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The introduction of computer technology to the mining industry has produced many benefits for the mining engineer. The most significant is the dramatic increase in productivity realized by the individual user. This is important during times of competitive market conditions. Software for the minerals and energy industries has evolved substantially over the past decade. But even today it remains difficult to find a system that features the flexibility and integration capabilities to effectively (and cost-effectively) handle the needs of professionals in each phase of the mining industry - from exploration to reclamation. Several national software developers are now addressing this challenge. One Denver-based company, MINEsoft Ltd., offers a software package that is currently being used in each phase of the mining industry. The basic technology used in MINEsoft's database management system was developed in the 1960s. But during these early years of the computer industry, most of the technology was available only on mainframe computers, and then only as separate entities. MINEsoft's system unifies these various systems in one package that can be used on most computers manufactured today. Database Management System TECHBASE is a flexible, integrated database management system designed specifically for technical applications. The system features a database manager with no practical limit to the amount of data it can store, retrieve, and manipulate, according to the company. TECHBASE in¬cludes Applications Packages (TAPs) designed to meet the needs of professionals in a host of industries. Clients use the TECH BASE system to prepare many reports, including important EPA information. The package reduces data to a manageable level and enables users to increase productivity with a smaller staff. Mining engineers no longer need to do things by hand. What used to be a day's work can be accomplished in an hour or two. Exploration "Using the TECHBASE system to generate maps has probably saved us the expense of three or four draftsmen," says Ralph Fitch, regional manager and senior staff geologist with Chevron Resources in Portland, ME. "The system has great flexibility. You can treat it much like a spreadsheet. If you are halfway through with a particular project, the system allows you to add fields and calculations with ease but without starting over." Fitch uses TECHBASE for the "straightforward" plotting of results and generation of geochemical and geophysical profiles. "In exploration," he says, "these are the two key elements ... the generation of maps and data profiles. The system allows you to plot as many elements and variables in these areas that you like." Other aspects are important, too, says Fitch, including drill hole sections. "We use all the basic capabilities the system provides in the complete package," he explains. "When shopping for a system, TECHBASE was clearly dedicated to exploration in the

Jan 9, 1987

By Libby R. Ricafort, Victorio V. Pato, R. S. Pizarro

Introduction Atlas Consolidated Mining and Development Corp. (ACMDC) started gold production at its Masbate gold mine early in 1980. This involved an open-pit mine and a 3.5-k/d (3850-stpd) carbon-in-pulp processing facility (Pizzaro and Antonio, 1981). When this operation started, the mine began stockpiling sub-grade milling material averaging 1 g/t (0.029 oz per st) gold. Furthermore, geologists estimated that there were additional low grade reserves within the ultimate pit limits. These amounted to 2.4 Mt (2.6 million st) with an average grade of 1.1 g/t (0.03 oz per st) gold. The success of low cost heap leaching prompted an investigation to determine if this tech¬nique would be applicable for the low grade Masbate ore. The findings were favorable and a series of laboratory tests were undertaken. These tests indicated the amenability of this subgrade milling ore to heap leaching. Depending on ore size, gold extractions of more than 60% were obtained. To further define operating parameters for a commercial heap leaching plant, a 400-t (440-st) batch pilot plant was built and operated. These test results were used to design the first commercial heap leaching plant in the Philippines. One design concern was the control of solutions during the rainy season. Due to the material's low grade, every effort was made to minimize capital and operating costs. To this end, surplus mining equipment from the copper operations of ACMDC and used machinery in the crushing circuit were considered. Location: The Masbate gold heap leaching operations are located on the northeastern part of Masbate Island, Philippines. This is about 480 km (300 miles) south-east of Manila. Climate: The climate is moderate with two distinct periods. The dry season runs from January through June, and the rainy season extends from July through December. During the wet season, the rainfall at the mine site averages 300 mm/m (11.8 in. per month) for a total of about 2000 mm/year (78 in. per year). However, heavy downpours in excess of 100 mm/h (4 in. per hour) can occur. Geology: Four distinct rock types have been identified in the pit area. They are tuffaceous agglomerates, andesitic agglomerates, metasedimentary rocks, and hornblende augite andesitic porphyry. The tuffaceous agglomerate occupies the northern and western flanks of the mine. Andesitic agglomerates are localized distinctly in the central portion of the volcanic plug within the mine site. The eastern boundary of the mine is occupied by metasedimentary rocks, whereas, the hornblende augite andesitic porphyry occurs as an intrusive within the andesitic agglomerate and tuffaceous agglomerate. Some areas of the pit contain high proportions of clay minerals, requiring an agglomeration step in the flowsheet. This ensures satisfactory percolation through the heaps. Ore characteristics: Gold and silver are microscopically dis-

Jan 9, 1987

By G. J. Jansen

Introduction Coal petrography is the microscopic study and description of coal and other organic substances in terms of the microscopically recognizable organic constituents and of the rank of the material. Petrography studies of coal and other organic substances are useful in themselves, and have a number of practical applications. Some of these include determining coking quality of coal, estimating yields of methane from coal beds, and assisting in coal preparation. Petrography studies can also help in mine planning, in source rock studies, in combustion problems, and in synthetic fuel applications. Most recently, petrography has been found to be useful in studying sediment-hosted ore deposits. Microscopic constituents-macerals Under the microscope, coal is a heterogeneous assemblage of the coalified remains of woody matter and plant remains from the swamp or bog from which the coal was formed. The individually recognizable materials making up the organic mass are termed macerals by petrographers. They are the organic equivalent of the minerals that make up rocks. Coal petrographers can examine coal in two ways. Those interested primarily in the microscopically transparent macerals or in the study of very low rank materials, lignites for examples, like to use transmitted light microscopy where light passes through a microsection about 3 to 6 µm (0.0001 to 0.0002 in.) thick (Fig. 1). The dominant red color of the section in Fig. 1 is inherent, not a stain or produced by a filter. Distinct suggestions of textures in the reddish constituents can be seen. The red material is vitrinite and is thought to be the coalified remains of woody tissues. The yellow, lenticular substance is exinite. It is what remains of the waxy coating on a spore. Also seen are white dots of mineral matter and black opaque material that is better seen and described in polished sections. A polished microsection is prepared by grinding and polishing to a mirror polish a compact of coal and embedding resin or a coherent chunk of coal. The resulting microsection is then examined in a reflecting microscope. High magnification, 200X to 400X, and an oil immersion lens are needed to resolve fully the macerals of the organic matter so prepared. Figure 2 shows two macerals, an even gray vitrinite, unstructured and fusinite, a whitish, more or less cellular constituent. Fusinite is thought to represent more or less completely carbonized cellular material. Coal petrographers appreciate that coal is a heterogeneous material. Figure 3 is a view of another section. The generally structureless gray material is vitrinite. The bean-shaped dark constituents are exinites. The long, narrow, somewhat scalloped dark constituent is cutinite. Cutinite is thought to be derived from leaf coatings. Some coal petrographers would describe the large white, structureless mass as micrinite. Others might prefer the term macrinite. A few fragments of fusinite can also be seen. Figure 4 shows a coalified fungal remain, termed sclerotinite. It is surrounded by vitrinite and crushed fragments of fusinite all floating in a sea of embedding resin. Sometimes the microscope reveals the great heterogeneity of coal even on the microscope scale. Figure 5 shows a section with semi-fusinite, inertodetritinite, vitrinite, and micrinite. The nature of the heterogeneity may be judged by noting that the long dimension of the photomicrograph is about 70 µm (0.0027 in.). Measurement of rank Hoffmann and Jenkner (1932) discovered that measuring the reflectance of the vitrinite constituent of coal in a polished section gave a good measurement of the rank of the coal. In practice, a photomultiplier is used to mea-

