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By Kunio Hashimoto

The conventional troughed belt conveyor system is the most widely used form of equipment for transporting bulk materials in the world today. The reason is not only because it is possible to transport a great deal over a long distance when compare to other types of equipment but also due to its greater economic efficiency and low initial and running costs. When dry, powdery materials and liquid materials are being conveyed, there are enclosed transport methods such as flow, case, air-slider and pipe line. In addition to features of the belt conveyor, a system employing a pipe line to transport dry powdery and liquid materials has always been considered an ideal method. This has been brought into reality through the Pipe Conveyor Sys tem.

Jan 1, 1984

By S. R. Dismuke

Ore at the Magmont Mine in southeast Missouri is extracted by the room and pillar method on two and sometimes three horizons. In 1991, an innovative plan was formulated for recovery of high grade ore in pillars using cable bolts to accommodate spans of more than 27 m (90 ft). A test area was subsequently selected and a recovery plan developed. A cooperative rock mechanics study effort by COMINCO METALS, the U.S. Bureau of Mines and the University of Utah was later established. When initially opened in 1968, the planned production rate was about 1,000,000 tons per year. Due to declining reserves, the production rate was decreased to 630,000 tons per year in November 1992. Pillar recovery now accounts for approximately 40%-50% of the mined tonnage and plays a vital role in allowing Magmont to continue to operate.

Apr 13, 2011

By Steve Rogers

Nautilus Minerals was listed on the Toronto Stock Exchange in May 2006. The company now has major mining companies Anglo America (5.7%), Teck Cominco (7.2%) and Epion Holdings (22.4%) as significant shareholders, and has raised approximately $US346 million dollars to develop the world's first deep-water mine. The company is currently targeting high-grade copper and gold in seafloor massive sulphide mineralization, located near plate boundaries in back-arch basins of the Western Pacific. The first mine scheduled to be developed by the company is located in 1,600 meters of water at Solwara 1, in the relatively quite waters of the Bismarck Sea approximately 50 km from the port of Rabaul, within the Territorial Waters of Papua New Guinea. During 2006 and 2007 the company completed detailed environmental and geological studies, culminating in a number of world firsts, including the world?s first NI 43-101 compliant resource statement and environmental impact study for a seafloor massive sulphide system. Permitting is well advanced for the project, with initial production scheduled for late 2010, subject to timely grant of the permits. Extensive government and stakeholder liaison and engagement has been undertaken throughout the projects life, and is a core feature of Nautilus' desire to "do it right" in all aspects of this new industry.

Jan 1, 2008

By R. L. Loofbourow

Most wet mines face unquantified water costs as well as the obvious wing costs. Both kinds of cost are multiplied by work at greater depth and by higher unit prices. This intensified challenge merits renewed or perhaps altogether new response. Any practicable way to reduce inflow tackles both obvious and unquantified costs. Ten groups of possible ways to do it are cited. Most have been demonstrated. Two are known from work other than mining. Surely new means can be found. Here are opportunities for operators of wet mines!

Jan 1, 1980

By Edwin R. Phelps

Good morning ladies and gentlemen - today I am in an enviable position for two basic reasons - No. 1, since I am first on the program, the audience should start out awake because those that partied too much last night are still asleep, but in their room, not here. No. 2, since copper, iron, and mining technology are not competitive, the veracity of my statements will not be questioned. Most such meetings I attend are based on the subject of energy and the coal industry does have competition from oil, gas, hydro, and nuclear. However, to counteract this advantage I am the usual engineer with a limited vocabulary by schooling, and the remaining vocabulary almost completely eliminated due to the presence of ladies. In relation to the past of the coal industry, we have not only suffered the competition of other energy sources mentioned before, but in addition have in the last 25 to 30 years been required to meet the demands of a vastly changing market. To explain this statement, I am sure many of you can remember 30 to 40 years back when most homes were heated by coal furnaces or stoves and shudder to recall the shoveling of coal into the fire and the carrying out of ashes with the attendent manual labor dust. Now this space heating portion of our sales has almost become non-existant due to an almost universal switch from coal to natural gas, oil, and electric heating. Actual figures show a decrease from 119 million to less than 28 million tons per year in less than a twenty year span. Also, most of you can remember the coal burning steam locomotives and the tremendous volume of coal they consumed and then the very rapid change to the diesel-electric locomotives, incorporating improved large diesel engines driving D C generators and electric drive motors, which resulted in cheaper motive power. This change over was so complete that the annual tonnage of coal dropped from 125 million to less than 2 million tons in 15 years. 'Actually, now it requires some considerable interrogation and traveling to find a locomotive still operating on steam.

