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By H. Murray

Introduction Industrial minerals are key ingredients in a large majority of domestic and industrial products that are used in our daily lives. In the 7th edition of Industrial Minerals and Rocks, fifty three industrial mineral commodities are described. A precise definition of industrial minerals and rocks is difficult. Bates (1975) proposed a definition which is widely used and is as follows: "any rock, mineral, or other naturally occurring substance of economic value, exclusive of metal ores, mineral fuels, and gemstones: one of the non-metallics". They can be igneous, metamorphic, or sedimentary and range in price from a few dollars per ton to a very high price of hundreds of dollars per ton. The growth in their production and use is closely allied with population growth particularly in countries that maintain a high standard of living. The United States just passed 300 million in population and it is predicted that by 2040 the population will be 400 million. This will result in large increases in the need for Industrial minerals. Other factors that relate to increased use of industrial minerals are increased research and development by the producing companies and better quality control. Many industrial minerals such as kaolin, barite, nepheline syenite, fluorspar, lithium carbonate, phosphate rock, potash, talc, and several others are exported from the producing countries to many users around the world which has significantly increased their use. Also, government agencies, State Geological Surveys, and Universities have contributed to their growth by their research and development activities.

Jan 1, 2007

By C. A. Rowland

Introduction Ball mills are lined drums, either cylindrical in shape or modified cylinders that have either one or both ends of the shell, consisting of conical sections, that rotate about the horizontal axis. Fig. I I shows a cylindrical mill, Fig. 12 a conical ball mill, and Fig. 13 a Tricone ball mill (Hardinge tradename). Steel or iron grinding media, generally in the shape of spheres, are used to grind the ore to the specified product size. In order to obtain more contact area for grinding and to simulate the shape of worn balls, balls have been made with two concave surfaces diametrically opposite each other. Some concentra¬tors, such as Erie Mining Co., have used slugs cut from worn and broken rods to supplement the balls in ball mills and save money otherwise lost as rod scrap. Cylindrical and conical shapes have been tried instead of balls, but balls remain as the most common shape grinding media used in ball mills. Ball mills were a logical development from the earlier pebble mills that used hard natural pebbles such as flint pebbles or sized ore pebbles (obtained from the ore itself) as grinding media. In the early 1900s36 it was found that when cast iron or cast steel balls were used in place of flint or ore pebbles, the mills drew more power and gave greater production capacity. Advances in technology have resulted in the manufacture of ball mills up to 18 ft diam inside shell, drawing up to 8,000 hp. Ball mills are employed to grind ores, especially the more abrasive ores, to finer sizes than can be produced economically in other size¬reduction machines such as roll crushers, hammer mills, and impactors. Ores can be ground dry-dry grinding-or in a slurry-wet grinding-using ball mills. Dry grinding nominally refers to less than I %v moisture by weight. If the moisture content increases by several percent, dry grinding capacity is significantly reduced as shown in Table 17. The usual range of solids content in wet ball-mill slurries is from 65 to 80% by weight. Wet grinding is used to prepare the feed material for unit opera¬tions such as flotation, magnetic separation, gravity concentration, and leaching that require a slurry of liberated valuable mineral and unwanted gangue particles. Dry grinding" is employed to produce feed for agglomeration, pelletizing, and pyrometallurgy processes that require feed that is dry or nearly so and for finely ground industrial mineral products used in the dry state. Dry grinding is also used when minerals cannot be dewatered economically to the required moisture level or when the ground product reacts unfavorably with liquids. For example, cement clinker must be ground dry. Dry grinding requires about 30% more power than wet grinding for comparable size reduction .28 The total power required in a dry¬grinding ball-mill plant including drying may be double that required for a wet-grinding plant. Grinding-media and liner consumption in dry grinding reported as pounds of metal consumed per kilowatt-hour per ton of ore" is 10-20% of that used in wet grinding. The Wabush pellet plant, Point Noire, Que.3o reported ball consumption dropped from 6.3 lb per ton of ore ground to 2.5 lb per ton of ore ground when they converted from wet to dry grinding, and a 30% increase in power consumption. A number of comparisons made on wet and dry grinding of cement raw materials show metal consumption in dry grinding to be 10% of that in wet grinding. The capital costs for wet grinding are generally lower than for dry grinding. When thickening and filtering of the wet-ground product are required, dry grinding may have a lower capital cost. With open-circuit grinding the ball-mill discharge passes directly to the next processing step without being screened or classified and no fraction is returned to the ball mill (Fig. 14). In closed-circuit grinding the ground material, undersize, in the ball-mill discharge is removed either using a screen or a classifier with the oversize being returned to the mill for additional size reduction (Fig. 15). The over¬size material that is returned to the ball mill is called the circulating load. Open-circuit ball-mill grinding requires more power than closed¬-circuit grinding for products containing similar amounts of top-size material. The less the amount of oversize allowed in the product, the longer the ore must remain in the ball mill when grinding in open circuit. This increases the production of extreme fines and thus the consumption of more power. The power required for open-circuit ball-mill grinding can be estimated using the multipliers listed in Table 18 and knowing the power required for closed-circuit grinding to yield the desired product particle size. For example, assuming the desired grind size is 90% passing some specific top size, open-¬circuit grinding would require 1.40 times the power to achieve similar results as closed-circuit grinding.

