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By C. J. Konya, A. Konya

"Presplitting is a form of blasting that when executed properly will create a smooth wall that will minimize secondary conditioning. In recent years, presplitting has become a popular technique to be used in both the mining and construction industry, however, presplitting fails on many occasions because of ‘geologic conditions’. This is typically because of improper explosive loads consisting of overloading and underloading blastholes. In this paper the authors introduce new factors such as a presplit factor which varies for different rock types, selection criteria for the spacing of presplits, the optimization of explosive load, as well as prediction methods for the environmental affects for the technique of Precision Presplitting. BACKGROUND Methods of controlled blasting in which a smooth, stable wall could be blasted have been an important consideration since blasting in mining and construction has begun. How can one use an explosive, with its massive energy and power, to break a non-homogenous rock without causing backbreak, poor walls, or deviations in the wall over large distances? The blasting industry has known for a long time that blasting ‘high benches’ would result in better walls and less backbreak. However, this was not a sufficiently controlled technique for critical projects, such as the Niagara Power Plant. This was one of the main challenges Hercules Powder faced when they began the project. In order to achieve this, they used a new tool in the explosive engineer’s toolkit, presplitting. The presplitting done on the Niagara Power Project utilized 1 ½” x 8” (38mm x 203mm) 40% gelatin dynamite in 2 ½” (63.5) diameter boreholes. This was done on multiple levels with benches between 12 feet to 52 feet (3.6m to 15.8m) with a total powder factor of 0.75 pounds/cubic yard (0.45 kg/m3). The spacing on these holes ranged between 18 inches to 24 inches (0.46m to 0.61m), center to center (Langfors & Kihlstrom, 1973). The strange aspect of this project was that this “lightly loaded” closely spaced row was fired before the production blast, yet this project produced some of the best walls seen at that time directly from blasting. In today’s blasting industry, presplitting is a more common way to produce smooth, stable high-walls for both the construction and the mining industry. Today, explosive loads for traditional presplitting is generally measured in pounds per foot (kilograms per meter) and typically ranges from 0.30 lb. /ft. to 0.5 lb. /ft. (0.45 kg/m to 0.75 kg/m). MECHANICS OF PRESPLITTING When analyzing a blasting process like the Niagara Project, many wonder how did that work when normally confining a charge would cause cratering and increased backbreak. Since then, presplitting mechanics have been studied extensively. It has been shown in many models that presplitting is not achieve through the collision of shockwave, but by gas pressure in the boreholes. In addition to models and finite element simulations, this has been proven full scale using Pyrodex, a propellant, to create a presplit plane with no shock wave present (Konya, Dean Barrett, & Smith Jr, Presplitting Granite Using Pyrodex, A Propellant, 1986)."

Jan 1, 2017

By Su Yang, Pang Shun, Xiaoding Xu, Guodong Yang, Hengfeng Liu, Meng Wu, Yuejin Zhou

By introducing the hydrochemical damage variable of coal gangue granular material, this paper analyzed the evolution law of gangue mechanical parameters with hydrochemical damage. By constructing a gangue damage model considering multifield coupling, the damage mechanism of gangue under multi-field coupling was revealed from the microscopical aspect, and the influence law of gangue damage mechanism on the dissolution of toxic substances under multi-field coupling was obtained: the conditions of Test 1 have the greatest influence on the porosity of coal gangue, and the damage of coal gangue is the greatest. Cu, Zn, Cd, and Pb are more easily leached under acidic conditions. The coupling effect of seepage, temperature, and chemical field can promote the formation of secondary voids, change the voids, and form migration paths in coal gangue. The kinetic model of toxic leaching of coal gangue under multi-field coupling can be well characterized by Elovich equation. The release mechanism of heavy metals is mainly manifested as delayed diffusion or dissolution in the early stage, diffusion and dissolution in the middle stage, and depletion in the late stage.

Nov 23, 2023

By J. F. Dresser

Managing environmental compliance at a complex facility has the potential to bring a high degree of personal and professional satisfaction to both the corporation and the individuals responsible for day-to-day operations. The decade of the 1990's, however, has seen the emergence of a nationwide trend of aggressive federal and state civil and criminal enforcement for environmental violations. This trend, spearheaded by the U.S. Department of Justice (DOJ) and the U.S. Environmental Protection Agency's (EPA) Office of Enforcement, has the potential to place the corporation, its corporate officers, and compliance personnel at collective professional risk, as well as a growing tendency to place accountability on individuals. Management of environmental compliance has been anecdotally compared to a shooting gallery at a carnival, with the following exception: At the shooting gallery, successfully hitting nine out of ten targets usually brings a reward and recognition of shooting skill; hitting nine out of ten environmental compliance expectations not only brings agency consternation and negative publicity, but the "gallery" will likely shoot back with stiff fines and possible criminal allegations. Faced with the challenges of the new environmental compliance shooting gallery, corporations and professionals are often left asking themselves, "How do we (or more appropriately, can we) win at this game?" This paper examines recent federal enforcement statistics and offers several suggestions for coping with the responsibility of managing environmental compliance in the 1990's.

