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By Collings P. S, Adair D. L

The Upper Robe (Robe Gorge) deposits occur in Kumina Creek and the Robe River, some 20-40 km upstream from mining operations at Pannawonica. The Gorge Deposits were rec- ognised, mapped and sampled in 1962-3 and re- examined in detail in 1971. Approximately 180 mineralized occurrences were mapped in 1971 on 1:4800 scale and 50 of these were remapped in detail at 1:1200 scale. Eighty cross sections were measured and sampled and 300 geological maps prepared. In addition 88 holes totalling 7388 feet were drilled in three occurrences considered to have the greatest potential. The Gorge Deposits occur in the Robe Pisolite unit which forms thin remnant crusts, bay fillings and occasional cut-off meanders along the edge of the present streams. Less than 50 of the deposits have tonnage potential of one million or more. Consequently exploit- ation of the Gorge reserves must be considered as a very uncertain, long range possibility because the deposits are small and scattered throughout the gorges in the area, thereby necessitating costly railroad spur lines to gain mining access. Grade of the occurrences is extremely variable over short distances both vertically

Jan 1, 1973

By G Brewster

The Eagle on the Hill tunnels form part of an upgrade of Mt Barker Road, 15 km to the southeast of Adelaide. The upgrade significantly improves safety and reduces delays on this major road, which winds steeply through mountainous terrain. The twin tunnels each spanning 15 metres run in parallel for a length of 480 metres. The tunnels are excavated in slightly weathered high strength slates and very high strength quartzites of the Saddleworth Formation on the western margin of the Mount Lofty Ranges. Steeply dipping slate cleavages and the high fracture ratio result in many slope stability problems in the project area. The level of geotechnical investigation undertaken prior to the calling of tenders for the project was extensive. This included the excavation of a pilot tunnel along one of the tunnel alignments, which allowed accurate mapping and rating of the rock, resulting in an increased level of confidence during the tender process. One of the features of the winning alternative tender design was the use of canopy tubes, flexible steel ribs and shotcrete to replace up to 40 metres of deep portal cuts in unstable rock with driven tunnels. Slope stability issues were overcome with the use of rock dowels and shotcrete. The support concept allowed the safe driving of the tunnel portals with as little as two metres of overburden. The design incorporated lining drainage and criteria for fireproofing based on European experience to ensure the ability of the tunnels to remain stable in the case of a severe fire incident. The support design allowed for maximum flexibility with a range of support types able to deal with the varying ground conditions. Design development and support refinement continued throughout the tunnel construction phase with close liaison between the designer and the constructor. Monitoring and review of feedback from the construction site by the Sydney based design team was easily achieved by means of electronic transfer of photographic and survey information, telephone and fax communication and regular site visits. The contractor for this project is Macmahon Concrete Constructions Joint Venture (MCCJV) and the designer is Connell Wagner. Excavation commenced in January 1998 with tunnel breakthrough having been achieved in early-August 1998 and mid-September 1998 respectively. Concrete lining construction is scheduled for completion in April 1999.

Jan 1, 1999

One of the more recent developments within the mining industry has been the adoption of formal continuous improvement programs. A continuous improvement (CI) program was launched across Kalgoorlie Consolidated Gold Mines (KCGM) in early-2002. The purpose of this program was to identify further operating improvements within departments. The focus of the continuous improvement program was not only on the areas of the operation which were performing below expectations but also on areas of the operation which were performing well but could still be further improved.The effectiveness of a continuous improvement program depends on the stability of the processes in place and the participation of many employees from all levels of the business.Continuous improvement has had some successes and failures at KCGM and this paper will discuss both within the open pits department. Further improvements that could be made to the process will also be discussed. Kalgoorlie Consolidated Gold Mines Fimiston operation is located in the Kalgoorlie Goldfields and it the largest gold mine in Australia producing over 800 000 ounces of gold per annum.

Jan 1, 2004

The aspect ratio (mill diameter/mill length) of autogenous and semi autogenous mills varies widely and can be as high as three or as low as 0.5. The literature on the subject of what effect aspect ratio has on grinding mill performance or energy efficiency is almost non-existent. However, at the design stage of many grinding circuits the subject is often vigorously debated amongst metallurgists. In this paper the performance characteristics of mills with different aspect ratios are examined to determine whether process performance characteristics are a function of aspect ratio and whether high aspect ratio mills are any more or less energy efficient than low aspect ratio units. Data from both pilot and full-scale mills are used for this purpose in open and closed circuit configurations.