Jan 1, 1968

By S. H. Amini, A. Noble

"While many classic mineral processing circuit design approaches rely on deterministic methods, numerous studies have shown that the uncertainty inherent to the various input parameters can significantly influence design decisions. In a separation circuit, many of the technical uncertainties can be mathematically represented as statistical distributions for the unit recovery and feed grade. These uncertainties are then propagated by the circuit design and reflected in the circuit performance indicators, such as product grade and global recovery. An effective design strategy entails identifying which units are most influential in this uncertainty propagation and thus merit further consideration. Unfortunately, few analytical tools provide this information, particularly those that rely solely on deterministic methods. However, one promising approach is through the application of Taguchi’s method, in a fashion similar to statistical tolerancing of manufactured products. Since the technical challenges are fundamentally similar, Taguchi’s method shows promise in evaluating the level of compounded uncertainty by various circuit designs while determining the role of each separation stage on the overall selectivity and variability of separation circuits. This paper demonstrates Taguchi’s method in several two and three unit circuit designs. INTRODUCTION AND METHOD DESCRIPTION Uncertainty in Mineral Processing Circuit Design Analysis and estimation of uncertainty propagation in mineral processing separation circuits is an essential and significant aspect of an optimal circuit design procedure. Most of the current circuit design methodologies have been constructed, implemented, and validated using a deterministic modeling approach. However, numerous studies have shown that the inherent uncertainty induced by uncertain design parameters can be a significant factor in many mineral processing applications (e.g. Kraslawski 1989; Xiao and Vien 2003; Ghaffari et al. 2012). Thus, an effective circuit design methodology must be able to quantify uncertainty in separation circuits with limited input data. This paper describes Taguchi’s method, as an experimental design technique, to approximate uncertainty in mineral processing applications, and then the similarity of results between Taguchi’s method and Monte Carlo Simulation is investigated. Monte Carlo Simulation The term “Monte Carlo Simulation” has been used to refer to a variety of stochastic simulation methods spanning a broad array of business, technical, and scientific domains. Most generally, Monte Carlo Simulation refers to numerical analysis which is based on (pseudo) random sampling from a domain of input parameters with a known statistical distribution. This methodology allows one to determine the distribution of expected results from a standard deterministic process model. Execution of a Monte Carlo simulation begins by identifying the domain of input parameters, statistical distributions for each parameter, and a deterministic process model which describes the anticipated result as a function of the inputs. Next, one discrete random sample is taken for each input parameter, considering the input distributions. The process model is then solved for this mix of input parameters, producing a single simulation result. This procedure is then repeated a “large” number of times, utilizing new randomly sampled input parameters for each simulation iteration. Once the desired number of iterations is reached, the results of each independent simulation are aggregated to produce descriptive statistics such as minimum, maximum, mean, standard deviation, kurtosis, and other distribution parameters. Given enough iterations, the Monte Carlo method fully explores potential synergies between the input parameters. The methodology does not require the process model to be differentiable, continuous, or even analytically defined. While the number of required iterations varies in relation to th"

Jan 1, 2017

By J. C. Gathje

The Robinson copper ores were mined for many years from pits containing varying ore grades, sulfide and oxide ore types, and differing mineralogy. The ores also contain gold and molybdenum values, and their recoveries are an integral part of the flowsheet development. Metallurgical responses were characterized using a standard flotation procedure. Further studies investigated primary and regrind particle sizes, reagents, and other variables. The metallurgical testing was supported by mineralogical studies. Results demonstrated a high degree of metallurgical success for flotation. Final copper concentrates ranged in grade from approximately 28 to 30% copper and copper recoveries were 89 to 95% based on laboratory and pilot plant data.

