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By Victor Azbe

Azbe System of Controlled Calcination To obtain good and cheap lime there are certain fundamental requirements that need to be satisfied. These are : (1) Proper combustion of fuel and steady supply of heat to the kiln. (2) Proper heat distribution in the kiln. (3) Uniform drawing of lime through the several shaft sections. (4) Complete cooling of the lime and recovery of the heat. (5) Temperature control of the hot zone by economical means. (6) Ample draft to obtain high capacity. (7) Arrangements to facilitate operation. Figure 17 shows diagrammatically one of the smaller kilns, intended for large stone. Such a kiln can be supplied with gas from a centrally located automatic gas producer, or, as shown, from an integral producer located snugly against the kiln. These producers make very good gas and have a gasification capacity of either 10 or 15 tons of coal a day. The producers have water-sealed ash pits, a rather thick fuel bed that is conducive to the making of high-CO gas, and are under forced draft. No steam is used. Clinkering is prevented by admixing some spent gas from the kiln with the air. Coal feeding is from a coal bunker through spouts into the hoppers over the producer. This is done, at proper intervals, by manual operation of slides, but it is planned to install mechanical feeders. Central mechanical gas producers have the advantage of requiring little labour, but the blowing of soot is a problem, as also is the proper distribution of the gas among several kilns. In the case of integral gas producers, soot from the centre burner is blown back into the producer to be burned, and the supply of gas to the kiln is controlled by regulation of air to the producer. In large plants, the mechanical producer may be preferable, but in small ones, the integral producer is cheaper, better, and more reliable. The kiln shown in Figure 17 is suitable for both systems of gas supply. It will be noticed that there are no side gas burners. All gas enters the kiln through the centre burner in a manner that permits any desired amount of gas to be directed to any of the kiln sections by the aid of regulating slides.

Jan 1, 1946

By Peter Broad

"Extracting any metal, especially specialty metals and rare earth elements, requires an in-depth analysis of the costs and potential revenue as well as a due diligence study of other stakeholder interests. Rare earth projects are generally in the billion dollar US range or above, and thus failure to accurately predict any loss of revenue caused by impurities within the product or additional effluent treatment costs can destroy an otherwise viable study. Two prime sources of input impurity are considered: impurities in the material feed and from reagents. The effect of these impurities factor on both the product (in reduced revenue) and on residual “tailings” that may incur additional unforeseen costs.INTRODUCTION“Truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident” – Arthur SchopenhauerThe era of unscoped, unbudgeted construction ended about 150 years ago. Today’s engineer must design with confidence; but do so amidst proprietary secrets and unfamiliar pollutants, which present a myriad of interesting challenges. Is it possible to build a viable rare earth plant to a realistic budget, without destroying that which we cherish? Some see this as contradictory but in reality it is the only viable option.WHEN GOOD PROJECTS FAILWithout rare earths the Copenhagen agreement might be null and void. Running a wind turbine with a 30 tonne conventional magnet requires some hefty engineering and prohibitive investment. Despite their ‘Green metal’ applications, production of rare earths have created environmental nightmares, as Folger stated in 2011 when visiting Baotou, or has Jaing Mainheng who has been quoted by Ambrose Evans-Pritchard 6 Jan 2013. This comment is not a criticism of China; the details are from a 2012 white paper published by the Chinese Government that initiated a $6 billion environmental clean-up. Nor is China unique; other plants have had problems as well. There were toxic leaks in the 1990s from Mountain Pass, and the Mitsubishi Bukit Merah Plant (built in Malaysia in 1958) required a $100 million clean-up."

Jan 1, 2016

By Lu Lin, Yan-ping Bao, Min Wang

In order to forecast the cost of dephosphorization during BOF process, and achieve economical dephosphorization of BOF. The mathematical model of dephosphorization cost for BOF process was established. The model calculations show that, when the silicon content and phosphorus content are increased in hot metal, and the final phosphorus content of BOF is decreased, the dephosphorization cost will be increased. The silicon content of hot metal is increased of 0.1% in the plant, the dephosphorization cost is added by 9 RMB/ton steel. The De-P cost of mode A is much higher than the other two modes for three typical production modes of single slag melting process, when the phosphorus content of hot metal is higher than 0.14%, an increase in the phosphorus content by 0.01%, the De-P cost of mode A is added by about 7 RMB/ton steel. Meanwhile, when the phosphorus content of hot metal is lower than 0.165%, the De-P cost of mode C is higher than mode B’s. For BOF single slag melting process, the dephosphorization cost calculated by model is between ± 2%, proving that the model is reliable for the prediction of dephosphorization cost.