Jan 1, 2007

The Quioma Mine is located along the axis of the Cordillera Oriental, 130 km southeast of Cochabamba, South Central Bolivia. Silver, lead, zinc, antimony, and gold have been intermittently produced from veins in the Quioma area since Colonial times. Mineralization occurs within steeply dipping fissure veins transecting moderately folded Lower Ordovician sediments. Tectonic activity is early to mid-Tertiary and the vein system parallels the fold axis of a major northwest-southeast striking, doubly plunging anticline. Vein sets occur within a 2 km wide band over a strike distance of 13 km along the northeast limb of the anticline. Economic mineralization occupies syntectonic pre-mineral fault zones developed in more competent stratigraphis units of Lower Ordovician clastic sediments. Veins average 55 cm in width, although mineralized structures up to 3 m wide with a known strike length of several hundred meters have been mined. Mineralization consists of siderite, argentifferous galena, sphalerite, and quartz, with minor amounts of chalcopyrite, barite, and bournonite. Pyrite is rare except at the Boston vein where it occurs with stibnite that contains trace amounts of gold. A marked characteristic of veins in the district is evidence of repeated stages of movement during mineralization. Intrusive rocks are rare in the Quioma area. Narrow porphyritic dikes of Andesitic composition averaging 1 m in thickness have been observed. These dikes occasionally show a close spatial relationship to the veins and are often kaolinized and carbonitized. Vein and dike contacts are sharp and alteration does not appear to extend into the wall rock. Mineral zoning is suggested by antimony mineralization observed in peripheral areas of the anticline.

Jan 1, 1987

By Reeves I. And Farquhar J, Pearce S

The irregular shape of the Rosebery orebody, coupled with the inconsistencies in grade over short strike lengths, has meant stoping blocks have had to be small to combat dilution and stability problems. In the past, each lens was divided into regular block sizes and developed up to five years before production commenced. There were two major drawbacks to this practice; firstly, existing development deteriorated over time therefore requiring rehabilitation prior to production. Secondly, the pre-determined blocks could not be easily changed to incorporate changes in mining technology or economic circumstances. Bearing these problems in mind, it was evident that any new lens development had to be designed to allow maximum flexibility. The lens being currently developed is J lens. It represents approximately 50 per cent of the current reserves tonnes, and 65 per cent of the zinc metal. Its importance to the mine's future cannot be over emphasised. At its core the lens is up to 25 m thick at grades of over 30 per cent zinc. The practice of dividing the orebody into levels and sublevels, with consequent crowns was no longer acceptable because of restrictions in stope design and potential loss of ore. To assist in the development planning of J lens, a geostatistical block model was applied in long section to graphically represent the lens. Areas of high zinc concentration, as well as zones of uneconomic material were identified by using the model. This has meant that the development could he targeted, enabling stope delineation to occur in the lens without significant ore loss. Because of limited development resources, and the need to bring J lens on-line in the near future, the development strategy has had to focus on 'just-in-time' principles, rather than accessing the whole lens from bottom, and progressing upwards. Tight development schedules have required individual stoping block to be developed on such factors as grade and available tonnes rather than as a vertical sequence.

Jan 1, 1993

Geological models for the exploration and evaluation of epithermal Au and porphyry Cu-Au deposits rely upon a classification of different deposit styles and an understanding of the evolutionary processes of deposit formation. These models guide the interpretation of subsurface deposit anatomy in order to target drill testing and assist the explorationist to focus on the more prospective projects. It is important for the explorationist to distinguish between different styles of magmatic arc Au deposits as each style displays distinctive characteristics with exploration implications. Magmatic arc Au deposits are distinguished as porphyry Cu-Au formed at depths of 1 - 2 km at the apophysis to larger, buried, magmatic sources which are also the ultimate metal sources for the varying styles of shallower level epithermal Au deposits. Low sulfidation epithermal Au deposits characteristically develop from dilute circulating meteoric waters and are distinguished as the group with a closer relationship to intrusive source rocks, and slightly higher sulfide contents (still generally

