. The key operational objective has been to maintain high process availability and stability while maximising the process efficiency and the produced hot metal quality. All ferrous raw material input feeds are sourced exclusively from company iron ore deposits in the nearby Middleback Ranges. The Whyalla blast furnace has mostly operated using a combination of a high percentage of pellet feed, produced in Whyalla, together with screened lump ore.The unique ironmaking challenge has always been to extract the maximum value from the ferrous burden feed available locally. In earlier times, high-grade hematite lump ore was available for both screened lump ore and pellet production. Blast furnace trials from acid to fluxed pellet feed commenced in 1977. The furnace pellet feed has been wholly fluxed since 1981. Many pellet/lump ore feed mixes and significant pellet chemistry composition design changes have been made over the years. These changes have been aimed at best balancing the ferrous burden availability/cost and the optimum reducibility/high temperature melting behaviour of the charged ferrous feed within the blast furnace. In more recent times since 2007, the Whyalla blast furnace operation has transitioned from a hematite based pellet feed to a magnetite based pellet feed while there is an ongoing contest dealing with diminishing absolute quality/increased variability raw material feed inputs.The paper will detail key elements of the Whyalla blast furnace operational philosophy with regards to ferrous feed use and process optimisation. The blast furnace ferrous feed design considerations will be discussed, together with the test work performed, the operational and slag design transition strategies employed and the process results achieved.CITATION:Tsalapatis, J, Middleton, M, Keil, R, Kerec, S and Caddy, G, 2015. The use and optimisation of ferrous feed at the Whyalla Blast Furnace, in Proceedings Iron Ore 2015, pp 377–384 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 13, 2015

Responsibility for the administration of mineral resources is divided between federal and provincial governments. The paper traces the evolution of mineral policies at both levels of government, from the end of World War II to the present. In the immediate post-World War II years, the emphasis was on supplying the raw material needs of a rapidly growing world economy. Policies favouring growth and development of the Canadian mining industry were instituted during this period. Two decades of uninterrupted expansion (the 1950s and 1960s) ensued. The decade of the 1970s was a turbulent one for Canadian mineral producers. Governments intervened more substantially than ever before. Moreover, the industry suffered from an intense period of competition for resource revenues by the two levels of government. At the same time, far reaching changes were taking place in the structure of world mineral markets. To date in the 1980s, the mineral industry has, perforce, adapted to existing mineral market structures. Mineral policies, too, have shown signs of adapting to the needs of the mineral industry. Whether the resulting mix of policies will permit the revitalization of the Canadian mining sector remains to be seen.

Jan 1, 1986

Australia as a leading producer of mineral sands has also occupied a leading position in many areas of research'in the processing and applications of these minerals. Research in upgrading ilmenite to produce synthetic rutile has resulted in the develop- ment of many processes, e.g,., Becher, Murso, Chlorine Technology, and ICI processes. Studies on the reducibility of ilmenites, aqueous leaching of reduced ilmenites, Fe-Ti-O system, leachability of natural and treated ilmenites in hydrochloric acid and selective chlorination of iron from ilmenites have been carried out in order to develop and improve the efficiency of the above processes. While research on the processing of zircon sand to produce high purity (99.99% ZrO2 zirconia powder and zirconium chemicals started only recently, research by CSIRO in the early 1970s led to the discovery of the phenomenon of transformation toughening in partially stabilized zirconia (PSZ) ceramics. Australia, with very significant resources of lanthanide-containing ores, pro- duces substantial quantities of monazite each year but research in processing and appli- cations of rare earths was neglected in recent years in this country. However, research to improve processes for the recovery of rare earths is now under way and studies on the production and testing of Nd-B-Fe magnets which are 1.5-2 times stronger than the strongest magnets (Sm-Co) currently available, have also commenced.' An overview of the research in the pro- cessing and applications of mineral sands during the last two decades in Australia and its implications for the industry are pre- sented in the paper.

