Search Documents

By R. J. A. Fricker

IT is the purpose of this essay to give a reasonably complete description of shaft sinking under a rock pentice in a small Northern Ontario gold property. Hallnor is in many ways an exceptional mine, but the sinking operations here described are but typical examples of the excellent practice for which Canadian mines and mining engineers are justly famous the world over. The worth of the subject lies, therefore, nor in its originality, but in its soundness; not in the spectacular, but in the economical and safe. Attention is particularly drawn to the excellent safety record and to the exceptionally low overall sinking cost. INTRODUCTION Prior to April, 1939, the Hallnor No. 1 shaft had been sunk vertically to a depth of 997 feet below the surface. It is a three-compartment shaft, 19 ft. 10 in. by 7ft. 7 in. outside the timbers (see Figure 1).

Jan 1, 1941

By C. E. McWhorter

IN underground mining recent trends toward mining large tonnages of low-grade ore have created, among other things, a need for cheaper and more flexible ore transport. A relatively new development has been the adaptation of shaker conveyors to meet this need. Although widely used in coal mining, only in the last few years have shaker conveyors been used in underground metal mining. The equipment consists of a driving engine, either electric or air powered, upon which is mounted a drive trough supported in ball-bearing frames. The trough line, or conveying medium, is made up of a number of sections, each section connected to another, usually with bolts. The length of each trough section is controlled by the length that can best be handled underground, but is usually from 9 to 13 ft over-all. The length of a complete conveyor line is determined by the character and weight of material to be handled as well as by the size of the ore body. Trough lines vary in lengths from 100 to 300 ft and the trough has a cross-section area of 127 sq in., and is 22 in. wide by 6 ½ in. deep.

Jan 1, 1948

By T. P. Meloy

Riffles on a shaking table have a major effect on particle separation. This effect is modeled in a spreadsheet.

Jan 1, 1993

"Ground control research in underground coal mines has been ongoing for over 50 years. One of the most problematic issues in underground coal mines is roof failures associated with weak shale. This paper will present a historical narrative on the research the National Institute for Occupational Safety and Health has conducted in relation to rock mechanics and shale. This paper begins by first discussing how shale is classified in relation to coal mining. Characterizing and planning for weak roof sequences is an important step in developing an engineering solution to prevent roof failures. Next, the failure mechanics associated with the weak characteristics of shale will be discussed. Understanding these failure mechanics also aids in applying the correct engineering solutions. The various solutions that have been implemented in the underground coal mining industry to control the different modes of failure will be summarized. Finally, a discussion on current and future research relating to rock mechanics and shale is presented. The overall goal of the paper is to share the collective ground control experience of controlling roof structures dominated by shale rock in underground coal mining.INTRODUCTIONThe National Institute for Occupational Safety and Health’s (NIOSH) Office of Mine Safety and Health Research (OMSHR), formerly the United States Bureau of Mines, has been conducting research on ground control safety for over 50 years. The overall objective of the research is to reduce underground mining injuries and fatalities by characterizing roof conditions, improving roof support performance and application, and optimizing pillar design and mine layout. Underground mining has one of the highest fatal injury rates of any industry in the United States—more than five times the national average compared to other industries (CDC, 2012). Roof fall injuries can be severe, resulting in lacerations, bone fractures, amputations, and death. Non-injury roof falls can also be problematic, resulting in lost production, delays, blockage of primary escape routes, disruption to ventilation, and hazardous rehabilitation conditions.Coal mining is increasingly subject to more adverse geological conditions. Weak roof can be found in all coal mining regions in the United States, but there are a few geographically isolated areas with higher roof fall rates contributed to by particularly poor roof conditions, as represented in Figure 1. This figure shows that when non-injury roof fall rates are normalized to production, the Illinois Basin and Central/Northern Appalachia regions have the highest rates. These isolated regions have inherently weak roof even before mining has occurred, and this roof is easily damaged during the mining process. The weak roof in these regions consists primarily of shale. Shale can be troublesome in underground coal mining because it can appear massive but easily splits along bedding planes and is often moisture-sensitive."