Jan 1, 1992

By H. G. Papacek

The Fabrica Mine of the Brazilian iron ore company Ferteco mines on an extremely inhomogenous ore deposit. A large amount of the crude ore consists of fines minus 100 micron which cannot be sold without further treatment because of its chemical and physical properties. In order to make full use of the mined crude ore an expansion program has been realized which incorporates among others a concentrator to produce classified blast furnace ore , sinter feed and pellet feed. The pellet feed is converted in a 2.5 million tons per year Lurgi Dravo plant into high grade pellets. The paper discusses the selection of the concentration process, the pelletizing process and describes the experiences with the operation plant during the startup and the first years of operation.

Jan 1, 1979

By G. Johnston, P. K. Chatterjee, S. Holguin

M. Gershon The article is an excellent one, providing a basis for the conduct of the major tasks in underground mine planning and scheduling. I object to only one word. Since that word is featured in the title, it is a strong objection. The word used erroneously is optimization. There is no optimization performed in the article. By definition, an optimization is an approach that yields the best of all possible solutions. We can limit this definition to its narrowest sense, the optimization techniques of operations research such as linear programming, or broaden it to include less sophisticated search procedures that find the best mine plan or schedule. No such claim is made in the article. No optimization of any kind is performed. The major tool used is a simulation, which, in truth, is probably more appropriate for this problem than any optimization. But simulation does not optimize. It only allows for quick evaluation of many options, leading to the selection of the best plan "of those tried," not "of all possible plans." This article, of course, is not the first mining paper to make this error. It seems that the word optimization is used more to impress people than to refer to any act of optimizing. It is used in a way that implies "try to optimize"or "come close to optimize," but not to really do it. It is usually appropriate to quietly ignore this error. But when Dr. Chatterjee, who has done so much good work in true optimization projects and whose work I have come to admire, makes such an error, it is time to publicly dispute it. Having discussed this very point with him in the past, I am sure that he will agree. If he can support this position in his response, perhaps people will start to listen and we can reduce the number of false claims of optimization. This should be easy for him in this case since the approach he used, simulation, is the more appropriate one anyway.

Jan 8, 1988

By O. M. Wicken

Magnesite has the unique combination of properties that make it useful in a wide variety of metallurgical applications. The use of refractory magnesite has been increasing throughout the world, but the source of the "ore" differs. The United States has increased production of synthetic magnesites while the rest of the world is exploiting its resources, using natural magnesites. The history and methods of manufacturing synthetic magnesite are discussed as well as the practices for beneficiating natural magnesite. The properties, costs, and uses of the two types of magnesite are discussed and compared.

Jan 1, 1964

By Douglas R. Shaw

Normal dodecyl mercaptan was evaluated as a collector for flotation of sulfide minerals and precious metals. The reagent is from the class of normal mercaptoalkanes (n-alkyl thiols), and is commercially available in the form of a mixture of n-dodecyl mercaptan and a dispersant, under the trade name Pennfloat(TM)3. Reported are results of bench-scale flotation experiments on many commercially treated base metal and precious metal sulfide ores. Dosages, points of addition, and flotation pH were among the uariables studied. Most notable results were increased copper, molybdenum, and precious metals recoveries. Dosages of dodecyl mercaptan on some ores were considerably lower than required for conventional collectors.

Jan 1, 1979

By Hemant Agrawal, Arvind Kumar Mishra

Rock breakage using blasting is one of the important operations of the mining industry. The delay timing decides the initiation sequence of holes in the blasts and is a crucial factor to improve the overall blast performance. Blast-induced ground vibration is an undesired yet unavoidable outcome of blasting. Peak particle velocity (PPV) is commonly used to measure the magnitude of blast-induced ground vibration. Channelization and better utilization of explosive energy delay are provided between blast holes using initiating systems. The use of different initiation systems even on the same site results in a very significant difference in the values of PPV generated. Due to scattered delay timings of pyrotechnic detonators, the scaled distance predictor equations obtained become unreliable. The error/scatter in delay timing leads to overlapping of holes and hence increases in maximum charge per delay. In this paper, an analytical approach has been discussed to measure the overlapping of holes during blasting with initiation systems having inherent cap scatter. The analytical approach will be calculating the probable overlapping of holes due to scatter in delay timing and will help blasting engineers to understand the variation in maximum charge per delay due to pyrotechnic based initiating systems. In this study, a total number of 102 blasts were conducted using different initiation systems at two different opencast coal mine and 221 corresponding blast vibrations events were recorded.