Jan 1, 1992

By E. Costa Silva

Among the methods of mineral processing, gravity concentration methods are, probably, those which have lower costs, higher capacities and lower operational complexity. In order to be really effective, these methods require a feed size distribution in which the particles are liberated. Further, there must be a significant difference (usually higher than 1-1.5) among the real densities of the particles. However, in most cases, the traditional gravity concentrators (jigs, shaking tables, spirals and dense medium hydrocyclones) lose efficiency (sharpness of cut and recovery) when the mean diameter of particles are lower than 0.05mm and the difference among densities are smaller than 1. Most gravity concentrators developed in the last 20 years are based on the use of centrifugal forces that create large "apparent gravitational gradient" seeking to overcome the limitations of particles size distribution. This paper presents the experience of the CVRD Research Center in evaluation and development of new process based on using this new generation of gravity concentrators.

Jan 1, 1999

By Irwan S. Halim

For tunnels in horizontally bedded rock, geologic factors affect the selection and design of the initial supports, including the rock propensity toward parting along bedding and the resulting high potential for rock slabbing during excavation. To evaluate this ground behavior, numerical analyses and results with Mohr-Coulomb, Hoek-Brown, and Ubiquitous Joint constitutive models were used, using the Upper Rouge CSO tunnel in Detroit, Michigan as an example. The different rock models and other geologic considerations are shown to impact the selection of the tunnel initial support and design. This paper emphasizes the appropriate selection of an analytical model based on the site specific geology to achieve an optimum initial support design.

Jan 1, 2008

By Keith G. Wallace, Robert Wise, Ian J. Duckworth

This paper describes a case study for the ventilation planning at Utah Fuel Company's Skyline Mines which are located outside Price. Utah. The Skyline Mines are currently comprised of two longwall coal mining blocks located in two different mines. A third replacement longwall block is currently being developed. Future ventilation systems for the mines were determined by establishing ventilation models developed from data collected during a detailed ventilation survey. The paper discusses the challenge to coordinate immediate ventilation requirements with long-term demands. The continuous movement of the longwall, which frequently represented the only open split in the ventilation network, resulted in cyclic ventilation demands dependent upon the length of the tailgate. A series of system configuration changes were recommended based on the results of the network modeling exercise and an economic evaluation of the various options. The scope and cost of the configuration changes, and the mead improvement resulting from these changes is discussed.

Jan 1, 1995

By John Mastoris, Kostis Dragasakis, Kostas Kouklidis, Shkurtë Gashi, Halil Berisha, Jenuz Bulica

Titan Group’s environmental policy and Sharrcem’s Corporate Social Responsibility (CSR) are the driving forces behind the development and implementation of a comprehensive Rehabilitation Plan at Dimce Quarry, which is the main raw material source for Sharrcem Cement Plant since the 1970’s, located in the municipality of Hani i Elezit in Kosovo. Based on an Environmental Impact Assessment Study and the approved Mining Plan and also on the principles prescribed in the Guidelines on Quarry Rehabilitation, released by the Cement Sustainability Initiative of the World Business Council for Sustainable Development (WBCSD-CSI), Sharrcem has adopted a quarry operation and rehabilitation process in line with the best practices in the mining and cement sector. This paper discusses the background for the development of the rehabilitation plan and the results of rehabilitation activities, as have been implemented over the last few years. The main objective of the progressive rehabilitation plan at Dimce Quarry is to restore the depleted pit and return it back to the original land owners for resettlement. To date approx. 3,4Ha of former mining area has been restored by backfilling and levelling of the depleted closed pit and returned back to owners, who have built their houses and turned it into a living area again. This Quarry has turned out to be a real composition and practical example of preserving and returning back the natural resources in a state compatible with the surrounding environment and with respect to the needs of the local stakeholders. The motivation for business to engage in rehabilitation activities in the first place lies in the belief that the development and implementation of a progressive and practical Quarry rehabilitation plan and restitution of the land will deliver significant environmental and social benefits that outweigh the long-term rehabilitation costs, while maintaining the company’s reputation.

