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By Z. Hyder, M. D. Cleason

"INTRODUCTION Mine Ventilation has come a long way over the years. The main purpose of mine ventilation is to keep conditions in the mine safe for the worker so that the mine will be productive and profitable. Technological developments to the mine ventilation system itself and the development of mining techniques have helped improve the safety and productivity of the miners and the mine. Most of the developments to mine ventilation and to safety devices came as the result of serious mining disasters. Another effect of those mining disasters, especially in the late 19th century and after, was legislation to set specific safety standards for mines, especially in the underground coal mines. This paper will focus on the connection between mines disasters and the mine safety legislations promulgated because of those disasters. A BRIEF HISTORY OF MINE SAFETY LEGISLATION Mine legislation has a long history in the U.S. dating back well in the 1800’s. However, mine safety legislation is considerably newer. In 1891, the U.S. Congress passed the very first version of mine safety legislations setting up minimum safety standards. By today’s standards, the 1891 legislation was incredibly basic (7). It took a series of horrific mining disasters for Congress to take action a second time. In 1910, Congress established the Bureau of mines. The role of Bureau developed and changed over next 60 years. In 1995, Congress voted to disband it (27). Initially the Bureau was only charged with investigating and coming up with ways to reduce accidents in coal mines. It was not until 1941, when Congress formally allowed Bureau of Mines’ Inspectors into the mines. In 1947, the Congress enacted and adopted a set of federal safety regulations for the inspectors to follow (1). Finally, in 1952 Congress granted the Bureau of Mines the authority to inspect the mines and to issue citations and/or orders of withdrawals. This act was known as the 1952 Coal Act and the penalties were limited to civil penalties. It would take a couple more iterations of mine safety legislation for monetary and criminal penalties to be introduced (10). Up until 1966, mine safety legislation was directed primarily at underground coal mines and surface coal mines. Congress passed the Federal Metal and Nonmetallic Mine Safety Act of 1966, thus providing a set of standards for all mines to follow (1). The 1952 Coal Act was amended again to be the Federal Coal Mine Health and Safety Act of 1969. This amendment was the beginning of modern mine safety legislation (13). In 1973, Congress created what can be considered the first ‘version’ of the modern day MSHA (Mine Safety and Health Administration). The initial version was the Mining Enforcement and Safety Administrations or MESA. Congress created MESA to act as the enforcement agency, relieving the Bureau of Mines of that responsibility so they could focus on their initial purpose, the development of countries natural resources (14). As mining industry grew, mine safety and health became a greater concern and priority. More efforts were put in legislating the industry. The Federal Mine Safety and Health Act of 1977 provided the platform for today’s mine safety and health legislation. Under the Federal Mine Safety and Health Act of 1977, also known as the Mine Act, MSHA came into being (1)."

Jan 1, 2016

By Robert B. Scott

The Dents Run Demonstration Project near Morgantown, West Virginia, was a cooperative venture involving the U.S. Environmental Protection Agency (EPA), the Water Resources Division (WRD)(1) of the West Virginia Department of Natural Resources (DNR), and the Christopher Division of the Consolidation Coal Company (CONSOL). The object of this project was to demonstrate pollution control methods and to clean up a 37.8 sq km (14.6 sq mi) watershed severely polluted by coal mine drainage. A study entitled, "Water Infiltration Control to Achieve Mine Water Pollution Control" (EPA-R-2-73-142),(2) was conducted by the Cyrus Wm. Rico Division of NUS Corporation for the grantee to determine the feasibility of utilizing remedial techniques to improve the Dents Run water¬shed. This study showed that the Dents Run watershed was discharging as much as 6,870 kg/day (15,100 lb/day) of acid; 1620 kg/day (3,560 lb/day) of iron 17,250 kg/day (38,000 lb/day) of sulfates; and 29,500 kg/day (64,900 lb/day) of total dissolved solids into the Monongahela River near Morgantown, West Virginia. This pollution was caused by the combination of borehole pump discharges from active underground mines, runoff from abandoned strip mines, and runoff from refuse dumps.