Jan 1, 1985

By J. R. Carr

A crucial concern when implementing computer algorithms for geostatistical analyses on microcomputers is speed of execution. Kriging, in particular, typically relies on a Gauss elimination algorithm to solve for weights. Because such an algorithm is required for each estimate, the solution for weights can result in very slow program execution speed on a microcomputer. One approach to enhancing the efficiency of Gauss elimination is demonstrated herein. The upper triangle plus diagonal of the intersample covariance matrix is used in a modified banded Gauss elimination algorithm. Results show that such an algorithm yields approximately a two-fold reduction in execution time for kriging when the number of nearest neighbors used for estimation is large.

Jan 1, 1990

By Charlie Sons

Pit and underground mine operators typically use a lot of big equipment tires. Just as typically, they spend a lot of money they shouldn't on these tires. That's because tire use and maintenance are not given enough attention. That often occurs because mine management and personnel do not know the basic facts of tire use and care. If a piece of large equipment is damaged or ruined, a good explanation better he forthcoming. A ruined tire is often just a shoulder shrug. But that sort of fatalistic acceptance can cost tens or hundreds of thousands of dollars a year extra for big equipment tires. That does not have to be. There are some basic tire considerations that, if followed, will extend tire life and lower tire costs. Most companies have the inevitable conflict between the production department, which resists any restrictions that may reduce productivity, and the maintenance department. Production success is based on meeting a schedule of yards moved, while maintenance success is based on availability and equipment cost. When production falls behind schedule and equipment speeds are increased, maintenance may soon find its tire costs rapidly increasing, unless everyone understands the tires' vulnerability to damage. Unless the production department understands the problem, or restraint is applied by top management, costs may become exorbitant. At one job site, tire costs alone exceeded $250,000, to move 55 dam3 (72 000 yd3) of dirt on an 11-km cycle. The operation temporarily caught up with its schedule, but tire costs and attendant downtime soon made this a not-for-profit exercise. Because an operator must always attempt to move payload at the lowest cost, there are cases when higher than normal tire costs must be accepted. For example, in pioneering work with tandem engine scrapers, steep grades shorten tire life to less than normal. But the steep grades make shorter haul cycles possible, yielding more trips per hour than alternative earth-moving methods.

Jan 1, 1982

By A. Ersoy, M. D. Waller

Because of a shortage of diamonds for the drilling industry in the 1970s, efforts were made to develop synthetic diamonds. The resulting development of polycrystalline diamond compacts (PDC) enabled the evolution of a new generation of rotary-drilling drag bits. Bits based on PDC cutters were very successful in drilling soft, abrasive and medium strength rocks. However, because of their thermal instability, they failed rapidly when drilling hard rocks. Thermally stable diamond (TSD) was then developed for hard-rock drilling. The rate of penetration (ROP) and bit life significantly influence the drilling cost. The ROP and the life of the TSD bits or cutters are affected by a number of complex factors. However, in laboratory testing and infield operations, the principal factors that need to be considered in predicting drilling and wear rates are bit design characteristics, bit operating parameters and the characteristics of the penetrated rock. These characteristics are comprehensively reviewed for both laboratory and field drilling results using TSD bits. Optimization of these parameters increases the drilling rate, prolongs the bit life and reduces the drilling cost.