Jan 1, 2017

By James Watson Baxter

Fluxes are used to promote pyrometallurgical processes that rely on adhesion (soldering or brazing) or fusion (gas and arc welding) to join metallic surfaces. In the adhesive processes, the metal surfaces to be joined are not melted; the join is formed using a filler metal with lower melting point than the base metal. Fusion welding involves use of heat in excess of the melting point of the base metal. The fused joint may be achieved either by simply fusing together metal surfaces brought in contact with each other or by introducing additional molten metal of similar composition to form a fused joint. ADHESIVE PROCESSES--SOLDERING AND BRAZING In order for molten filler metal, solder or braze, to spread in a manner that creates a successful join; the work surfaces on the base metal must be thoroughly cleansed. Fluxes remove stubborn oxide films and other surface contaminants, promote wetting of the work surfaces, add fluidity to the solder or braze, and enhance workability and ease of spreading. Brazing processes involve higher temperatures than those reached in soldering. Brazing fluxes, which must remain active and effective at the higher temperatures, differ from those employed in soldering. Some common fluxes used in adhesive processes are rosin for soldering tin and electrical connections, hydrochloric acid for use in soldering galvanized iron and other zinc surfaces, and borax for brazing. Soldering and brazing are similar processes, the primary difference being the temperature at which the joining operation is carried out. Soldered joints, produced with low-melting-point fillers (solders) that melt and flow at temperature less that 450°C (Althouse et al., 1988) can sustain loads of 1 to 1.7 MPa for extended periods of time (Anon., 1966). Brazing involves the use of filler materials with melting points commonly above 500°C and generally provides stronger joints than those obtained with solder. Both processes require local application of heat to melt and spread the filler so that the molten filler can wet (adhere to) the base metals by alloying and diffusion. Soldering Soldering is a means of joining metals by adhesion using a metallic bonding alloy as the filler, commonly a mixture of lead and tin. However, the adhesion of solder depends more on its ability to be keyed into minute surface irregularities than on alloying. The most familiar application is to provide and secure electrical connections. Soft solders can range from 1 to 70% tin with the remainder mostly lead. However, for general-purpose, soft-solder work, the alloy is commonly 50% lead-50% tin. Higher lead contents provide a wider range in the melting temperature and, for this reason, a 60% lead-40% tin alloy, which yields a mushy mixture, is used for wiped joints in lead sheet and pipe work. Conversely, 40% lead-60% tin alloys are used in soldering tin and other low- melting-point materials for which a narrower range of melting temperature is required. There are numerous other solder compositions such as tin-silver, 95% tin-5% silver and antimony-tin, 95% tin and 5% antimony (Carlin, Jr., 1992). Heat needed to melt and spread the solders is commonly provided by electrically heated, copper-tipped soldering irons or by means of torches; the solder is applied by hand, usually face-fed by means of wire. For wiped joints in plumbing and lead-cable splicing, the solder is manipulated with cloth pads. The molten solder wets the joint surfaces and is drawn, by surface tension, into minute fissures and capillary openings. Other applications involve use of induction heaters and furnaces with pre-shaped solder appropriately placed prior to fluxing and heating. In some processes, the joints are immersed in molten solder. Constituents and Role of Soldering Fluxes: Soldering fluxes generally fall into one of three categories: highly corrosive fluxes, intermediate fluxes, and noncorrosive fluxes. These same categories are sometimes designated inorganic, organic and rosin-based respectively (Althouse et al., 1988). Common constituents of each group are discussed briefly below. Corrosive Fluxes (Inorganic). Work with aluminum, magnesium, stainless steel, high alloy steel, aluminum bronzes, and silicon bronzes is carried out at temperatures in the upper portion of the range for solder operations. Soldering these materials requires use of highly active, corrosive fluxes to remove and prevent the formation of the especially stubborn, hard, oxide films that form on these materials upon exposure to the atmosphere. The corrosive fluxes consist of inorganic acids and salts that are applied either as pastes or dry. They are active at elevated temperatures and, since they remain active after the soldering is completed, must be completely removed. The main constituent of most corrosive fluxes is zinc chloride with a melting temperature well above the solidus temperature of most commercial tin-lead solders. It is made by the action of hydrochloric acid on zinc. When zinc chloride is used alone, un- melted particles of this corrosive salt get caught up in the joint and weaken it. For this reason, other inorganic salts such as ammonium chloride (NH4Cl) or sodium chloride (NaCl) may be added to lower the melting temperature. A mixture of zinc chloride and ammonium chloride is very effective because the excellent oxide reducing properties of ammonium chloride and the protective action of the molten zinc chloride combine to produce a fluxing action superior to that achieved when either is used alone. In addition to zinc chloride, ammonium chloride, and sodium chloride; common con-

