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By Ross Glanville

INTRODUCTION The Optimum Production Rate (OPR) is one of the most important parameters in the evaluation of a mineral deposit. The OPR can also be expressed as the Optimum Mine Life (OML) in years since the expected mine life is determined by dividing the OPR per year into the estimated ore reserves. Unfortunately, very little time and effort has been directed towards the determination of the OPR. Instead, "rules of thumb" are often applied to select a mine life without due consideration of the economic implications of such a selection. A "justification" for a particular production rate is often based on a pre-conceived arbitrary requirement for a mine life of 5, 10, or 15 years, for example. In this paper it is demonstrated that such arbitrary selections for high-grade/low-tonnage mines (such as many underground gold/silver deposits) often lead to sub-optimal results. In fact, an apparently uneconomic deposit at an arbitrary production rate may be economic at the OPR. Consequently, investment opportunities may be overlooked if one analyzes mine properties based on arbitrary production rates. This paper analyzes the interrelationships of variables such as production rates, capital and operating costs, cut-off grades, discount rates, metal prices, etc. The analysis shows that the OML for high-grade/low-tonnage deposits is often in the range of two to four years. Although such mine lives intuitively appear too short to many individuals, it should be noted that, in the past, much of the mining industry became familiar with the economics of large scale mining operations. The rules of thumb developed for such large scale operations should not be applied to high-grade/low-tonnage mines such as many of the underground gold deposits. DEFINITION OF OPTIMUM PRODUCTION RATE The OPR is selected on the basis of maximizing the net present value of the after-tax cash flows. However, as discussed later in this paper, the production rate selected for a particular mine may be somewhat higher or lower than the theoretical OPR as a result of other variables such as: 1) the probability or expectation of additional reserves being discovered 2) the likelihood of being able to custom mill nearby deposits owned by others 3) the configuration or attitude of the orebody, which may place upper limits on the production rate 4) the residual, or salvage values, of the mine/mill facilities COMPARISON BETWEEN DIFFERENT PRODUCTION RATES For an orebody with definite physical cutoffs*, or boundaries (such as faults or unconformities), the total ore reserves at different production rates may be identical. Consequently, for such an orebody, varying production rates result in differing mine lives. Although the metallurgical recoveries, the mine dilution, and other similar physical parameters may vary slightly at different production rates, the major differences are the capital costs and operating costs per ton. The ramifications of these differences are especially important at low production rates (up to approximately 1000 tons per day), but can also be significant at higher production rates.

Jan 1, 1985

By Ross Glanville

The Optimum Production Rate (OPR) is one of the most important parameters in the evaluation of a mineral deposit. The OPR cam also be expressed as the Optimum Mime Life (OML) in years since the expected mime life is determined by dividing the OPR per year into the estimated ore reserves. Unfortunately, very little time and effort has been directed towards the determination of the OPR. Instead, "rules of thumb" are often applied to select a mime life without due consideration of the economic implications of such a selection. A "justification" for a particular production rate is often based on a pre-conceived arbitrary requirement for a mime life of 5, 10, or 15 years, for example. In this paper it is demonstrated that such arbitrary selections for high-grade/low¬-tonnage mines (such as many underground gold/silver deposits) often lead to sub¬optimal results. In fact, am apparently uneconomic deposit at am arbitrary production rate may be economic at the OPR. Consequently, investment opportunities may be overlooked if one analyzes mime' properties based on arbitrary production rates.

Jan 1, 1984

By Norman D. Fitz, Gerald

BOTH physical and economic factors are concerned in determining the optimum rate of depletion of a mineral deposit. The physical limitations are, in a large measure fixed by nature. Economic influences on the other hand, are man-made and subject to wide changes. Analyses of the interrelations of these two groups of factors are of major importance in selecting the optimum rate of production of petroleum and mining properties and in their valuation. Physical Influences PRIMARY limitations on the rate of mining are the rate of shaft sinking and underground development, the rate of hoisting, and the rate of sloping. These rates are largely determined by the physical features of a property. Technical methods which may be employed, and consequently the length of time required, are governed by the dimensions of the deposit, its attitude, depth, regularity, the unit value and character of the ore, the nature of the wall rocks, and similar factors.