Jan 1, 2015

By John A. Church

AT a time when the treatment of gold and silver ores by fusion, in opposition to the mill-process, is attracting so much attention in this country, it may be useful to consider what is done in a well-conducted foreign work. For this purpose I will ask the reader to accompany me to Lend, in Austria, a small but thoroughly organized

Jan 1, 1873

By C. Norman Bowers, Blaine B. Wescott

MARKED improvement in the serviceability of sucker rods has been effected in the last two years, partly because of the insistent necessity for greater economy in the operating costs of crude oil production growing out of the general industrial depression and partly because many of the recently developed fields have imposed more severe operating conditions upon both surface and underground equipment. The latter is particularly true of Kansas, where practically all of the oil produced. is associated with damaging amounts of hydrogen sulfide brine and where the method of establishing potential production demands equipment capable of being operated at maximum capacity without interruptions. The decline of flush production in the Oklahoma City field created new problems in deep-well pumping on a scale heretofore unequaled and the increased proportion of water it has been necessary to produce in the fields of the Greater Seminole area presented conditions that were acutely in need of betterment. The problem in the latter fields was complicated by the shift towards sulfide characteristics, which accompanied water encroachment, and it is probably true that nowhere, at the present time, are pump¬ing conditions generally as severe as in this territory. The Mid-Continent district, therefore, has become the proving ground for the numerous materials that have been proposed for sucker-rod fabrication. The information that ultimately will be obtained from an unprecedented amount of field experimentation will pay ample dividends when the decline of East Texas increases the demand for the vast reserves of sour crude in West Texas. It is a rare occurrence in industry that the use of such a simple piece of equipment as a sucker rod presents so complicated a problem for solution. As proof of this, it is only necessary to consider the numerous types of sucker rods on .the market at the present time and contrast this condition with that of less than four years ago, when it was the common aim of manufacturers to develop a single sucker rod for all conditions of

Jan 1, 1935

By Bell I. F

In 1985, ZC Mines (now Pasminco South) had been unprofitable for some years due to a combination of high operating costs, low metal prices, low head grade and an aging and inadequate mining infrastructure. However, the resource of metal in the ground was still of world class, even after some 80 years of mining. A major study, which was to be of two years duration, was therefore commenced to establish a practical and profitable long term mining strategy and to cost the infrastructure options needed for its support and thus form the justification for a capital expenditure program to take the mine profitably into the 21st century and its second century of operation. This paper discusses the rationale behind the methodology adopted and the nature of the results achieved in one aspect of the study - the determination of the mineable resource and the relationship between the head grade/quantity of the economically mineable resource and the variables of cut-off grade, cost structure, annual production rate and metal prices/exchange rates. The basis of the study was the designing of some 5000 scopes to mine out the entire resource for a range of cut- off grades and the assembly of the detailed physical data thus obtained in a stope-by-stope data base for financial and other analysis. Those scopes which were shown to be economically mineable were then scheduled for two optimum annual production/cut-off grade/metal price combinations to provide life-of-mine cost and value of production cash flows.

Jan 1, 1992

Shallow ore deposits are mined by surface methods but a depth is reached in the case of most deposits after which underground methods are applied for the extraction of the remaining ore. The determination of this depth and its analysis is the subject of this paper. In order to determine transition depth from open-pit to underground mining on the basis of the allowable and economically feasible overall stripping ratios, an economic-mathematical equation is first introduced. Using the achieved equation and an analytical procedure on a particular two-dimensional hypothetical tabulate deposit, an effective formula is then established. The formula introduced here, together with the procedure adopted, could be used in all similar mining situations by the mining design engineer.

Jan 1, 2010

By H. J. Struth

Conditions in the gasoline market undoubtedly influence the oil industry's general economic situation to a greater degree than perhaps any other single factor. No matter how efficiently the oil industry manages to conduct its producing operations, a drop in the price of gasoline exerts definite pressure upon the posted price of crude oil in the field. Efforts of the recent past have shown that profits from the producing division of the industry are closely tied in with the course of the gasoline market. When refinery gasoline prices are depressed, as they have been during recent months, it is utterly impossible for purchasers to maintain a crude market that is commensurate with the cost of production, regardless of how well balanced the producing situation may be. In fact, the producer can no longer regard his operations in the light of an independent unit of the oil industry, since his financial well-being is directly dependent upon the well-being of the refiner. Because gasoline is the principal constituent of crude oil, it is obvious that profitable refining operations can only be maintained through profitable gasoline markets. Likewise, when the price of gasoline influences a profit for the refinery it also influences the prosperity of the producer, through the advent of higher and more profitable posted prices for crude oil in the field. Financial results for 1932 showed material improvement over the preceding year, primarily because the price of gasoline was maintained at levels somewhat above those of 1931. Consequently, the producer was able to record improvement in the crude market, through a somewhat higher level of posted prices. While effective methods of prora-t,ion of crude production are given credit for the advance recorded in the crude market last year, it is also a fact that the advent of higher prices for gasoline had a direct influence upon the posted prices of crude oil. For example, when gasoline was sold in Group 3 at 2 3/4 a gallon in June and July, 1931, the price of 36-gravity Mid-Continent crude was down to its lowest point of only 18c a barrel. As refinery prices advanced, however, there was a corresponding advance in posted prices of crude oil. Thus, when Group 3 gasoline commanded a price of 5c a gallon