Jan 1, 2015

By Peter Zhang, Daniel Su, Mark Van Dyke, Heather Dougherty

The integrity of shale gas wells in longwall chain pillars under the influence of longwall mining is a safety concern for both coal and gas operators. Previous modeling studies of gas wells in longwall pillars have shown that a FLAC3D model can predict longwall-induced stresses and deformations in gas well casings with reasonable accuracy. The predicted casing deformations can be verified by multi-finger caliper survey. This study concerns the influence of longwall mining on eight shale gas wells in a shale gas well pad located in the chain pillars between two adjacent longwall panels under 1,030 feet of cover. FLAC3D modeling was performed to predict longwall-induced deformations in gas well casings based on site-specific mining and geological conditions. Small deformations less than 0.5 in were predicted in the intermediate casing above 600 ft depth, and very small casing deformations less than 0.15 in were predicted below 600 ft due to high abutment pressure and high frictional resistance along the weak bedding interfaces. After the first panel was mined, a 56-arm caliper survey was performed on one of the wells to measure the longwall-induced casing deformations in the intermediate casing. The predicted casing deformations were then compared with the measured deformations, which indicated that the prediction was generally in good agreement with the measurement in terms of deformation locations and magnitudes. Findings from this study provide valuable information not only for stability assessment of shale gas wells in longwall chain pillars but also for developing engineering guidelines to preserve casing integrity through adequate pillar and casing design.

By D. Moronkeji, R. Maharidge, D. A. Curry, B. J. Davis, U. Prasad, J. Franquet

"Proper shale characterization is crucial in shale gas drilling, exploration, completion and production. Unlike porous sandstone and carbonate reservoirs, the challenge with shales comes from their micro- to nano-darcy permeability ranges and the anisotropy of their mechanical and hydraulic properties. Most porosity-dependent logs are not sensitive enough to capture the true behavior of shales. Consequently, mineralogy and other strength and stiffness-related properties must be determined to characterize magnitudes and variances in shale mechanical and flow properties. In addition, these properties must pass quality assurance/quality control (QA/QC) practices to give confidence in their use in subsequent log calibrations, during geomechanical modeling, or in fracture design models. This paper presents a technique to integrate shale properties that are measured by various methods, and a methodology to perform QA/QC on the data before application.Shale properties originate from various sources, including downhole and laboratory measurements. Physical samples for laboratory testing are usually limited to a few depths. Lab tests are often costly, and replicating in-situ conditions can be difficult or impossible. In addition, results frequently show wide scatter, reflecting inherent depth variability and lateral heterogeneity. Wireline logs provide nearcontinuous data, but rarely yield direct measurements of rock strength properties. Although geomechanical and fracture models use log data, calibrating it with reliable and previously verified lab-measured properties is important. This paper presents a process to perform QA/QC on lab-measured data using various crossplots.Ten mechanical, microstructural and physical properties are graphically displayed to visually characterize shale strength behavior in ambient and in-situ conditions, whether measured or modeled statically or dynamically. These properties are often sourced from different departments. The properties are integrated but are individually subject to the previously mentioned uncertainties. Pairs of property values are crossplotted and compared with correlations from the literature or previously established with qualified data from related formations. Conformance with these correlations gives confidence in the data, whereas outliers are flagged as questionable. Repeating the process with questionable data crossplotted against other parameters for the same depth highlights the property with the greatest uncertainty. The determination of its value is investigated to locate the source of the inconsistency and establish a more reliable value. Where this is not possible, the user has a rational basis for rejecting that property value."

