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By K. Bragg

During the last several years considerable discussion has taken place on the long term aspects of uranium tailings management. These discussions have centered around a variety of topics which in turn lead to a variety of opinions. In order to come to grips with the various differences of opinion and points of view, the Atomic Energy Control Board has decided to prepare, as an interim measure, a list of proposed close-out criteria for uranium tailings management facilities. It is important to keep in mind that the criteria set out in this paper are proposals and are intended to initiate a continuing dialogue between the uranium mining industry and the various regulatory and government agencies. It is envisaged that this dialogue would continue for a period of from six to twelve months after which some final form of these criteria would be issued and applied to the active uranium mining facilities. In attempting to understand the reasons why the Atomic Energy Control Board has decided to propose these criteria now instead of at some future point in time, it is necessary to look at a number of existing facts. One of the most important of these is that something in excess of one hundred million tonnes of tailings currently are placed in various tailings management facilities. Furthermore, the rate at which tailings are being deposited into such management facilities is on the increase and this increase is expected to continue over the next five to ten years. The management of these tailings is currently covered under the Mine Facility Operating Licences issued by the AECB. Implied within these licences and supporting documents leading to them, are requirements for the conceptual approach to be used at abandonment. There is however, no current requirement for a detailed study on the engineering or financial aspects of such abandonment procedures. This is a gap which the Board feels must be addressed. There are, at this time, various initiatives underway both in Canada and within the international community which are attempting to address the problems and concerns of the very long term management of tailings. For example, current research in Canada which is composed of two components, one by the AECB dealing with purely regulatory aspects and a second major coordinated program under the direction of the Department of Energy, Mines and Resources and in particular by CANMET is going to deal with the technical problems. On the international scene

Jan 1, 1980

By Frank A. Aplan, Barbara J. Arnold

INTRODUCTION Coal flotation is a fine cleaning process usually present in all but the older preparation plants. It is typically used to clean either the -28 mesh (-500 pm) or - 100 mesh (- 150 pm) raw coal fines, and it is the only commonly used preparation method that can effectively recover coal particles finer than, say, -200 mesh (74 pm). To place coal flotation into its proper context, it should be noted that the bulk of the raw coal sent to preparation plants is treated by gravity concentration. On a worldwide basis, from 0 to 40% of the raw feed to a preparation plant is treated by flotation, while in the US only about 10% of the raw coal feed is floated. Roughly, 50% of US preparation plants use flotation to process at least a portion of the raw coal feed, although most of the newer plants incorporate flotation into their flowsheet. Historically, the process has only been used to treat the raw coal fines naturally occurring after mining and a minimal amount of crushing at the preparation plant. This is in sharp contrast to ore flotation where, typically, the entire tonnage is first ground and then floated. As a consequence, of the approximately 500 Mt of raw coal treated by preparation in the US yearly, it is estimated that only about 40 Mt are sent to the flotation circuits (producing -30 Mt of clean product).'O1 This small tonnage compares with about 400 Mt of ores treated annually in the US by flotation. By analogy to ore flotation, where it is an effective, large tonnage, low cost, easy to operate process, its potential in coal preparation should be great. Reasons why it has not achieved a greater potential in coal preparation have been attributed by Aplan 102 to: 1. Indifferent results in removing sulfur and ash. 2. Difficulty in floating low rank and oxidized coals. 3. Inability to make clean separations with the finer sizes. 4.Inability to clean slurries with a high percentage of clay. 5. Problems with water chemistry. 6. Competition with effective, gravity coarse-cleaning methods. 7. Low value of coal historically. 8. Dewatering problems. 9. Transportation and storage problems with coal fines. 10. Marketing problems with coal fines. 11. Inadequate attention to the process in the plant. 12. Inefficient use of capital and operating monies. Inadequate attention to procedures, machines, and processes.

Jan 1, 1991

By A. Yazadni-Chamzini

Risk ranking of projects is one of the importance parts of the complicated risk management procedure. Recognizing the riskiest criteria enable the managers to plan for risk reduction. The first stage for meeting this aim is defining the risky parameters and then working to establish order between them. There are variety methods for risk ranking. The ELECTRE method is one of the best among the multi criteria decision making methods. In this paper with implementing the fuzzy ELECTRE, The risky criteria in the Tehran Subway project are being ranked. The result of this research presents damage and accident of machineries as well as the lack of labor and equipment safety is located in the first order. Collapse factors and local prices are in second rank. Also wrong design, pollution, urban facilities damageable are in third to fifth respectively. Delay and ? are located in the last positions.

Jan 1, 2012

By Brian E. McGee

The Federal Coal Management Program represents the culmination of several years of effort by the Department of the Interior (001) to reformulate the manner in which coal owned by the United States is leased and developed. These efforts began in 1970 with a study by the Bureau of Land Management (BLM), which indicated that unless drastic changes were made in. the federal coal leasing procedures, federal coal lands would be leased almost for the asking while production of coal from those lands had been decreasing. Consequently, informal action was taken in 1971, which resulted in no further leasing being authorized until February, 1973. At that time, a formal moratorium on most coal leasing was established, with exceptions granted only for leases needed to satisfy short-term needs such as maintaining existing mines or supplying reserves for new contracts in the immediate future. This leasing policy embodied a long term objective of developing an entirely new planning system for federal coal leasing, as well as to schedule the preparation of a programmatic impact statement for this new system. As a result of the 1973 moratorium and the ensuing application of short-term criteria, only 10 federal coal leases (covering approximately 30,177 acres) were issued from February, 1973, through January l, 1976.