Jan 9, 1987

By J. D. Patsey, G. T. Lineberry

A.E. Hall The authors are to be commended for their attempt to provide a convenient piece of software for preliminary drum hoist specification. This field has received little attention in recent years and is eminently suited to calculation by computer. Unfortunately, there appears to be an error in the calculation of the required rope diameter. The 66-mm (2 5/8-in.) rope selected is oversized for this application. Wire rope weight and breaking strength are related to the rope diameter. For a round strand rope

Jan 8, 1987

By Elza Burch

Introduction The feeding to zero concept involves feeding 600 µm x 0 (28 mesh x 0) size raw coal to heavy media (magnetite) cyclones along with the +600 µm (+28 mesh) size coal. Traditional circuits employ desliming or removing the 600 µm x 0 (28 mesh x 0) size fraction and feeding the cyclones +600 µm (+28 mesh) size coal. The feeding to zero concept recirculates 600 µm x 0 (28 mesh x 0) fines in the circuit. At the same time, a portion of the fine material is continuously withdrawn and recovered. This, in turn, prevents a fines buildup. This concept eliminates desliming screens and secondary fines circuitry for recovery of 600 x 150 µm (28 mesh x 100 mesh) coal. The result is a very simple circuit. Feeding to zero at Island Creek Island Creek Corp. was the first involved with the new concept in 1976. The company needed a temporary plant for the 9.5 mm x 0 (0.4 in. x 0) raw coal at its Pond Fork mine, near Madison, WV, while a full-scale plant was being designed and built. At that time, the Childress Corp., of Beckley, WV, became interested in the feeding to zero concept. Island Creek awarded a contract to Childress to build a single cyclone modular plant, incorporating this feeding to zero concept. The plant was erected in three months. The Pond Fork modular plant proved successful in attaining the desired feed rate of about 63.5 t/h (70 stph), while maintaining good separating efficiencies and low magnetite consumption rates. The 9.5 mm x 150 µm (0.4 in. x 100 mesh) clean coal was recovered and the 150 µm x 0 (100 mesh x 0) size was disposed of to waste. The full-scale plant was completed about two years later and the Pond Fork modular plant was moved to Holden, WV. There, it was incorporated into the Holden 29 preparation plant as a separate circuit for cleaning -25 mm (-1 in.) coal. In 1976, a similar plant was installed in Virginia by another company. These two plants are believed to be the first two operational plants in the United States incorporating the feeding to zero concept. Island Creek subsequently contracted with Childress for an identical plant at the Coal Mountain operation in West Virginia. The plant operated for three years before the mine was closed. The unit was then moved to the Spurlock mine near Martin, KY where it continues to operate. The successful operation of the Pond Fork and Coal Mountain plants before and after relocation proved both the performance and moveability of this type of circuit when constructed in a modular fashion. Since the first two plants were built, Island Creek has incorporated the feeding to zero circuit in nine additional plants. A grand total of 33 cyclones have been installed using this concept. One is the Providence mine, near Providence. Providence preparation plant Island Creek contracted with J.O. Lively Corp. of Glen White, WV in July 1978 for the construction of the Providence preparation plant. The plant began operation in February 1979. The construction period was about halved by building the plant with modular design concepts. Prefabricated sections, floors, and sides were brought in as units and then bolted in place. The Providence plant has a good track record of processing coal at a feed rate of 454 kt/h (500 stph). Feed coal to the plant has an average ash content of about 18% and sulfur content of about 4.5%. It contains about 22% refuse. The coal product has an average ash content of about 8% and sulfur content is about 3%. Raw West Kentucky No. 9 seam coal is conveyed from a box cut in the Providence mine to a rotary breaker. The breaker is fitted with 74 mm-diam (3 in.-diam) opening breaker plates. Therefore, it is well suited for removing trash, roof bolts, wood, and pyritic balls that are common in Illinois Basin coal. The -75 mm (-3 in.) coal is conveyed from the rotary breaker to