Jan 1, 1977

By H. B. Charmbury

In the United States and in Pennsylvania in particular the coal mine drainage problem is of continuing and growing interest to the coal mining industry, the state government, the federal government and the public at large. The 1965 amendments to Pennsylvania's Clean Streams Law prohibit the discharge of acid mine drainage into the streams of the Commonwealth after January 1, 1967. Because of this new legislation, the coal mining industry and state government are extremely aware of the necessity for new techniques for treatment and prevention of the flow of acid mine drainage from the active mines of the Commonwealth in order to keep the coal mining industry in business in Pennsylvania. Approximately one-third of the total volume of mine drainage presently polluting the streams of the Commonwealth originates from "active" coal operations and two-thirds comes from "abandoned" mine discharges. As early as 1963 it became evident that the Commonwealth of Pennsylvania and the coal industry in Pennsylvania would have to take active steps to abate the mine drainage pollution of Pennsylvania's streams and rivers. This became quite clear during the deliberations in Harrisburg which climaxed a twenty year struggle for effective strip mining legislation. The bituminous strip mining law enacted that year made it unlawful to have any acid discharge from active stripping operations.

Jan 1, 1968

By Roger C. Wilmoth

The most common method of treating mine drainage to prevent water pollution consists of neutralization and aeration. This process removes the acidity, iron, aluminum, and some other heavy metals, but does not render a water suitable for domestic or industrial use because of the high dissolved solids, hardness, and sulfate in the treated water. The Environmental Protection Agency (EPA), has been sponsoring and conducting research since 1966 on the use of reverse osmosis (R.O.) for the treatment of mine drainage. This process has been found to be highly effective in the removal of nearly all the dissolved solids. In addition, since R.O. is a concentrating process, potentials for recovery of valuable heavy metals are possible. This paper is a review of the state-of-the-art on the treatment of mine drainage by reverse osmosis.

Jan 1, 1972

By Douglas R. Malicoat, Christopher J. Pritchard

Tg Soda Ash operates an underground trona mine located In southwestern Wyoming, which utilizes continuous mining machinery to produce 2.OM tpy (2.2M stpy) by shortwall and room and pillar methods. As the mine developed, the Increasing distance from the shafts caused travel times to be a significant factor in planning for mine emergencies. It was decided to construct a barricade chamber, a modified refuge chamber, to Increase safety and to provide an additional escape option in the case of a mine emergency. Fortunately, there has been no need to use these facilities during the last 9 years, but mine emergency planning has been greatly improved.

Jan 1, 1993

By W. Moser

During the ten year span from 1978 to 1987, the number of fires which occurred in under-ground coal mines doubled from the previous ten years. Anyone involved with underground coal mines is well aware of the associated tragedy that can result from these fires, both to personnel and to property. Every day mine management and mining personnel face this threat of a possible mine disaster or fire. Their ability to deal with such a situation safely and effectively depends on the level of emergency preparation developed and maintained. As a direct result of the ever-increasing interest in the Mine Emergency Preparedness Program and the Mine Fire Training Programs currently being conducted, the Emergency Preparedness Center was created. As a branch of the Mining Extension Service at West Virginia University, the Center provides preparedness training at several different levels on a varying range of topics. Classes are conducted at a new especially-designed training laboratory at the National Mine Safety & Health Academy in West Virginia. By maintaining the proper equipment and levels of training allowing for immediate response, the personnel who are part of the Center believe that the impact of a mine fire or other such emergency situation can be minimized. This paper will present recommendations for maintaining an efficient mine emergency preparedness program and will provide information regarding the Mine Fire Training Program as conducted by the Emergency Preparedness Center and describe the advantages of the newly constructed training facility.