Jan 1, 1938

For a large scale open pit mining and concentrating operation, on a low-grade disseminated ore body, it is possible to set an approximate lower bound on economically feasible operating scales and an approximate upper bound on economically desirable scales in a relatively straight forward manner. The optimum scale ofplanned operations, with respect to the objective ofmaximisation ofthe net value ofthe orebody, will have to be arrived at by iterative planning runs, but it may be expected to lie close to this upper bound. The effects of infrastructural costs and of the addition of a risk premium to the cost of capital, to form the discount rate for planning purposes, are considered theoretically and by worked example. It is concluded that a perceived special, unsystematic, risk should not be accounted for by the use of such a risk premium as this is inducive to placing a greater amount of investment capital at risk, for no greater return-rate to investment.

Jan 1, 1986

By Prashanta K. Chatterjee

The planning of an underground coal mine requires a complex blend of technical expertise, experience and subjective design criteria implemented by the mining engineer. Currently the procedure is largely manual and requires considerable resources to generate a single mine plan. Often three or four people are assigned to work in the development of a single draft layout. Evaluation of the layouts is also tedious as it requires many repetitive calculations. The evaluation of layouts developed manually generally attempts to derive a single economically feasible solution. Operational constraints in underground coal mining such as manpower, time, equipment, etc, do not allow the generations of more than one alternative layout. As a result, the first plan is generally the only one considered. Computer-aided mine planning can automate many of the manual procedures and calculations involved in mine planning thus allowing to evaluate many layouts and mining strategies and to select the optimum plan with confidence. An optimized planning procedure will also provide the capability to evaluate mine performance continuously and critically, thereby helping to maximize return on investment.

Jan 1, 1986

By Ben L. Seegmiller

How to obtain optimum slope angles for future open pit mines using the rock mechanics approach is the subject of this paper. In the past ten years significant developments in open pit rock mechanics have come about. This has been due to the mining industry's need for the steepest, yet safe, pit slope angles attainable. Requirements for economically achieving slope stability and the actual payoff that may be achieved through stability studies have been previously discussed', by stability engineers. While the emphasis has generally been placed on the concept of "stable slopes" in the past, it is suggested that emphasis now be placed on "optimum slopes" or "optimum slope angles". A definition of an optimum slope angle is one which (1) is as steep as possible and practical from orebody and mining constraint standpoints and yet, (2) maintains the accepted standard of safety defined by a safety factor against failure and/or a probability of failure. In other words, the emphasis is placed on achieving practical stability results as defined by safety and economic considerations, as opposed to simply achieving stability. The essential purposes of this paper are to (1) outline the need for optimum slope angles, (2) discuss the procedures for using the rock mechanics approach in slope angle design for a future open pit and (3) specify the end results that may be achieved by using such an approach. While the basic concepts and recommendations outlined in this paper may be equally applicable to soil as well as rock slopes, the emphasis and procedures have been directed at rock slope angle design.

Jan 1, 1976

By W. A. Hodgson

"In order to be able to map the variation in the concentration of elements in soils, it is necessary to sample at intervals that will give adequate coverage of the area and will allow determination of the rate of fluctuation of concentration with distance in any environment. This rate of fluctuation with distance can be referred to as the continuity of concentration.The continuity of concentration in soils varies according to the chemical characteristics of the element being considered, the underlying rock type or orebody and in response to the dispersion processes that operated during soil formation. Within any environment there is a maximum distance between sampling points within which adjacent sample values are related. This distance, the critical sampling interval, can be determined by means of a correlograrm.Where the sampling grid has been chosen to provide an adequate coverage over unmineralized rock, adjacent samples being related, anomalies may be missed if the element continuity in the anomaly is less than in the background. Results show that a knowledge of the critical sampling interval of the environment being examined may used to select a more efficient sampling pattern for a geochemical survey."

Jan 1, 2014

By L. M. Dwarkin

Strip mining in Western Canada, though of considerable importance, is a fairly recent development for many of the operators in the district. Adding to the difficulty of unfamiliarity is the fact that a great deal of the stripping is done on pitching seams, for which the engineering and economic principles of setting the most advantageous strip ratio are not readily apparent. The novelty of the operation combined with the complexity of the principles involved can easily lead to misconceptions as to the determination of the economic ratio. Definition of Strip Ration There are two commonly accepted meanings of the term strip ratio: (1) The ratio of feet of overburden to be stripped per foot of coal recoverable. (2) The ratio of cubic yards of overburden per cubic yard or ton of coal. The first definition is inapplicable to pitching seams so, throughout this paper, strip ratio will be taken as the ratio of cubic yards of overburden to be removed per cubic yard of coal recoverable. Economic Ratio In the case of flat seams, the strip ratio is fixed by existing natural conditions, and the magnitude of this ratio determines whether stripping is economically feasible. With pitching seams, however, the strip ratio is a variable. On the outcrop, there is usually some coal which can be obtained with little or no stripping. As the work is carried down the pitch of the coal seam, the proportion of overburden continually increases until a point is reached where it is no longer economical to continue the operation. The question immediately arises as to the location of this point, and this resolves into the problem of determining the most favourable strip ratio, or, to use the accepted term, the economic ratio.