Jan 1, 1933

By Sidney A. Swensrud

The writer has been interested for some time in trying to appraise our industry's prospects for gasoline consumption over the next half dozen years or so. Anyone who has even approached the problem knows the intimate relationship to it of the number of automobiles in use— by automobiles I mean both passenger cars and trucks. Probably at least 90 per cent of our gasoline is used in automotive vehicles. Some recent estimates secured from the Department of Commerce show the following breakdown: Per Cent Passenger cars............................................ 60.0 Trucks................................................... 27.4 Busses................................................... 2.9 Taxicabs................................................. 2.2 Subtotal............................................... 92.5 Aviation, motor boats and railroads......................... 0.5 Agricultural: farm tractors, etc.............................. 3.3 Balance (manufacturing, government use, construction, etc.)... 3.7 100.0 Up to the beginning of the depression there was, of course, a constant annual increase in the number of automobiles in use, for each year the industry added to the total inventory or ''population" more new units than were being scrapped, as may be seen in Fig. 1. Few of us in the oil industry needed to give much attention to the detailed figures, although the automobile industry seemed to interest itself in all sorts of calculations of replacement demand vs. new car demand, the average life of the car, the number scrapped, and the like. Probably many people in the oil industry, as well as outside it, were surprised at the way in which automobile registrations and gasoline consumption held up during the early years of the depression. Nor were they greatly perturbed when, as in the last two years, both registrations and consumption began to fall somewhat. That was natural enough; it

Jan 1, 1933

By H. J. Struth

In these trying times of proration and low oil prices, it is decidedly necessary for all branches of the petroleum industry to accord full recognition to the economic phenomena that contribute to its varying state of welfare. Perhaps no other single factor has a more important bearing upon the general oil situation than the supply and demand of gasoline. Year after year, the records have shown that the degree of prosperity or depression accompanying the industry's developments has been to a large extent influenced by the degree of balance maintamed between the supply and demand of gasoline. More and more it is being realized within the industry that equilibrium between the supply and demand of gasoline forms the basic structure of crude and product market values and, consequently, the deciding factor in the financial results of the industry as a whole. The influence of the gasoline situation upon the market and financial structure of the petroleum industry was effectively demonstrated during 1930, when excess accumulation of gasoline undermined not only the refined oil market but the crude market as well. In fact, it was a top-heavy gasoline situation that defeated the realization of benefits that might have accrued from an otherwise favorable statistical position in the producing branch of the industry. Indicative of this is the fact that crude oil production was curtailed to the extent of 98,323,000 bbl. last year, while refinery runs to stills were maintained at an excessive rate until late in the year, creating an excess gasoline production of 6,663,000 bbl. above actual requirements. Nevertheless, the movement to curtail refinery operations during the closing months of the year prevented a far worse situation, although it came too late to turn the ebbing momentum of the general oil market. Despite the severe depression of the market values that accompanied 1930 developments, it can be said that the results attained during the closing months of the year, in the direction of production control, marked a decisive turn in the industry's economic affairs. In fact, a review of the oil situation from every angle points definitely to a better general understanding and recognition of the workings of the economic law of supply and demand. As a result, the year closed with crude production in