Jan 1, 1982

While the United States and the rest of the world struggles with record-setting oil prices Canadian oil sands producers are ramping up production to meet demand for oil while also fighting against a host of negative images. In recent months, the price of oil has skyrocketed. Most of that oil comes from Saudi Arabia. In Alberta, Canada there are unconventional oil reserves that rival those in Saudi Arabia in the vast Canadian oil sands, sometimes called the tar sands. Proponents of the oil sands say that Alberta?s oil sands can be a secure source of oil and energy for the United States for many years to come. With new mining and drilling projects, the industry has said that it could quadruple its production to nearly 4 million bbl/day by 2020. Time magazine once called the oil sands, ?Canada?s greatest buried treasure that could satisfy the world?s demand for petroleum for the next century.? So why hasn?t the United States embraced this close, politically secure source of energy? Because, getting usable fuel from the oil sands can be a dirty business, say opponents. The oil sands are a combination of clay, sand, water and bitumen. It is a heavy, black, thick oil. Oil sands can be mined and processed to extract the oil-rich bitumen, which is then refined into oil. The bitumen cannot be pumped from the ground in its natural state. Instead, tar sand deposits are mined, usually using strip mining or openpit techniques, or the oil is extracted by underground heating with additional upgrading. These methods require a huge amount of energy and water and produce a large amount of carbon emissions. Environmental groups that have long spoken out against the oil sands projects got some political backing in the United States in June when a group of mayors from large U.S. cities spoke out against the oil sands, as did presumptive Democratic candidate for U.S. president Barack Obama?s senior energy advisor. During a convention of large-city mayors in Miami, FL, Alberta?s oil sands were singled out in a nonbinding resolution calling for national guidelines to track the lifecycle impact of different types of fossil fuels. The resolution urges cities not to use unconventional sources of energy with a large carbon footprint, such as liquid coal and oil shale and oil sands.

Jan 1, 2008

By Michael Robert Hodson

I. Introduction The free market cash price of aluminium in the third quarter of 1985 is approximately $1000/tonne, well below the short as well as the long run marginal costs of production. The current disparity between marginal costs and price, as well as the pattern of prices since their high level in 1980, has led many economists to question whether prices are governed by the 'fundamentals'. Prices, some would argue, are the result of speculation; and speculation is irrational, little influenced by the fundamentals of the industry. The object of this paper is first to examine the relation between the fundamentals and price. A number of simple models are formulated and some empirical evidence is given to show that prices are not very different from costs. There are good reasons why costs and prices have fallen since 1980. Second, the connection is drawn between the fundamentals and speculation. To do this the concept of 'rational expectations' is defined and applied to a model of the aluminium industry. Then speculation is introduced into the model and the characteristics of the solution are examined. The object is to discover the new factors that determine prices and the basic change in the nature of the solution that is caused by speculation. 2. Prices and the Simple Supply-Demand Model Consider a simple model of the aluminium industry. Demand, D, is determined by economic activity, A, given exogenously, and inversely by the price, P. Supply, Q, is determined by the inverse of the rnarginal cost curve, and so varies inversely with exogenous factor costs, C, and directly with price. Price is determined by the equality of supply and demand. Given the equilibrium level of demand, price in this model is equal to the rnarginal cost of producing the required level of demand, P = MC (Dl. Algebraically, [ ] How well does this simple model explain the change in prices during the last five years? Table I shows the LME cash price and the estimated marginal cost of producing consumption during the second quarters of 1980 through 1985. The figures in the table show that price and the marginal cost of supplying demand both fell between 1980 and 1982, rose in 1983 and by 1985 had fallen again. Only in 1984 is the direction of change different. And during the 1980 to 1985 period, marginal costs fell by approximately $560/tonne while the LME cash price fell by $678/tonne. There is a correspondence between the fundamentals of cost and price over most of the individual years and the period as a whole.

Jan 1, 1986

By Eileen Ashworth

Introduction A study was completed that investigated the enrollment in mining engineering programs in 24 universities and colleges. All programs considered in the study award four-year bachelor of science degrees in mining engineering. They also provide all the engineers for the mining industry and a large portion of the geotechnical engineers working on environmental problems, storage of hazardous waste, civic, and Federal government underground projects. The numbers used as the base for the study are those reported by each program to SME-AIME and published yearly (SME, 1986). Data for the study came from the period 1975-1985. Also, since some programs include students in related disciplines and special categories, such as cooperative students, a few inaccuracies were unavoidable. A 23-page document has been prepared that reports on the overall picture of current enrollment, the trends, and discusses the results, perceived effects, and what can, or should, be done. There has been an obvious, and dramatic decrease in total undergraduate enrollment since the late 1970s. In 1978, 3117 students were enrolled. In the 1985 fall semester, enrollment was 1022, less than one-third. There were 485 seniors, 265 juniors, 147 sophomores, and 125 freshmen. The downward trend in total enrollment is likely to continue for at least another two years. Class size The catastrophic drop in enrollment is shared by all programs across the country. It does not discriminate between types of programs, coal or hard rock mining, or location. In general, 1985's enrollment is about 30% of whatever the maximum enrollment was in any program, though this varies from the teens to 50%. The latter percentage occurs only for some programs with special circumstances, particularly new programs not well established in the late 1970s. The beginning of the decline in enrollment has occurred at slightly different times as affected by the demise of each program's local industry. The numbers in each class produced from a specific freshmen year (Fig. 1) are worthy of comment. The dramatic drop in enrollment for all classes after 1982 is clearly demonstrated. The timing coincides with the general downturn in the mining industry, when many employed engineers were laid off and new graduates could not find jobs. Also, significantly fewer students are being attracted to mining programs as freshmen. The number of seniors shown seems inappropriate. Where did so many seniors come from and why are so few graduates produced? There is an increasing trend for students to take four-and-a-half or five years to graduate. Therefore, they are counted twice, once when they are first classed as seniors and again the following year. Some students purposely delay graduation to obtain more summer work experience and take additional courses. They believe that this gives them a better