Jan 1, 2004

By Quinlan M. J, Ratcliffe J. S

Chemical kinetics is a dependent process which usually correlates the rate at which a reaction proceeds with the mechanism descriptive of the manner by which reactive particles interact. Given the latter, the object gen- erally is to find the reaction rate dependency in terms of an intensive property of the system - number of reactive particles present, and of the energetics of the system - usually temperature. Chemical kinetics depend on a dem- onstration that reaction considerations alone control the phenomenological process under study. For these rea- sons, chemical kinetics are usually involved in homogeneous gaseous systems. Even in liquid homogeneous sys- tems earliness or lateness of reactant mixing rather than chemical kinetics may be controlling. Considerations of transport phenomena are involved in heterogeneous systems and often control the observable rate:an additional problem in such systems is to apportion the rate due to mass transfer - usually a linear process - and that due to reaction which may be linear or non-linear. Experimentally, conditions are often chosen so that only one consideration controls but this becomes more difficult where solid phases are involved. Kinetic modelling involves considerations of chemical kinetics, transport phenomena, and factors attributable to the physical environment in which the process takes place. The latter two considerations may be quite different as between experiment and plant. The kinetic model may be a mathematical representation of a conceptual mech- anistic model of the reaction. Alternatively, it may be an empirical relationship resulting from, for example, some curve fitting procedure applied to experimental data. The latter approach may be necessary where the system is particularly complicated.

Jan 1, 1975

By Watt JS

The ash content of coal can be determined using radioisotope X-ray techniques. A number of overseas applications of X-ray techniques are described; however these suffer from the disadvantage of either not compensating for iron variations or, if compensation is used, using X-rays of low penetration with consequent sampling difficulties. Current Australian Atomic Energy Commiss- ion (AAEC) research on X-ray techniques is aimed at overcoming the limitations of these methods. The AAEC method involves making measurements proportional to mass absorption coefficients of X-rays in coal at two energies. Calculations and experiments with X-rays up to 35 keV have shown that ash content can be determined to about 1 wt.%. This work is being extended to higher X-ray energies to enable the technique to be used directly on a conveyor belt or in a hopper. Neutron techniques can be used to measure the concentration of specific elements such as carbon, hydrogen and silicon in coal. Their con- centration is correlated to the coal parameters of interest. Methods of moisture determination based on hydrogen measurement and ash determina- tion based on silicon and aluminium measurement are described. Energy content can be determined accurate- ly by analysing the carbon content of coal

Jan 1, 1978

By Coxhead B. A, Brandt B. A

The geological exploration and evaluation of coal reserves involves the appraisal of very large amounts of data. Computers afford an ideal means of handling and manipulating the data, thereby avoiding the laborious and expensive method of manually compiling the logs in full descriptive language. The Minad system of computer storage and retrieval of geological and analytical data is particularly suited to the description of cores and cuttings from exploration drill-holes. The encoded data is arranged in a 120-column computer output sheet format; descriptive geological information in a 54-column geolog and analytical information in a 64-column assaylog. The acquired data is quantitative, uniform and relatively complete and can be selectively retrieved for processing by a wide range of specialized computer programs developed for the coal mining industry. Visual retrieval of data for manual processing is facilitated by the use of simple codes and logical word abbreviations.

Jan 1, 1977

By Smith CB, Boxer GL

The Argyle diamond deposits in the East Kimberley were found as a result of a long term exploration programme, begun in 1972 by the Kalumburu Joint Venture (KJV), to search for diamonds on the Kimberley craton. When CRA Exploration Pty. Limited joined the KJV in 1976, it was re-named the Ashton Joint Venture (AJV). The Kimberley craton was considered prospective by analogy with structural settings of diamondiferous kimberlites in Africa. Diamonds were found during regional drainage sampling in Smoke Creek in late 1979, which led directly to the discovery of the rich Argyle lamproite diatreme (AK1) and associated alluvial deposits of Smoke and Limestone Creeks. The diatreme intruded into quartzites, sandstones and shales of Adelaidean age, and consists predominantly of lapilli ash tuff, with minor coarse and fine ash tuffs, 'non-sandy tuff' and olivine lamproite dykes. Erosion of the diatreme has produced the alluvial deposits of Smoke Creek and Limestone Creek to the north and east. Argyle diamonds are of predominately industrial quality, and the typical diamond is a brown, irregularly shaped, frosted, heavily resorbed form with abundant graphite inclusions, well developed etch channels and prominent hexagonal surface depressions. The pre-feasibility evaluation of AK1 comprised diamond drilling, surface and underground sampling, metallurgical sampling, marketing studies and ore reserve estimation. The proven AK1 ore reserve is 61Mtonne at 6.8ct/tonne. Evaluation of the alluvial deposits gave results of Upper Smoke Creek, 580 000 tonne at 4.6ct/tonne and Limestone Creek, 1.7Mtonne at 3.5ct/tonne. Commercial production from the two alluvial deposits began in 1983 with production for the year reaching 6.2 Mct. Mining of the alluvial deposits at three to five Mct/year is proposed to continue until the start of mining of the AK1 deposit in late 1985 or early 1986 at which time a new processing plant and associated infra- structure will have been constructed adjacent to the AKl deposit in the Limestone Creek area. Production is planned at three Mtonne/year, producing 25Mct/year, which will make Western Australia the largest producer of natural diamond (by weight) in the world.