Jan 1, 1931

By A. B. Bowman

The 1963 Jackling Award lecturer describes the founding of Banner Mining Co. and its trials and tribulations before becoming an established firm. Such aspects as geological description of Banner mining areas, history of exploration and production, areas of present interest to the company and research work conducted by the company are included. Several years ago a wealthy Chinese business friend of mine purchased an interest in a proposed oil well to be drilled a great distance from his home. A few months later it came in as a producer and proved to be a huge success and materially added to his resources. I asked him why a man of his wealth should be so lucky in a venture outside his sphere of knowledge when most people of modest means never seemed to get ahead. His answer was, "Fat Hoy takes a chance." Even though this was his answer, I knew from my association with him that there were other tempering considerations which Mr. Hoy applied before making up his mind to enter any transaction. First, he was a cautious individual. He was also a great believer in details and insisted on knowing everything possible about a situation, and finally, he was what we call a very solid individual with good basic instincts and judgment. This philosophy of Mr. Hoy may be applied to most any business but especially to those engaged in a search for natural resources such as mining where great risks are involved. This article concerns events in the history and growth of Banner Mining Co., with which I have been associated for 27 years in capacities from mine surveyor to vice president. Mr. Hoy's philosophy has played a significant role in the exploration projects of this company over the years, but what is more important, the officers, directors, and controlling interests in Banner have been aggressive in their search for ore reserves. THE BIRTH OF BANNER Banner Mining Company was incorporated in September 1935 by a group of Oklahoma and Texas oil men for the purpose of exploring and developing the Bonney-Manilla mines at Lordsburg, N.M. These properties had a history of intermittent production since the first ore discoveries as far back as 1870. Most of the production from the district has come from four mines, namely, the Eighty-Five, the Atwood, the Bonney-Manilla, and the Misers Chest. The last two are now owned by Banner Mining. The Eighty-Five mine operated between 1885 and 1931, and production totalled 1,494,287 tons averaging 0.11 oz of gold per ton, 1.23 oz of silver per ton, and 2.80% copper. The vein extended for a distance of about 3000 ft northeast and was mined to a depth of 1650 ft. The Atwood mine, adjoining the Eighty-Five mine, to date has been of lesser importance as a producer, but it has been operating for several years producing high silica flux ores for a smelter. Production totalled 352,828 tons up to January 1, 1962 From the Bonney-Manilla and Misers Chest mines, owned by Banner, production through 1961 totalled 2,006,343 tons with an average grade as mined of 0.0192 oz of gold per ton, 0.760 oz of silver per ton and 2.63% copper. Banner built a 150-tpd flotation mill in 1936 after almost a year of development on the 600 level of the Bonney mine. After less than one year's operation, it became apparent that the 150-tpd rate was not sufficient to make a reasonable profit due to the marginal grade ores. The low tenor of the ore, mainly chalco-pyrite in a highly siliceous gangue, made mandatory the close control of costs in order to make ends meet. A 300-tpd unit was added to the mill in 1937, and it is still the operating unit today. The clean sulfides presented no problems in milling. A metallurgist doing research on it at the time stated that the copper minerals seemed to have a built-in desire to float. Mill recovery of copper throughout the 27 years of operation has averaged 96.23%. A PERIOD OF FORCED GROWTH World War II brought many hardships to Banner. Labor and supply shortages caused drastic curtailment in development work. Rapidly rising costs far outdistanced any relief from pegged prices which we received from Government agencies. Finally, a branch of the Government asked us to stop all devel-

Jan 1, 1963

By Barnabas Bryan

During the boom period of 1928 and 1929, several oil companies took advantage of high security prices to sell stocks, thereby securing money for the company very cheaply. Few if any of those companies realized that the money received was not at all cheap in view of the fact that it was for investment in fixed assets at inflated prices. Suppose a company borrowed twenty millions of dollars to expand its marketing facilities during the boom. It diluted its capital and acquired fixed property which could not earn its interest requirements during the following deflation and therefore consumed income from other company activities. The company also had to stand the deflation in the capital value of all the property it bought. Since the mistaken expansion during the boom accelerated the decline in net income during deflation, the financial position of the company was harmed in proportion to the amount of that expansion. Thus the company was unable to get money to buy fixed assets in the depression when all property is cheap. The same condition holds for the company that sold common stock for the purpose of developing potential production in a newly discovered oil field. Regardless of what the ultimate value of the new field may be, potential production does not increase the net income of the company. The difficulty of meeting the enlarged dividend requirements due to the increased number of shares outstanding impairs the financial position of the company during deflation in some relation to the probability of decreased dividends. This company also is not in a position to expand during the depression when properties and companies can be bought for a fraction of their real value. Expansion of fixed assets during boom times has been the ruin of many otherwise good companies. Some of those which most extensively bought property during the post-war boom have not yet recovered. A number of cases could be cited in sugar, leather, fertilizer and wool. This does not seem to be governed by the quality of the property bought, for examination shows the assets to have been of individual high quality in many cases. When recovery is long deferred it is likely to be true, as in sugar or textiles, that the industry has a large "potential" capacity for overproduction.

