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By J. W. van der Merwe, A. S. Bolokang, M. J. Phasha, V. J. Matjeke, C. Moopanar

"Excessive wear rates on railway wheels can result in rolling-stock derailments. If wear is detected early the possible derailments can be prevented by prematurely replacing wheelsets, although the inventory cost and maintenance downtime remain a challenge. In the current study, wheels were introduced and monitored in-service for two years to investigate the cause of excessive wear rates. The wear rates and stresses were calculated for the wheels suitable for a maximum load of 26 t per axle. Microstructural and mechanical properties were analysed. As expected, the general microstructure of all the wheels tested was pearlitic. Although all the wheels complied with the tensile strength requirements, stress calculations confirmed material distortion on excessively worn wheels whereas trial wheels revealed yield strength exceeding the yield criterion. High wear rates observed on the wheels were a result of low yield strength relative to the load per axle. The typical wear mechanism found was due to a combination of rolling contact fatigue and abrasive brake wear. Despite compliance of the wheels with existing requirements regarding material and mechanical properties (hardness, ultimate tensile strength), it is recommended that the yield strength must also be taken into consideration as a critical parameter.IntroductionRailway wheels are used to support the wagon mass and guide the wagon along the tracks (Park, 1974). The wheels and rails must be able to tolerate the applied tangential forces in order to effect wagon dynamic performance and reduce material deformation (Ghidini et al., 1994; RSE_TE_SPC_0045, 2011; AAR M107/M 208 Specification, 2011. Over the past ten years, the South African coal wagon maintenance depot has experienced excessive hollow wheel wear rates on the heavy haul line wheels. The maximum load of Jumbo wagons on the coal line is 104 t, or 26 t per axle. Although the maintenance intervention cycle for wheelsets was two years, between February 2011 and August 2012 some wheels experienced excessive hollow wear. Hollow wear is regarded as wear exceeding 2 mm on the central portion of the wheel tread (RSE_TE_SPC_0045, 2011). This happened despite the fact that these wheels were manufactured and certified according to the requirements of AAR M107/208 standard for carbon steel wheels (AAR M107/M 208 Specification,. 2011) and the local wheel RS/ME/SP 021 standard specification (RS / ME / SP / 021 REV 5 (2013). The AAR standard only specifies a minimum hardness as a required mechanical property and the local standard specifies hardness and minimum tensile strength only. In general, an increase in hardness will improve the rolling/sliding wear resistance of steel. This relationship of hardness and wear resistance was found to be true only in a situation where solid and similar alloys are in contact (Singh, Khatirkar and Sapate, 2015). The sliding wear resistance of a material is usually estimated using Archard’s equation (Liu and Li, 2001)."

Jan 1, 2016

By J. H. Zietsman, S. Maharajh, J. Muller

In the chlorination process for TiO2 pigment production, blends of titania feedstocks such as ilmenite, synthetic rutile (SR), natural rutile, upgraded slag, and chloride-grade slag are reacted with coke and chlorine at a temperature of around 1000°C to form TiCl4, which is the main product, and other waste metal chlorides. TiCl4 is the main feed material for the TiO2 pigment-making process. Feeding different titania materials to the chlorinator affects the amounts of coke and chlorine required for the process, the amount of waste generated, waste disposal costs, the amount of TiCl4 produced, and bed build-up rates. These factors influence the value of the feedstock. Generally, a higher TiO2 feedstock is more valued since less waste is generated and less reagents are consumed. To quantify the impact of different feedstocks on the chlorinator, a techno-economic model was developed to describe the chlorination process and estimate process variables at steady state. This paper describes the development of the model and studies in which the model has been used to quantify the effects of using different feedstocks.

Jan 1, 2014

Significant advances have been made in the design of centrifugal slurry pumps that are used for pumping high-density viscous and paste slurries. This paper presents the results of a series of centrifugal pump performance tests that were conducted using an FLSmidth 6 x 4 Krebs millMAX centrifugal pump. The pump was fitted with a dry mechanical seal to prevent dilution of the slurry from gland service water, as the theology of the slurry is sensitive to small changes in slurry density. Tests were done using paste kaolin slurry with Bingham yield stress values between 578-1 120 Pa and plastic viscosities between 728 and 1491 mPa.s. The viscous properties of the paste during each pump test were measured using a rotational viscometer. Pump head and efficiency de-rating were measured and compared to the correlations of Walker and Goulas (1984). The test data shows the pump's best-efficiency point (BEP) changes and shifts to the left of the performance curve. The pump efficiency decreases as the slurry yield stress increases. The head de-rating data shows more head de-rating at the low flow rates compared to the high flow rates for the high viscosity slurry, which is in line with the findings of Walker and Goulas (1984). This paper demonstrates that it is possible to pump very viscous, high yield stress slurries with limited head and efficiency de-rating using centrifugal pumps, provided that positive suction conditions are maintained at all times.