Jan 8, 1986

By David Whitehead

My qualification to speak on the globalization of the the mining industry comes from having worked in the industry in Europe, North and South America, Africa and Australasia in positions ranging from exploration geologist to chief executive. For about a third of my career I have lived and worked in the Southern Hemisphere. And for much of the rest of my career I have been involved in or responsible for activities in the Southern Hemisphere. This has given me the opportunity to experience globalization from the sharp end, as it were. This means speaking English with an Australian accent, Spanish with a Chilean accent, French with a West African accent and Dutch with an English accent. My topic is globalization, especially of the mining industry from a Southern Hemisphere perspective and specifically the experience and history of Gencor in that context. First, I will say a little about what globalization means to the southern part of the world: How and why the South differs from the North and how the challenge of globalization affects a south-based company differently than a northern one. I will also detail how Gencor has made significant progress in globalizing through the acquisition of mining assets from Shell. As Fig. 1 shows, I have divided up the world into northern and southern components, rather than hemispheres. The southern world comprises mainly countries that have emerged from the status of economic - if not political - colonies of nations such as England, Spain, Portugal, France, the Netherlands and, surprisingly, Italy and Germany. I have not considered the Indochinese and Arabian peninsulas in my southern world. The emergence of the. former is still in its early stages while the latter is clearly a part of the northern economic system. Large parts of Africa and South America are geometrically in the Northern Hemisphere but economically in the southern world. The reverse is the case for the IndoPersian peninsula. With the distinguished exception of Australia and South Africa, most of these countries nationalized their mining industries and mineral patrimony after attaining political independence. A major element of the globalization of the mining industry is related to the privatization of the mining industry in these countries and to the opening up of their min¬eral patrimony to non-national exploitation. The Southern Hemisphere is the watery part of the world. It is almost three quarters ocean as against a slight preponderance of land in the north. Economically, ocean areas have only a fraction of the productivity of land, except in a few oil-rich areas like the Gulf of Mexico and the North Sea. The consequence is that even on an economically level playing field we would expect the south to generate only about one third of the world's economic product.

Jan 1, 1997

JIM ARNOLD: Questions? Comments? Gary, were you gone when I made the comments about corporate puke? [laughter] SPEAKER: You were hiding. BRUCE CAVENDER, BHP Copper: Having worked in both places, I'd like to address the issue of the plant versus the corporate office. One thing to keep in mind is that we are all very engaged with the technical elegance of a lot of the work we do. There's some tremendous technical expertise in the plant. But remember, the guys in the corporate office are only thinking in one denomination, and that's dollars. So we'll see something like a spill, and for us it's a problem. At the end of the day, what the corporation cares about is the financial impact. So we've got to be careful to couch our solutions in dollar terms. JIM ARNOLD: Rebuttal? [laughter] DOUG HALBE: Are you going to rebut this one, Andy? ANDY CARTER, Oxidor Gold Corporation: No, I don't think so. I'm not up to it. I'd just like to address a question both to our panel and the floor. Those of us who've been in this industry any length of time have seen these same mistakes made over and over again. Wherever you go, year after year, plant after plant, you see the same problems. I guarantee you, Doug, that if we have a similar conference down the road, you're going to see the same thing. My question to the panel and to the floor is what is it about our industry that stops us from learning from our mistakes? What characteristic is it that prevents us from learning and makes us repeat the same mistakes over and over again? DOUG HALBE: That's a great question. Someone said in a meeting 10 years ago that if the people who design plants designed airplanes, the planes would be falling out of the air all the time. GARY SIMMONS, Newmont Gold Company: I've got an answer to your question as to why many plants are poorly designed. It's that the minute anybody demonstrates any sort of competence in plant design, they're promoted to a higher-paying job, and the talent pool is left with people of lesser experience. Just think about it: The people who have the experience and have demonstrated it more than once have moved up. JIM ARNOLD: I think that there's another reason, too. Seven or eight years ago I was chairing a session, and I challenged everyone in the session to some day publish an article about the design mistakes they'd made because we never talk about our mistakes. I'll

Jan 1, 1998

By W. E. Cobb

The financial implications of environmental liabilities are becoming staggering, particularly for mining companies. The Environmental Protection Agency's (EPA) Record of Decision (ROD) list for Superfund mining sites has some pretty hefty financial commitments, such as the $10 million operable unit remedy for the Yak Tunnel at California Gulch (in Colorado) or the $40 to 60 million remediation at Bunker Hill (in Idaho). These costs are driven by the large volume and areal extent associated with historical waste management practices at mining sites. (It's difficult to have a low-cost remedy for a 20-square-mile site.) Unfortunately, there are other ways of generating environmental liabilities besides Superfund, such as non-compliance with Clean Air Act provisions, stormwater permits, or National Pollutant Discharge Elimination System (NPDES) permits. In the last 2 years, EPA has increased enforcement in its regulatory programs, which has resulted in increased fines and criminal actions. Leaders in other industries (primarily the chemical and manufacturing industries) are viewing environmental liabilities as a strong motivator to select engineering approaches carefully based on technical, legal, economic, and philosophical perspectives. Industry interest in waste minimization programs comes from the concept that it is economically advantageous not to create waste in the first place. Waste minimization programs typically balance increased front-end capital investment with the minimization of potential long-term environmental liabilities as a way to achieve the lowest total-or life-cycle-cost. A side benefit of waste minimization programs is that they tend to improve overall regulatory compliance. Waste management practices are also becoming philosophical, as evidenced by a May 11, 1992, Business Week article: Companies that incorporate innovative thinking on sustainable development will do more than clean up or prevent their own pollution. They'll make and distribute a product more efficiently than ever, worry about its lifelong environmental impact, plan for recycling, and get their suppliers on the bandwagon. This type of approach will require a new mind-set, new tools, and adjustments throughout the organization. A key aspect of waste minimization or life-cycle waste management programs is the incorporation of environmental costs into economic analyses that compare various waste management alternatives. However, the incorporation of environmental costs into an economic analysis can be more difficult than initially thought. As noted above, new tools-or even a new toolbag-are needed, such as new accounting methods that track and assign the true lifetime environmental costs of a particular product. One piece of the new toolbag is life-cycle cost analysis, which is discussed in this paper. To simplify the discussion, this paper looks at the total costs associated with a given mining site. The concepts presented in this paper, however, can be applied to any mine waste management decision. The ultimate extension of life-cycle costing, as presented in the Business Week article, is to include the potential environmental costs throughout the life of a metal. At this point, I am perplexed on why, let alone how, to include the potential downstream environmental costs (i.e., the costs associated with smelting, manufacturing, use, and recycle or disposal) throughout the life cycle of mined copper, lead, or zinc.