Jan 1, 1931

By G. M. Wiles

The increasing number of problems of the modem mine manager has led the author to discuss the art of management. He lists the principles concerning selection of personnel, exploitation and development, new equipment, process improvements, new processes, maintenance, operating cost data and public relations. Application of the principles to problems of mine startup, operation and rehabilitation are described. Since D. C. Jackling was famous for his adeptness at organizing and training teams of operating personnel, the subject of mine management is particularly appropriate for a Jackling Lecture. In fact, it is doubly appropriate because in very basic ways Jackling's career changed the nature of the tasks and challenges facing a mine manager. Management of mines, of course, is the art of finding and winning minerals economically from the earth's crust, and it involves the use of all the engineering sciences. But also of prime importance is a skill which is not yet a science - the area of management often referred to as human engineering. Since expenditures on staff and labor may well involve more than 50% of the direct costs of operating a mine, ability at human engineering is just as important as the ability to plan and put into effect the most efficient operating procedures. In addition to his ability to select and train operating personnel, Jackling possessed, to a degree unmatched by many of his contemporaries, broad, analytical powers covering both the economics and operating phases of large scale mineral extraction. His breadth of vision found its greatest expression at the time he analyzed the Utah copper deposit. Fortunately, Messrs. Penrose and Gemmell had enough faith in his analyses to furnish the capital needed to begin operations. The result, as is well known to all of you, was Kennecott's lucrative Utah copper mine — and the beginning of the open pit porphyry copper era. The Utah copper mine, and Jackling's subsequent similar successes in Arizona, New Mexico and Nevada, had one thing in common —all of these large porphyry deposits were worthless until open pit, large daily tonnage schemes were developed for their exploitation. The successful development of such schemes made vast new mineral resources available for economic exploitation. But at the same time, the trend away from smaller high grade operations in favor of the far more complicated operations required to handle large deposits of low grade ore have greatly altered a mine manager's problems. We are all familiar with the saying "mines make managers." There is still some truth in this statement, but far less than there used to be in the days when high grade properties were the rule rather than the exception. When high grade orebodies prevailed, many managers, superficially at least, could not make a mistake because the profits of their mines

Jan 1, 1962

By L. D. Clark

Pay-out, the ratio of capital expenditure to annual cash return can be very revealing when employed to gage the merits of a proposed mining venture. It is a quantity, numerically but not physically equal to a factor, by which cash return may be discounted to equal required investment. The fewer the pay-out years, the greater the average annual earning power of the project. Considerable material has been written in the past about the most important and difficult problem mining management faces in evaluation of a property: the optimum production rate for the venture. What daily capacity should be adopted for the proposed operation that it may be the most rewarding to those underwriting it? H.C. Hoover has said, "The most important objective is the least cost per ton mined; and minimum working costs can only be gained by the most intensive production." Theoretically and practically, the quicker the ore is removed, the more profitable should be the venture because of the saving in fixed charges, the consequent lower unit costs and the interest unearned by the profit from the unmined ore. Yet, such performance will be tempered by policy and a restraint imposed by the ratio of capital expenditure to annual cash return. * The 'Annual net profit after taxes but including depreciation and depletion allowances. former will be based upon an analysis of the economic climate anticipated, with its many ramifications including the demand for the product, prices, tax laws, the conduct of labor and related wage scales. The variables and intangibles involved in estimating the optimum production rate for a mine do not readily lend themselves to mathematical relationships or equations and the problem can become complex indeed. The more readily applicable and relatively faster appraisal method will be used which, in addition to being reasonably adequate in most cases, will serve as a guide, should a more expanded and detailed estimate be desired. The first question is what is company policy with respect to the rate of investment return? This will depend on that significant period of time referred to as the pay-out, which can be defined as the estimated interval during which capital investment is returned through application of annual cash return to its recovery. Expressed another way, it is the ratio of capital expenditure to the annual cash return. For example, if the capital investment is $C and the annual cash return is $A (after Federal tax), then $C/$A = the pay-out period in years. That is to say, if $C = $1,500,000 and $A = $214,000, then which is the mathematical expression for the period of time it takes to recover the funds originally invested in a mining enterprise. The relationship yp = $C/$A can be useful — an expression which requires only the significant tern yp to be fixed; in other words, the long range investment policy. For what is the pay-out period but an expression of that policy in terms of the speed, within practical limits, with which an individual or company may want to recover capital expenditure? A policy by which pay-out will be fixed is imperative. This ratio must lie within relatively narrow limits governed by what is economically feasible. It cannot be too low, rendering the ratio impractical or absurd, nor too great, delaying the return of capital for reinvestment beyond a commensurate interval. What pay-out will govern this policy? Federal corporate taxes would seem to present the best measure. Consider mining in Canada where new mines are exempt from Federal income tax for 3½ yr from date of first production. This exemption expressly allows The Act states: "A corporation . . . i s not required to include the profits . . . for the period of 36 months commencing with the day on which the mine came into production in reasonable commercial quantites." a company to recover capital expenditure during the early stages of production. With such an incentive, it is logical to strive for as much capital redemption as possible during this period. Thus, 3½ yr would be a major contribution to the pay-out in Canada. Furthermore, it generally takes from 1½ to 3 yr to develop