Jan 1, 2012

By C. J. H. Steenkamp

Theoretically, the main driver behind a mining operations? sourcing decision should differ from company to company, and within a company from project to project, but in reality it often relates to cost. Research confirms that there are a number of factors, including cost, to consider when choosing between in-house and outsourced mining. While the literature is rife with factors to consider, little information exists on how to apply these in practice and the relative importance of the different factors to be considered. A study was conducted to determine whether mining is truly a core competency for a mid-tier commodity specialist mining company. Furthermore, a decision-making framework for mining operations sourcing was developed, and the critical success factors that should be adhered to if outsourced mining is chosen were determined. The research showed that owner mining is not a core competency for the mining company investigated. A decision-making framework was developed using the order winner/order qualifier structure, which can be used to facilitate the mining sourcing decision. The most important tools at the disposal of a mine owner?s team to manage a contractor miner are the social and output control mechanisms, according to the critical success factors study.

Jan 1, 2014

By L. Petzold

The demand for stainless steel is ever-increasing. As an essential element in stainless steel-making process, so is the demand of chromite concentrate. At the same time, the industry proven technologies for beneficiation of chromite are limited. Chromite is only crushed, screened and jigged to produce a concentrate. However, for ultrafine and low-grade material, no satisfactory beneficiation methods for the enrichment of chromite fines exist in industrial operation. This poses a clear challenge for the industry, which Primetals Technologies has addressed with the development of a new beneficiation process. The aim of this process was to enrich low grade chromite tailings to a quality suitable for the smelting process. Required concentrate grades are different over the world, concentrate grades of Cr2O3=40% and lower are found at the Bushveld Complex, South Africa. The target for the present study was a Cr2O3-grade in the area of 49%. Three different chromite tailings with Cr2O3 grades between 16 % and 29 % were part of a study, executed by Primetals Technologies. All three tailing materials were characterised by Mineral Liberation Analysis (MLA). Based on the physical, chemical and mineralogical findings, process flowsheets were developed. The process flowsheets included grinding to ensure a full liberation of the chromite. The liberated material was classified at a cut size of 63 μm to a coarse and fine fraction. Gravity separation and flotation processes were tested with the coarse particle fraction. Due to the limitations of gravity separation with fine particles, only the flotation process is suitable and was tested with the fine fraction < 63 μm. A Design of Experiment (DoE) with six factors, each three levels, was conducted to identify optimal parameters for the fine chromite flotation. Two different collectors were tested: a phosphoric acid ester and a fatty acid type collector. In small scale test work a chromite concentration suitable for the smelting process was achieved. On this basis Primetals Technologies will develop a pilot-scale test program to research recirculation effects and upscale potential of the process. Keywords: Mineral processing, tailings beneficiation, flotation, density separation, process development, chromite

Jan 1, 2020

By W. P. C. Duyvesteyn, J. R. Cutland, J. R. L. Russell

In 1970 it was decided to build a large new plant at the Chingola Division of N.C.C.M., Ltd., to treat concentrator tailings and leach residues with a low copper content by a leach-solvent extraction-electrowinning process. In order to assist in the establishment of the design parameters for the new plant, and to study the interaction of this plant with the existing leach-electrowinning plant, mathematical models, formulated as linear programs, have been developed and used extensively. The paper outlines the metallurgy of the plants and describes briefly the way in which the models have been formulated and used. The formulation involved the use of separable programming to form the products of some variables.

Jan 1, 2014

By J. West

For many years line-of-sight (LOS) issues for underground mobile equipment is a growing focus of research. This research is a result of the numerous fatalities and injuries which occur in the mining industry and which are related to poor operator LOS. Three assessment methods are currently used to assess operator LOS of underground mobile equipment. The light filament (LF) method is a hands-on assessment method that is performed in the field. This method is not evaluated in this paper. The laser scan (LS) method of assessing equipment is a quick and reliable method that comes from the need to evaluate vehicles already located in the field. The computer simulation (CS) method can assess LOS issues using a computer aided drawing (CAD) model, which is useful for assessing current or prototype models. The purpose of the current research is to compare and validate different operator LOS assessment methods. Comparison of the results of the LS and CS visibility plots yielded similar quantifiable results. A visual comparison of the results further illustrate that the LS and CS methods are acceptable assessment tools for mobile equipment operator LOS evaluation. The visibility assessment methods are now being prepared as guidelines for the mining industry to assess current and potential designs.