Jan 1, 1949

By Fengyu Ren, Ruslan Puscasu, Kunpeng Yu, Gideon Chitombo, Liangliang Kang

Weak rock mass and poor flow of material can cause excessive ore loss and dilution in sublevel caving. This paper proposes a method to establish design parameters for an inclined deposit within a weak rock mass and evaluates its effectiveness through a case study. In order to solve the problem of low production capacity and poor safety conditions of sublevel caving mining at the Yingfangzi silver mine in China and to ensure a smooth production from the refractory ore body, it is necessary to select appropriate stope structure parameters. Based on random medium theory of gravity flow and the improved equation of ore discharge in random medium, an end wall drawing experiment is carried out to determine the optimum design and flow parameters. It was observed from the experiment that, due to the influence of the randomness of particle movement, there is a mismatch in the flow parameter measurement. The flow characteristics and distribution of the marker particles are different from that of the tested particles resulting in large drawbody shape distortion. The study finds that the flow parameters obtained by the new method are more practical and account for drawpoint width and recommends that the new method for determining the sublevel stope height is used when the drawbody is a non-standard ellipsoid. The outcomes have shown a significant reduction in the dilution and improvement in the recovery rates, and the safety and efficiency of mining have been greatly improved.

By Fengyu Ren, Ruslan Puscasu, Kunpeng Yu, Gideon Chitombo, Liangliang Kang

Weak rock mass and poor flow of material can cause excessive ore loss and dilution in sublevel caving. This paper proposes a method to establish design parameters for an inclined deposit within a weak rock mass and evaluates its effectiveness through a case study. In order to solve the problem of low production capacity and poor safety conditions of sublevel caving mining at the Yingfangzi silver mine in China and to ensure a smooth production from the refractory ore body, it is necessary to select appropriate stope structure parameters. Based on random medium theory of gravity flow and the improved equation of ore discharge in random medium, an end wall drawing experiment is carried out to determine the optimum design and flow parameters. It was observed from the experiment that, due to the influence of the randomness of particle movement, there is a mismatch in the flow parameter measurement. The flow characteristics and distribution of the marker particles are different from that of the tested particles resulting in large drawbody shape distortion. The study finds that the flow parameters obtained by the new method are more practical and account for drawpoint width and recommends that the new method for determining the sublevel stope height is used when the drawbody is a non-standard ellipsoid. The outcomes have shown a significant reduction in the dilution and improvement in the recovery rates, and the safety and efficiency of mining have been greatly improved.

Diamond wire rock cutting is the most widely used technology in carbonate stone quarrying owing to technical performance and block face quality. Interest is also growing for siliceous deposits. This paper deals with the problem of optimum wire utilization under restrictions regarding a set of variables and parameters. A computer program of general applicability has been set up with the aim of studying the most suitable combination of technologies and the effect on the technical and economic results of bench geometry, overall quarry yield, market -stone value, quarry size as well as the quantity, productivity and price of human and material resources and their organization in the elemental working cycle. Two quarrying problems are considered as significant instances a granite and a travertine quarry. The results are illustrated and discussed.

Jan 1, 1989

By P. R. Jochens

It is interesting to note that, when the Technical Programme Committee-Mining first decided on this particular topic for a colloquium, the proposed title was different in that it used the words 'rising price of gold'. The very fact that the title was reworded to use the words 'fluctuating gold price' highlights the problem that faces the South African gold-mining industry.