Jan 1, 1998

By J. H. Calder, J. C. Hower

Three lithotypes of Phalen coal from Cape Breton County, Nova Scotia, Canada, were subjected to a modified Hardgrove grindability index (HGI) test. The testing scheme differed from conventional (ASTM D-409) Hardgrove testing by, in one case, repeating the test three times prior to removing the -200-mesh fine coal from the Hardgrove mill, and, in a second test, removing fines after each of three successive Hardgrove tests. Only the first stage of the latter testing scheme actually conforms to the standard HGI test. All processed samples were analyzed petrographically by a combined maceral/microlithotype analysis. The increase in the percentage of coal ground to -200 mesh increases through the 60- to 180-mesh fractions for each of the lithotypes for the following two apparent reasons. First, with progressive grinding, more of the oversize material is close to 200 mesh (75 µm), creating a "pool" of particles ready to be ground to -200 mesh, and, second, the removal of fines from the system at each step eases the grinding at the successive step. The fines retained system shows the influence of buffering of further grinding by the particles retained in the grinding mill. The Phalen lithotypes and the series of Central Appalachian coals, evaluated previously by Hower and Wild (1994), differ in that an increase in vitrite and a decrease in trimacerite is observed in successive -200-mesh fractions in two of the Phalen lithotypes. This is the opposite of the trend observed in the slightly lower-rank Central Appalachian coals.

Jan 1, 1998

By William S. Brack

The mining industry is very capital intensive. Competition for shareholder investment has never been greater. Among our challenges is the need to meet shareholder expectations (return on investment), and one area of focus lies in our ability to deliver value on our capital investments. Our ability to meet project expectations affects not only the economics associated with the immediate project but also directly influences our ability to finance future projects. Moreover, our ability as individual companies to attract investor capital is influenced by how we have done overall as an industry, and our industry track record has not been that stellar. With safety, scope, cost, schedule, and quality as guiding principles, our project managers today must address high expectations on every project. This paper examines some items that should be on today's project management checklist. PROJECT ENGINEERING Herbert Hoover, himself a mining engineer, said Engineering is a great profession. There is the fascination of watching a figment of the imagination emerge through the aid of science to a plan on paper. Then it moves to realization in stone or metal or energy. Then it brings jobs and homes to men. Then it elevates the standards of living and adds to the comforts of life. That is the engineer's high privilege.