Jan 1, 2007

By E. M. Sacris

The semi-autogenous grinding mill is the bottleneck whenever treating hard and finely fragmented ore at Benguet Corporation&apos;s Kaline Concentrator. Low milling rates result from very high and fluctuating mill power draw. Attempts to use a mill horsepower control loop to regulate feed rate were unsuccessful because of operational upsets caused by fluctuations in feed rate on downstream operations. The objective of the computer control was to maximize tonnage throughput by stabilizing the power draw at a high but safe level without upsetting subsequent operations. The semi-autogenous mill is operated in closed circuit with a stationary screen. Instrumentation consists of a feed weightometer, a power transmitter to measure mill load, a headwater flowmeter and an ultrasonic level sensor to measure the mill discharge sump level. A 64 k-byte FOX-3 Foxboro computer processes field data from various sensors and manipulates the input control variables. These variables are the fresh feed rate and the headwater flowrate. Feed rate is controlled through a supervisor-type computer program aimed at maximizing and stabilizing power draw. The control scheme was according to how the operators responded during an operator-directed automatic control mode. Mill dilution is similarly controlled. Results achieved reflect a 3% increase in tonnage milled because of the reduction in control variability that ensued.

Jan 1, 1987

By K Kongolo, M K. Kalenga

It is well known that the electrochemical precipitation of metals from aqueous solutions is conducted by the electrochemical standard potential scale. This scale indicates the order of nobility of different metals. Consequently, the standard potential scale shows the nocivity of metals when they are present as impurities in aqueous solutions containing metals. In the hydrometallurgy of cobalt, nickel and zinc are co-deposited during cobalt electrodeposition. Nickel has almost the same chemical, physical and electrochemical properties as cobalt. Furthermore, the electrochemical potential of nickel is relatively higher than that of cobalt. For this reason nickel is preferentially reduced at the cathode in the presence of cobalt. The presence of small amounts of zinc in solution leads to contamination of cobalt electro won. In spite of its lower electrochemical potential in comparison to cobalt, zinc is reduced on the cathode because of its higher hydrogen-overvoltage. But, in the hydrometallurgy of zinc, small amounts of cobalt present into solution will contaminates the zinc reduced at the cathode. This is easily explained by the fact that cobalt is more electropositive than zinc. The co-deposition mechanism of sulphur at the cathode is not yet well understood. Great attention has to be paid to the mechanism of co-deposition of sulphur during cobalt electrolysis..This work aimed to investigate the influence of some parameters on the co-deposition of nickel, zinc and sulphur during cobalt electrowinning. The following parameters have been investigated : Co2+ concentration in the electrolyte, current density and ammonium sulphate (NH4)2SO4 additions. It has been established that important nickel, zinc and sulphur co-deposition takes place at relatively low Co2+ concentration in solution. The behaviour of these elements with regard to the cathodic phenomena has been established.

Jan 1, 2005

By D White, L. Lorenzen

Sampling and metallurgical testwork during various phases of engineering studies is of paramount importance for a robust processing plant design. When developing a process flowsheet, risks in achieving desirable financial outcomes are minimised by ensuring that appropriate sampling and adequate metallurgical testwork support the engineering and cost estimation at each phase of project development. The quality and type of samples used for metallurgical testwork are just as important as the metallurgical testwork itself. The key characteristic required of any sample is that it represents some defined portion of a mineral deposit. Representivity should consider the spatial orientation, lithology, alteration, degree of oxidation, mineralogy, and competency of the ore such as hardness and abrasiveness. Statistically representative sampling procedures and an appropriate metallurgical testwork program should be designed to bring metallurgical understanding up to feasibility study standard and to give a basis for process plant design. The authors have observed that the quality of sampling and quantity of metallurgical testwork carried out during the various phases of engineering studies are often insufficient to truly support a robust plant design. Some designs are based on benchmarks of apparently similar ore bodies or rely on buoyant metal prices supporting cash flows until rectifications can be implemented. The paper will discuss important aspects of sampling and testwork required for engineering studies in designing process plants. Keywords: Sampling, metallurgical testwork, studies, design