Jan 1, 1993

By R. L. Derick

The Orchard Valley Mine, a large underground coal mine located in western Colorado, experienced a major mine fire during an idled Sunday on June 1, 1986. This mine had extensive problems with spontaneous combustion near the coal outcrop. Spontaneous combustion has been determined to be the probable cause of that fire. Preparing for a mine emergency was an on-going task. Once the emergency occurred, much of the preparation work was implemented and aided in controlling the situation. Later, the successes and shortfalls that arose from that emergency were analyzed for future course of action. This paper summarizes the activity that led up to the major fire, the handling of that emergency, the lessons learned, and the changes implemented.

Jan 1, 1993

By Mark L. Mott, Michael P. Synder

The Mine Safety and Health Administration has developed a program to improve the decision making process of personnel involved in mine emergency situations. The Mine Emergency Responsiveness Development Program (MERD) has been designed specifically for fires and explosions in underground mines. This program addresses the responsibilities and organizational requirements that are necessary during rescue and recovery operations of a mine emergency . Specific skills and knowledge are required to manage an organization of personnel under conditions of intense stress, such as a mine fire or explosion. As a result, the MERD program develops these skills by providing role playing emergency simulations. This role playing provides the participants with the opportunity to experience problems, explore solutions and interact with other personalities which may exist during mine emergency situations. This paper presents the standard procedures for the MERD program developed by the Ventilation Division of the Pittsburgh Health Technology Center.

Jan 1, 1991

By M. L. Matt

The Pittsburgh Safety and Health Technology Center of the Mine Safety and Health Administration has developed the Mine Emergency Responsiveness Development (MERD) program to improve the reaction and response of mine personnel in mine emergency situations. The MERD program simulates problems that may be encountered in underground mine fires, underground mine explosions or surface mine accidents. Since its inception in 1982, the MERD program has been presented to MSHA, Industry, Labor and State Government Personnel. The program is extremely versatile and is easily adapted to suit various training requirements. It gives the participants the opportunity to experience some of the emotions, frustrations and successes of a mine emergency in a controlled environment without having to be involved in one. Past participants have indicated that this training has better prepared them in actual emergency situations through increased awareness and advanced preparation of plans and resources. In 1992, a Mine Simulation Laboratory, which simulates a coal mine and metal/nonmetal mine, was built to improve training for mine emergencies and prevention and fighting of mine fires. This facility has been included in the MERD Program to provide realistic and practical training for mine rescue teams and MERD participants in advanced mine emergency operations. This paper presents an overview of the MERD program.

Jan 1, 1993

By Mark L. Mott

The Pittsburgh Safety and Health Technology Center of the Mine Safety and Health Administration (MSHA) has developed the Mine Emergency Responsiveness Development (MERD) program to improve the reaction and re¬sponse of mine personnel in mine emergency situations. The MERD program simulates problems that may occur in underground mine fires and explosions or surface mine accidents. Since its inception in 1982, the MERD program has been presented to MSHA, industry, labor and state government personnel. This versatile program is easily adapted to suit various training requirements. In 1992, a Mine Simulation Laboratory was built at the Natinal Mine Health and Safety Academy, Beckley, WV, to improve training for mine emergencies and prevention and fighting of mine fires. This facility is capability of simulating a coal mine and metal-non-metal mine for training purposes. It has been included in the MERD program to provide realistic and practical training for mine rescue teams and MERD partici¬pants in advanced mine emergency operations. The objectives of the MERD program are to improve the organizational and management skills of the participants in a rescue and recovery operation and provide a better understanding of the importance that various roles have on the overall organization and the importance of their interaction. The MERD program is not intended to provide the participants with all of the abilities and knowledge required to respond effectively to a mine emergency. Rather, it is intended to give the participant an opportunity to experience the emotions, frustrations and successes of a mine emergency without having to actually be involved in one. The participants are expected to return to their regular jobs with a greater appreciation of the environment in which emergency operations take place. Experience in mine emergencies is extremely limited in the industry today. The participants are encouraged to use the knowledge gained during a MERD program to develop or enhance a mine emergency plan suitable to their needs.