Nov 10, 2020

By A. Jahedsaravani, M. Massinaei, M. Zarie

Deep learning is a subset of machine learning that uses artificial neural networks for extracting high-level features from image data. In the present study, a soft sensor is proposed for the prediction of the flotation performance through froth features generated by the use of pre-trained convolutional neural networks. Several state-of-the-art convolutional neural networks (AlexNet, GoogLeNet, VGGNet, ResNet, and SqueezeNet) pre-trained on the ImageNet database are used to predict the metallurgical performance of two flotation systems. The first case study is a batch copper flotation system video-captured over a wide range of process conditions. The second case study is an industrial coal flotation column equipped with a continuous video recording system. The pre-trained networks are used to extract features from the froth images, and these features are subsequently used to predict the flotation conditions and performance. The prediction results by the pre-trained algorithms were compared with the traditional image processing algorithms. This demonstrates the ability of the pre-trained structures to generalize to images outside the ImageNet database. GoogLeNet outperforms other network architectures and provides more accurate predictions of the flotation process behavior and performance.

May 5, 2023

By D. Parks, A. Miller, M. McNinch, R. Jacksha, H. Nickerson

Each year hundreds of mine workers are involved in machinery-related accidents. Many of these accidents involve inadequate or improper use of lockout/tagout (LOTO) procedures. To mitigate the occurrence of these accidents, new safety methods are needed to monitor access to hazardous areas around operating machinery, improve documentation/monitoring of maintenance that requires shutdown of the machinery, and prevent unexpected startup or movement during machine maintenance activities. The National Institute for Occupational Safety and Health (NIOSH) is currently researching the application of Internet of Things (IoT) technologies to provide intelligent machine monitoring as part of a comprehensive LOTO program. This paper introduces NIOSH’s implementation of an IoT-based intelligent machine monitoring system to improve safety during operation and maintenance at a concrete batch plant. INTRODUCTION Of the hundreds of machinery-related accidents occurring every year in the mining industry, incidents involving stationary machinery at surface mines continue to be amongst the most frequent [1]. A National Institute for Occupational Safety and Health (NIOSH) study showed that the majority of fatal accidents involving stationary machinery at surface mines occurred at sand and gravel (38%) and stone (26%) operations. Of these accidents, entanglement in conveyor components were the most common cause of fatal accidents (48%) [2]. The same study stated that one-third of these accidents involved improper lockout/tagout (LOTO) procedures as a contributing factor. The U.S. Mine Safety and Health Administration (MSHA) acknowledged this problem, stating in a recent request for information (RFI) [3]: “Since 2007, there have been 17 fatalities related to working near or around belt conveyors, of which 76 percent were related to miners becoming entangled in belt drives, belt rollers, and discharge points. Factors that contribute to entanglement hazards include inadequate or missing guards, inadequate or an insufficient number of crossovers in strategic locations, and/or inappropriate lock out/tag out procedures. Systems that can sense a miner's presence in hazardous locations; ensure that machine guards are properly secured in place; and/or ensure machines are properly locked out and tagged out during maintenance would reduce fatalities [3].” In response to this problem, NIOSH’s Spokane Mining Research Division (SMRD) is exploring the potential application of Internet of Things (IoT) technologies to provide cost-effective intelligent machine monitoring systems for improved worker safety [4, 5]. SMRD partnered with Central Pre-mix CRH Company (Central Pre-mix) to develop and install a proof-of-concept wireless IoT solution to monitor machinery and conveyors during operation and maintenance. The primary goals of the system were to provide real-time monitoring of access points and facilitate the planning and execution of LOTO procedures