Jan 1, 1994

By Henry Brehaut

The International Network for Acid Prevention (INAP) was formed in 1998 by 17 international mining companies to promote significant improvements in the management of sulphidic mine materials and the reduction of liability associated with acid drainage through knowledge sharing and research and development of technology. Since its inception two panels have been formed to identify and move forward with research projects and eight networks have been constituted to initiate interaction and knowledge sharing within the membership in specific areas of technical interest. An INAP web site has been developed to facilitate the sharing of information and to encourage the exchange and development of new ideas.

Jan 1, 2000

By Robert Schnab

ASFINAG is responsible for the construction and operation of the Austrian highway system. It is approx. 2,400 km of highways and 65 tunnels with a total length of 200 km including the Tauern Tunnel. In order to improve the documentation of the tunnel construction, ASFINAG chose to use a state of the art tunnel scanning system to record the various stages of construction: excavation, initial shotcrete lining, smoothing layer and final cast in place concrete lining. The geometric and photogrammetric documentation is provided on a daily basis to all par-ties involved. This innovative concept provides accurate & complete information in real time. The tunnel scanner documentation of the 2nd tube at the 6.4 km long Tauern Tunnel will be presented in this paper as a part of the survey contract.

By D. Kozelj

Introduction The porphyry copper deposit “Borska Reka” is the biggest undeveloped deposit in the Timok Magmatic Complex (TMC). Total reserve calculated manually is 611 Mt (cut-off grade 0.3% Cu) of 0.62% Cu, 0.21 g/t Au and 1.81 g/t Ag and 869 Mt of 0.58% Cu, 0.14 g/t Au and 1.11 g/t Ag using software. But since several deep drill holes are suspended in high grade (0.7% Cu) porphyry, total reserves could exceed 1Gt. The massive sulfide is also detected in the central (12 m at 4% Cu) and the bottom of porphyry style. Deposit was discovered during geologic exploration of deeper part of the Bor copper and gold deposit, i.e. area of high sulfidation with dominant massive sulfides. During exploitation of massive sulfide, constant explorations were carried out aimed at the expansion of reserve and discovery of new ore bodies. In that way, porphyry copper mineralization was discovered without knowing in the beginning that it was different mineralization type in regard to the ones that had been already identified and exploited. Vertical extension of porphyry is 0 m up to -1000 m sea level and not contoured along plunge. In the very beginning (1976), the exploration was focused on the shallow part of porphyry. That is because block caving method of massive underground mining was not developed at that time. Up to 1999, most of activity was related to underground exploration up to level -395 m. Geographic position The Bor deposit is located close to the industrial and University town Bor, which has over 50,000 inhabitants (census made in the year 2002). Apart from the Bor Mines, industrial complex of Mining & Smelting Basin Bor (RTB) comprises also a copper smelter (installed capacity up to 160,000 tons of blister copper) and tank house, copper wire factory, copper tube factory etc. Currently, RTB Bor is under privatization process that is going to be completed by the end of 2006. Up to date, over 20 companies have bought tender documentation.

Jan 1, 2007

By John E. Auten

The computer program "Spike" is an "expert-rule based system" designed to fulfill two requirements. 1) acquaint unfamiliar personnel with big hole drilling techniques and 2) to stimulate the "old hands" in solving drilling problems. "Spike" will not make anyone a drilling expert The best way to understand a computer program is by example, but first some explanation of an? "expert-rule based system", As the name implies, the program tries to imitate a human expert. Unlike a normal computer program which uses a list of instructions to follow in a set order, a rule-base program has a collection of independent rules without an explicit list of things to do, one after the other. This type of program was mandatory to accommodate the ever changing situations and corrective actions that more accurately duplicate actual drilling operations and the advise of an experienced drilling expert.

Jan 1, 1988

By M. G. Ayat

A novel tracing technique employing specifically prepared trace particles has been applied to coal preparation separatory systems. The technique employs individually prepared trace particles representing specific known sizes and densities of coal particles. These trace particles are injected into the feed, to the processing circuit, and are then detected at locations in the coal product and refuse streams. It is anticipated that on-line input of the generated partition data will be linked with computer technology to provide rapid analysis of the processing efficiency, and to allow for process control. This tracing technique can revolutionize many processing operations from the diagnostic viewpoint as well as from the coal processing standpoint.