Jan 8, 1987

By R. Timothy McCrum

It is not often that the Interior Department's Bureau of Land Management, Office of the Solicitor, and Interior Board of Land Appeals (IBLA) jointly act to do the mining industry a good turn. That happened, however, in the recent decision, Schlosser v. Pierce, 92 IBLA 109 (1986). It was ruled that the theorized "independent mine requirement" was not a part of the discovery standard for mining claim validity under the 1872 Mining Law. The phrase "independent mine requirement" would require the mineral reserves within the boundaries of each individual mining claim in a claim group to support an independent economic mining operation. This, without regard to the fact that reserves on adjacent claims could be mined in a group operation, resulting in greatly reduced mining and marketing costs per ton of ore. Such a rule would render invalid under the 1872 Mining Law mining claims for almost all low-grade, high-tonnage, commercially valuable mineral deposits. Until the Schlosser case, no judicial or administrative decision had addressed the issue of the independent mine requirement. Nonetheless, a series of Interior decisions in the 1970s implied such a rule. Even the Rocky Mountain Mineral Law Foundation reluctantly concluded in 1984 that, "each claim to be valid must be capable of being operated at a profit independently of any other claim," the Foundation did criticize the rule as "excessively stringent" and urged the adoption of a "more realistic rule." Fortunately, the IBLA did just that in Schlosser when it ruled that the "application of a requirement that each claim be independently capable of being mined and marketed at a profit is rejected," 92 IBLA at 134. Now, a year after the 1986 decision, there remains some unwarranted confusion over the issue resolved in, and the meaning of, the Schlosser decision. There is no need for this confusion. The Interior Department's decision is a clear and legally sound victory for the mining industry. Grazing rights vs. mining claims The Schlosser case was an unusual mining claim contest. A private contest was brought before the Interior Department. Schlosser was a federal grazing lessee and surface owner. He filed against Pierce, the locator of a group of mining claims for bentonite over the same lands. At a hearing before interior's administrative law judge (alj), Schlosser's counsel began laying the foundation for the independent mine requirement. Counsel asked the mining claimant's expert whether he would go through the permitting procedure, road building, and reclamation just to mine the amount of bentonite on any one claim in the group. Schlosser's counsel proceeded with this line of questioning for each of the 16 claims in the group. Pierce's mining expert testified that the tonnages of mineral on any individual claim could not be mined, processed, and marketed at a profit if only one individual claim was considered. However, if the claims in the group were operated jointly, all the mineral could be mined, processed, and marketed at a profit.

Jan 8, 1987

By P. R. Dugan

Sulfur removal from high sulfur coal has several objectives including: a) reduction of the atmospheric load that contributes to the problem of acid precipitation; b) reduction of ash, which contributes to decreased energy transfer in boilers, as well as ash disposal; and c) alleviation of the social and economic dislocations reluted to uneven geographical distribution of sulfur in coal reserves. Cost in relation to the value of refined coal will govern the development of an emerging coal refining industry. Estimation of the premium paid by power companies for coal with a low sulfur content is a good estimate of the value that will be added as the result of refining. Estimates of premiums paid in 1984 are $28.65/t ($26 per st) for reduction of total sulfur from 3’% to 1% S and greater than $28.65/t ($26 per st) for removal below 1% sulfur.

Jan 8, 1987

By Steve O. Green

Introduction The US coal mining industry is in the midst of a serious economic crisis. To overcome increased operating costs, operators must take advantage of technological advancements in mining systems and equipment. A relatively new concept available to underground operators is that of extending the cutting depth for continuous mining machines (continuous miners). This system is referred to as deep-cut mining, and may be described as mining cuts to depths greater than the standard 6 m (20 ft). Productivity is increased through the reduction in continuous miner tram time since the machine stays longer in each working face. To successfully implement a deep-cut mining system, three problems must be overcome: Exposing personnel to unsupported roof, methane removal, and controlling respirable dust. Remote control cutting The solution to the unsupported roof problem is remote control. Recent advances in remote operation, especially in radio remote controls, have resulted in what is generally accepted as a safe and reliable tool. By installing remote control on the continuous miner, the operator and helper can now be stationed in a supported area. This allows for improved visibility while cutting coal. With this in mind, the limiting factor now becomes the position of the haulage equipment operator. North River No. 1 uses Joy 21SC shuttle cars and Jeffrey 4110 diesel ramcars. These cars are pulled against the bumper of the continuous miner. Thirteen meters (43 ft) can be cut with the shuttle car and 14 m (45 ft) with the Ramcar before the operator of the car is inby permanent supports. By loading away from the bumper, about 1.5 m (5 ft) can be added, bringing total cut depths up to 14.5 and 15 m (48 and 50 ft), respectively. Methane removal The second problem involves methane removal, and the line curtain-to-face distance. In other words, how to maintain the line curtain to allow sufficient ventilation to remove methane and not expose workers to unsupported roof. The solution, in most cases, is to use a blowing-type ventilation system. Unlike the exhausting system that, to be effective, must be installed within 3 m (10 ft) of the working face, the blowing system can be effective at greater distances from the face. Numerous studies have documented the advantages of a blowing-type ventilation system over an exhausting system. Furthermore, a blowing system can be significantly improved by in¬creasing the velocity of the air delivered without increasing the volume of air. With this greater ventilation efficiency, it is possible to secure ventilation plan approval from the Mine Safety and Health Administration (MSHA) for a greater curtain set-back distance. This eliminates the need for personnel to travel inby permanent supports to extend the face brattice. The distance from the face MSHA will approve, however, is on a mine-by-mine basis. MSHA will evaluate the particular mine's face methane liberation rates, along with the specific proposals regarding face ventilation volumes and velocities. Dust control The third problem is controlling respirable dust. This is actually a result of the solution to the second problem. In the blowing system, while mining on the slab cut, both the continuous miner and haulage units are located on the dusty side of the line curtain (Fig. 1). In the early 1970s, underground operators virtually abandoned this system, in order to comply with the 2 mg/m3 (0.87 gr per cu ft) federal dust standards. The blowing face curtain did offer increased face ventilation efficiency. With that, greater curtain-to-face distances were also