Jan 1, 1993

By William C. York-Feirn, Jeffrey H. Kravitz, David Stalfort

"Mining is an inherently risky business. Over the years, major mine disasters have resulted in the deaths and injuries of thousands of miners in the United States. These disasters also resulted in innovations in approaches to mine design, operations and the training of miners and mine rescue teams. The U.S. Congress responded to these disasters with new laws designed to create mandatory safety and health standards as a means to eliminate fatal accidents; to reduce the frequency and severity of nonfatal accidents; to minimize health hazards and to promote improved safety and health conditions in the nation’s mines.Following a mine emergency preparedness and response holistic gap analysis in 2012, the U.S. Mine Safety and Health Administration (MSHA) identified the need for the development of risk and readiness assessment models for MSHA and the mining industry. MSHA’s objective was to evolve existing theoretical concepts for risk and readiness assessment into simplified tools that can be applied by the mining industry for use at operational levels. In 2012, MSHA hired ABS Group, a recognized industry leader in safety risk management and a wholly owned subsidiary of the American Bureau of Shipping, to develop self-assessment models to help meet this objective.In September 2012, MSHA chartered a project to supply the coal mining industry with a pro-active toolset for mine operators to:1. Self-assess the risks associated with underground coal mining operations in order to prevent major mine emergencies.2. Assess the preparedness of mine operators to respond to an emergency.3. Measure the readiness of mine rescue teams and responsible persons to execute emergency plans.MSHA’s objective was to evolve existing theoretical concepts for risk and readiness assessment into simplified tools that can be applied by the coal mining industry for use at operational levels."

Jan 10, 2018

By E. L. Bohnet

The purpose of this paper is to translate a mining company's "Corporate Objectives" into usable and practical guidelines for long term mine design and production scheduling. These guidelines are required to ensure that both operating and development properties are designed and economically ranked on the same basis, and with the "current" Corporate Objectives in mind. Secondly, if both management and mining engineers have a better understanding of the cause and effect of corporate policies, then penalties and risks associated with various Corporate Objectives can be put into better perspective for management. Corporate Objectives, relative to usable guidelines for either short and/or long term mine planning, could be defined as one or more of the following four objectives: 1) Maximize the recovery of the economic portion of the defined geologic resources, and hence, maximize total non-discounted project cash flows and profits (most common approach in mine design), 2) Maximize the Net Present Value (NPV) of the after-tax cash flows from each existing or proposed project, either on an individual basis or in concert with other projects, including downstream processing facilities (primary method used to judge relative investment merit of a proposed development or operating concept), 3) Limit short and long term capital expenditures to a defined ceiling, 4) Maximize product output for the existing facilities in the short term, or conversely, keep commodity production at a constant level for a series of years.

Jan 1, 1994

By M. K. Gangal, E. D. Dainty

The paper describes the capabilities of a micro-computer-based real time data acquisition system for monitoring and control of mine environments. Applications of such a system for monitoring the ventilation and air quality of a mine is outlined. The paper discusses the results of running a monitoring system with various environmental sensors in a simulated mine environment. The sensors used in this study are: carbon monoxide (CO), carbon dioxide (C02), nitric oxide (NO), nitrogen dioxide (NO2), sulphur dioxide (SO2 ), methane (CH4 ), air flow, absolute pressure, temperature and relative humidity. A performance evaluation of the monitoring system and sensors is presented.

Jan 1, 1987

By John Jonkman

The cost of equipment maintenance is the largest single expense at many mines and processing plants. It is not unusual for a maintenance and repair budget to be larger than 50% of the punt's total budget. Generally, in the mining industry, 400-60% of the work force in a plant reports to the maintenance department. Studies have shown that many plant maintenance workers are only 33 to 40% productive, working 2.6 to 3.7 hours of every 8-hour day. In recent years, many companies have begun to recognize that- productivity improvements and cost reductions can he achieved by upgrading maintenance methods. This paper discusses ten common causes of low maintenance productivity and how recent advancements in computing technology can be utilized to address these causes for low productivity.