Jan 1, 2015

By J. B. NEALEY

THE common method of shale mining, drilling, shooting and steam-shovel loading, is fast giving place to a comparatively new method which is purely mechanical. This machine is known as the shale planer and takes a cut from a very large face, 50 ft. or more in height. As shale deposits are usually stratified, the quality varying with the stratification, a very uniform product is obtained with this planer, for its "cut" is across the entire face, vertically. This planer was designed and built some 15 years ago by J. M. Powell, president of the Indiana Drain Tile Co., Brooklyn, Ind. Unevenness in mixing the material from the different layers in the shale deposit of this company was causing considerable fluctuation in the firing- shrinkage and color of the ware produced, thus lowering the quality. Some method of maintaining a uniform proportion was vital and this planer was therefore devised. Its capacity was approximately 175 tons daily: cut, mixed and loaded.

Jan 1, 1929

By Peter M. Herzig

In September-October 2002, shallow seafloor drilling using the 5 m-Rockdrill of the British Geological Survey and the German R/V Sonne has revealed critical information on the sub-surface nature of two distinct hydrothermal systems in the New Ireland fore-arc and the Manus Basin of Papua New Guinea. Drilling at the summit plateau of Conical Seamount (39 holes, 31 % recovery) south of Lihir Island in the central New Ireland fore-arc has confirmed the sub-seafloor extend of previously discovered surface gold mineralization (up to 230 g/t Au) and associated alteration to a depth of at least 4.5 m below the seafloor and further proven analogies to the giant Ladolam epithermal gold deposit on Lihir Island. Drill core samples of clay-silica alteration contain average gold grades up to 14.2 g/t Au over a length of about 30 cm (fire assay Lihir Gold Ltd. laboratory) and appear to be part of a more extensive gold zone located below a carapace of relatively fresh ancaramitic and trachybasalt. These samples contain a complex mineralogy including realgar, orpiment, galena, sphalerite, some chalcopyrite and pyrite, together with amorphous silica, and possibly cinnabar. In addition to high concentrations of gold, shipboard analyses indicate that the gold-rich samples contain high values of Pb, As, and Sb, which is a characteristic feature of a magmatic-hydrothermal style of mineralization and alteration.

Jan 1, 2002

By Robert E. Sorenson

EXPLORATION for deep-seated orebodies in the Silver Belt area of the Coeur d'Alene mining district is complicated by meager surface expressions of diagnostic criteria, lack of knowledge of the significance of specific alteration phenomena, and the great expense involved in the exploration for ore shoots, the tops of which often occur near sea level elevation or below and as much as 4000 ft or more below the surface. Except for the early studies of Ransome and Calkins in 1903 and 1904,[1] little geological work was done in the Coeur d'Alene district for many years, and it is only during the last 15 to 20 years that complete and careful geological mapping has been applied to most of the mines in the area. Much early information, which now would prove invaluable, is lost in hundreds of miles of caved and inaccessible mine openings not mapped by mining geologists. In more recent years mining geology has become a tool of greater use in the district, and some measurable progress is being made in the accumulation of observations that are adding gradually to the knowledge of ore deposits in the district.