Jan 1, 2004

By L. R. Duncan, W. H. McCracken

Magnesium is the eighth most abundant element in the earth's crust and the third most plentiful element in seawater. It is found in more than sixty minerals and in brines and seawater as a magnesium salt. One of the more important magnesium minerals is magnesium carbonate, MgCO3, with a theoretical maximum magnesia, MgO, content of 47.6%; this carbonate form represents the world's largest source of magnesia. The next most used sources for magnesia are magnesia-rich brines and seawater, where it occurs as magnesium sulfate and magnesium chloride. Other commercially important magnesium-bearing minerals are dolomite, CaMg(CO3)2, which serves the aggregate industry as well as the chemical industry; brucite, Mg(OH)2, which is used in the production of both caustic and sintered magnesia; olivine, ([MgFe]2-SiO2), which serves the refractory and heat storage industries; talc, (H2Mg3(SiO3)4), which serves several industries as a filler and as an ingredient in cosmetics; and serpentine, (H4Mg3SiO9). All these minerals are of commercial value because of the desirable characteristics given to them by magnesia and by its placement in the crystal structure. These minerals are the starting raw materials for a wide range of products. These include the production of magnesium metal, and several grades of magnesia used for the production of both sintered magnesia for refractory manufacture and lighter fired caustic magnesia, the latter is used in fluxes, fillers, insulation, cements, decolorants, fertilizers, chemicals, in the treatment of waste water including pH control, and in the removal of sulfur compounds from exhaust stacks. Magnesite is one of several major minerals possessing a dual character, i.e., non-metallic industrial mineral because of its principal end use as a calcined/dead burned raw material in non-metallic end products and magnesium metal. A large percentage of the magnesia used to produce magnesium metal comes from seawater1 brines. The total primary metal production worldwide is about 350 ktpy. This report reviews magnesite solely as an industrial non- metallic raw material. Magnesite for most refractory purposes must have a content of sintered magnesia above 85%, with a preference for those sources that have the potential for 90 to 98% magnesia values. Dolomite, used in large tonnages because of its physical properties in the construction industry, also has a use in the chemical and the refractory industry. In its calcined form, dolomite is used as a slag addition in the making of steel, and it is used in a high-purity calcine to precipitate magnesium hydroxide from brines or seawater. The precipitated magnesium hydroxide is intermediate for the production of deadburned clinker for refractories and the production of magnesium metal. In many cases the high-purity magnesium hydroxide obtained by precipitation with calcined dolomite, or in some cases limestone, has supplanted much of the world's production of magnesia from the natural mineral magnesite. This is especially true of the United States and in major industrialized areas of Europe and Japan. The best known of the minerals directly and widely exploited for its magnesia content is magnesite (MgCO3), one of the calcite group of rhombohedra1 carbonates, which includes calcite (CaCO3), siderite (Fe2CO3), and rhodocrosite (MnCO3), among others. The members of this group enter into a wide range of substitutional solid solutions when the positive ions have similar radii. The radii of magnesium and iron ions are within 6% of each other; hence magnesite and siderite form a complete series, of which the mineral breunnerite (ferroan magnesite) is a well known end member. The radii of calcium ion is 36% larger than that of magnesium ion and only limited substitution exists at each end of the MgC03-CaCO3 series. Dolomite is not a member of the calcite group, but it occurs when calcium and magnesium ions alternate in equal number in an ordered structure among carbonate ions. The result of this relationship is that calcite and dolomite are commonly found intermixed with magnesite. They occur, commonly, as identifiable crystal entities, which can be separated to a varying degree from the magnesite by benefication techniques. Magnesite, when pure, contains 47.8% MgO and 52.2% CO,. The pure mineral is found occasionally as transparent crystals resembling calcite. Magnesite principally contains variable amounts of the carbonates, oxides, and the silicates of iron, calcium, manganese, and aluminum. Although the genesis of natural magnesite deposits can be complex, it is distinguished in nature in two distinct physical forms, namely crystalline, (with a wide range of visible crystal sizes) and cryptocrystalline, sometimes referred to as amorphous, where the crystal size is not detectable to the eye and will range from 1 to 10 pm. The two types not only differ in crystal structure but in the sizes of the deposits and in modes of formations. The crystalline form has a Mohs hardness of 3.5 to 4.0. The color range is from white to black with shades of yellow, blue, red, or gray. The color is not a significant indicator of purity but in a given deposit an experienced person can often roughly grade the magnesite by observing color and crystallinity. Macrocrystalline deposits occur in relatively few, but generally large, deposits on the order of several million tons. The ore shows a marble-like crystal structure and belongs to the sedimentary or metasomatic groups of origin. The cryptocrystalline variety of magnesite frequently occurs in many small deposits, although there are exceptions. Cryptocrystalline magnesite is typically massive with no cleavage and is sometimes descriptively called bone magnesite. The fracture is usually conchoidal, with a hardness of 3.5 to 5.0. The color is mainly white, but it can have tints of yellow, orange, or buff. Accessory silaceous minerals such as serpentine, quartz, or chalcedony are usually present. Calcium minerals are normally absent or in low concentration, this contrasting with the macrocrystalline form where calcium minerals are almost invariably present and some- times in high concentration. The specific gravity of cryptocrystalline magnesite ranges between 2.90 and 3.00, whereas the value of pure crystalline magnesite is 3.02. In actuality, the normal specific