Jan 1, 1986

By S. Cotten

The concept for a Mine Escape Vehicle (MEV) is motivated by the desire to enable personnel to evacuate a mine rapidly as the first and most desirable response to any underground emergency. Under a NIOSH contract, Raytheon UTD developed a conceptual design for a vehicle that coal miners could use to facilitate their rapid exit from an underground coal mine in the case of emergency, including fire or explosion. The vehicle requirements include the capacity to provide life support functions for a number of miners, operate in an oxygen deficient, low or no visibility atmosphere, and travel at speeds faster than miners can walk out of the mine. To develop the MEV concept, three primary tasks were identified and executed. The first task focused on developing a realistic concept of operations (CONOPS) and associated high level vehicle requirements. The second task identified and evaluated currently available equipment and technologies that could be applied to address the CONOPS. The final task developed a design concept that integrated the identified components for the five (5) MEV sub-systems to provide the foundation for future detailed engineering design and prototype construction. The resulting MEV design concept is centered upon retrofitting existing mine personnel carrier chasses with available, mine-worthy equipment capable of addressing the MEV requirements. This approach offers a practical and economic avenue to prototype development and delivery with minimum lead-time and risk. Furthermore, by integrating familiar and available equipment into the design and CONOPS, the resulting Mine Escape Vehicles should also be more readily accepted by the mining industry.

Jan 1, 2010

By L. Giraldo, S. Cotten

"INTRODUCTION The vision for a “Mine Escape Vehicle” (MEV) is to provide capabilities to better enable underground travel to allow miners to escape to safety in the event of a major mine emergency such as a fire or explosion. Enhanced transportation and survival capability such as a MEV may have minimized or eliminated the loss of life associated with several of the mine disasters that occurred in 2006, which together resulted in the deaths of 19 miners. Although the most desirable response in an emergency is for the miners exit the mine, if escape proved to be impossible, the miners could use the vehicle to proceed to an underground point of refuge to await rescue. Under a NIOSH contract issued in April 2008, Raytheon developed a conceptual vehicle design including (1) the capacity to provide life support functions for a number of miners, (2) operate in a reduced oxygen atmosphere with little or no visibility, and (3) travel at speeds faster than miners could walk out of the mine. The proposed MEV concept envisioned modification of a personnel carrier (a.k.a. a “mantrip”) that would be used every day during normal mine operations, not a specialized vehicle reserved only for or dedicated solely to escape. The MEV concept also included escape aids that are detachable from the vehicle in the event that the vehicle must be abandoned on the way out of the mine and the dismounted miners had to proceed on foot. To advance MEV development, NIOSH awarded a second contract in 2010 to Raytheon to build, test, and evaluate the performance of a proof-of-concept MEV that culminated in a 7-month performance evaluation of vehicle in an Eastern Kentucky coal mine (Figure 1). User feedback and lessons learned from the proof-of-concept vehicle evaluation provided support for the general MEV approach, guidance related to the practicality of MEV capabilities, and indication of specific technology shortcomings for this application."

Jan 1, 2015

By Timothy J. Orr, Jami M. Girard

A NIOSH study on occupational deaths between 1980 and 1989 indicated that in the United States, mining had the highest average annual fatality rate (3 1.9 per 100,000 workers) of any other major industry. Since "lack of training" was often cited as the primary cause of accidents, NIOSH has been investigating new methods for effective training. One such method is the use of low- cost, desktop computers to simulate a virtual mining environment. Computer-based training offers several advantages over conventional training because the computer programs provide a three- dimensional environment that allows the trainee to practice using evacuation routes, encounter mining hazards, and view mining operations without being exposed to any real danger. One major focus of the project is mine escapeway multiuser training using desktop virtual reality programs. Researchers have imported mine maps into the software for the purpose of practicing actual evacuation routes and procedures. Various scenarios for evacuation can be practiced in a three-dimensional computer simulation of the mine in a disaster situation, complete with smoke, fire, and other dangers. Depending on the trainee's job description (i.e., foreman, shift boss, beltman, etc.), certain tasks need to be performed in addition to navigating primary and/or secondary escape routes. Each scenario allows for individual or team-based training and provides a means to educate mine workers in hazard recognition and hazard avoidance. Using this program, mine workers can practice evacuating various mine layouts without the danger and expense associated with escapeway training in an actual underground mine. Each scenario can be changed to test the trainee's reaction in a variety of circumstances and run many times so the trainee can practice concepts. This training experience will help reinforce the knowledge acquired during more conventional classroom instruction, and the inherent flexibility of the program allows training materials to be tailored to meet the specific requirements of individual mines.