Jan 1, 2020

By J. West

For many years line-of-sight (LOS) issues for underground mobile equipment is a growing focus of research. This research is a result of the numerous fatalities and injuries which occur in the mining industry and which are related to poor operator LOS. Three assessment methods are currently used to assess operator LOS of underground mobile equipment. The light filament (LF) method is a hands-on assessment method that is performed in the field. This method is not evaluated in this paper. The laser scan (LS) method of assessing equipment is a quick and reliable method that comes from the need to evaluate vehicles already located in the field. The computer simulation (CS) method can assess LOS issues using a computer aided drawing (CAD) model, which is useful for assessing current or prototype models. The purpose of the current research is to compare and validate different operator LOS assessment methods. Comparison of the results of the LS and CS visibility plots yielded similar quantifiable results. A visual comparison of the results further illustrate that the LS and CS methods are acceptable assessment tools for mobile equipment operator LOS evaluation. The visibility assessment methods are now being prepared as guidelines for the mining industry to assess current and potential designs.

Jan 1, 2007

By N. Kornelius

In recent years there has been an increased focus on corporate governance matters worldwide. The duties and responsibilities of directors of companies have come under close scrutiny, with shareholders increasing their demands for greater responsibility and accountability. Media attention and pressure groups have also had their effect. Governmental actions have supported these demands and directors have witnessed sweeping legislative changes imposing more onerous duties and liabilities than formerly imposed upon them at common law and in terms of the Companies Act. At the same time, the power of regulatory bodies has been increased to enforce this legislation and make someone pay to remedy an alleged infringement. Breach of such duties may incur personal or criminal liability, or both. Environmental protection legislation has become a particularly prevalent feature in this regard, and the number and complexity of statutes concerning the environment have increased over the past few years. Directors of South African companies will be familiar with relevant acts such as the National Environmental Management Act 107 of 1998; Conservation of Agricultural Resources Act 43 of 1983;Hazardous Substances Act 15 of 1973, as well as the National Water Act 36 of 1998. Now the directors of mining companies are faced with the Mineral and Petroleum Resources Development Act 28 of 2002.

Jan 1, 2003

By N. Coulson, P. Ledwaba

"The University of the Witwatersrand presents an accredited four-course training programme for community relations practitioners (CRPs). Between May 2013 and October 2014 six courses were facilitated for 145 participants, of whom 82% were from sub-Saharan Africa, 62% worked in mining, and 58% worked directly with communities. Thematic analysis of the comments of course participants collected during course exercises found that there were a set of coherent drivers for resilient companycommunity relationships, but that the restrainers to resilient relationships were often context-specific and dominated by politics. CRPs reported facing as many difficulties in the internal company environment as in the external environment. These findings for CRPs in Africa resonate with those worldwide.InroductionMuch has changed in how the extractive industry responds to social and community issues. There has been a growing prioritization of community-related issues within the extractive industry globally (Kemp, 2010; Tatar, n.d.). According to Kemp (2010) this can be attributed partly to escalating pressure from local-level stakeholders to push mining companies to take greater responsibility for the social, economic, and environmental impacts of mining. Securing and maintaining the social licence to operate is ranked fourth in terms of the top risks facing the mining and metals industry in 2016, up one place from 2015 (Ernst & Young, 2016).Conflicts between local communities and large-scale mining companies arise because of the social, environmental, and economic impacts of mining. Worldwide, large-scale mining companies have a poor reputation amongst communities, including those in Africa (Gilberthorpe and Banks, 2012; Kemp and Owen, 2013a; van Wyk, n.d.). For mining companies, conflicts for whatever reason, result in loss of productivity, lost opportunities, lost time, and adverse impacts on reputation (International Council on Mining and Metals, 2015). Conflicts also have a significant financial impact on mining operations (Franks et al., 2014). Davis and Franks (2014), estimated that US$10 000–50 000 is lost each day when a project is delayed during the exploration phase, and about US$20 million per week when in operation. Today these costs could be expected to be higher due to increasing input costs."