Jan 8, 1987

By H. Richard Eisenbeis, Donna M. Watkins

Many technical professionals (tp)* desire to occupy upper level management positions. But career paths for most scientists and engineers do not extend beyond their specific disciplines. This is unfortunate. Our technical frontiers are expanding so rapdily that it is difficult, if not impossible, to make sound top management decisions without understanding the technical complexities involved. Technical professionals often are not considered for upper level management positions because they lack the managerial and interpersonal skills necessary to become successful administrators. You've heard this before, but a key component of these skills is the ability to communicate. Technical professionals are often unable to communicate as well as they should with nontechnical professionals and nonprofessionals within the organizations that employ them. Communication is important for managerial success Communication is the network of interactions whereby knowledge and understanding are conveyed from one social set to another (Flippo and Munsinger, 1982). In order to be successful, managers must not only be "good" communicators, they must be "effective" communicators as well. Good communication occurs when managers are able to formulate and transmit their messages in such a way that they are received and understood. Effective communication goes one step further: It occurs when recipients accept messages as legitimate and respond to these messages in the manner desired. Before promotion into upper level positions, managers must have developed organizational skills (planning, decision making, organizing, and controlling) and interpersonal skills (directing, influencing, and motivating). Applying these skills effectively is difficult without a highly refined ability to communicate. Effective communication, then, is basic to managerial success. Nowhere, perhaps, has the importance of being able to communicate effectively been emphasized more than in Mintzberg's landmark study of managerial roles (Mintzberg, 1973). Mintzberg's results indicate that executives typically averaged 36 written and 16 verbal contacts a day. These contacts were both important and trivial. They generally occurred in a random manner. Time spent on each varied. Scheduled meetings averaged over an hour. Desk work, telephone calls, and unscheduled meetings required an average of 15 minutes or less. Why technical professionals have difficulty communicating Three reasons why technical professionals do not communicate well are: • The work motivational patterns and personal attitudes of technical professionals are not conducive to effective communication. • Students in technical professions are not encouraged by educational institutions to develop their communication skills. • Organizations do not insist that all technical professionals be able to communicate in the language of business. The work motivational patterns of most technical professionals are indicative of internals and high achievers (Hunt, Salisbury, and Whittington, 1968). As internals, they believe they control their own destinies. As high achievers, they believe that task accomplishment is a primary indicator of success. To ensure a task is completed in the manner desired, tp's attempt to structure and define work situations so they alone are responsible for results. TPs consider the task accomplished when they, and perhaps other tp's, are satisfied with the results. From the tp's perspective, the task may have been completed. From a communication standpoint, two other factors may apply. First, solving the problem required very little interaction (and thus, communication) with others. Second, the tp's, considering the task accomplished, have little concern for how their "technical" answers will be translated to nontechnical persons needing

Jan 8, 1987

By Garrett R. Hyde, Aleksandar Stojsic

Introduction Economic pressures in the international marketplace have spurred advances in almost every facet of flotation. New developments have occurred in flotation chemicals, flotation machines, and in the application of automated process control technology to grinding and flotation. Many of these advances are the results of concerted efforts to apply the knowledge obtained from basic flotation research over the past 15 to 20 years, to develop industrial technology for the more efficient separation of sulfide minerals in real ores. Mining company executives and equipment manufacturers are being called on to make decisions for incorporating some of this technology into present operations. This discussion is limited to two developments now at the stage of being engineered into industrial scale operations. They are control of the electrochemical environment or redox potential of the slurry, and control of bubble size in column flotation. Potential economic impacts are noted. Froth flotation Froth flotation makes use of differences in the surface properties of finely ground minerals to obtain separation. If the mineral surface is water repellent, the mineral particle will stick at the air-water interface of a bubble and float. If a mineral surface is not naturally water repellent, a chemical collector is added to the slurry to make it so. The collector must adsorb on, and make water repellent only the mineral to be recovered, not the gangue minerals. To achieve this degree of selective adsorption, chemical modifiers may have to be added to the slurry. Modifiers include pH regulators, activators, and depressants. Electrochemical control One of the most significant developments in recent years in the area of mineral processing technology is the recognition that collector adsorption of sulfide minerals is an electrochemical process. Consequently, flotation of these minerals depends on the electrochemical or redox potential of the system. Many of the modifiers used to control various flotation processes are actually potential controlling reagents. For example, the role of well known depressants, such as cyanide, sodium hydrosulfide, and sulfur dioxide, is essentially to

Jan 7, 1987

By J. P. Ferro, W. H. Stewart

Wet ground and dry muscovite mica continued to be the most commercially significant types of mica in the US. Canada's phlogopite mica and some US deposits of sericite mica have also contributed to the overall application of mica in a variety of industries. Mica's major end uses are paint, rubber, and construction material. Its value was about $30 million last year. The southern Appalachian Mountains weathered granitic bodies and pegmatites continued to be the primary US muscovite mica source. North Carolina production of mica as a coproduct of feldspar, kaolin, and lithium processing accounted for more than 60% of the total output. New Mexico, South Carolina, South Dakota, Georgia, and Connecticut accounted for the rest. Flake mica was also produced from mica schists in North Carolina and South Dakota. It is also being investigated in Ontario, Canada. Wet ground mica Wet ground mica was produced by four companies: KMG Minerals, Franklin Mineral Products, J.M. Huber Corp., and Concord Mica. KMG and Franklin Mineral Products accounted for more than 80% of the production. Wet ground mica is a highly delaminated platey powder used to reinforce solvent and aqueous system paints for increased weatherability, durability, and greater resistance to moisture and corrosive atmospheres. In plastics, it is an excellent filler and reinforcing agent, providing better dielectric properties, heat resistance, and added tensile and flexural strength. In the rubber industry, wet ground mica is used as a mold lubricant to manufacture molded rubber products, such as tires. It also acts as an inert filler that reduces gas permeability. Miscellaneous uses include additives to caulking compounds, foundry applications, lubricants, greases, silicone release agents, and dry powder fire extinguishers. Wet ground mica prices range from $353 to $496/t ($320 to $450 per st) fob plant. Specialty products may be higher, depending on customer requirements. Dry ground muscovite mica Dry ground mica was produced by nine companies: KMG Minerals, Unimin, US Gypsum, Mineral Industrial Commodities of America, Spartan Minerals Corp., Asheville Mica Corp., Deneen Mica Co., Pacer Corp., and J.M. Huber Corp. Dry ground mica's primary market is wallboard joint compound. Here, it is a functional extender that improves the physical properties and finishing characteristics of the mud. It is also used in various grades as a filler in asphalt products, enamels, mastics, cements, plastics, adhesives, texture paints, and plaster. Dry ground mica became popular as an additive in oil well drilling fluids, where the mica flakes platey nature helps seal the well bore, preventing circulating fluid loss. But oil's dramatic price drop and consequent curtailing of well drilling brought this once booming market to a virtual halt. Forecasters predict that this business will gradually pick up during the next few years and most current dry ground mica producers will again produce the oil well drilling material. Dry ground mica prices range from $110 to $420/t ($100 to $380 per st) fob plant. High quality sericite mica, sometimes referred to as an altered muscovite, was mainly produced by two US companies. Mineral Industrial Commodities of America and Mineral Mining Corp. have equivalent capacities of about 27 kt/a (30,000 stpy). The majority of the material produced was consumed by the joint compound industry. Minor uses are in paint and oil well drilling. The lack of ground sericite penetration into the traditional ground muscovite markets is attributed to high silica content, typically in excess of 20%, and a bulk density. Prices range from $88 to $187/t ($80 to $170 per st) fob plant. Phlogopite mica is a dark colored, magnesium bearing mica rarely found in the US. Suzorite Mica Corp., a division of Lacana Petroleum, mines a deposit in Quebec that is 80% to 90% phlogopite. The dark color has prevented the material's entry into the traditional paint markets. But the physical properties and high purity make it useful as a low-cost reinforcing filler in many plastics and several asphalt applications. Phlogopite mica is ground to several grades and may be treated with various surface coatings for use in plastics or coated with nickel for EMI/RFI shielding applications. Prices for phlogopite products range from $144 to $580/t ($104 to $580 per st) fob plant. As in recent years, production of domestic muscovite sheet - block, film, and splittings - remained insignificant. These resources are limited and uneconomic due to the high cost of hand labor required to process sheet mica in the US. Imports from India and Brazil were the primary sources of the estimated 1 kt (2.4 million lbs) valued at $2.5 million consumed by US electronic and electrical equipment manufacturers in 1986. Reserves As a feldspar, kaolin, and lithium industry coproduct, flake mica will continue to provide a large percentage of mica re- This summary of 1986 mica activity was received too late to be used in the June issue.