Jan 1, 2002

By Donald W. Gentry

This section deals with one of the most fascinating aspects of mining the evaluation of mine investment opportunities. Be-fore proceeding further, it is important to clarify the meaning of some fundamental terms used frequently in the text. 6.0.1.1 Mine Valuation vs. Evaluation The words "valuation" and "evaluation" in a mining context are often used interchangeably. However, for the purposes of this section, a distinction is made between the two terms in accordance with commonly accepted practice. The word valuation in a mining project context has the rather narrow meaning of placing a dollar or other currency value on the worth of the project as a whole. In other words, the value of a mining project refers to a measure of the desirability of ownership of that property. As such, the major item of interest is, "what is the mine worth?," or `what is the value of the mine?" The value of a mining project may actually be determined in the marketplace at any specific point in time, or it may be estimated by one of several methods. The topic of mine valuation is discussed in more detail in Chapter 6.1. The word evaluation in a mining project context connotes the broader meaning of determining the numerical values of all

Jan 1, 2008

By Thomas J. Neil, O&apos

Most analysts find that progress has been evolutionary in any technologic field. To be sure, a few discrete breakthroughs can usually be identified, but viewed in its entirety, the curve of technologic progress over time tends to be relatively smooth with few discontinuities. Even in those cases where a major scientific discovery is achieved, the rate of technologic progress is limited by the often surprisingly slow rate of commercializing the concept into usable products. Whereas discovery and invention tend to be discrete events, technical innovation is often a painfully slow process. In spite of overall gradual change, technologic progress in most fields, when viewed in retrospect, tends to reveal certain relatively homogeneous periods where little change is evident, separated by episodes of accelerated progress. Thus, open-pit mining over the past century has changed from predominately train haulage to truck haulage and is now experiencing a major increase in belt haulage. Ore reserve estimation is another field that fits the same pattern, and the history of mine evaluation lends itself to a similar analysis. Evaluating mine investment opportunities is a fascinating aspect of mining. The unique set of risks inherent to every mining project is particularly intriguing. Geologic risks are most obvious, since faulty ore grade and tonnage estimates are among the leading causes of mine failures. Wide swine's in mineral commodity prices are usually cited as another major risk in mining. Because any ore deposit is a finite resource and the miner has limited discretion in selecting a mining sequence, mines are generally at the mercy of notoriously fickle commodity markets. There is a tendency for many mine investment analysts to feel that mineral market uncertainties are unprecedented in severity. Of course, prices in other markets rise and fall also-in some cases as precipitously as with minerals. However, two other mining characteristics tend to compound this marketing risk. First, the preproduction development period for a new mine is characteristically long. Under extremely favorable conditions, a significant mine may be developed in as little as two years, but the norm is four to six years or more. Second, mining is among the most capital intensive industries, consistently ranking near the top among all industrial sectors in assets per employee, and near the bottom in annual sales dollars per dollar of assets. Thus, mine investors typically have large sums invested for a long time before the outcome of the venture is determined by notoriously unpredictable markets. This is not a business for the faint of heart, and the importance of sound investment decision making is obvious. The high risk and technical complexity of mining operations have combined to require greater attention to financial evaluation by mining engineers than by most engineers in other specialties. Nearly all early mining engineering textbooks dealt with problems in mine valuation in a detailed manner; and, today, the sophistication of capital investment analysis is high in the mineral industries. Traditional Mine Valuation Methods Although some evaluation process has no doubt accompanied nearly every mine development throughout history, a formalized quantitative approach first emerged in the last half of the 19th century with the establishment of academic programs in mining engineering. The philosophy and approach to mine valuation that evolved at this time were, with periodic minor refinements, considered the standard for nearly a century. Only after 1960 did major changes begin to occur. The traditional approach to mine valuation reflected the investment community's historic attitudes toward risk. Mines were generally considered too risky for debt financing, and virtually every new mine was financed from internally generated funds or new equity subscriptions. The investment evaluation methods that evolved focused on mining's higher risk relative to other