Jan 1, 1984

Minerals and Metals Group (MMG) Century mine (Century) is a large open-cut mine in northwest Queensland approximately 2.5 km long, 1.5 km wide and 240 m deep, with an ultimate pit depth of 320 m. In 2009, the mine experienced three failures which began as small failures, and progressively developed into significant multi-batter failures. The incidents were managed by a combination of analysis, redesign and practical management to achieve positive outcomes for the mine. On the south wall of the mine, a series of batter-scale wedge failures occurred in December 2007. Analysis of structure orientations and design changes aimed to minimise the risk of failure extending over multiple batters, while accepting a risk of further small-scale failures. Design changes were constrained by a culturally sensitive area (CSA) located south of the wall. As mining progressed, shallow wedge failures developed over multiple batters and cracks were observed 60m back from the pit crest, indicating that a large-scale wedge failure was developing. Movement increased in January 2009 as a result of significant rainfall. After considering several design options, the area was stabilised by a cut-back of the wall. Two multi-batter failures also occurred on the north wall as mining progressed through a structurally complex area. Both north wall failures began as small failures that progressively developed, and required a redesign of the wall below as well as practical management of safety aspects. The complex structural geology was difficult to predict ahead of mining, and required geotechnical input into design changes as mining progressed. All three failures potentially had significant impact for ore recovery, and were managed by a combination of analysis, redesign and operational management have resulted to achieve positive outcomes in a challenging mining environment.

May 1, 2010

Historical exploration of the Ballarat East goldfield defined two primary quartz vein lode types. Tracking the intersection of these lodes with vertical lines of enrichment (or so-called æindicatorsÆ) was the basic practice for historical mining. This strategy proved highly successful in terms of identifying quartz veins associated with mineralisation. However, it provides little understanding of the timing or processes involved in the formation of these veins, or the associated emplacement of gold. Current underground mapping shows the Ballarat East gold deposit can be subdivided into four stages of vein formation. The earliest veins (V1 and V2) strike north-south and formed during bedding flexural slip and limb thrust fault propagation in parasitic chevron folds. V3 veins are subhorizontal and relate to further fold tightening involving a transition from east-west compression to north-south extension that initiated re-shear of bedded slip surfaces and additional strike-slip faults. Sporadic V4 veins overprint the shallow-dipping sections of V2 and V3 veins and are associated with weak north-south compression. The V4 veins mineralogy is distinguished by a high carbonate content and sphalerite-galena sulfide assemblage. Vein sampling indicates a significant increase in gold mineralisation where overprinting by the later deformation/veining has occurred. As a result of these observations, a new model is emerging that identifies the chronology, structural control and spatial distribution of respective quartz vein types. This is a major advance in terms of exploration targeting, resource modelling and mine planning.