Jan 7, 1987

By Earl Rau

Introduction Will cogeneration be a major power source in the future? The location of electric power generating plants has changed. In 1900, more than 50% of electricity was generated by industrial plants. Since then, industrial plant generation of electricity greatly decreased to 17% in 1950 and to only 3% in 1980. Changing economics in electric power generating costs, though, may allow cogeneration to reverse this trend. Cogeneration has been defined as the simultaneous production of electric (mechanical) and thermal energy from a single energy source. Some applications are considered to be byproduct generation of electricity from industrial, thermal operations. Cogeneration is not new to the mining and minerals industry. Smelters and steel mills have used waste heat to generate electricity. Public Utilities Regulatory Policies Act of 1978 The potential for increased industrial cogeneration of electricity is related to the March 9, 1978 enactment of the Public Utility Regulatory Policies Act (PURPA). The US Supreme Court ruled that PURPA is constitutional. The court upheld requirements that utilities interconnect to cogenerators. It also ruled that 100% of avoided costs be used as the guideline for electricity sales by a qualifying facility (QF) to a utility. The state of New York established a floor price $0.06/kWh for electricity sales from a QF to a utility. It is obvious, then, that a cogenerator must first establish price and then become a qualifying facility in order to sell electricity to a utility. Proposed cogeneration plants The estimated industrial cogeneration potential for the years 1986 to 2000 is 9500 to 25,000 MW. Industries represented in this cogeneration estimate are pulp and paper, petroleum, chemicals, food, textiles, rubber, plastics, steel, lumber and wood, cement, glass, metal fabrication, and industrial parks. A cogeneration plant has been proposed for the Union Carbide chemical plant in Institute, WV. A steam turbine/generator would be installed to replace the pressure-reducing valve in the 2.7 MPa (400 psig) header. Scott Paper Co., Mobile, AL, proposed a cogeneration plant using a coal- and wood-fired boiler and a turbine/generator to produce process steam and electric power. A cogeneration system has been proposed for a large oil refining plant. A pulverized coal boiler would produce high-pressure steam to operate a turbine, generator. The exhaust steam from the turbine will go to the process and an existing turbine. Kansas City, MO's Armour meat-processing plant has proposed a cogeneration plant. This proposal is to use a natural gas or oil-fired, gas-driven turbine and a generator. The waste heat from the gas turbine would go to a heat recovery boiler for use as process heat. Dade County, FL is implementing a central energy system to supply electricity, air conditioning, and domestic hot water for five buildings in downtown Miami. The cogeneration system is to provide flexibility, to optimize fuel use efficiency while serving the variable thermal demands. Generation of electricity from municipal waste is not considered to be a cogeneration process but is covered by PURPA. Special considerations are provided for waste/electric power generation to encourage the development of these systems. ?

Jan 7, 1987

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 H. Lyn Bourne

This is the fifth annual tabulation of mineral royalty information. This tabulation, like the previous editions, includes all of the earlier data. There are also 60 new entries. In addition to royalty information, some entries show the cost of purchased reserves. Two articles relative to the evaluation of minerals reserves appeared in December, 1986. R.H. Paschall (In the Aggregate, ME, p 1139) wrote a good article, although it lacked specific royalty data. However, this author takes exception to two ideas in Paschall's column. Paschall contends that the royalty rate does not affect the mineral appraisal. This present author could not disagree more. Paschall also claims the location of an industrial mineral deposit is the only serious or practical caveat in comparing royalties. Comments received here from readers helped make the list of caveats that are cited each year. The readers will decide which factors influence the mineral value for their commodities of interest. Paschall's point about the relationship of the parties who are negotiating a royalty agreement is important and very well taken. The other article, written by William Vernon (Pit and Quarry, December 1986), gives a step-by-step process on how to conduct a mineral appraisal. The article cites three reasons for an appraisal: transfer rights; collateral for a loan; and taxation. A fourth reason is to establish adequate compensation for reserves lost through condemnation. This author has appeared in several court cases where compensation for loss of mineral reserves through condemnation required a mineral appraisal. Royalty rate becomes an important factor in the appraisal process, although the Pit and Quarry article refers to that part of the valuation equation as "profitability." Both articles were well written and are recommended reading for those interested in mineral valuations. The same caveats that have appeared in previous columns relative to factors that influence the value of reserves are restated. The data in the table serve as a general reference and are not intended to present an absolute scale of reserves costs. Several factors influence the value of any mineral commodity. The factors include: • location/transportation - especially significant for most industrial minerals; • market conditions both for the commodity and the company acquiring the right to mine; • quality or grade of the deposit as it reflects the amount of processing/beneficiation necessary to produce the finished product; and • legislative restrictions and conditions for mining a given material at a given site. These and other factors will significantly influence the cost of reserves. The table shows the range of royalties and the variations in the basis of computing the fees. In a few instances, it gives the cost of acquired reserves based on purchase price and quantitative estimates of the material in place. The table lists the commodity in column 1, and the subsequent columns give: • the location by state, US geographic area, or Canadian province ; • the cost - R for royalty and P for purchased cost; • the year in which the lease or purchase agreement occurred; and • comments or footnotes for more information. The cost column requires more explanation. The units may refer to cubic yards (/cu yd), cubic feet (/cu ft), short tons (/T), or acres (/A). 1 cu yd = 0.76 M2 1cuft = 0.28m3 1 st = 0.9072 t 1 acre - 0.4047 ha or m2