Jan 11, 1982

By Thomas O’Neil

Part 2 of this article continues with a discussion of features that distinguish contemporary investment analysis in mining from earlier methods. Part 1 traced the evolution of evaluation methodology from the traditional and discounted cash flow methods to the present. Quantitative investment models of the past 20 years played an important role in mine evaluation, but a new integrated approach to mine investment decision-making is now developing because of growing economic, technical, and political uncertainties. One of those uncertainties -inflation-was discussed in Part 1. Increased Risk At a time when mineral production technology and analytical evaluation tools have never been more sophisticated, it may seem anomalous to claim that mining ventures are riskier. Whereas technical risk has, indeed, been notably reduced, business risk the chance of a major loss due to market factors-has increased. This has been caused by two factors: the rapidly rising capital requirements of new projects and increasingly unpredictable future economic conditions. These difficulties are compounded by the long lead times of large, new mining projects. Rising Capital Requirements A $100 million investment is no longer considered to be a large mining project in most cases. For a large metal mining project, the total cost of the concentrator alone can exceed $100 million. Amoco Minerals' Thompson Creek molybdenum mine being developed in Idaho will cost over $350 million, for a relatively modest sized (23-kt/d or 25,000-stpd) ore operation with no extraordinary features. For a major grass roots copper operation producing blis¬ter or refined copper, the capital requirements are billions of dollars, not millions. Project costs are higher for two reasons. One, the projects themselves are larger; and two, the capital cost per unit of production is rising rapidly. Projects are larger because lower grade ores, yielding smaller margins, must be mined in greater volume-particularly in view of the high fixed costs of modern technology. When analysts contemplate any capital project, an important consideration is the minimum economic size of the facility. This is the smallest size that can be built and still be competitive on a total unit production cost basis. In the conventional copper smelting business, for example, a production rate of at least 91 kt/a (100,000 stpy) of blister copper is about the absolute minimum for reducing unit fixed costs to competitive levels. Clearly, many variables affect the minimum economic size of a mining facility, but with few exceptions that size continues to grow. Unit capital costs of new mining projects also are continuing to rise. The accompanying table shows that the capital costs in primary copper production have risen faster than the cost of living. Of particular note is the capital charge of over $1.70/kg (77411b) required for a new, fully integrated facility in 1981. Thus, the mid-1982 copper price would not even cover the cost of capital for a new copper producing complex without considering the direct operating costs for such a facility. The breath-taking costs of new mining projects are caused by factors such as increasingly complex technology, the rising social costs of creating attractive living and working conditions for employ¬ees, and the expenditures re¬quired for environmental protec¬tion. For whatever reasons, how¬ever, unit capital costs in mining continue to exhibit staggering growth rates. Future Economic Conditions Risk is not only a function of the size of the potential loss-an im¬portant measure of which is the capital intensity of mining dis¬cussed above-but also of the like¬lihood of incurring the loss. It is here that the ever increasing lead times of mining projects and the glaring limitations of economic forecasting are so important. In comparison to nearly all other in¬vestments, mining has more capi¬tal at stake for a longer period of time before commercial uncer¬tainty is resolved by distant eco¬nomic conditions that are subject to high forecasting errors. A sobering example of the pre¬ceding points occurred with the Lakeshore copper mine in south¬ern Arizona that Hecla Mining Co. undertook to finance and manage in 1969. The project was a joint venture of Hecla and the El Paso Natural Gas Co. and included two mines-one producing oxide ore and a second in the sulfide zone¬and a complex processing facility producing both electrowon cop¬per cathodes and copper precipi¬tates. The project originally was

Jan 12, 1982