Jan 1, 2019

By P. M. Soupios

A near geophysical surface investigation of a landfill area close to the Hania city, in Crete Island, Greece, was conducted as inextricable phase of a preliminary geotechnical, geological and hydrogeological study of the area under investigation. Electrical Resistivity Tomography (ERT), one of the most promising prospecting techniques mainly concerning its effective contribution to resolve several environmental problems, was applied for the geophysical modelling. ERT is a robust imaging method the theory and implementation of which are well documented in geophysical research literature. The survey site is located in Akrotirion Peninsula, about 7km east of Hania city in Crete I. The geological setting comprises Trypalion limestones, marly limestones and a clayed weathered layer. Cavities are also identified at various scales which are recent tectono-karstic voids resulted from the combined actions of karstic erosion and tectonic stress on the Trypalion limestones where they are located. Due to the above-mentioned geological singularity and in the light of the requirement for an environmentally safe construction of the landfill, an ERT survey was carried out by deploying the dipole?dipole electrode configuration. Specifically, seven geoelectrical tomographies were conducted reaching the prospecting depth of 36m. The resulted images conduced, a) to overcome geotechnical problems, b) to plan the future sites for waste disposal and c) to reliably estimate the thickness of the already deposited wastes.

Jan 1, 2005

By Donald S. Bubar

The Separation Rapids property, located approximately 60 km (37 miles) north of Kenora, Ontario, Canada, is host to one of the largest rare metal pegmatite deposits in the world. This pegmatite was named the Big Whopper by its discoverer, Dr. Fred Breaks of the Ontario Geological Survey, because of the exceptional length and width of the surface exposure. The property is readily accessible from a main, all-weather road via a network of secondary logging roads. The main line of the Canadian National Railway passes through the village of Redditt, just 40 km (24 miles) south of the property. The Big Whopper is one of the complex-type (petalite sub-type) class of rare metal pegmatites that are geochemically the most highly evolved in the spectrum of granitic pegmatites. Such deposits are economically important as resources for the rare metals lithium, tantalum, cesium, and rubidium. While complex-type pegmatites are found in many areas of the world, most are too small to be profitably mined, however, with an inferred resource in excess of 15 million metric tons (mt) (17 million short tons [st]), the Big Whopper is only the fourth deposit of its type in the world with the size required to be of major economic importance. The other three deposits, which are currently in production, are the Tanco mine in Manitoba, the Bikita mine in Zimbabwe, and the Greenbushes mine in Western Australia. The Big Whopper is situated in the eastern continuation of the Archean Bird River greenstone belt which also hosts the Tanco pegmatite, approximately 60 km (37 miles) to the west. The principal commodities identified in the portions of the Big Whopper pegmatite explored to date are petalite (LiAlSi4010) and rubidium-rich K-feldspar. These are industrial minerals with important applications in the glass and ceramics industries. The Big Whopper also contains substantial quantities of lepidolite, a lithium, rubidium-mica which is the principal ore mineral for rubidium metal. Tantalum and cesium occur in anomalous levels with the petalite mineralization, and the possibility of finding zones of high enrichment in these valuable high-tech metals elsewhere in the deposit is excellent. Such enriched zones are typical of pegmatites as highly evolved as the Big Whopper. To date, the geological mapping and diamond drilling work completed by Avalon have delineated the Big Whopper pegmatite system over a strike length exceeding 1.5 km (0.9 miles), over widths ranging from 10 m to 80 m (30 feet to 260 feet) in thickness, and to a vertical depth of close to 300 m (1,000 feet), where it remains open. The pegmatite system consists of a vertically oriented massive petalite pegmatite dyke striking 280 degrees that is flanked by amphibolites containing a swarm of narrower albite and petalite dykes which have all undergone intense deformation in a high strain zone resulting in folding and intense shearing. The Big Whopper exhibits a mineralogical zonation pattern which is complicated by the superimposed deformation that has both folded and stretched the deposit. Drilling has defined a dilute geological resource totaling 7.1 million mt (7.8 million st) grading 1.283 percent Li20, 0.346 percent Rb20, and .007 percent Ta205 over a strike length of 600 m (2,000 feet), and to a vertical depth of 250 m (820 feet), where it remains open. The petalite and rubidium-rich-K-feldspars contained in the Big Whopper all appear to be of superior quality. The grades are consistent with a petalite content averaging 25-30 percent and a rubidium-rich-K feldspar content averaging 15-20 percent. The remainder of the rock consists mainly of albite, several types of mica, and quartz. Accessory minerals include columbitetantalite, cassiterite, apatite, garnet, and gahnite. Market studies show that the deposit is located close enough to existing transportation infrastructure to access rapidly growing, major markets in the glass and ceramics industries, both in the northeastern U.S. and Europe. There are only three competing lithium minerals producers in the world with the Bikita mine in Zimbabwe being the only major producer of petalite. The other lithium deposits produce spodumene, a less desirable lithium mineral. Lakefield Research Limited has successfully designed a process to produce an ultra-pure petalite concentrate containing up to 4.65 percent lithium oxide, and as little as 0.014 percent iron oxide, low levels of soda and potash, and negligible amounts of other trace elements. With these specifications, Avalon will have an excellent quality product for glass-ceramics applications such as Corningware®, CERAN® stove tops, and other thermal shock-resistant products. Lakefield is presently designing the balance of the flowsheet to produce separate concentrates of rubidium-rich K-feldspar, albite, mica, tantalum, tin, and high-purity quartz. Initial test work indicates that the feldspar products will be of exceptional quality. The K-feldspar concentrates contain 11-12 percent K20 and 1 percent Rb20, while the sodaspar contains over 10 percent Na20, and both have very low iron (0.01 percent Fe203). A preliminary economic model shows that with an initial production rate of 90,000 mt (100,000 st) per year, expanding to 170,000 mt (190,000 st) per year over 5 years, the project is capable of generating over CDN $10 million per year in pre-tax cash flow by year 5 on a capital cost of approximately CDN $30 million.