Jan 1, 1992

By Stephen Semeniuk

Discussion by Stephen Semeniuk Discussion As a valuator and SME member, I view Ross D. Lawrence's position as based on unproven and faulty assumptions made with regard to the pragmatic evidence presented in his paper. Moreover, his call for the inclusion of all mineral resources in discounted cash flow valuations is redundant, if not irrelevant, as there are procedures that already take all classes of mineralization into consideration for valuation purposes. In my experience as a valuator, I find that Canadian securities regulators are more than accommodating in allowing any valuations of mineral properties to be based on cash flow calculations. In other business areas, the same regulators usually reject discounted cash flow valuations of projects or businesses with no operating history. Instead, the regulators prefer valuations to be based on other transactions tested in the marketplace. Valuations based on actual market transactions are less subjective than discounted cash flow calculations and/or the capitalization of arbitrary, untested or undemonstrated earnings projections. In the mining and minerals sector, such projections may be made by persons not qualified to make such projections. In support of this statement, I direct readers to the article "Valuation of mineral properties which do not contain exploitable reserves" by Lionel C. Kilburn, which appeared in the August 1990 issue of the CIM Bulletin. To quote from the article: "Value of a mineral property depends basically upon metal prices, recoverable grades, mining and metallurgical practices, commodity supply and demand, and political-economic conditions, all of which vary with time. Five fields of expertise influence the value of a mineral property: •geological engineering, •commodity markets, •financial markets, •stock markets and •mineral property markets. The skills of geologists and engineers properly apply to the first field of expertise. Knowledge and consideration of the other four fields is important, but such advice is more properly sought from marketing experts, economists and stockbrokers." Securities regulators have created no hardship for valuators by excluding unsubstantiated resources in discounted cash flow valuations. In the field of engineering, best design practices apply. A margin of safety is built into the design criteria for any new equipment or structure that will exceed normally expected load levels and stresses, even though such considerations imply higher front end costs. In accounting, the comparable operating principle is conservatism. It explains why, for balancesheet presentation purposes, inventory is stated at cost or market, whichever is the lowest value. Similarly, when the engineering or geoscience-based valuator plays in the field of finance, the rules of accounting and applied economics apply. Regulators in their skepticism of income-based valuations are in tune with similar views already expressed in mining literature. To quote H. Van Tingley, in Mining Magazine, July 1996: "... the DCF method has inherent dangers when applied to undeveloped resources. Firstly, it presents an often-undeserved aura of accuracy. A DCF value is no more accurate than the least accurate of the assumptions incorporated into the calculation - and assumptions

Jan 1, 2003

By S. D. Bechtel

Bechtel Civil and Minerals, Inc., one of the Bechtel group of companies, is a large engineering and construction firm that services the mining industry, among others. The firm's head, S. D. Bechtel Jr., comments on how his E&C company is dealing with the recessionary economy. First, he offered a historical perspective. About a half century ago-in the middle of the Great Depression-W. A. Bechtel and several business partners drew up a fixed price bid to build the Hoover Dam. At that moment in history, the W. A. Bechtel Co. was a modest success, but the times were troubled and uncertain. Money was scarce and a lot of contractors across the country were one project ahead of bankruptcy. The bid for Hoover was a make-or-break proposition for Bechtel, and it turned out successfully. The Hoover Dam was a no-frills operation in an isolated and harsh environment. There was plenty of hard work, long hours, and not many amenities. Controlling costs was critical. Everyone knew what had to be done, and why and what the consequences were. Today's Challenge Bechtel is now a bigger, more complex organization whose management views the current economic recession as a challenge to be met in much the same way W. A. Bechtel met the challenge of the Hoover Dam: by pulling together with a sense of purpose and direction. In many respects, Bechtel's situation today has a number of parallels to that which faced my grandfather. The company is eminently successful, but times are tough and there are plenty of signs that they could get tougher. My grandfather bet on the Hoover Dam to insure the future health of his company and I think we can work together again in that same tradition, make some tough decisions together, and the company's future can be just as promising. The first and most important requirement is to make certain that everyone understands the situation. The Bechtel group of companies are in an excellent financial position now. Its workload hit an alltime high in 1982 and it is well positioned in its principal markets. But the next two years may be critical for the company. Traditionally, Bechtel's work load lags behind general developments in the economy. Although many of its clients continue to suffer serious business difficulties, Bechtel is only beginning to feel the impact. The worldwide market for basic metals remains soft; relatively low prices and abundant supplies of oil and gas have flattened the petroleum market and made once promising synfuels projects economically unattractive; utility clients are still caught in the vise between overregulation and escalating costs. And persistently high, long-term interest rates have made capital investments expensive and difficult to justify. The company maintained a healthy workload through 1982. In some areas it has had little new work and consequently has been forced to lay off some staff as projects have been canceled or concluded. In other areas new work has tided the company over and more people have been hired. But new work bookings have fallen off, creating some uncertainty for the near future. 1983 requirements are clear, although seemingly contradictory. Belt tightening and cost reduction are necessary for Bechtel to remain healthy and competitive, enabling it to handle a possible further downturn with a minimum of turmoil and dislocation. At the same time, we need to allocate resources and funds in areas that will keep us positioned for the turn-around marketplace.