Jan 7, 1951

By Matthew Grzelak, Gulsah Erinc, David R. Chapman

"The third phase of the Bagram Drainage System project at Bagram Air Force Base in Afghanistan included construction of a shallow, 540-m long, 1.8-m inside diameter drainage tunnel. The tunnel penetrated mostly stiff to hard clayey and silty soils. The contractor’s Value Engineering Change Proposal (VECP) to use pipe-jacking with a microtunnel boring machine (MTBM) instead of the specified two-pass Earth Pressure Balance method was evaluated and supported using hand calculations. Contractor support was provided throughout the project by providing design reviews and instrumentation monitoring during construction. This paper compares the value-engineering proposal to the specified method and describes the construction conditions encountered. INTRODUCTION As part of a larger improvement project at the Bagram Air Force Base in Afghanistan, a shallow, 540-m long, 1.8-m inside diameter drainage tunnel was constructed to provide additional capacity for Coyote Creek to pass below several critical structures, including taxiways and the main runway, for mitigation of recurring flooding (see Figures 1 and 2). Overburden over the tunnel crown ranged from about 3 m to 5.5 m. An existing cast-in-place twin barrel concrete culvert runs approximately parallel to the new tunnel and is within about 8 m at its closest point. The contractor’s Value Engineering Change Proposal (VECP) to the specified two-pass Earth Pressure Balance (EPB) method (steel ribs and lagging or steel liner plate with a carrier pipe later grouted in-place) called for installation of the required drainage pipe by pipe-jacking (one-pass installation) using a slurry microtunnel boring machine (MTBM). The critical nature of the operations at the air base resulted in significant construction coordination challenges and a greater than usual need to avoid excessive settlements. Substantial restrictions were placed on drilling of investigative borings and installing instrumentation near runways and taxiways due to drill mast height. The prime contractor was SERKA TAAHHUT INSAAT A. S. (SERKA), the microtunneling subcontractor was Ludwig Pfeiffer Microtunnel GmbH & Co.KG (Pfeiffer), the jacking pipe designer was Gollwitzer Pipe and Shaft Technology GmbH (Gollwitzer), and the contractor’s tunnel engineer was Lachel & Associates, Inc. (Lachel). Lachel provided contractor support throughout the project including preparation of a VECP/Design Summary (including interpretation of existing and new geotechnical information), design reviews for jacking pipe, estimating settlement of an existing drainage structure above the new tunnel, and instrumentation planning, monitoring, and analysis during construction."

Jan 1, 2016

By Ulrich Schwarz-Schampera

Submarine hydrothermal vents and associated mineralization on the Tonga arc have been identified in the summit calderas of two shallow-water volcanoes. The highest temperature vents (up to 270°C) occur at water depths between 430 and 540 meters below sea level (mbsl) near the summit of one volcano at 24°S (volcano 19). Clusters of large barite, anhydrite, and sulfide chimneys on the summit cone are vigorously discharging clear hydrothermal fluids with temperatures on the seawater boiling curve. There is abundant evidence of phase separation and associated gold and base metal precipitates. Pyrite, marcasite, wurtzite-sphalerite, tennantite, and chalcopyrite line the interiors of the highest temperature vents. Acid-sulfate alteration of basalts and basaltic andesites is evidenced by intense silicification and the presence of abundant alunite. One volcano at 21°S (volcano 1) has a chain of explosion craters on the flank of a neovolcanic scoria cone and associated massive pyrite, barite and native sulfur deposits at a water depth of 210 mbsl. Intergrowths of pyrite and enargite are associated with intensely argillic altered basaltic andesites. The reported alteration and Au-enriched mineralization styles of these vent fields are similar to other shallow water hydrothermal systems at island arc volcanoes and contribute to the diversity of seafloor hydrothermal activity in the western Pacific region.

Jan 1, 2010

By Peter M. Herzig

In 1994 and 1998 the German research vessel R/V Sonne undertook detailed mapping and sampling of the largely uncharted offshore areas of the Tabar-Lihir-Tanga-Feni island chain in the New Ireland Basin of Papua New Guinea. The New Ireland Basin occupies a fore-arc position with respect to the formerly active Manus-Kilinailau arc-trench system and hosts a series of Pliocene to Recent alkaline volcanoes which are built on rifted Miocene sedimentary basement. Several of the volcanoes possess high-level porphyry stocks and active geothermal systems, including gold-depositing hot springs and the giant (40 million ounces) Ladolam gold deposit on the island of Lihir. On the southern flank of Lihir island, a group of three volcanic cones were discovered at water depths from 1.000-1.500 m. The volcanoes are located in a narrow zone of recent seismic activity and elevated heat flow (up to 100 mW/m2). The recovered volcanic rocks consist of fresh alkali-olivine basalts, clinopyroxene-rich basalts (ankaramites), porphyritic phlogopite basalts, and trachybasalts. Unusual gold-rich hydrothermal precipitates were recovered from the summit of the 600 m high Conical Seamount located only about 10 km south of Lihir Island. 1200 kg of sampled material systematically collected with a TV-guided grab from the top plateau (150 x 200 m, 1.050 m water depth) are intensely mineralized with pyrite, marcasite, minor sphalerite, chalcopyrite, galena, tennantite/tetrahedrite, and orpiment/realgar together with traces of anglesite, cerrusite, and amorphous silica in stockwork-like veins. Bulk samples of the vein mineralization consist mainly of clays, silica, and disseminated sulfides, and have an unusual high gold content ranging from 1.2-44.0 ppm Au. In some of these samples, grains of native gold (about 1 micron in diameter) were identified by SEM in pyrite and sphalerite. The gold-rich material also contains high concentrations of silver (up to 1000 ppm) and typical epithermal elements such as As (2.6 wt.%), Sb (0.2 wt.%), and Hg (34 ppm). Similar to epithermal deposits on land, which usually have only low base metal contents, the samples from Conical Seamount contain only minor amounts of Zn (max. 4.5 wt.%), Cu (2.0 wt.%), and Pb (2.0 wt.%). Many of the samples recovered from Conical Seamount are virtually identical to the gold ore at Lihir.