Jan 1, 2001

By O. A. Bascur

Current competitive demands on the process industries stimulate the need for improved operating efficiencies and compliance to stricter governmental regulations. Emerging information technologies allow narrowing the gap between management business objectives and the process control level. Benefits come from enhanced energy management, operating costs reduction, enhanced scheduling of activities, reduced quality giveaway, enhanced market driven production and enhanced decision making. Plant management systems integrate economic performance monitoring by controlling the business rather than just throughput and product quality. Sound business based decisions about how to operate the plant can be achieved by adequate dynamic performance monitoring at the plant level and the enforcement of the desired targets at the process control level. This paper describes some of the key requirements to implement a process management system to meet stricter process performance standards. Extensions are made to facilitate conforming with regulations established by various governmental and industry monitoring agencies.

Jan 1, 1993

By R. J. Visintainer, J. M. Furlan

"Due to the time-consuming nature of froth testing in a laboratory environment, practical limitations require the development of a method of applying a single set of performance test data (Visintainer and Whitlock, 2012) obtained for a single froth pump at a given speed to a range of froth pump speeds and sizes, % air content and liquid viscosities. Head, efficiency and flow all vary as functions of both liquid viscosity and air content. As such, it is necessary to develop a technique that can be used to interpolate from existing test data in order to predict froth performance for pumps of various sizes running at variable speeds. Details of the technique developed in order to achieve this goal, as well as the insights gained from analysis of the resulting regressions, are discussed. Additionally, comparisons are made between the performance predictions of this test-derived method and those of the Hydraulic Institute standard for the effects of liquid viscosity on centrifugal pump performance (ANSI, 2010).IntroductionPump performance data (Visintainer and Whitlock, 2012) has been collected for a froth pump using an experimental loop outfitted with an array of pressure transducers, mass flow meters, an inverted U-loop, magnetic flow meter and an assortment of other instrumentation. Experiments were performed on pure water, water and air, pure corn syrup, and corn syrup and air. Data was obtained for % air contents of 0-30% and viscosities of 1- 15,000 cSt at eight specific valve positions (eight different flows as a percentage of best efficiency flow points) and the viscosity was changed by allowing the system temperature to increase during testing. The test pump is a 710-mm diameter impeller, GIW HVF, open shrouded, vented design that has its discharge axis oriented at 45° upward from the horizontal. A schematic diagram of the froth pump test loop can be seen in Fig. 1."