Jan 1, 1963

By David Donoghue

Efforts made in the year 1930 and in previous years restricted production in most of the fields of Texas to a point that was satisfactory, at the beginning of 1931, to the majority of producers and buyers. In the Panhandle, North Texas and West Central Texas districts, a few operators with refinery affiliations or contracts either ignored, or by virtue of injunction suits, did not comply with the Railroad Commission's orders, and there was some oil sold at less than posted prices, which, with the Oklahoma City difficulties, caused the first general price reduction. More could have been done perhaps to help the situation on the Gulf Coast and in the Laredo district, but natural advantages are not readily surrendered. East Texas Proration troubles in 1930 were insignificant when compared with those of 1931. In January, 1931, efforts were begun to convince the producers and citizens of East Texas of the necessity of curtailment. Opposition quickly developed and meetings were held in the towns of the region and proration denounced vigorously. Notwithstanding a strenuous campaign for additional legislation waged by many producers, the regular session of the State Legislature refused to strengthen the conservation laws and passed only the Marginal Well Bill, designed to prevent the Commission from prorating small wells. The Railroad Commission held a heated hearing on East Texas in the latter part of March. During April the Commission issued three orders based on the Yates plan for the proration of the East Texas field. Each succeeding order raised the allowable for the field. In June the opposition held more mass meetings at which a plan based on acreage was endorsed. Apparently on the theory that any plan was better than none, the Commission issued an order on July 2 embodying some of the features of the proposed plan, limiting production to 250,000 bbl. per day, and dividing the producing area into 20-acre units participating equally in the outlet. Owing to the bringing in of many wells and the many violators of the Commission's orders, production increased to such an extent that prices went as low as 5c per barrel.

Jan 1, 1932

By E. B. Swanson

Frequent reference has been made to the increased domestic gasoline demand recorded for 1931. This increase was in the neighborhood of 7,000,000 bbl. Although smaller relatively than that to which the oil industry had become accustomed by virtue of the experience of preceding years, the increase was of substantial amount, particularly at a time when any increase at all could be regarded with eminent satisfaction. Less has been said, however, of the 18,000,000 bbl. decline in gasoline shipments to territories and foreign countries. When the loss of business outside the United States is combined with the domestic increase, there results a net loss of some 11,000,000 bbl. in total gasoline demand. The gain of 2 per cent in domestic sales gives way to a loss of 2.5 per cent in total domestic and foreign sales. The United States actually has been losing ground in the international gasoline market since 1924, when shipments from this country equaled 72 per cent of the gasoline shipments from the leading gasoline-producing countries of the world. A loss in relative standing was recorded with each succeeding year. As long, however, as gasoline shipments showed an actual increase, the loss in relative standing was of little concern. Foreign producing centers annually supplied an increasing share of the foreign gasoline markets, but, until the past year, the demand abroad continued to increase at a pace which could accommodate all of the increased output of foreign plants and yet require increasing quantities from the United States. It was not until 1931 that the various factors were combined so as to produce an actual and substantial decrease in the foreign demand for United States gasoline. Consumption in foreign countries generally declined, while the output of foreign refineries and the foreign manufacture of substitute fuels continued to increase. From our own viewpoint, this meant a loss of some 18,000,000 bbl. of gasoline business in foreign countries, one-half of it probably due to the lowering in foreign demand and the other half to the increased output of foreign refineries and the increased utilization of substitute fuels.