Jan 1, 1994

By Mike Jahraus

The topic I would like to throw out for discussion this morning concerns the metallurgical solution management of operating a valley fill leach facility where ore depths approach 250 feet and deeper. We are currently beginning to experience solution transport times through our heaps on the order of 60 to 70 days as our heaps approach 250 feet. Incorporating a two-stage leach scenario, or solution enrichment, these times are nearly doubled. Concurrent with the increased solution transport times, the solution tenors being produced by our heaps are being diluted slightly as percolation occurs through the lower lifts. I feel the best way to handle these situations is to closely monitor solution application rates, and carefully manage ore stacking. Also, as heaps become deeper, metallurgical and hydrologic characteristics of the ore become inter-related, i.e. if channeling or preferential flow is taking place, lowering cross-sectional flow rates to older leach panels with help re­institute capillary flow while helping to prevent solution tenor dilution.

Jan 1, 1999

By E. B. Fitch, D. A. Dahlstrom

Liquid-solids separation is common to practically all mineral and coal processing as the bulk of beneficiation plants employ water as the major processing vehicle. The growing usage of hydrometallurgy has increased the importance of liquid-solid separation as acidic and basic solutions result in greater amounts of colloidal solids, with their consequent greater difficulty of separation, the economic need for chemical recovery to minimize this operating cost, and the usual necessity of employing more costly construction materials. The three processing steps covered in this section have significant capital costs. Drying, particularly, has an important operating cost because of the obvious need for energy to evaporate the water or solvent. Several common factors influence all three liquid-solid separation steps. Particle Size and Size Distribution. In general, finer particles have slower settling and filtration rates. The specific surface area is increased, which means a lower solids concentration in the thickener underflow and discharged filter cake as well as a grater moisture content to be evaporated in the drying step. Therefore, overgrinding or excessive attrition should be avoided. Consideration should be given to optimum particle size consistent with entire plant operation performance and recovery. Solids Concentration. Increased feed solids concentration will generally minimize required equipment size and costs in all three liquid-solid separation steps. Most thickeners are designed on the basis of unit area required, expressed as square feet per short ton of dry solids per day (square meters per metric ton per day) which will usually decrease with increased feed solids concentration. Filtration rates also increase as the required flow through the capillaries of the filter cake decreases. Dryer capacity increases and less energy per ton of final product is required to evaporate the associated moisture. Particle Shape and Surface Characteristics. Generally, optimum shape is a spherical particle of zero porosity. As either of these factors degrade away from the desired state, difficulty increases. This is particularly true in drying, where porosity can decrease drying rate significantly if the moisture must first reach the particle surface by diffusion

Jan 1, 1985

By Kenneth R. Maser

In the past 30 years, great advances have taken place in the development of tunnel boring machines, raise drills, large diameter drills and blind shaft borers that have revolutionized the shaft sinking and tunneling industries. Techniques for placing concrete linings, however, have not changed significantly during this period, and still constitute a stumbling block to the achievement of the rapid construction. In the past 5 years, Foster-Miller Associates, Inc. (FMA) has been involved with the development of a remotely operated shotcrete system for lining raise drilled shafts, an Extruded Tunnel Lining System (ETLS) for lining TBM bored tunnels, and a Continuous Shaft Lining System (CSL) for lining any type of machine bored shaft. This paper presents an overview of these three developments, including capabilities and limitations, a description of the concrete production, concrete placement, and advance rate, and control subsystems, a description of the concrete mix development required for each system, a discussion of test results to date, and an assessment of the state of development of each concept. Plans for future development will also be presented.

Jan 1, 1981

By M. Akser, F. L. Pirkle, B. W. Stratford, B. Ipekoglu

To date, no ilmenite, rutile and zircon deposits of commercial importance have been reported in Turkey. However, information from recent reconnaissance activities indicates the possibility of an economically viable heavy-mineral deposit in the vicinity of Ormanli, which is located northwest of Istanbul along Turkey's Black Sea Coast. Consequently, beach coil sand-dune samples were collected from that area for additional analysis. Laboratory methodologies drat were designed to simulate standard industrial heavy-mineral plant practices were used to analyze and evaluate the samples. Based on these analyses and current market needs, none of the deposits in the Ormanli area qualify as a commercial heavy-mineral deposit.