Jan 7, 1987

By C. Meyer, J. J. Eidel

C. W. Hunt I wish to register strong disagreement with the choices of drilling sites chosen by the Continental Scientific Drilling Committee, while endorsing the stated objectives. Of special significance is the lack of any site involving the metals most needed today in the US, while 9 to 13 km of drilling are allocated to gold and silver districts and 11 to 17 km to base metal (mainly copper) districts. Why is nothing proposed for platinum group or chromite? Is this because the committee did not know of such a site? If so, I offer such a site in California (see Fig. 1). The mineralization shown in Table 1 occurs in a large peridotite body in western Tehama County, CA. Petrography has demonstrated unequivocal evidence of migrated PGE deposited in peridotite and chromite of hypabyssal nature. Active diapirism (due probably to serpentine buoyancy) above a reactivated mantle to surface conduit marks the position of the conduit. Young explosion breccia cemented loosely by volcanic glass and tuff demonstrates the significance of the conduit as the prime source of the various emissions. Deep drilling could result in major metals discoveries as well as shedding light on the grand questions of platinum group mineralization. What role water has played in this occurrence is not yet certain; but chlorine and asphaltite have been detected in and adjacent to native PGM, suggesting a major role for water. The explosion breccia suggests that this excellent site could overlie entrapped geothermal steam.

Jan 6, 1987

By G. Coombs, L. Meade, J. Welshimer

Industrial Minerals commodity profiles are continued from May's Annual Review issue. Diatomite G. Coombs, Manville Sales Corp. Growth in US diatomite production continued to lag in 1986. The US Bureau of Mines estimated that 580 kt (640,000 st) were produced last year. This is a 1%0 growth over 1985. The cumulative growth from the 1982 low point is 4.4%. Present production, though, is still only 90% of the high tonnage of 1979. The industry will see increased competitive activity with the start-ups of two new mines and production facilities in California and Oregon. US production has come primarily from Lompoc, CA, Bassalt, Clark Station, and Lovelock, NV, and Quincy, WA. New production, probably with capacities of 45 kt/a (50,000 stpy) each, have started near Burney, CA, and Vale, OR. Eagle Picher's new, full-line filter aid and filler plant at Celatom, Vale, OR, was dedicated in August. The plant uses diatomite from the Celatom mining district in Juntura, OR. Grefco's new filter aid and filler plant near Burney, CA, was ready in July. It produced flux calcined products through a single kiln and can handle both bag and bulk shipments. The operations are in Shata County with the plant and mine at the same site. Manville Specialties Group is moving its Filtration and Minerals Division headquarters and research staffs to Lompoc, CA. The move is intended to strengthen response and performance by locating research, marketing, and production close together. Diatomite is processed in three methods: natural, calcined, and flux calcined. The natural is dried to remove water and is particle size classified. Calcined or straight calcined products have been sintered to modify particle size or permeability. Flux calcination, or flux sintering, has a stronger influence on permeability and also benefits color. The unique structure of diatomite is used in a range of particle sizes from fine paint fillers, to coarser filter aids, to granular aggregates. Dimension stone L. Meade, Geomapping Associates Ltd. 1986 was another good year for dimension stone production. The trend toward using marble, granite, limestone, sandstone, and slate has created an increasing demand. According to US Bureau of Mines 1986 estimates, 1.1 Mt (1.2 million st) of dimension stone, with a value of $173 million, was produced by 200 companies. This is an increase from 1985, where 220 companies produced 1 Mt (1.12 million st) valued at $172 million. The increased production volume and decreased unit value is due to the competition from imports. The net import reliance in 1986 was 68% compared to 62% in 1985. The value of imports was $374 million in 1986 versus $295 million the year before. In an effort to maintain their market share, domestic finishers, particularly in the granite industry, continued to upgrade plants and machinery during 1986. In addition, offshore dollars have financed a number of fabricating facilities in North America that will finish imported rough stock. It is hoped that this increased domestic production capability will capitalize on a devalued US dollar. The trend has been for growth in stone usage and market. This trend is continuing with increased public awareness and desire for natural stone in buildings. The area of greatest market growth is expected to be in residential and interior decorative stone usage. Use of sophisticated, automated equipment has made the cost more affordable. Now lobbies, foyers, and specialty rooms are being clad in stone. Dolomite J. Welshimer, National Lime & Stone Co. About three-quarters of dolomite production is used as construction aggregates and 10% to 20% is sold or used as an industrial mineral. Total limestone and dolomite consumed for chemical and metallurgical purposes is about 136 Mt/a (150 million stpy). Sales of industrial dolomitic products were somewhat stronger in 1986 than levels recorded in the early 1980s. Some of the sales' strength, however, can be attributed to reductions in the number of active mining and processing operations. The industry will probably undergo further consolidation by the end of this decade. This will be due primarily to the continued softening in demand by the steel industry. Dolomitic limestone deposits being mined for raw materials for the steel, glass, and refractory in¬dustries are generally 54% calcium carbonate and 45% magnesium carbonate by weight. Impurities composed of silicon, aluminum, iron, sulfur, and phosphorous, represent less than 1%. The heaviest concentration of high purity, surface mineable dolomite in the US is in northwestern Ohio. Crushed and sized dolomitic limestone is a basic raw material for the iron and steel industry. It is also used as feed stone or lime kilns. Soft-burned lime is a popular raw material for BOF steel production. It is also used extensively in insulating glass fiber manufacturing. A related material, hydrated