Jan 1, 1932

By A. Weiss, W. A. Coster

The search for ore is characterized by a great variety of uncertainties, each of which can be resolved by obtaining information at a cost. Three exploration stages may be distinguished in which information can be obtained, based on inherently different cost structure: 1) the reconnaissance or scanning stage, 2) the examination or screening stage and 3) the project stage. This exploration sequence would roughly coincide with replies to questions as to: where, how, why and how much. As complete information in each stage is too costly to acquire, we must assess the probability that adequate information will be furnished by a limited amount of effort and attempt to maximize the expected value of ore to be found for a given exploration expenditure. Several problems are discussed relative to the mathematical formulation and possible computer procedures for determining the optimum allocation of a total exploration effort. Based on the available literature possible solutions to this problem are indicated. When scanning through published literature on mineral exploration, it seems at first that there is little room for substantial and systematic improvements in the efficiency with which the problem of discovery of new ore deposits is presently being handled by large organizations active in exploration. It appears equally difficult to offer something relevantly new which could generate a break-through in exploration thinking and cause a marked improvement in the ratio of successful undertakings to the total exploration projects started. On the other hand, a number of experts in recent years have urged that the problems in prospecting be analyzed in a more skillful and sophisticated manner than in the past. Their thesis is based mainly on the premise that the cost of finding mineral deposits will increase with increasing technical difficulties. In present large-scale exploration ventures, especially in those regions where outcrops and immediately visible geologic evidence are scarce, older methods of prospecting are increasingly being replaced by more indirect and systematic geophysical and geochemical methods with more emphasis on correct statistical design of exploration patterns. It is perhaps the oil industry which has made the greatest strides in developing statistically, well justified patterns in its search for oil; possibly because oil seepages, as indicators of the presence of oil, left off at an earlier point in time than did outcrops as indicators of base metals. Among the pioneers in the field of statistics and operations research, as applied to mineral exploration, the excellent works of Allais, Slichter, Koop-man, Mickey, de Guhnin, Krumbein, Griffith, Sichel, Krige, de Wijs, and Matheron may be mentioned. It should, however, be pointed out that three subjects of basic importance to the allocation of exploration efforts have so far received only scant attention in published literature, even by the aforementioned authors. In the first place, a more precise definition of the object of the search, i.e., a minimum-size orebody, seems to be outstanding. Secondly, a decision model is not a widely-discussed subject. Thirdly, no concentrated attempt so far seems to have been made to establish probabilities of the occurrence of economic deposits on a regional scale and to arrive at a slightly more accurate knowledge of the probability laws governing the deposition of ore. It is not the purpose of this paper to create new order in the complexity of uncertainties in which our decision processes in exploration necessarily have to be conducted. Rather, we intend to highlight some of the outstanding, hitherto unmapped territory, where diligent compilation and a utilization of present and historic data may statistically improve our chances of success. We hope that the contribution of this paper will lie in bringing allocation problems into better focus and in increasing the mineral industry's realization of the magnitude of the factors involved. THE MINIMUM-SIZE OREBODY The concept of target specifications for what constitute a minimum-size orebody in exploration is a rather variable one and depends to some extent on

Jan 1, 1963

By Leonard Logan

The petroleum industry is not peculiar in that it has a problem of stabilization. Economic conditions, not only in the United States but throughout the entire world, are unstable. However, the petroleum industry together with coal mining and agriculture has experienced a longer period of depression than most of the others. It is significant to note that industries engaged in the production of basic raw materials, the primary industries, have not enjoyed as much prosperity since the war as the secondary industries, or those engaged in the fabricating of raw materials and their distribution. The problems of the primary industries are not all the same. Overproduction has existed for several years in agriculture but its causes are not the same as those that have brought about overproduction in the petroleum industry. Unlike agriculture, the institution of property rights and the migratory nature of oil are responsible for the oil man's troubles. Our laws permit the owner of the oil and gas rights, with certain exceptions, to drill when and where he pleases. Since oil is migratory, the adjacent property owner must go and do likewise—drill. This condition spread over a wide area soon brings to the surface more petroleum than can be readily absorbed by the market, creating a condition of overproduction. It is significant to note at this place that when overproduction occurs the complete units in the industry suffer least. A complete unit is taken here to mean a corporation engaged in all the phases of the industry through production, transportation, refining and marketing. In the present depression the complete units in the industry are not in as bad financial condition as those engaged in single phases of the industry. The same thing can be said of the zinc industry, the lumber industry, and the other industries where there are organizations engaged in all the steps through the production of raw materials to the marketing of the finished product. The reason for this is that the complete units are in better position to coordinate all the factors that would work for a stabilized condition than are the units that are engaged in a single branch of the industry.

Jan 1, 1931

By Albert J. McIntosh

In discussing the petroleum products situation the first thing that comes to mind is "what is happening to gasoline." Is the consumption increasing? How is the export market? What about imports? Are stocks on hand too high? Have we produced too much? This paper will attempt to answer these questions. Consumption of gasoline (motor fuel) in the United States in spite of the depression and the chaotic conditions of many industries has increased during 1931 about 2 per cent over 1930. This favorable factor was offset by a severe contraction in exports, which fell off about 30 per cent from 1930. This drop in exports was so large that very little more export business was done than in 1926 or 1927. Taking all demand combined, there was a decrease from the peak year of 1930 of nearly 11,000,000 bbl., amounting to slightly over 2 per cent. The units of the industry, though, should have expected some decrease and governed themselves accordingly. Let us see what they did. They reduced imports over 3,000,000 bbl., which helped. Production was cut 3,000,000 bbl., but this was not enough, so that stocks increased 1,800,000 bbl. whereas during the previous year stocks were reduced 2,500,000 bbl. It is apparent, therefore, that something was done to keep the industry in balance in regard to gasoline, but not enough. If the year had ended on Sept. 30, we could have said that production had been cut 19,000,000 bbl. and stocks had been reduced from the previous year, but the excessive production during the last three months of the year changed everything. It is a strange thing and worthy of note that the price of gasoline fell to its lowest levels when apparently the greatest improvement was being made, and that during the last quarter of the year prices started to improve, when, in spite of an improvement in total demand which approximated 1930, an excessive production caused an uneconomic condition to set in. Stocks on hand on Dec. 31 were unquestionably too high, possibly 10,000,000 bbl. more than was needed for a strong condition to obtain. It seems almost unbelievable that the industry would continue to produce