Jan 2, 1983

By Ava Walker

The first form of a surety bond was an honest handshake between two or more parties agreeing to a decision, and their personal guarantee of following through to completion. This has all changed. In 1895, the United States Treasury Department disclosed that $35 million worth of personal surety guarantees on file had become worthless. A law was then passed requiring all surety bonds, in favor of the United States, must be corporate surety bonds. Today, a surety bond is one of the nation's leading fi¬nancial instruments used to guarantee the completion of an obligation. One hundred-fifty years before cor¬porate surety bonds, outcrops near Richmond, VA, were being mined. These surface mines became under¬ground mines. Today, both are still being used to obtain a leading energy source, coal. Since that time, more than 5956 km2 (1.47 million acres) of coal mined lands have been reclaimed in the US (Coal News, August, 1987). More than 25,000 state and Federal mining permits cover¬ing 14,164 km2 (3.5 million acres) have been issued during the last 10 years. Coal production has exceeded 7.2 Gt (8 billion st). More than 5665 km2 (1.4 million acres) of mined land has been reclaimed by active coal mining opera¬tions and 267 km2 (66,000 acres) of abandoned mined lands have been re¬claimed by others. Reclamation bonds were freely writ¬ten in the 1970s. So why are they almost extinct today? Contract bond losses have been severe in the past several years, sureties reporting losses exceed¬ing 110%. But the same proof is not provided on coal reclamation bonds. A surety bond is generally required when one party has an agreement with another party, and that party wants a guarantee from a third party that a job will be completed according to the terms and conditions of a written contract. In the case of a reclamation bond, the surety company (surety) is the financial party. It extends the credit and a guarantee to the obligee (the State, Commonwealth, or Office of Surface Mining) that the principal (the coal operator/company) will complete the terms and conditions of the contract (the rules and regulations governing mining and reclamation). The Surety Association of America defines a surety bond as an agreement providing for monetary compensation should there be a failure to perform specified acts within a stated period. Webster's Dictionary defines surety in the following ways: "l: the state of being sure; 2a: a pledge or other formal engagement given for the fulfillment of an undertaking and; 3b: one who has become legally liable for the debt, de¬fault, or failure in duty of another." Banks never make accommodation loans. Either the loan is good or no loan is made. Surety companies feel the same way about surety bonds. In fact, the average person does not realize the dangers of becoming surety for another. How does a surety determine if a company is worthy of receiving surety credit? How is a coal account under¬written today for an obligation that may not be released for many years? When a surety company executes a reclama¬tion bond, it financially puts its name behind the coal company and its guaran¬tee that should the coal miner default on the obligation, the surety will fulfill the contract. How is the surety to determine if a coal company may still be in business five, 10, 20, or 40 years from today?

Jan 1, 1989

By I. Iwasaki

There are many reasons why the US mineral and primary metals industry is in its present state. Undoubtedly, a flood of imported goods in all sectors is playing a major role in the plight of our raw materials industry. Domestic industry is becoming increasingly aware of the importance of its international competitiveness. And we are beginning to wonder what is happening to our technological edge. A number of factors affect the international competitiveness. Engineers cannot do much about some of these factors - labor costs, tax policy, government relations, interest rates, dollar strength, and labor-management relations. Something can be done about technology, however. Some say technology is so easily transferable today. But I would like to believe that we have the ability to apply it better than others. Not too many years ago, "made in Japan" meant cheap and shoddy products. Today, Japan has completely changed its image. The US is beginning to feel the threat from Japan's low-cost, defect-free products with dependable delivery. With worldwide recession and the strength of the dollar, we were shocked at the sudden weakness that developed in America's industries, not only in the international market, but domestically as well. What went wrong and what can we do about it? Senior executives from 300 large American manufacturing companies were surveyed. These executives believe US companies must: • invest in more efficient plants and equipment (27%); • invest in more research and development (23%); • improve the quality of service to customers (23%); and • adopt more aggressive marketing tactics and strategies (14%). Are we not doing enough research? The US has nearly four times as many people engaged in research and spends four times as much for research as Japan (Fig. 1). There is little doubt about the excellence of the US performance in basic science as indicated by the number of Nobel prize recipients. Japan has produced only four winners since World War II. Look at technology trade of five countries (Fig. 2). Again, US performance has been remarkable. An interesting observation here, is that the United Kingdom, another country with economic woes, is also in the black, West Germany and Japan, both with trade surpluses, are net technology importers. It is apparent that the US' performance in the commercialization of new knowledge is much more in question. Japan had $50 billion of trade surpluses with the US last year, which led to some friction between Washington, DC and Tokyo. Comparing the technology trade of Japan and the US in more detail, Japan imports disproportionately large amounts of technology from the US and Europe. This data is rather old, 1978, but the general trend is not too different even today. It is generally believed that scientific research leads to innovative technology, then to economic payoff. But, after seeing the current technological challenge by Japan, we are forced to change this traditional view. Investment in research may eventually lead to economic payoff, but not directly. There is a middle ground between new knowledge and its commercialization. This is an area where the Japanese have been successful. Until the 1970s, many western companies licensed patents to Japan for quick profits. But, in recent years, these companies have become more discrete about the terms of technological transfer. As a result, a number of scientists and engineers are expressing deep concern over the future of technological developments in Japan. A survey was conducted on 450 research managers of private industries in Japan on how they viewed the level of breakthroughtype original research in Japan as