Jan 1, 1997

By John M. Anderson

This paper examines the methods available to improve climatic conditions around a deep, high production longwall district of a British coal mine using results from a computer model. Such methods include the provision of increased ventilation quantities, the application of refrigeration, the reduction of heat input at source and the use of alternative ventilation systems. An approach to the solution of a climatic problem is explained with reference to other coal mine contaminants and a cooling strategy for deep high production British coal mines is described.

Jan 1, 1987

By Michael J. Shulman

The DEAREX knowledge acquisition and engineering system is a teaching and exploration tool designed to facilitate the under- standing and development of expert systems by explorationists without the aid of a knowledge engineer and without recourse to expert system languages. To fulfill its objective, the DEAREX system considers the selection of exploration methods in desert areas. The system consists of three parts: 1. A tutorial which introduces the basic and selected advanced concepts of expert systems, 2. A sample program illustrating how an expert system works and can be used, and, most importantly, 3. A knowledge acqusition and engineering program which enables users to develop their own expert systems. The tutorial provides a brief and concise introduction to expert systems, a 10 rule exploration example which defines, explains and illustrates the basic concepts and design of expert systems, and a glossary of expert system terms including cross references. The sample program is a larger, self contained example of an expert system with some commentary illustrating addition- al expert system concepts and the role of the knowledge engineer in particularizing rules and ascertaining the knowledge base. Restricting itself to the selection of exploration methods in desert areas, the knowledge acquisition and engineering program questions the user and converts the answers into an expert system. Questions pertain to geology, infrastructure, availability of instrumentation, personnel, etc. Additional information may also included. In conclusion, some salient points concerning knowledge engineering toolkits, shells and knowledge acquisition capabilities such as contained in DEAREX are discussed.

Jan 1, 1992

By S. A. Voltura

The Phelps Dodge Miami smelter has smelted copper concentrate using the ISASMELT technology since 1992. The design throughput rate was 591,000 tonnes/year and after a slow start-up, the production rate has exceeded the design after the seventh year of operation. In 2002, the smelter consumed 719,000 tonnes of copper concentrate and has the potential to hit the permitted rate of 772,000 tonnes/year. Improvements to the smelting vessel and the surrounding support processes have allowed for continuous improvement from start up until now. This presentation will outline the chronological events and the improvements completed to accomplish these improvements

Jan 1, 2004

By J. G. Groppo, B. K. Parekh

Eastern US oil shale contains approximately 10 to 12 gallons of oil per ton and 7 to 10% pyritic sulfur. Physical beneficiation of these low grade shales using froth flotation provides a high grade material that makes extraction of oil more economically attractive. The Alabama oil shale used in the present study contained 16.46% organic carbon and 14.5 gallons of oil per ton as determined by Fischer assay. Liberation size of the kerogen was estimated at 10 µm. `Ken-Flote' column flotation technology provided a high grade concentrate containing as much as 60% organic carbon. However, carbon recovery was about 60%. Carbon recovery was improved to 75-85% while maintaining concentrate grades in excess of 40% carbon by providing longer retention time in the column, which facilitated effective bubble-particle collision and attachment.

Jan 1, 1994

By J. W. Leonard

Breakage, handling and treatment techniques that result in the placement of greater quantities of coal in fixed volume haulage units such as ships, railroad cars, trucks, mine cars, shuttle cars and scoops can do much to increase productivity by improving bulk density to reduce delivered cost, surprisingly enough, only in steel industry by-product coking has this subject been investigated and applied to practice, where as much as 20% or more productivity has been achieved. Research at UK Mining using popular coal mine loading cycle simulators shows that for typical Central Appalachian mining conditions a 10 to 20 percent gain in bulk density can produce a 15 to 30 percent increase in the loading cycle time of fixed volume shuttle-car/scoop based mining systems.