Jan 1, 2015

By George White

On June 25, 1876 Lt. Colonel George Armstrong Custer led the Seventh U.S. Cavalry Regiment., comprising 31 officers and 637 enlisted men, into the valley of the Little Big Horn River in southern Montana. His assigned mission was a reconnaissance-in- force to locate the Indians reported to be assemblying in that area. Custer was extremely successful in locating the Indians. Unfortunately he located more than 3000 Cheyenne and Sioux under the leadership of the great war chiefs Crazy Horse and Gall. Custer's entire battalion of more than 200 men was annihilated; there were no survivors. While I don't seriously suggest that things will be all that bad in the uranium industry, I do suggest that some very fundamental changes have occurred in the uranium market. Conventional thinking based on past truths will no longer suffice. Geology, economics, politics, nuclear growth pat terns, technology, and utility attitudes have all changed. New thinking is in order. It is at this point that I would offer my usual disclaimer. My views regarding the future are simply that--my personal views. My belief that certain events will come to pass does not mean I view those events as appropriate, wise, good, equitable, or economic.

Jan 1, 1985

By Graham J. Morgan

The following material is excerpted from a presentation Mr. Morgan gave recently to representatives of the financial community. Introduction 1982 was a period of challenge for United States Gypsum Company because of reduced market opportunity. Housing starts for the first 10 months averaged a seasonally adjusted annual rate of 1 million units, 9% below the comparable 1981 period when housing starts were the lowest in 35 years. Industry gypsum board shipments declined 9% from the already low levels of the same period in 1981. US Gypsum met the challenge with stringent cost reduction programs and aggressive action in the marketplace. In late 1981, anticipating market deterioration, the company's management adopted strategies to focus on two shortterm objectives: • Adjust operations to perform profitably in view of limited opportunities through more efficient operations and asset management. • Continue to strengthen U.S.G.'s resources and ability to take advantage of important market opportunities as the economy improves through selective expansion of production capacity in key growth markets. Concentration on these two objectives resulted in a nine month performance in 1982 that, while certainly not satisfactory by company standards, compared very favorably with that of principal competitors in terms of net earnings, margin on sales, and return on average stockholders' equity. To counteract limited market opportunities, U.S.G. focused on productivity improvement, cost reduction, expense control, and maximization of market penetration. Energy Use Improving performance encompassed all segments of operations. For example, efficient use of energy was a significant factor despite lower operating rates at most plants. Overall, in the third quarter of 1982 versus 1972, the company used 27% less energy per unit of production, a savings of $15 million in that quarter alone. These continuing improvements helped to partially offset constantly rising energy costs. A number of operations achieved superior results in the first nine months of the year compared with the same period in 1981. For example, gypsum board plants in Jacksonville, FL, and Sweetwater, TX, recorded 8% and 7% reductions, respectively, in energy use per unit of production. Paper mills in Oakfield, NY, Galena Park, TX, and Kansas City, MO, each reduced energy use more than 12%, while the Greenville, MS, ceiling products facility achieved a 16%o reduction. Safety Safety is another important element that received increased attention. U.S.G.'s safety performance over the past five years has consistently improved. In 1981 it was five times better than that of the gypsum industry; nearly 10 times better than all industry as measured by the National Safety Council; and almost 20 times better than all US manufacturing as recorded by the Bureau of Labor Statistics. In addition to human concerns, this excellent record results in significant dollar savings that directly affect company results. In 1981, U.S.G.'s pre-tax savings in claims, premiums, and related expenses were about $20 million compared to the industries in which it competes. For the first half of 1982 performance improved further, with a cumulative lost workday incidence rate per 200,000 man-hours worked of only 0.27, an all-time record. Expense Control Careful control of inventories and receivables also received special attention. As of Sept. 30, 1982, inventories were 29%, or $44 million, below the level of Sept. 30,

Jan 2, 1983