Jan 6, 1986

By Don S. McCoy, W. Joseoph Schlitt, Donald B. Swanson

Introduction Contract miners have long played an important role in the minerals industry. Historically, these were individuals who worked as underground miners and were paid by the ton or the day. These hardy types still ply their trade in the industry. However, today the term "contract miner" generally refers to an independent contractor who supplies the people and equipment needed to conduct surface mining operations for an owner or lease holder. At one time or another, contract miners have probably handled virtually every mineral commodity from sand, gravel, and stone quarrying to mining uranium and precious metal ores. In today's market, though, contract mining appears to be concentrated in just a few areas. These include precious metal mines, various types of solid fuel operations, and reclamation of abandoned mines. This article covers market areas, contract mining organizations and services, and their advantages and disadvantages. Gold and silver mines Although exact figures are not available, contract mining represents a significant element in the precious metals segment of US mining. For gold and silver, the growth in contract mining appears to be paralleling the overall growth in mining activity itself. Nevada is the largest gold producer in the US. The latest available data (1985) on open pit gold/ silver mines is summarized in Table 1 (Nevada Division of Mine Inspection, 1986). These figures show that contractors mined nearly half of the ore in 1985. Total tonnage mined, of course, was much higher for both owners and contractors. Assuming an average stripping ratio of 2.5 to 1, the total daily mining rate for the contractors was more than 145 kt (160,000 st). This translates into a contract mining rate of about 36 Mt/a (40 million stpy) based on 250 operating days a year. This approximate 50-50 split between owner and contractor also appears to hold for the future. Metals Economics Group (1987) published a survey of 51 short-range and 54 long-range precious metal projects being considered throughout the US. Contacts with owners, requests for proposals, and past corporate philosophies all suggest that about 55% of the open pit operations scheduled for the near-term will be contract mined. This represents an estimated 26 kt/d (28.5 stpd) of ore. A similar assessment of the long-term projects indicates that about 12 kt/d (13,000 stpd), or just under 50% of the open pit tonnage will be contract mined. There are several reasons why gold and silver represent such an attractive opportunity for contract miners. One is that many properties are owned or leased by individuals or partnerships that are essentially entrepreneurial. Many of these owners or lease holders have minimal mining experience. They must therefore either rely on contract mining organizations, sell an interest in the project to another mining company that will become the operator, or hire an experienced management team. For about the same reason, junior mining companies also represent good prospects for contracting. This is because most junior companies focus on exploration. They would prefer to spend their generally limited funds on drilling programs. Thus, they tend to minimize additional capital requirements by using contract miners or farming out the property to another mining company. Another good reason for using contract miners is the size of the deposit. Many properties are so small that their reserves will not support the capital expenditures

Jan 12, 1987

By L. T. Larson

Nothing in Turkey is simple. Its his¬tory is long and convoluted, its culture fascinating, its metallogeny diverse, and its geology very complex. This article will focus on the geology of western Anatolia and the precious metals poten¬tial of this third of Turkey. Any gold produced by mines in Tur¬key since the early 1900s has been a by-product of the mining for other met¬als, such as copper from the massive sulfide deposits of the Pontics. Archaeological records, however, prove that gold was mined from the Pactolus (present day Gediz) River and refined by Croesus at Sardis in about 550 BC. Other records and legends make it possible that gold was mined before 1200 BC for the Homeric City of Troy (Priams treasure?) about 25 km (15 miles) east of Canakkale at Mad¬endag and Kartaldag. A final legend of antiquity suggesting gold in what is now Turkey relates to King Midas. And, indeed, the city-state belonging to a king of that name has been recognized near the city of Eskise¬hir. More recently, precious metals have been mined at Madendag-Kartaldag in the late 1800s. Arapdag, near Izmir, remains the only "authenticated" epith¬ermal precious metal deposit in Turkey (Mosier et al., 1985). With this spotty record, why the sud¬den interest shown by at least five Euro¬pean-based, three or four US-based, and several other international mining firms and their Turkish subsidiaries? Like other aspects of Turkey, the complete answer is not simple but, reduced to its basics, has three parts. Turkey, relative to many developing nations, has a stable, democratic form of government (although it also has a for¬midable bureaucracy) whose currency exchange rate is premised on the US dollar. New laws promulgated since 1983 have opened the country and welcomed foreign investment. Some have even provided investment incentives. The Mining Law of August 1985 made sweeping reforms of the old land tenure system. This law made it possible for a foreign-based company to have a wholly-owned Turkish subsidiary en¬gaged in mining. Equally important is the belated recognition that western Anatolia, while geologically compli¬cated, is today basically a province Neogene extensional tectonics having many of the geologic attributes of the leading gold producing province of the US - the Basin and the Range. Geologic rationale for precious metals exploration Tectonic/lithologic framework: Alle¬gorically and simplistically, Anatolia during early Neogene (middle Miocene) can be likened to a tube of toothpaste with the cap off. It is squeezed in the vise formed by the Arabian plate mi¬grating north toward the southwest end of a stable Asian platform. The "tube" was compressed. It could not expand to the east because it was sealed by what is now southern Russia and Iran. The filling of the tube escaped to the west, in the direction in which the cap was miss¬ing (Fig. 1). So developed during the middle to late Miocene the western-most struc¬tural province of Anatolia. This was done by a process aptly termed tectonic "escape" by Sengor et al (1985). This province is dominated by exten¬sional tectonics much like the Basin and Range of the western US and has an estimated extension of between 30% and 50%. The most striking manifesta¬tion of this extension is the 10 to 11 major east-west trending grabens (Ge¬diz, Buyuk Mendares, Kocuk Mendares, etc.) and intervening horsts, although a much greater number of smaller, gener¬ally northeast-striking grabens and half