Jan 6, 1987

Two years ago, about the only US mining ventures that could turn even marginal profits were precious metals. In 1986, the price of gold dramatically increased, as did earnings from precious metals, mostly gold mines. First quarter results for 1987 show that gold will again be the most profitable type of mining in the US. All this money being made in gold resulted in many new mines being opened and hundreds of old workings being re-evaluated. The Society of Mining Engineers has put together a technical program to aid in developing precious metals mines. Small Mines Development in Precious Metals will take place Aug. 30-Sept. 2, 1987 at Bally's Hotel, Reno, NV. For registration and hotel information see page 426 or contact Meetings Department, SME, P.O. Box 625002, Littleton, CO 80162-5002, 303-973-9550. Topics at this meeting will include Problems Facing Small Miners; Understanding Geology and Ore Reserves; Mining-Production Options to Maintain Competitiveness; Processing for Precious Metals; Financing and Economics that Work for Small Miners; and Understanding the Environmental and Permit Maze. Problems facing the small miner The small miner has found and started most of the productive mines in the world, says Alfred G. Hoyl, of Coal Fuels Corp., Rollinsville, CO. Hoyl will state his case for small mines development in the opening session of the program. He will make the point that government regulations must never restrict the small mine or miner. And the mining industry must be careful not to crowd out the independent miner. "To restrict small mining is to say to our young men and women entering the mineral industry `There is no place for you as an independent.' Small is a relative term and we must never feel that starting small will restrict our possibilities of becoming big." In the same session, David J. Starbuck, Starbuck Minerals Management, Mayer, AZ will take a look at why smaller precious metals mines are profitable. Mining companies have changed their perspective on reworking previously mined properties. They are looking at abandoned properties in older mining districts. The attitude is that smaller operations in these districts can be profitable with the present economic climate, more advanced technology, and better management. Small, independent mining companies may not have the same resources to draw from as the majors. But there are affordable technologies available that fit into the independents' budget. Betty Gibbs, of Gibbs Associates, Boulder, Co will explain how a personal computer can help a small operation to analyze data more effectively and respond quickly to changing conditions. Scenarios will be developed that will describe how PCs can be incorporated into all phases of an operation. Financial institutions are becoming more willing to consider venture capital for small precious metals mines, according to Stanley Dempsey, Denver Mining Finance Co., Denver, CO. This may be in the form of equity or debt, he says, but they want to receive assurances of the quality of the resource. And they will ask about the ore reserves. Next, the potential lender will want to know about the mining method and en¬vironmental regulations. Dempsey will discuss these requirements. Once a high grade gold mineralization is located and reserves proven, it must be evaluated to determine which recovery process is best suited for this deposit. Robert Martinez, Amselco Minerals, Ely, NV will evaluate processes for such a deposit located in Mexico. Heap leaching, vat leaching, and a carbon-in-pulp circuit are all viable options, he says. He will explain which recovery process proved to be the most economic. Other papers in the introductory session include How to Best Use Consulting Firms to Accelerate the Development Process, by H. Schreiber and R.P. Fronk, both of Behre Dolbear-Riverside, New York, NY. And W. Mayrsohn of Asamera Minerals, Denver, CO will present Marketing Fundamentals that Work for Small Mines. Understanding geology and ore reserves In the current scheme of fast-track exploration and mine development, insufficient time and thought is given to understanding the geology of a deposit as it relates to controls of mineralization and subsequent mine development, say D.S. Bolin and J.W. Rozelle, of Pincock, Allen & Holt,

Jan 6, 1987

By T. K. Bundtzen, C. B. Green

Exploration expenditures in Alaska last year amounted to $8.9 million. This was comparable to 1985's $9.1 million. Development expenditures dropped 29%, $24.3 million in 1986 vs. $34.1 million in 1985. The exploration industry is restructuring and stabilizing after the loss of major mineral firms during the last few years. These included Anaconda Minerals, Asarco, Hecla Mining, Enserch Exploration, Phillips Minerals Division, Exxon Minerals, Noranda Inc., General Crude, Mohawk Oil & Gas, Inspiration Development, Teton Exploration, and St. Joe Minerals Division. Some of these companies were mineral subsidiaries of oil companies and were either dissolved or redirected to programs outside of Alaska. However, recent entry exploration firms include Echo Bay Mines Ltd., Long Lac Minerals, and Exvenco. They are busy evaluating prospects and mineral developments in the southeastern panhandle. In the 1970s, about $254 million was spent on Alaska mineral exploration. Of this, about 5% ($12 million) was for nonmetallics and coal, about 26% was directed at precious metals ($66 million) mainly gold, and 69% ($175.3 million) for the base metals zinc, copper, molybdenum, tin, tungsten, and nickel. Since the early 1980s, trends have reversed. Of the nearly $196.3 million spent from 1981-1986, 48% has been for precious metals ($94.3 million) and 40% on nonmetallics and coal. In the last two years, nearly 70% of the Alaskan exploration dollar has been spent in search of precious metals. Three gold skarns were explored during the year - the Nixon Fork project in western Alaska (Battle Mountain Mining Co.), the Nebesna and Rambler lodes of the northern Wrangell Mountains (Nebesna Mining Partners), and the Zackley project near Paxson in southcentral Alaska (Nerco Minerals). Nearly 7.6 km (25,000 ft) of diamond and rotary drilling were conducted on these three properties. Aspen Exploration announced that significant gold mineralization was found under the Nome coastal plain in western Alaska. Meridian Minerals joint ventured with Resource Associates of Alaska, exploring precious metal