Jan 1, 2008

By D Wardiman, R Benton, D Sims, T Carr, V Singh

The Kencana underground gold mine comprises two world-class epithermal vein deposits located in the North Maluku province of Indonesia on Halmahera Island. The K1 deposit has a recent extensive mining history, whilst development of the K2 deposit is in progress. Kencana epithermal vein zones have a relatively simple planar geometry dipping 25 to 45¦ towards the East and extend 400 to 600 m along strike and down dip. True width ranges from 1 m to 20 m. Economic gold grades are generally associated with two distinct mineralisation styles: Main Zone û continuous material characterised by classic epithermal vein textures including crustiform/colloform chalky white quartz- adularia sulfide banded and brecciated veining typically grading 10 to 40 g/t Au. Bonanza Zone û semi-continuous identifiable zones within the Main Zone. Characterised by brecciated quartz-adularia sulfide banded vein æginguroÆ material typically grading 80 to 200 g/t Au. Associated with this æBonanzaÆ zone are gold grades averaging around ten times higher than the surrounding Main Zone. At the resource evaluation stage, these deposits are typically drilled on approximately 25 m by 25 m spacing. This drilling density is usually adequate to allow robust estimation of global resources, including the lateral definition of æBonanzaÆ style mineralisation. It appears intuitive at the resource definition stage to separately model the æBonanza ZoneÆ using deterministic methods such as manual interpretation and wireframing. Inevitably, however, such deterministic methods result in a simplified version of reality. Whilst the geologistÆs interpretation of the overall vein volume and lateral extent of æBonanzaÆ mineralisation has proven to be remarkably accurate, close-spaced sampling and mapping of the K1 orebody has shown that this style of mineralisation exhibits extreme short-scale geometric and spatial variability. A consequence of this short-scale geometric and grade variability is the significant uncertainty with reporting these Resources and Reserves at relatively small reporting time periods such as monthly production periods. The mining method employed at Kencana often involves extracting the full width of the mineralised vein with multiple mining passes over several months. In the past it has proven difficult to achieve accurate production budgets and forecasts at Kencana as any given mining schedule based on the resource model is acutely sensitive to the quantity and location of æBonanzaÆ material. Moreover, the degree of uncertainty or risk associated with a mining schedule significantly increases as the reporting time period becomes smaller. A further deficiency of deterministic methods for geometric modelling is the inherent lack of ability to derive confidence intervals for quantifying uncertainty and risk. The use of conditional simulation techniques can help overcome this deficiency. Geostatistical conditional simulation techniques have been applied at Kencana in an attempt to model and quantify geological and grade variability in the upcoming K2 orebody based on the experience to date with mining the K1 orebody. At Kencana, conditional simulation has provided a successful means to quantify uncertainties and risks associated with various data densities and reporting time periods. The results of this project have provided managers and planners with a clearer understanding of the likely variances and risks associated with predicting gold metal production at key reporting time periods based on data at the resource model level of resolution. With corporate requirements to adhere to mining budgets/quarterly schedules, this type of analysis allows a more scientific approach to estimating grade uncertainty in the mining schedule. Until now this has been difficult to quantify due to the extreme gold metal variability. The availability of this type of analysis allows a time-efficient rationalisation on redesigns of the mining shapes and effective communication of the likely uncertainties involved.

Jan 1, 2009

New Celebration Gold Mine is located 35 km SE of Kalgoorlie, Western Australia, in the Archaean Kalgoorlie-St Ives Greenstone belt. The leases total 119 sq kms and arepart of a joint venture between Newmont Australia Ltd (as manager) and Mt Martin Gold Mines N.L. Mining commenced in August, 1986 and is now producing over 115,000 ounces of gold per annum. A variety of gold mineralisation styles with a total resource of 23.5 million tonnes at 2.19g/t are associated with shear zones at New Celebration. Gold production is co-ordinated from 7 open pits with others planned to com- mence soon. A large scale underground trial mining operation has com- menced with a decline on the hanging wall of the main producing orebody, Hampton Boulder. Millfeed produced is classified on the stockpile according to grade and metallurgical performance and blended tomaximise throughput while main- taining grade through a CIL treatment plant currently operating at 1.7 million tonnes per year.

Jan 1, 1991

By Morley C

The Mount Charlotte gold mine is located 0.75 km east of the General Post Office in Hannan Street, Kalgoorlie WA and about 3.5 km north of the Fimiston Operations on the famous Golden Mile.Mechanised underground bulk-mining at Mount Charlotte has been in continuous operation since 1963. For the 30-year period ending December 1992, the mine produced 22 million tonnes (Mt) of ore for a recovery of 2.73 million ounces. During 1991/92, the mine produced 1.53 Mt of ore at a head grade of 3.15 gramshonne (g/t) for a recovery of 135 822 ounces.The principal ore source at Mount Charlotte has been the Charlotte Orebody which is now largely mined out. Since 1990, approximately 75 per cent of production has been sourced from the Reward Orebodies. The Charlotte Orebody was a relatively homogeneous quartz stockwork with simple geometry and average bulked grades in the range of 4.0 to 5.5 g/t. This is in contrast to the Reward Orebodies and the more recently defined Charlotte Deeps and Maritana Stockworks, which have complex grade distribution and geometry with lower average bulked grades (2 to 4 g/t). The lower grades are principally due to the decreased density and volume of stockwork venation and related vein halo alteration. Typically, these stockworks comprise a patchy mosaic of quartz veins and vein swarms, with irregular distribution and geometry within the quartz gabbro host rock.