Jan 1, 1998

By Megan Becker, Aubrey Mainza, Indigo Research Laboratories, Jenny Wiese, Gaynor Yorath, Lucy Little

Particle shape characterisation has an important role to play in mineral processing, to clarify effects of shape on rheology, equipment wear rates, comminution, classification, sizing and flotation. However in industry, shape characterisation is not routine, and the most commonly used shape descriptor in the field (circularity/ angularity/ sphericity) is not invariant. This study aims to investigate shape measurements for a fine particulate ore sample measured with different analytical devices. Two Automated Scanning Electron Microscopy devices with Energy Dispersive X-ray Spectrometry (FEI QEMSCAN® and Zeiss Mineralogic®), and a camera based image-sizer using dynamic image analysis (Retsch CAMSIZER® XT) were compared. Each device was used to analyse the shape characteristics of specific particles in both a coarse sample (–212/+150 µm) and a fine sample (-53 µm) of UG2 platinum ore. Circularity and Roundness frequency distributions obtained from the three devices were then compared. For selected individual particles, circularity showed higher variability than roundness, and the sample circularity distributions obtained by the three devices were completely different. It is clear that circularity data from different studies relying on different devices should not be compared on an absolute scale. The shape parameter roundness was found to be a more robust descriptor than circularity, and it can give a stronger indication of a particulate sample’s shape characteristics on an absolute scale. However, there were still significant differences in the roundness measurements obtained by the CAMSIZER XT and the two Auto-SEM devices, which was attributed to the dissimilar mechanisms of image capture.

Jan 1, 2016

By David Cole, Paul Cooper, Dale Preece, Jerome Stofleth

The Explosive Destruction System (EDS) has been designed at Sandia National Laboratories for the disposal of chemical munitions (phosgene, mustard gas, sarin etc.), many dating back to World War I. EDS is a portable system that is trailer mounted and consists of a vessel into which a chemical munition can be loaded and opened for neutralization with linear and conical shaped charges. Gases are contained within the sealed chamber. The linear shaped charges split the munition in two and the conical shaped charge (CSC) is aimed at the explosive burster, in each munition, which is detonated by the resulting shaped charge jet, Toxic chemicals remaining in the vessel following detonation are neutralized and disposed of. This paper documents the development of a new CSC needed to reliably detonate explosive bursters in an expanding array of chemical munitions that are beyond what the EDS device was originally designed to eutralize. Design of this new CSC was controlled by the need to deliver energy above the detonation threshold into the explosive after penetrating the outer steel casing, fluid, the burster casing and finally the explosive. Design considerations were driven by jet conditions at the steel/explosive interface inside the burster. Parameters to consider in CSC design include: 1) diameter, 2) liner thickness, 3) liner position in body, 4) explosive weight, and 5) liner shape or interior (apex) angle. The effects of these parameters on final CSC performance are examined in detail. CSC’s that meet the design specifications have been manufactured and tested. The performance of these charges are compared with the original design requirements.