Jan 1, 1932

By C. W. Merrill

The price records of seven representative mineral commodities for the 68-year period 1890 through 1957 have been compiled and analyzed for significant trends. When these records are reduced to real prices in terms of dollars of constant purchasing power or to the purchasing power of industrial wages at average rates, a substantial overall fall in prices is revealed. This downtrend contradicts the widely held concept that heavy drafts on a mineral resource must lead to scarcity, reflected in rising prices. Three metals (aluminum, copper, and pig iron), two fuels (bituminous coal and petroleum), and two nonmetals (sulfur and cement) have been chosen because of their pre-eminence in their respective categories, their significance in an industrial economy, and the ready availability of their price records. It might be added that these seven commodities were selected before any price figures were compiled; none was selected or rejected to substantiate any preconceived notions as to price trends. The overall importance of the seven is demonstrated by the fact that, taken together, they composed over three-fourths of the value of all minerals produced in the U. S. in 1957. The first step in the analysis was to reduce the price records to a basis for significant comparisons. Two such comparisons have been made: 1) The quantities of each of the commodities that could have been purchased for an average hour's wage in each year, and 2) the unit price of each commodity through the years in terms of deflated dollars. These data are set forth in the accompanying table and two charts. The quantities of the mineral commodity purchasable with the average wage for one hour's work in all manufacturing industries through 1926 were based on annual average prices and on average annual wage rates determined by Paul H. Douglas and published in his "Real Wages in the United States, 1890-1926." The series was extended through 1957 by the Bureau of Labor Statistics, U. S. Department of Labor. Calculations based on these data show that the average worker could have purchased 1.28 lb of copper with his hourly wage in 1890, whereas his hourly wage would have purchased 8.11 lb in 1957, an increase of 633 pct in the 68-year period. An average hour's wage would have bought 10.85 gal of petroleum in 1890, compared with 33.04 gal in 1957. Even more spectacular is the increase in sulfur, of which 25.25 lb could have been purchased with the 1904 average hourly wage; 223.08 lb were purchasable with the wage in 1957—an increase of 883 pct. Comparable price data for sulfur are not available for years earlier than 1904. For every commodity, the calculations show an improvement in the wage earner's purchasing power in 1957 compared with the early years. Measuring purchasing power in terms of wages does not give an entirely fair picture of the availability of a commodity in an economy. When the efficiency of an economy changes and the balance shifts among such elements as raw-material production, manufacturing, and service trade, the economic significance of an hour's work changes. Partly to meet such criticism, but mostly to present another interesting measure of the response of minerals to changing market conditions, a second set of calculations has been made to deflate unit prices for the seven commodities into terms of 1954 dollars. To accomplish this adjustment to a common 1954 parity, the Gross National Product Price Deflator, developed by the Office of Business Economics, U. S. Department of Commerce, was used. Although the results of these calculations are not as striking as those based on labor's increasing purchasing power, nevertheless the declines outweigh the rises in the prices of the mineral commodities. In terms of these deflated prices, aluminum and sulfur are much cheaper today than in the early years; copper was substantially cheaper in 1957 than in 1890; pig iron and petroleum are little changed; and only bituminous coal and cement have increased substantially. Strangely, the two mineral commodities with the strongest reserve positions are the two to exhibit rising real prices. Now this apparent overall downtrend in prices has taken place during a period of almost fantastic increase in the demand for mineral products. The value of minerals consumed in the world during the period greatly exceeds all mineral consumption up to 1890. A stage has been reached in the U.S. in which 95 pct of the energy used is of mineral origin and in which machines, structures, roadways, communication facilities, and most other elements in the industrial economy are primarily of mineral origin. Even agricultural fertility is maintained, in large measure, by mineral fertilizers. A series published in Minerals Yearbook shows that the value of U. S. mineral products has risen from $615 million in 1890 to $18,000 million in 1957, a 29-fold increase. Even in deflated dollars, the increase has been eightfold, while population has expanded less than threefold. Not only are demands of the industrial nations— the U. S., countries of Western Europe, and Japan— increasing at rapid rates, but those countries with agrarian economies are calling themselves underdeveloped and clamoring to industrialize. The ever-expanding mineral requirements in the U. S. and throughout the world show no abatement. Mineral reserves frequently have been described as wasting assets. Much concern has been shown for future users, who have been pictured as finding themselves on a plundered planet. Conservationists have viewed the future with alarm and have demanded legislation and regulations to reduce the drain on mineral reserves.

Jan 1, 1960