Jan 1, 1993

The Middleback Ranges are a series of parallel northsouth ridges on the eastern side of the Eyre Peninsula, South Australia, about 20 miles inland from the Spencer Gulf, as shown in Fig. 1. They extend for some 20 miles across the centre of the County of York. North of them, on the same line of strike, in, the County of Manchester, is a disconnected series of lesser which ends in the Iron Monarch-Iron Knob ridge, the principal iron ore locality. These ridges are referred to in the following pages as an integral part of the Middleback Ranges.The deposits of hematite which outcrop in these ranges (Fig. 1) form the most important group of iron ore bodies in Australia, and are exploited by the Broken Hill Proprietary Company. The largest of them is the Iron Monarch (Fig. 6) .H: The next largest are the Iron Duke, the Iron Prince and Iron Baron. The Iron Knob, Iron Duchess, the North and South Iron Knights, Iron Queen, and the small body south of it, the Kimba Lease, and the deposits in the Cook's and Ash Leases, are all smaller.Numerous small lens-like bodies of hematite occur throughout the ridges, but are not of sufficient size to be of commercial use. At present only the Iron Monarch and the Iron Prince bodies are being worked. The Iron Knob was quarried previously, but its remaining supply is held in reserve.*Published by permission of the Council for Scientific and Industrial Research.

Jan 1, 1936

By D C. Franklin, C T. Farrelly

The future of human exploration in space is intimately bound to the future of mining and energy production on Earth. By 2025, one or more manned bases will probably exist on the Moon, exploring the lunar landscape and geology, and acting as a learning platform, and possibly a resource platform, for expeditions to Mars and beyond. Unless the mining and space industries take an active and cooperative interest in the technologies required to exploit minerals and fuels in and from hostile environments, the necessary advances to support permanent extraterrestrial exploration will not be ready in time. With the notable exception of using lunar Helium-3 as a fusion power fuel, no other reason has been identified for the mining industry to take any direct interest in the exploitation of extraterrestrial resources for the benefit of its customers on Earth. Ample reasons exist, however, for the industry to take a direct interest in supporting technological development of the extraterrestrial resources necessary to support the economical exploration of space. The mining industry has critical experience in the development and application of technologies for the discovery, extraction and processing of natural resources; experience that the space industry will need to create a viable permanent presence in space. The industry also understands the end to end process of resource development and utilisation. On the other hand, the space industry can directly benefit the mining sector by helping mature and advance the extractive and processing technologies needed to economically and sustainably develop resources in hostile terrestrial environments, such as those available in low concentrations, at extreme depth and/or inconvenient geographic locations. We propose that strategic partnerships be created between the mining, space and allied industries and research organisations. Such partnerships would develop a joint capability for mutual benefit, targeting the most significant advances in the least time. The space industry will learn how to exploit essential resources off-planet, and the mining industry will gain access to technologies to help extend their activities on earth.

Jan 1, 2008

By B Olsson, C Glassock

Computer simulation modelling (discrete event) has been used at Olympic Dam (OD) to model the handling of ore from the point of extraction at the stope drawpoint through to the ore stockpile on the surface. Computer simulation is a well accepted tool for modelling the behaviour of such large and complex operating systems. It is a particularly useful technique in complex operations where there are multiple interactions between the inputs and outputs of various unit operations. In this instance it can be utilised during the early stages of a project, for example, as part of the business case definition phase or the early engineering phase. A well constructed and tested simulation model provides a sound base upon which informed business decisions can be made. Furthermore, the behaviour of the model with varying inputs can help build a solid understanding of how the asset behaves when varying inputs and constraints are imposed upon it and, as a result, the major points of leverage that designers and operations personnel have to affect the real world behaviour of those assets. Better decisions can be made when the right facts can be examined, various options explored and conclusions tested. Simulation modelling is one of the tools available to make this process work.

Jan 1, 2005

This paper examines some of the fundamental economics of mining - in particular, for optimisation studies, for production rate determination and for reserve estimates.It includes introductory discussion on the principles as to how economics drives mining investment decision-making, applicable to the optimising of pit shapes and production, or truck fleets, or any other part of the mine.The main part of this paper looks at the decision to start-up a mine and why the 'optimum' production rate to start-up a mine is not the point of lowest cost according to traditional discounted cash flow (DCF) analysis. The optimum production rate is usually substantially less than this rate. The paper recognises the difference between typical mining investments and investments in other industries that do not have the unique characteristics of mining and the problem of uncertainty resolution. It examines the marginal revenue effects, the marginal cost of capital and the value of a real option to expand pending uncertainty resolution as determinants of optimum initial production rates.The final part of this paper looks at applying these principles to renewable and non-renewable resources. It examines mine life and reserve estimates from an economic perspective.

Dec 6, 2010