Jan 1, 1986

By David Butts

Solar ponding to crystdlize sodium chloride has been used for thousands of years.1 The systems used were inefficient and usually small compared to the large 25,000 acre pond areas seen today. It has only been in the last 25 years that any real effort has been applied to develop solar ponding technology. Many large solar pond systems have been constructed without much thought to efficient and optimum production rates. The recent high costs of labor, of equipment and of energy have forced producers to take a closer look at their solar pond systems in an attempt to squeeze out the highest possible yields. Other companies such as the Arab Potash Company, the Dead Sea Works, Texas Gulf (Moab, Utah) and San Francisco Salt Companies have no more land area in which to expand and therefore efficient ponds are essential. This paper is written to show how the subdivision of solar ponds can result in production increases of up to 20% and beyond.

Jan 1, 1984

"The National Mining Hall of Fame and Museum (NMHFM) announced the 2017 National Mining Hall of Fame inductees. This year’s inductees, selected by the National Mining Hall of Fame’s Board of Governors, represent exploration and extraction of new frontiers, environmental stewardship, leadership in formulating U.S. mineral policy, education, and research and development, including the use of computers in planning, designing and managing mineral industry operations. The contributions of these individuals have undoubtedly had a significant and lasting impact on the mineral and mining industry. These individuals were selected for being visionary leaders, innovators, authors, pioneers in corporate social responsibility, and long-standing advocates for the U.S. mining industry.Dr. Thomas V. Falkie, Leonard Harris, Dr. Vincent E. McKelvey, and Gordon R. Parker will join 236 other mining industry luminaries when formally inducted into the National Mining Hall of Fame on Sept. 23, 2017. The 30th Annual Induction Banquet and Ceremony will be held at the Pinnacle Club, Grand Hyatt Hotel in Denver, CO.2017 National Mining Hall of Fame inductees:Dr. Thomas V. Falkie — In a career spanning six decades, Falkie’s accomplishments in industry, academia, government and professional societies demonstrate a pattern of integrity and sustained excellence. His gravitas and management style left highly favorable impressions in every position he held. He was the chairman and president of Berwind Natural Resources Corp.; President of SME; President of the American Institute of Mining, Metallurgy and Petroleum Engineers; Director of the U.S. Bureau of Mines and head of the Department of Mineral Engineering at the Pennsylvania State University. He played major leadership roles in the American Mining Congress, National Coal Association, Mining and Metallurgical Society of America, and the National Mining Association. He served on the board of directors of Foote Minerals and Cyprus-Amax and was very active in the National Academy of Engineering, the SME Foundation and the National Mining Hall of Fame and Museum.Leonard Harris — A highly regarded metallurgist and business executive, Leonard (Len) Harris may be most remembered for the heart he has for the people whose lives were touched by his career. For more than six decades, Harris has been a true pioneer in corporate social responsibility, leading companies to understand that doing the right thing for the local people is also the best path to business success. After an early career in Australia and Ghana, Harris moved to Peru in 1955 to join Cerro de Pasco Corp., owner of several mines with one of the most complex metallurgical operations in the world. Harris was quickly promoted through multiple positions and was ultimately named director of metallurgy."

Jan 8, 2017

By V. L. Franzen, Z. J. Hladysz, C. A. Kliche

The Wharf Resources mine, located in the Bald Mountain Mining District approximately 6.4 km (4miles) west of Lead, South Dakota, has operated a surface gold and silver mine and heap leaching processing facility since 1983. Wharf Resources intends to mine and process gold and silver ore from the Wharf Expansion area which is located on the eastern flank of the currently permitted Foley Ridge Mine. The Trojan Pit for the Wharf Expansion area was initially designed with an overall highwall slope angle of 45o. During mine permit presubmission meetings with personnel from the SD Department of Environment and Natural Resources (SD DENR), the question arose as to whether a detailed slope stability analysis of the proposed Trojan Pit highwalls was completed to justify the 45o slope. Wharf’s response was that the highwall design was based, in part, upon studies completed in1987 on the Annie Creek and Foley Ridge Mines; and, in part, upon subsequent slope stability analyses conducted by Wharf mine personnel through 1996. It was suggested by the SD DENR that the stability study be updated to reflect structural geological conditions in the Wharf Expansion area.