Jan 1, 2002

By Alana Pereira Ramos, Walman Benicio de Castro

Amorphization and martensitic transformation (Ms) characteristics of Ti–Ni-Cu alloy ribbons prepared by melt spinning were investigated by means of differential scanning calorimetry and X-ray diffraction. In these experiments particular attention has been paid to change the wheel linear velocity from 21 to 63 m/s. Then the cooling rates of ribbons were controlled. The effect of this cooling rate and alloy composition on martensitic transformation behavior is discussed.

Jan 1, 2015

By Jing Zhan

The fibrous precursor can be obtained by coordination precipitation process, using oxalate, cobalt chloride and ammonia. The composition and morphology of fibrous precursor were characterized by XRD, IR, DTA/TGA and SEM analysis. The results show that XRD pattern and composition of the precursor with fibrous morphology precipitated at pH=9.0 were different from that of ß-CoC2O4?2H2O precipitated at pH=1.0. The mechanism on the thermal decomposition of fibrous precursor was addressed. The influences of various conditions in pyrolysis, including the temperature, time, atmosphere, and the morphology of the precursor, on the morphology, average size and specific surface area of the Co powders were investigated in detailed. At last, the final product, fibrous cobalt powders with diameter about 0.3~0.5µm in size and 40~60 in aspect ratio, were produced by thermal decomposition at 400~500? in the weak reducing atmosphere. The structure of pores in cobalt powders was capillary tube with open ports and the majority was mesoporous.

Jan 1, 2009

By Mauro Chiesa

A. New Dictionary, Since 2007/8 Traditional concept of ?cycle? is dead A dearth of projects AND good metal prices suggests otherwise In a depletion-business, good times for any greenfields in 2-3 yrs! ?Balance? sheet means quality assets = quality capital So, de-risk the assets, and ration the capital ?Replacement costs > historical costs ?Discounted assets depleting; replacement costs need self-financing (FCF) ?Public-sector slows permits, avoids assets and wants more of FCF ?Capital ?markets? are now ?market fragments? ..and? ??Shareholder? has changed from ?growth? to ?income + performance? ?Higher search costs, higher capital costs and higher cost of capital

May 1, 2013

By D. Elroi

This paper addresses the sharing of 2D and 3D data between GIS and mine planning software. Two-dimensional (2D) data, and now three-dimensional (3D) data as well, can be formatted such that both types of software can use, exchange, and display the same datasets. This increases the ability to share data between such groups as environmental, exploration, and mine planning. It overcomes shortcomings of mine planning software in areas of open database connectivity, spatial analysis, and data input and output. It also helps to overcome shortcomings of GIS software in the areas of geologic modeling, three-dimensional interpolation, and visualization.