Jan 1, 2017

By K. Cole, D. Mesa, P. R. Brito-Parada, M. R. van Heerden

Turbulence in stirred tank flotation vessels determines the bulk transport of particles and has an important role in particle-bubble collisions necessary for attachment. Positron emission particle tracking (PEPT) produces quantitative measurements of the kinematic motion of different particle classes inside flotation vessels. This paper presents flow profiles of the vessel, residence time distributions, flow profiles through the mesh and macroturbulent kinetic energy distributions as experienced by valuable (hydrophobic) mineral particles in a laboratory scale flotation vessel. The results highlight the impact of the rotor-stator design and a retrofit mesh modification at the upper part of the vessel which improve recovery by decreasing turbulence in the quiescent zone and at the interface. Keywords: Flotation machines, turbulence, PEPT

Jan 1, 2020

Mining is an inherently risky business; from the technical, environmental, social, and economic uncertainties associated with advancing an exploration prospect to a viable project to the operating, market, and safety risks and uncertainties attached to a developed mine. Since we cannot totally escape the risk and uncertainty related to resource projects, as an industry we should improve our presentation of the upside and downside risks in the context of the project?s development path and maturity. More transparent, consistent, and balanced views of technical confidence will better inform both internal and external stakeholders about the expected risk in the project. International reporting codes set out the minimum standards, recommendations, and guidelines for public reporting of Exploration Results, Mineral Resources, and Mineral Reserves. However, the reporting code principles of transparency and materiality are largely subject to the interpretation of the competent person(s), which may introduce a degree of subjectivity in reporting, particularly the level of disclosure regarding supporting information. It is fundamental that Mineral Resources, Mineral Reserves, and study outcomes are reported so as to unambiguously present the level of inherent technical uncertainty (or confidence) in a project, while conveying a balanced view of the opportunities a project presents. Reporting needs to consider various stakeholders who may rely on this information, and present the data in the context of the changing risk profile associated with project development paths and project maturity. This paper discusses the interdependence of resource-to-reserve conversion, the consideration of various technical-economic study types, and the level of confidence conveyed to stakeholders relying on these technical reports and other company public announcements.

Jan 1, 2014

By E. Spicer

X-Ray diffraction (XRD) provides useful information about the composition of an ore sample in terms of quantification of crystalline phases and amorphous content. The use of new, fast detection systems in XRD creates the opportunity to use this technique in modern process control. In the analysis of heavy mineral sands, XRD can identify the main mineral phases, such as ilmenite FeTiO3, rutile TiO2, Zircon ZrSiO4and quartz SiO2, and any other minor components present, such as anatase TiO2, magnetite Fe3O4, haematite Fe2O3or monazite (Ce, REE)PO4. Quantitative analysis is possible by various classical methods such as straight line or polynomial calibration with standards, but modern quantification analysis techniques such as Rietveld analysis (Bish and Howard, 1988) are attractive alternatives, as they do not require any standards or monitors. These methods offer impressive accuracy and speed of analysis. The Rietveld method compares calculated versus experimentally derived X-ray powder diffraction patterns for the sum of all crystalline phases. Another analysis technique offering great benefit to mining industries is cluster analysis. Enormous amounts of XRD measurement data are generated during the process control and material evaluation. New ways of handling such vast amounts of data are required to produce meaningful information for the end users. Cluster analysis greatly simplifies the analysis of a large amount of data from different processes or different raw materials, and automatically sorts closely related scans of an experiment into clusters and marks the most representative scan of each cluster as well as outlying patterns. The use of cluster analysis to evaluate the XRD data allows fast and reliable tracking of the process. It is the most economical procedure to have automatic data evaluation without involving any dedicated personnel in the process. Details of the techniques used, sample optimization methodologies, results, data precision and limitations will be discussed. The approach has potential as a relatively inexpensive, reliable tool, useful in the characterization of heavy minerals sand materials.

Jan 1, 2007

By Reginald N. Boryor, Steven D. Woods

1.0 Introduction ?Low grade, high tonnage, open pit gold mine. ?Gold bearing Tarkwaian conglomerates. ?Reverse Circulation percussion drilling (25m X 25m grid). ?Composite 1m intervals, logged and split in the field to provide±2Kg samples. ?Samples used to build grade control block models using SURPAC. ?Approximately 100,000-130,000 meters drilled per year. ?RC samples are assayed using Rapid Cyanide Leach (RCL). ?Check assays are done using Fire Assay