Jan 1, 2000

By J. T. Winkelmann

The Mineral Park Mine is an open pit copper-molybdenum mine located in northwestern Arizona, approximately twenty miles northwest of Kingman, Arizona. The concentrating facility has been regarded, with the expansion in 2011, as a plant capable of treating fifty thousand short tons of feed per day for the mixture of supergene and hypogene ores available. The grinding circuit consists of two 32? x 14? SAG mills and four 20? x 28? ball mills. As ores became harder with greater depth in the adjacent pit areas, however, the SAG mills became severely throughput limited. The traditional treatment for similar properties is the installation of a recycle pebble crushing circuit. Because the cost of such an installation is quite elevated, and preliminary testing and research was inconclusive regarding the predicted throughput increases, management and technical personnel set out to find another solution to the problem. The result entailed a redesign of SAG lifters/liners and a nearly unique circuit change which was, at best, a difficult step that defied current grinding logic. This paper describes these changes, events leading up to them, and the results.

Feb 23, 2014

By C. Tom Blevins

LADIES AND GENTLEMEN : This presentation is to discuss production and roof control problems associated with directional lateral stresses in an in situ stress field and the approach that Inland Steel Coal Company made in trying to cope with them. Before proceeding, a brief description of the mine location, product, geology, restraints, and mine history is in order.

Jan 1, 1982

Bigger is indeed better in today's surface mining operations. That is especially true regarding haul trucks. Building larger, "supersize" trucks, however, means designing more powerful engines and drive systems that are also more efficient and environmentally friendly. And miners are demanding that these trucks have longer service lives with minimum maintenance. So truck makers are teaming with engine manufacturers and mining customers to design these larger trucks that will ultimately lead to reduced mining costs. About 180 of those truck makers, engine designers and miners gathered in Tucson, AZ in September to discuss the state of haul trucks in today's mining environment. Haulage 2000 was sponsored by World Mining Equipment and attracted attendees from around the world. Manufacturers described the latest in haul truck advancements. These included the design of more powerful engines, improvements to mechanical and ac and dc drive systems and suggestions on how to reduce maintenance spending. Technology improvements in tires for larger struck was discussed as was the cost efficiency of new, lighter-weight bed liners. The following is a summary of a handful of the presentations.

Jan 1, 1997

By Roger S. Dewey

1.1. INTRODUCTION Despite indications of a general economic recovery in the U.S. during the mid-19801s, mine operators have not generally shared in the benefits of these reported better times. Budgets have not rebounded, borrowing is tougher, parent companies' pockets are not as deep as in previous years, and margins are not any better -- if there is any left over at all. Managing capital equipment budgets is always a challenge, and the last five years of stretched equipment lives make these decisions more tenuous. Delays and avoidance of replacements due to tough times inevitably makes those decisions increasingly difficult and usually more expensive The purposes of this paper are to present. a brief refresher outline of the fundamentals of equipment replacement analysis, to suggest a number of papers where analysis methods are explained in greater detail. and to recommend the use of a widespread microcomputer software capability (1-2-3) as the easiest path to a much-needed solution for a very difficult, and usually under-supported management decision problem 2. REPLACEMENT DECISION POLICY Investments in equipment replacements must compete for capital with all other investment alternatives. Capital for replacements of ten represents a greater commitment than do the new projects which a company might handle in a given year. But. sadly, formal policies for standardized analysis of replacements rarely exist, even in major companies. Yet this policy can be very significant in determining the competitiveness of a firm. Whereas many replacement decisions are based on cost minimization, economists and financial analysts agree that wealth maximization or return on investment is the superior criterion. Though the difference may seem slight, agreement on a firm's financial objective is vital. Replacement policy should be straight- forward. have a logical basis, and a proper level of sophistication. There are several reasons to develop a policy for replacement decision-making: [I] 1 - equipment's optimal economic life is nearly always shorter than its physical life; 2 - mine life often exceeds equipment life, so management must face these decisions routinly 3 - replacement capital costs, on an undiscounted basis, can run 25 to 75% of original capital 4 - technological changes may result in a newer machine or system which can operate more efficiently, more safely. or less expensively 5 - estimates should be made consistently in the fundamental areas of life expectancy, availability, utilization. price escalation, taxes 6 - long-term and short-term budgeting without decent data and analytical capability is nearly impossible, or at least ineffective Policy development assumptions which must be considered include: the planning horizon, cost patterns, interest rates, availability of capital, replacement vs. expansion, technology advances.

Jan 1, 1987