Jan 1, 1989

By Peter Joralemon

Introduction The Sierra Nevada Foothill Gold Belt in California extends from Mariposa north for more than 420 km (200 miles). It includes the Grass Valley and Alleghany districts in the zone of Northern Mines and the famous Mother Lode to the south. The gold belt has produced more than 3.1 kt (100 million oz) of gold since its discovery in 1848. This remarkable production, at the present gold price, would be valued at more than $40 billion. The Law of Gambler's Ruin supposes that averages are based on systematic rather than random variations. It emphasizes the vast differences between finite and infinite probability. By applying this Law to this figure, it can be seen that the belt has produced an average of 15.5 t (500,000 oz) of gold per running mile. Many geologists believe, with some justification, that less than half the gold in this belt has been mined. Sixty per cent of the past production has come from lode deposits, the balance from Tertiary and Recent placer gravels. This paper will concern itself with the developing lode mines along the Sierra Nevada Foothill Gold Belt. As a further and final note regarding placer mining along this belt, Mark Twain suggested that placer miners, having lost their senses, had contributed liberally to the population of California's insane asylums. After a 40-year lull with little or no gold production, the lode mines of this famous belt are showing signs of renewed activity. Two open pit mines, the Sonora (Jamestown) and Carson Hill, are now in operation at substantial scales. Two others, the Goldenbell (Pine Tree-Josephine) and the Royal-Mountain King, are being readied for production on equally impressive scales. All are in the southern part of the Mother Lode. Exploration farther north, at Sutter Creek, Drytown, and Georgetown, is showing encouraging results in developing deeper lode deposits. This new activity has been sponsored to a large extent by junior Canadian mining and exploration companies. Most of the established American mining companies have looked the other way, not participating in this important development. One major reason for domestic disinterest in this opportunity is there is little chance for heap leachable open pit ore in this belt, excluding Carson Hill. And heap leaching has become fashionable with American mining companies today. Also, this great old gold belt must have been worked out, for why else is there so little activity here - Catch 22 logic. Another reason is that if a new deposit of size and grade similar to the mines in the past was found, high costs would preclude a profitable operation. And, finally, California environmentalists would not permit mining, even if a rich deposit were found. These may all be pefectly valid reasons not to explore for gold along this belt. But a look at the history of gold mining in California may suggest that the future for exploration and development of the gold resources in the Sierra Nevada Foothills can be greater than the past. It was during the Depression of the 1930s that this gold belt saw its maximum activity, with more than 3000 mines in operation. Some were father and son operations producing only a few tons of ore a day. Other mines employed hundreds of miners to hoist more than 900 t/d (1000 stpd). Some ores were of marginal grade. Others, like the Sixteen to

Jan 7, 1987

By David J. Starbuck

For small precious metals mining to show a comeback a different perspective must be taken than that of larger mining companies. This perspective must be much the same as that of past successful smaller mining enterprises such as when the US had a need for Uranium. Abandoned mines and environmental concerns in older mining districts have discouraged many from entering with the attitudes of why try there if so many unsuccessful mines exist. A small mining venture can be successful there but must have a "think smart'' attitude. There must be a thorough understanding of deposits, utilization of advanced technology and a properly managed mining operation. "THINK SMART" MINING The small mine operator is usually looking for small high grade deposits, consequently, long term success depends on a series of small successful mining operations. The small miner must succeed right-off or credibility and future project funding will suffer. No veteran of even a few years in the mining industry needs to be told that a dollar spent on production today fails to yield as much as it once did. More efficient equipment and techniques have helped soften the problem, but there is little likelihood that a mining company can do much to control inflation, wages, regulations, or grade. That leaves the small miner to "think smart" as one area where operating dollars can still be stretched to produce more than they presently do (Gardner. 1981). In the planning stage of a mining venture, when most options are still open, the main controllable elements are market timing, deposit selection, cutoff grade, mining method, mine design, mining sequence, rate of production build up, process design, project financing structure, project management, and project ownership structure. During planning, optimum criteria can be established for each of these. Once a mine is in production, these options are foreclosed or at least severely constrained. The more thought given to a mining program using all information available the less the risk of encountering disabling surprises. Thus the intent of this paper is to suggest the "think smart" attitude most small mine operations use for long term success. If one looks at a number of successful mining ventures, whether large or small, there is a general logic most have followed to be successful. They have used proven exploration, mining and processing techniques along with economic evaluation and experienced personnel to improve their odds. LOGIC IN DEVELOPING A FEASIBLE VENTURE Most successful small mine ventures achieve positive cash flow as quickly as possible by seeking out those deposits which require the least time and expense on activities leading up to production. To do this they look for deposits that are the most accessible, easily investigated, mined and processed with the cheapest fundamental methods. The general sequence of events starting with district selection are deposit selection, preliminary feasibility, exploration, detailed economic feasibility, mine planning, development and production. Each successive step becomes more costly requiring intermediate decisions along the way. District Selection Small operations should look for known deposits which favor the occurrence of the type deposit sought rather than efforts in unproductive areas. Known deposits in developed areas have some advantages over remote areas: 1. More alternative methods of transportation are available. 2. A larger stable work force is available. 3. The area is usually more pro-mining. 4. Power, water, housing, technical services, skilled services, schools, recreation and shopping are available.