Jan 1, 2005

Decision-making regarding plant-scale reagent dosage regimes and air rates is a topic of ongoing investigation and high importance. The current work explains some techniques that have proven useful in deciding on plant-scale flotation operating regimes. Specific focus has been placed on the reagents: frother and depressant, as well as some discussion around the control of air rate and froth depth. Air rate has been selected based on its effects on the froth phase. Froth velocity and froth height above the cell lip are the two variables measured and used to select the operating air rate. Pulp level is then adjusted to increase or decrease mass pull. A technique has been developed using the Anglo Platinum Bubble Sizer on an industrial flotation cell to determine the relationship between bubble size and frother concentration. This technique has been extended to measure the equivalent frother concentration or frothabilities of various streams on a rougher bank. A mass balance for frother was performed successfully, and this provided a better understanding of the way frother moved in the rougher bank. With this knowledge, more informed decisions can be made about frother addition required in subsequent flotation stages. For depressant, a new protocol for deciding on dosage rate has been developed. The depressant dosage should be based on the amount of fresh feed material reporting to a bank. Currently 400 g per ton of fresh feed has been assumed a reasonable starting point, with promising results. Improved froth stability and grades were observed. There is scope for more accurately defining the optimal dosage rate. Importantly, the combined effect of changing the chemistry and the hydrodynamics together has been demonstrated. A significant upward shift in the grade-recovery relationship for a cleaner bank was observed.

Jan 1, 2013

By J. Bal, V. D. Dao, W. Li

"SynopsisThis study proposes a methodology for evaluating the risk of coal bumps in multiple-seam longwall mining. Both the stress field and the total energy release (TER) during retreat were evaluated in the specified case involving multiple-seam mining using the LaModel program. The results of numerical simulations indicated that both the peak vertical stresses on the panel edges and the peak TERs in the outby longwalls increased significantly as the horizontal offsets were reduced from 60 m to zero. With the comprehensive consideration of the stress field and TERs, a conservative offset of 60 m was ultimately adopted when developing the gateroads of the lower panel in the field. The field measurements indicated that coal bumps were avoided completely by employing the proposed design, and the maximum roof-to-floor and rib-to-rib convergences of the tailgate during retreat were only 360 mm and 576 mm, respectively.IntroductionCoal bumps – sudden, violent bursts of coal – pose a serious threat to the safe excavation of coal. Their occurrence depends on the properties of the surrounding rocks, stress field, and dynamic disturbance. The complexity of the mechanism of coal bumps is further enhanced in multiple-seam mining due to seam interaction. Multiple-seam mining is most frequently found in the coalfields in eastern China, such as Xuzhou, Xinwen, Zaozhuang, and Huainan. In the past, due to issues of availability, economics, and ignorance of the potential risk in multipleseam mining, coal seams in such conditions were mined without proper planning to account for seam interaction. Fortunately, studies published over the past three decades have raised awareness of the problems associated with multiple-seam mining, and indicated that the ground control issues induced by multiple-seam mining can be avoided and/or minimized with proper planning.A number of technical studies pertaining to the design of multiple-seam mines have been published. These studies can be divided into two groups based on their methodologies of design: empirical (Chekan and Listak, 1993; Haycocks and Zhou, 1990, Matetic et al.; 1987a, 1987b) and numerical approaches (Li et al., 2000; Maleki, 2007; Mark, 2007; Peng, 2007; Zipf, 2005). The majority of the extant studies on the interaction mechanisms in multiple-seam mining have focused on the load transfer during operation, resulting in the proposal of the pressure bulb theory (Forrest et al., 1987; Haycocks and Karmis, 1983; Peng, 2008; Peng and Chandra, 1980) and pressure arch theory (Holland, 1973; Oram and Ponder, 1997) to guide multiple-seam mine design. However, neither, of these theories can be used to evaluate the potential for coal bumps."

Jan 1, 2015

Mining executives often have a difficult task determining what the strategic objective of the business should be as this can be impacted by the prevailing market conditions. In addition, they have no mechanism to quantitatively &apos;test&apos; the impact of this strategic decision on the business and understand the underlying dynamics. During the commodities bull run of 2003 to 2008 the strategic objective may have been to grow the long term value of the business (NPV) through increased tonnage, acquisition and finding new reserves, which all came with an increasing fixed cost base. Now with the financial crisis upon us and the collapse of commodity prices and demand, executives have adjusted their strategies as &apos;cash is king&apos; and short-term cash flow, in some instances at the expense of long terms value, is the order of the day. For many mining companies, mine closures, reductions in production and cost cutting exercisers are now the focus. In many instances, management do not have an ability to rapidly test different strategic alternatives to &apos;test&apos; the impact on value, unit costs, reserves and profitability at the operational level and optimize the underlying trade-off variables. Economic modelling of the complete business value chain is a means of linking the operational &apos;reality&apos; and strategic choices, so that the full impact can be assessed. This paper describes some of the challenges facing mining executives and how economic modelling can be applied to make decision making more rigorous.

Jan 1, 2010