Jan 1, 1986

By A Maier, M Goldner, C Gimber

Given the ongoing global crises of climate change and nature loss, with the World Economic Forum (WEF) identifying them as the top risks to global economies in terms of both likelihood and impact in the coming ten years (WEF, 2022), there is increasing, pressing demand for companies to demonstrate they understand their climate and nature related risks and look toward contributing genuine beneficial environmental outcomes. Within the mining industry, mine closure is the obvious field in which climate and nature positive strategy can be linked with operations. To do so, there is a need to challenge long-held assumptions around closure in the mining and regulatory context; particularly, to shift the focus from closing individual mines to considering regional opportunity generation and value creation.

Aug 2, 2023

By Y, Li Jianxiong, Hu Hua, Gu Desheng

After having briefed the technical and economical advantages of continuous mass mining in underground metal mines, the authors discuss the four stages of research and development of continuous mass mining in China. The four stages are: vibrating ore drawing in a stope, continuous mass mining in a stope continuous mass mining without rib pillars in an area and continuous mass mining in whole mine. The authors briefly review the research achievements of the first and the second stage; Combining the key national research project of the æNinth Five Year PlanÆ ù æThe experiment and research of continuous mass mining without rib pillarÆ, the authors introduce in detail the technological condition of mining, the design ideas of continuous mass mining, the design scheme of mining, the technology of mining. the equipment of mass mining, the chief research achievements and so on. The success of research of continuous mass mining without rib pillar indicates the arrival of the third stage of research. The introduction of continuous mass mining will promote the technology revolution of mining in China remarkably. The authors also point out that the development direction of continuous mass mining of the 21 century is continuous mass mining in whole mine, which is the fourth stage of research.

Jan 1, 2000

By G J. Jameson, A Agarwal

This paper is concerned with the observation and analysis of bubble clusters in a laboratory flotation cell. A device was used in which bubbles were allowed to rise in clean water containing the same frother and collector concentration as in the cell. Bubble clusters were recorded using a high speed camera and analysed using an image analyser. Dodecyl amine was employed as a collector to float silica. The effect of impeller speed on the cluster behaviour was investigated. The results were interpreted in terms of cluster diameter and shape factor. The sizes of the bubbles forming the clusters were also measured and compared to the sizes of the independent bubbles in the cell. It was found that there was an optimum impeller speed in which the cluster diameter was a maximum. Higher agitation and the consequent higher power inputs resulted in cluster break-up while lower shear rates promoted cluster formation.

Jan 1, 2005

"Recognising that the mining industry is wedded to the break-even cut-off grade rather than a cut-off grade that optimises value, the author examines some perils and pitfalls in the use of break-even grades that lead to what the author calls ‘negatively geared ore reserves’.Negatively geared ore reserves occur when a portion of the ore reserves actually has a negative value and is effectively being subsidised by the more profitable portion of the ore reserves. This situation is generally difficult to detect with the level of information available to the public investor. The ore reserves can still be quite profitable in total, but now possess a level of risk that may not be appreciated.The risk profile (financial risk) of a negatively geared ore reserve is far greater than for a non-negatively geared ore reserve. Like a negatively geared investment property in a falling property market (for readers familiar with the Australian tax minimisation investment strategy), when the price of a commodity falls, a company that possesses a negatively geared ore reserve loses value at a magnified rate relative to a company that has a neutral or positively geared ore reserve. In the extreme case of a major commodity price reduction, as happened with the gold price in mid-2013, the negatively geared ore reserve can easily become negative value in total, not just in part.The negatively geared ore reserve is sometimes intentional – for instance in order to increase published ore reserve tonnages and meet the CEO’s key performance indicators – but is also often unintentional, resulting from various errors in the break-even calculation. Common errors in calculating a break-even grade include using fixed metallurgical recoveries, not including allowances for ideal laboratory versus real plant results, ignoring available operational data and using modal rather than mean parameter values in cost and performance calculations.This paper examines a common value distribution profile in many ore reserves and the effect of common break-even grade errors on this profile.CITATION:Poniewierski, J, 2016. Negatively geared ore reserves – a major peril of the break-even cut-off grade, in Proceedings Project Evaluation 2016, pp 236–247 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016