Jan 1, 1981

Determine the minimum waterflow rate needed for effective control of dust produced by cutting machines used to mine water-soluble ores. Approach Conventional wet-bar cutting techniques were studied to evaluate their dust control performance, and the optimum water flow needed for dust suppression was determined. Wet-bar type cutting techniques are used to help control mine dust by keeping the cutting chain wet. As the chain cuts the kerf, it dampens the dust produced by the cutting action at the point of generation. The Bureau, under contract, evaluated three basic wet-bar techniques, as shown in the diagram: water-trickle system A uses a gravity-feed or low-pressure (less than 50 psi) pump to send water through the bar and to discharge it at the bar tip. Water-spray system B uses a low-pressure spray nozzle located at the front of the cutter head. For protection the nozzle can be located within the cutter

Jan 1, 1982

By P. C. Thakur

In Part I of this paper, it was established that the width of longwall faces in highly gassy mines is primarily limited by the volume of air reaching the tail-end of the face. The ventilation air reaching the tail-end of the face should be not only enough to keep methane concentrations below the statutory limits (generally 1 percent) but also enough to prevent any gas layering. The air volume leaking from the longwall face into the gob should also be able to push the explosive methane-air mixture away from the gob area immediately behind the longwall face where active roof-fall is taking place (typically 30-45 m). The second group of variables that also controls the width of the longwall panel consists of (a) the rate of advance, (b) bleeder air quantities, (c) specific methane emissions for the gob area and, (d) efficiency and cost of gob gas capture. This paper will discuss the second group of variables and its impact on the optimum width of longwall faces in highly gassy coal mines.

Jan 1, 2009

By Wen H. Su

Multiple seam mining and its associated problems are very serious in Southern West Virginia where poor planning or lack of knowledge in seam interaction often results in complete loss of coal properties. Several measures have been proposed to alleviate the interaction prob¬lems under various multiple seam conditions, but few of them are spec¬ific in terms of mining plan. Two parallel approaches are adopted for this paper. One is field investigation which consists mainly of mine site visits and gathering of data. The other is the two-dimensional finite element simulation of mine workings using the data gathered as input. Two typical cases which represent the past and present multi¬ple seam mining practice in West Virginia were investigated. Much attention is focused on the interaction problems experienced and the important parameters controlling interaction. Several key parameters controlling interaction in multiple seam mining were analyzed. Proper mining plans, by which the interaction problems can be minimized, are proposed for the individual cases after a better understanding of the interaction mechanism was realized through finite element analyses.

Jan 1, 1984

By Scott K. Palm, Neil D. Pearson, Jr. Read

"Uncertainty is an important feature of many investments, but it is especially important for mineral properties. Mine properties often entail large investments and fixed commitments. Managers in the mining industry often view price uncertainty as undesirable, due to the possibility that the price of the mined commodity will fall to a level that prevents the firm from recovering its investment and fixed costs. This paper identifies pitfalls in conventional valuation methods and outlines a new approach to valuation based on option pricing theory and dynamic programming. In the process, it identifies generic strategies for organizing mine production in ways that allow the owner to benefit from the uncertainty in mineral prices. IntroductionRisk is pervasive in the mining industry. The operation and maintenance of a mine may involve high, and unavoidable, fixed costs. A mine owner can only begin to recover these fixed costs if the price of the mined commodity is greater than the incremental cost of production. But the prices of many minerals are extremely volatile. The price volatility of copper has been significantly higher than the price volatility of a typical stock, for example. A mine owner cannot be sure that the price of the mineral product will remain high long enough for the firm to recover its capital and fixed costs.Mine owners are able to minimize their losses during periods when the output price is below the incremental cost of production by temporarily closing operations. During these periods they incur only fixed costs. While shut-downs help minimize losses, the y do not help the firm recover its initial investment. If output prices remain low long enough, the fixed costs and original investment may never be recovered. High fixed costs, therefore, lead to substantial downside risk."

Jan 1, 1986

"Option pricing is used in finance for valuing options to buy (or sell) shares at some future date because it provides a convenient framework for quantifying values subject to uncertainty. As one of the main sources of uncertainty in mining is the price (sales) of the metal, this approach can also be used for valuing mining projects.The first part of this paper reviews options and option pricing; the second part presents the approach developed by Brennan and Schwartz (1985) for using option pricing to value natural resources. Several applications of this methodology have been published; these are described. From a mining point of view, the assumptions made by Brennan and Schwartz are too simplistic. The weaknesses are discussed with a view to improving an apparently promising new way of assessing the value of projects. IntroductionThe collapse of the British merchant banking group, Barings, has highlighted the risks that can be incurred by speculators and arbitragers in the futures and options markets. But this negative attention on futures and options should not make us forget their positive aspects. They can provide producers and consumers of metals with more predictable sales prices. The introduction of the new traded average price options, TAPOS, by the London Metal Exchange in January 1997 is a response to this need. Equally important, the theory that the finance industry has developed for valuing options provides an interesting framework for valuing mineral projects as well. While this paper was being revised, the South African gold mining house, JCI, announced that it was using a methodology based on option pricing for valuing the mineral rights to deeplevel gold resources (see Box 1)."