Jan 1, 1998

By C. Frenzel, N. Blechschmidt

"INTRODUCTION There is no doubt about the time and effort companies put in establishing and maintaining their equipment. However, the question about how these companies can map the benefits comes up. Neither do they have the tools to quantify the benefit of their action, nor do they have the tools to know the actual quality of their current maintenance system. The resources used in the process seem futile to observers. It seems impossible to trace improvements and to get information about the impact of actions in retrospect. Improvements in maintenance performance cannot be recognised by management or shareholders. Thus the necessity for measuring the performance of maintenance systems is given. In this paper ConMoto is systematically showing the strengths and weaknesses of many companies' maintenance management and is providing field-tested proven design elements for measuring maintenance systems and implementing Value Oriented Maintenance. Considering only business assets in production facilities and related machinery out of all investment goods in Europe, you reach a value of around 9.7 trillion euros in 2008. In Germany alone the equipment replacement value amounted to about 1.9 trillion euros [8,10,11,13]. If you calculate a cross sector maintenance costs rate of 4.8 % (corresponding to the average value identified in this study), direct maintenance costs in European production locations add up to over 450 billion euros per year [3]. These figures speak for themselves. Yet maintenance is not only of enormous significance for European enterprises. Our experiences show that maintenance and asset management, particularly sustainability issues, are also increasingly moving to the forefront in the BRIC states, in the Middle East and in many emerging countries. First of all, in order to meet the resulting high quality and cost related requirements of maintenance systems, a comprehensive overview of the issue is needed. This overview is provided by a detailed analysis of 83 companies and production plants from various sectors – with amazing results. SIGNIFICANCE OF MAINTENANCE Current studies show the high financial significance of maintenance and asset management. According to the market study in the Asset Manager [9], in industrialised countries about 10 to 15 per cent of the labour force are employed in maintenance and facility management tasks. In Europe about 40 to50 million people are directly and indirectly involved in retaining the value of machinery, plants, buildings, transport systems and infrastructure facilities. A glance at the costs side also demonstrates the great relevance of maintenance. EU-wide annual direct maintenance costs amount to a total of more than 1,500 billion euros. In Germany alone they are about 250 billion euros. This impressive total is considerably exceeded by indirect maintenance costs caused by technical failures. Indirect costs are estimated to be five times higher (Figure 1). [7,12,14]"

Jan 1, 2018

By Pedro L. Lizaur

INTRODUCTION The degree of success of an association between parties in establishing a new venture ultimately depends on three factors: a. the venture's underlying economic strength, which is based on the complementarity of the comparative advantages brought by each party to the negotiating table; b. the ability to reach an agreement which satisfies each party's objectives and constraints; and, c. the capacity to design and implement a funding structure which is consistent with the project economics. A thorough assessment of the venture's profitability and associated risks under alternative technical and economic scenarios is the basis for a sound "go" or "no go" decision. In-depth evaluation of the risks and rewards to each of the parties involved under alternative legal and financial structure must be the foundation for a long lasting "how to go" decision. The allocation of risks and rewards should be consistent with the objectives and constraints of all parties and the sharing mechanisms, established in the contract, should be flexible to assure the long-term stability of the agreement. Rapidly changing economic conditions during the last decade have had a dramatic impact on the envisaged allocation of risks and rewards between host countries and private investors. The effects of these changes, and the fact that the relative strengths of the parties involved may shift during the life of a project (e.g. before and after major capital investments have been made), have forced the renegotiation of a multitude of contracts. Therefore, the present and future stability of an economic agreement would depend not only on the originally designed provisions, but also on provisions which allow for the automatic adjustment of rewards to project sponsors under a variety of future economic situations. A pre-condition for the allocation and quantification of risks and rewards is the definition of standards of measurement used by each of the parties. This is critical in international negotiations when one of the parties represents the national interests of a country. The understanding and use of different standards for the measurement of rewards for risk taken between a government and private enterprise facilitate the negotiation of a satisfactory agreement. This is possible because certain trade-offs between the negotiating parties may have different relative values. STANDARDS OF MEASUREMENT OF REWARDS FOR RISK TAKEN The negotiating process takes a step forward when the parties are able to focus on their interests, explore different alternative solutions and then base results on a set of objective standards. Unfortunately, the parties frequently put more effort into "staking out" and defending positions, than into understanding their intrinsic interests. Moreover, when one party, such as a governemnt owned corporation, represents a country's national interests, the negotiation process increases in complexity. Private firms focus on commercial profitability, using discounted cash flow techniques such as NPV, IRR, or ROE. In contrast, the government is also concerned with the project's impact on the local socio-economic environment. Without entering into a discussion of alternative economic development theories and approaches, there exist several possible measures that could be pragmatically utilized by each party in evaluating the socio-economic impact of a project. The more complete measure is the National Profitability (NP). The NP is a discounted cash flow procedure similar in structure to IRR or NPV but in which the project's financial cash inflows and outflows and discount rates are adjusted to take into consideration the local conditions. The NP is calculated on an unlevered basis and all taxes and duties are removed from the project

Jan 1, 1985