Jan 1, 1989

By C. Tsatsanifos

Following closure of an old asbestos mine in Zidani, Kozani Prefecture, Greece, the geotechnical and environmental restoration of the tailings slopes was required. The geotechnical aspects of the restoration included the formation of gentler slopes to increase stability, in combination with drainage works for the same purpose. The environmental aspects of the restoration included covering the slopes with successive layers of soil in order to minimize infiltration of rainwater, and hence the potential for further transport of asbestos fibers, and to provide a suitable layer for revegetation of the slope. The paper presents results of slope stability evaluation using both limit equilibrium and finite element analyses and raises some issues related to reducing impacts to the geoenvironment when designing such restoration projects.

Jan 1, 2006

By Gary Johnson, Bill Mackenzie

The Paddy's Flat plant of Dominion Mining Limited was commissioned in March 1988 with a design throughput rate of 700,000 tpa. The plant now treats ore at an annualised rate of over 2,000,000 tpa. The only major capital improvement to the plant has been the addition of a pebble crushing circuit. Whilst significant changes in the average hardness of the ore being fed to the plant have obviously occurred, a number of processing innovations have been necessary to enable these throughputs to be maintained. The treatment of ore types with a wide variety of physical properties has been a feature of the operation of the Paddy's Flat plant. The leaching characteristics of the ores are relatively straight forward, and it has been possible to considerably enhance the rate of gold extraction from the ore. Reserves of soft surface ore have been increased which has created the opportunity to improve the profitability of the operation by increasing throughput to considerably above the design level, without having to increase the capital investment in the plant.

Jan 1, 1992

By Thomas F. Stinson

Energy-producing states see severance taxes as attractive sources of increased revenues for otherwise tight budgets. Consumers in energy-poor states, however, protest that current rates are excessive and have moved to obtain a reduction. The US Supreme Court heard two cases questioning such taxes during its 1981 term, and Congress, in each of its last two sessions, has seriously considered measures placing a ceiling on severance tax rates. Although discussions usually focus on coal severance taxes levied by Montana and Wyoming, ramifications of changes in national policy are much larger, potentially affecting mineral taxes in all states. Severance taxes yield substantial revenues in some states, as illustrated in the accompanying table. In fiscal 1980, Texas collected more than $1.5 billion from such taxes, while Louisiana, Alaska, and Oklahoma collected $525 million, $507 million, and $436 million, respectively. Oil and natural gas production were the major items taxed. While the table shows only the 10 states with the largest severance tax collections, a total of 17 states had severance tax receipts exceeding $10 million in 1980. The enormous increases in severance tax revenue between 1970 and 1980 can be seen from the table by comparing columns A and B. For the 10 states shown, revenues increased from $650 million to $3.8 billion during that period, due to a combination of higher prices, increased production, and new or increased taxes. In most states, increases in prices and production were more evident than higher tax rates. Although the revenue increase is impressive, it understates the extent of changes occurring during the past decade. Since tax collections are shown for fiscal 1980, the full impact of the decontrol of domestic oil prices is not evident. Also, taxes on natural gas reflect controlled prices. When full de-control of natural gas occurs, significantly higher revenues can be expected in gas-producing states, even if tax rates, production, and world prices remain constant. These increases in severance tax revenues, coupled with further increases expected to accompany natural gas decontrol, have produced fears that a substantial transfer of income is taking place from residents of energy-poor states to those living in energy-rich areas. Others worry that increased severance tax revenues will be used to substitute for a substantial portion of state taxes that would have otherwise been collected from firms and individuals. The resulting improvements in tax climate, it is thought, may encourage firms and workers to migrate to energy-producing states. While these issues are often portrayed as pitting energy have-nots against the haves, such is not entirely the case. Much of the original impetus for limits on coal taxes came from Texas residents, the state collecting the most severance tax revenue. One way of gaining perspective on these concerns is by examining severance taxes per capita and as a percent of state tax collections (see columns C and D in the table). When this is done, Alaska, where 1980 taxes on oil and gas production totaled more than $1300 per capita (and 35% of all state tax collections), stands out as a special case. There, the state was able to eliminate some individual taxes, place revenues in a permanent trust fund, and consider offering a rebate of some previous income

Jan 4, 1982