Jan 1, 1997

By B. D. H. Knights, N. B. du Preez

The recovery of the economy of the Democratic Republic of Congo has allowed for the rapid increase in production of copper from this region, while the increased price of cobalt continues to support the recovery of that country’s economy. This has enabled the modernization of the process technology used, particularly the change from direct electrowinning of copper to solvent extraction-electrowinning. With this change has come a variety of technical challenges in optimizing the recovery of cobalt from these sources. In this paper, we discuss aspects of the flowsheets for the production of cobalt from the ores of the DRC and Zambia, highlighting the technological improvements that have been made. Following this description of the practice, we assess the challenges of further improving the recovery and purity of cobalt from these sources. INTRODUCTION The African Copperbelt (Figure 1) is by far the biggest producer and holds the greatest reserves of cobalt (Sheed, 2015). However, the ores of this great mining region are extracted primarily for their copper content, and cobalt is a by-product. The ratio of copper-to-cobalt is between 6 and 20 to 1, with the ores from the DRC richer in cobalt than those from Zambia. The overall supply of cobalt, shown in Figure 2, is increasing due to an increase in demand for its use as a battery material. Cobalt is used in superalloys, hard metals, pigments, catalysts magnets, tyre adhesives, lithium-ion rechargeable batteries, and wear-resistant coatings, amongst others. Although these generic categories persist, Figure 3 shows how the relative usage of cobalt is changing due to the uptake of electric vehicles in China and Europe. Cobalt is a key element in lithium-ion batteries, and because it is widely anticipated that electric vehicles will be legislatively encouraged, it is anticipated that the demand for cobalt will rise. This anticipated increase in demand resulted in an increase in the price for cobalt, to which suppliers responded over-eagerly, and the price has dropped dramatically in the first few months of 2019, as shown in Figure 4. However, there is a clear cycle of price peaks in cobalt’s history.

Jan 1, 2019

By E. W. Hawk

he power generation industry may be required to reduce carbon dioxide (C02) emissions if regulations related to global climate change are enacted. Coal-fired generation emits more than 80% of the power sector CO2 and would be a likely target for CO2 reductions. Compliance with the Kyoto Protocol will require a 33% reduction from the projected year 2012 emission level, even with moderate load growth. This article describes an analysis of power industry CO2 reduction options and their costs. It assesses how a generator would make compliance decisions under a mandatory CO2 emissions reduction program. Carbon sequestration, fuel switching and new plant construction are considered. The Global Climate Change Treaty signed at the Rio de Janiero Earth Summit in June 1992 set the long-term goal of stabilizing CO2 concentration in the atmosphere. The December 1997 Kyoto Protocol established short-term mandatory targets for the United States and 37 other developed countries. The United States' target is a 7% decrease by 2012 from the 1990 "greenhouse gas" level. Developing countries are exempted from reductions, according to the Kyoto Protocol, despite projections that indicate a significant increase in their emission levels. The Kyoto Protocol must be ratified by the US Senate. US power industry carbon emissions were 490 Mt (540 million st) in 1990 and are projected to be 680 Mt (749 million st) in 2012, according to the US Energy Information Administration. Coal-fired generation emits more than 80% of the power sector CO2. Assuming that the power industry is only required to reduce emissions by a proportional share, a 33% emission reduction, or 225 Mt (248 million st) of carbon, would be required to comply with

Jan 1, 1999

By E. W. Hawk

The power generation industry may be required to reduce CO, emissions if regulations related to global climate change are enacted. Coal-fired generation, which emits 82% of the power sector CO2, would be a likely target for CO2 reduction. Compliance with the Kyoto protocol will require a 30% reduction from the projected year 2012 emission level even with moderate load growth. This paper describes an analysis of power industry CO2 reduction options and their costs to assess how a generator would make compliance decisions under a mandatory CO2 emissions reduction program. Carbon sequestration, fuel switching and new plant construction are considered.

Jan 1, 1999