Jan 5, 1987

By K. C. Liddell

Chemical processing research made notable advances during 1986. This overview is necessarily brief. It is intended, though, to give the flavor of selected areas where recent activity has been high. At the 1986 Annual Meeting of The Metallurgical Society, a symposium was held on hydrometallurgical reactor design and kinetics. R. G. Bautista, R. J. Wesely, and G. W. Warren edited the resultant proceedings volume. This is the first available volume on this subject. It includes 26 papers on fundamental kinetic studies, modeling of reaction kinetics and reactor performance, and pilot and production-scale operations. Metals discussed include silver, gold, platinum, titanium, cobalt, nickel, zinc, copper, manganese, and iron. Agitated tanks, heaps, dumps, pachucas, pressure auto-claves, electrolytic reactors, liquid membranes, and fluidized beds are among the reactor types covered. An international symposium dealt with iron control in hydrometallurgy. It was sponsored by the Metallurgical Society of CIM, the Institution of Mining and Metallurgy, The Metallurgical Society of AIME, and Gesellschaft Deutscher Metallhutten and Bergleute. J. E. Dutrizac and A. J. Monhemius edited a proceedings volume containing 41 papers. These covered many areas of process chemistry, solvent extraction, precipitation, treatment of pickle liquors, impurities, residues and the environment, and process selection. Precious metals Concerning precious metals processing, the US Bureau of Mines IC 9059 is noteworthy. It includes papers presented at a USBM briefing at the Western Mining Conference in Denver. Topics covered included ion exchange, staged heap-leaching direct-electrowinning, and mercury precipitation during cyanide leaching of gold ores. Also dealt with were carbonaceous gold ores, carbon adsorption and desorption, heap leaching, the carbon-in-pulp process, and precious metals recovery from electronic scrap and solder. R. C. Sandberg and J. L. Huiatt (Journal of Metals, June 1986, and USBM RI 9022) developed a method to recover silver, gold, and lead from a complex sulfide using ferric chloride, thiourea, and brine-leach solutions. Gallium Gallium recovery was also a subject of considerable interest. Much information on this topic is proprietary. But two papers described solvent extraction of gallium. V. P. Judin and R. G. Bautista (Metallurgical Transactions B, 1986) developed an equilibrium model to separate gallium chloride from aluminum chloride. Tributyl phosphate was the extractant studied. T. Sato and H. Oishi (Hydrometallurgy, 16, 1986) investigated gallium extraction from sodium hydroxide by using Kelex 100. Data were given on the equilibrium distribution and the extraction kinetics. Galena Interest continues in recovering lead by hydrometallurgical processing of galena. J. E. Dutrizac; S. H. Kim, H. Henein, and G. W. Warren; and M. C. Fuerstenau et al. (Metallurgical Transactions B, 1986) all investigated leaching of PbS by ferric chloride. Dutrizac reported parabolic kinetics and reaction control by outward diffusion of lead through a porous layer of elemental sulfur. Kim, Henein, and Warren, however, reported that two leaching reactions occur. A nonoxidative reaction produces H2S and there is an oxidative leaching by ferric ion. Acid dissolution was found to predominate when the acid activity to ferric activity ratio is high. Surface chemical reaction was reported to be controlling. Fuerstenau et al. also reported that mass transfer through the sulfur layer is rate determining. But they believe that the species transferred are chloro complexes of ferric ion. In other work on lead, A. Y. Lee, A. M. Wethington, and E. R. Cole, Jr. of the USBM described an environmentally acceptable hydrometallurgical alternative to the smelting of lead concentrates (RI 9055). Uranium In spite of depressed prices, much work has been reported on uranium processing. R. G. L. McCready, D. Wadden, and A. March-bank (Hydrometallurgy 17, 1986) described the nutrient needs for in-place leaching by T. ferrooxidans. They reported the optimal conditions for uranium solubilization. L. E. Eary, H. L. Barnes, and L. M. Cathles (Metallurgical Transactions B, 1986) carried out an experimental and modeling study of uraninite dissolution. They concluded that ferric ion preferentially leaches uraninite in pyritic ores. Hydrogen peroxide was found to be less selective. A. Vuorinen, P. Hiltunen, and O. H. Tuovinen (Hydrometallurgy 15, 1986) studied redox and precipitation reactions of iron and uranium in leach liquors. P. T. Chiang (Hydrometallurgy 17, 1986) reported on the effect of uranium loading in the DEPA-TOPO process to separate uranium and iron from wet-process phosphoric acid. F. J. Hurst (Hydrometallurgy 16, 1986) conducted a fundamental study of the separation of uranium from phosphoric acid by DEPA and TOPO. D. E. Chia and W. C. Cooper (Hydrometallurgy 16, 1986) reported on bench and pilot scale work to recover uranium by the HIMIX process. They reported that the acid consumption to produce an eluate suitable for yellowcake

Jan 5, 1987

By E. D. Attanasi, J. H. DeYoung

Although fraught with problems of completeness and comparability, statistical measures of mineral exploration in the United States point downward for 1985 and 1986. Exploration expenditures in the US domestic and Canadian companies have dropped steadily from a 1981 peak of about $400 million to about $190 million in 1985, according to a recent survey of exploration statistics by the Society of Economic Geologists (SEG). These totals have been adjusted to account for differences in the estimated coverage of exploration activity by each year's SEG survey. This survey is now supported by the US Bureau of Mines and the US Geological Survey (USGS). The drop in current dollar amounts does not take into account the effects of inflation, which would make the decline even more substantial. Metals Economics Group of Boulder, CO reported in its Mine Development Bimonthly that announced exploration budgets for 1986 indicated an even larger drop for the past year. Worldwide expenditures for companies covered by the report dropped from about $800 million to $750 million from 1984 to 1985 and plummeted to about $600 million in 1986. Exploration activity has been declining since about 1981. This has been due in large part to low prices for base and ferrous metals. Exploration budgets of mining subsidiaries of oil companies have plunged as parent companies try to conserve cash in the face of the sharpest decline in oil prices in nearly 40 years. Mining subsidiaries of petroleum firms that were either liquidated or divested recently include Anaconda (Arco), Getty Mining (Texaco), and Cyprus Minerals (Amoco). Exploration expenditures in Canada increased in 1984 in regions where gold is a traditional target. But there was little change in 1985, based on preliminary statistics from a federal government report (Energy, Mines and Resources Mineral Bulletin MR 211, 1986). Claim staking in Canada dropped 23% from 1983 to 1984 and declined slightly in 1985. Diamond drilling increased in 1984 to the record levels of 1980 and 1981. The ratio of exploration to development expenditures in Canada, however, fell from a 1981 peak of 0.9 to about 0.5 in 1984. The report also indicated that, since 1981, there has been a massive write-off of reserves with high production costs. Reserve levels of all major metals were down since 1981. Precious metals exploration accounts for an increasing share of total mineral exploration. For example, the SEG data show that 90% of 1985 US exploration expenses by domestic mining companies were devoted to base and precious metals, compared with only 51% in 1980. The restructuring of the mining industry has been accompanied by a decrease in response to the last two SEG annual surveys, but the trend towards precious metals was already established in earlier years. Trade journal reports suggest that the reduction of long-term interest rates has encouraged the mining industry to make cost-reducing capital investments in existing mines to maintain competitiveness. This is consistent with the observations that metals explorations in 1986 was characterized not by announcements of "grassroots" discoveries, but by on-property exploration on identified mines or prospects. In an effort to cut costs, gold mining companies have been following up on low cost production opportunities in their prospect inventories. Short-term, low risk, heap leach operations that can produce rapid returns on investment have been pursued. Specific exploration projects are covered in the individual state sections of this Annual Review. Even though economic growth continued steadily through 1986, the domestic mining industry has

Jan 5, 1987