Jan 1, 1987

By Alfred Weiss, Andrew E. Nevin, Thomas J. Neil, O&apos

As Edward E. Runyan, 1983 AIME President, in an interview excerpt in ME, June, p. 607, stated, "...the AIME Transition Committee has recom¬mended to the AIME Board that each Constituent Society be allowed the option of separate incorporation, whereby each could become its own separate legal entity." Background The American Institute of Mining Engineers (AIME) was formed in 1871 by 22 engineers in Wilkes-Barre, PA. Although originally a mining organization, it became a home for metallurgists, iron and steel industry people, and for the individuals in the expanding petroleum engineering profession. There are now four Constituent Societies: Society of Mining Engineers, located in Littleton, CO, 29,000 members; Society of Petroleum Engineers, located in Dallas, TX, 47,500 members; The Metallurgical Society, located in Warrendale, PA, 10,000 members; and Iron and Steel Society, located in Warrendale, PA, 6,500 members. Each of the four groups has grown and continues to serve the specific and/or diverse needs of its membership. As the needs and requirements of their industries and professions change, each of the Societies has perceived and initiated programs that serve their constituency rather than AIME as a whole. Therefore, each Society has recognized an increasing need for autonomy to better augment their own programs. An AIME Ad Hoc Transition Committee, with Robert Merrill, AIME Past President, as chairman, made a number of recommendations pertaining to AIME operations that were approved in October 1982 by the AIME Board of Directors. One of the recommendations was to endorse separate incorporation of the Constituent Societies on an individual-society-option basis. The AIME Board commissioned a task force of Constituent Society representatives to develop specific revisions to the AIME Certificate of Incorporation and the AIME Constitution and Bylaws. This was done to allow separate incorporation and to reflect the decentralized structure of the Institute. The SME-AIME Board of Directors subsequently approved the recommendation of SME Working Party #69 that SME pursue separate incorporation. Meanwhile, Working Party #69 continues to work with the other Constituent Societies and with the AIME Task Force on Reorganization to determine the form and substance of the separate incorporation. Why Incorporate? George Webster in The Law of Associations quoted Chief Justice Marshall's (1819) definition of corporation as: "A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created." SME-AIME attorneys, Davis, Graham & Stubbs, have pointed out that the status of an organization operating as an unincorporated association is always unclear. At present, SME-AIME administers assets of almost $3.5 million (mainly property and inventory) but technical ownership and ability to enter into contractual relationships resides with AIME. However, the operation appears to outsiders (particularly those with whom SME-AIME does business) to be an independent operation which would be expected to be a legal entity in its own right. Advantages of Incorporation Liability. Because of legal ownership by AIME of all assets of the Constituent Societies, those assets are subject to the claims of any of the creditors of AIME or any of its constituent parts (i.e., the other societies). Liabilities can be those usually encountered in business but also encompass special risks, which could develop if there were a careless and erroneous publication of material that might be used in practice or if standards are improperly established. The recent US Supreme Court decision in American Society of Mechanical Engineers, Inc.,

Jan 10, 1983

By John G. Myers, William A. Vogely, Harold J. Barnett

INTRODUCTION, CONCEPTS, AND MEASUREMENT Introduction Periods in the history of man, from his earliest appearance to the present, are often characterized by the principal materials used. In nearly all cases, the material or fuel is of mineral origin-stone, copper, bronze, iron, coal, and so forth-indicating the principal ingredient of the tools or source of power of the period. Each of these periods represented great improvement over the preceding one in terms of human well-being, as measured by population growth and other indicators (Cipolla, 1978). A major reason for the improvements in production and well-being was the nature of the material or fuel, each successively superior to the preceding, which made it possible to produce more food, fuel, shelter, and clothing with a given amount of labor. If we accept this well-documented description of economic progress as accurate, we may then turn to the consideration of two related questions concerning this development. The first, easily answered,-is why man spent long periods of time (millenia, in many cases) making tools from inferior materials, such as copper, instead of passing directly to superior materials, such as iron and steel. The second, closely related question, concerns the relation between the rate of economic growth and the quantity of mineral reserves available at any time. For the first question, the answer is that the technology required to discover, extract, and process each successive material had to be discovered and developed before the material could be used. Once the technology was available, the new material could be and was exploited widely, raising productivity-output per unit of labor- and consequent consumption per person. This familiar idea underlies a fundamental principle of the economics of resources, namely, at any time, available resources depend upon available technology. No mineral or other raw material is a resource unless the technology has been developed to utilize it. But once the technology is at hand, the new resources associated with it provide the means for economic growth and rising levels of living. This principle is subject to certain conditions. For example, governments or other institutions may prevent a mineral from being used, even though the technology is available. And, if a mineral is located in a remote place, transportation charges may make it uneconomic to exploit. Such minor qualifications do not, however, change the thrust of the argument that technology is the overriding determinant. With respect to the second question, it might seem apparent that the greater the quantity of reserves available, up to some point, the more economic growth will be facilitated. This line of reasoning leads to the conclusion that as re- serves are consumed the quantity available will be reduced and economic growth will eventually be restrained. Reasoning of this sort underlies much popular (and scholarly) thought, in which depletion of mineral and other resources is assumed to lead to constraints on economic growth, through higher materials costs and absolute limitations on materials use. Two important qualifications must be made to this explanation, however, which together

Jan 1, 1985