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By J. B. Morrow, D. H. Davis

THERE are two general approaches to the problem of increasing profits from an operation. One is to lower expense; the other is to raise income. Mechanical preparation of coal may be used for either purpose but a prudent consideration of many details must precede any decision lest the results be negative instead of positive. It is quite possible that any net gain will result from a combination of the two. Since mechanically prepared coal invariably is a better product qualitatively than a hand-picked coal from the same mine, it is a reason- able expectation that the customer will be willing to increase the producer's income by paying a higher price. Or there may be the possibility that a combination of mechanical mining plus mechanical cleaning will give a lower over-all production cost for the coal in the railroad car. More likely, there will be found a combination of these two factors. From the customer's point of view, the competitive delivered cost per B.t.u. considered in relation to such incidental factors as dust nuisance, handling properties, ash disposal, and ash fusibility determines what he will pay. In a bulk tonnage product such as coal, freight is a very considerable part of the delivered fuel cost, and obviously freight paid on incombustible ash has no economic attractions. INCENTIVE FOR CLEANING Coal is prepared in four major ways: 1 (I) by screening or sizing, (a) by mixing or blending, (3) by cleaning, including hand picking and mechanical cleaning, (4) by dustless treatment. By a combination of any or all of these methods, coal can be prepared to standard specifications. It is easily possible to have good cleaning and still get a poor final product because of faulty screening or mixing,

Jan 1, 1943

By J. B. Morrow, D. H. Davis

THERE are two general approaches to the problem of increasing profits from an operation. One is to lower expense; the other is to raise income. Mechanical preparation of coal may be used for either purpose but a prudent consideration of many details must precede any decision lest the results be negative instead of positive. It is quite possible that any net gain will result from a combination of the two. Since mechanically prepared coal invariably is a better product qualitatively than a hand-picked coal from the same mine, it is a reasonable expectation that the customer will be willing to increase the producer's income by paying a higher price. Or there may be the possibility that a combination of mechanical mining plus mechanical cleaning will give a lower over-all production cost for the coal in the railroad car. More likely, there will be found a combination of these two factors. From the customer's point of view, the competitive delivered cost per B.t.u. considered in relation to such incidental factors as dust nuisance, handling properties, ash disposal, and ash fusibility determines what he will pay. In-a bulk tonnage such as coal, freight is a very considerable part of the delivered fuel cost, and obviously freight paid on incombustible ash has no economic attractions. INCENTIVE FOR CLEANING Coal is prepared in four major ways: l (1) by screening or sizing, (2) by mixing or blending, (3) by cleaning, including hand picking and mechanical cleaning, (4) by dustless treatment. By a combination of any or all of these methods, coal can be prepared to standard specifications. It is easily possible to have good cleaning and still get a poor final product because of faulty screening or mixing, while it is possible to produce a very acceptable product from mediocre cleaning if the coal is well screened and mixed.

Jan 1, 1950

By Kenneth K. Humphreys, R. M. Quinlan, Stan Venkatesan

INTRODUCTION 1 * The coal industry in the United States has undergone significant economic changes in recent years. For example, the price of coal remained relatively constant from 1950 to 1969 (see Figs. 5-1 and 5-2) but steam coal prices tripled and metallurgical coal prices doubled from 1969 to 1974. This price structure has created a new economic environment for coal preparation. Contributing factors to these price trends include: 1) Coal Mine Health and Safety Act of 1969. 2) Mid-East oil embargo of 1973.

Jan 1, 1979

By Kenneth K. Humphreys, F. R. Zachar, A. G. Gilbert

INTRODUCTION by F. R. ZACHAR and A. G. GILBERT Coal producers are not only faced with the problems of mining coal, but must also decide to what extent they can invest capital and what operating and maintenance expense they can afford, after mining, to market their product in sufficient volume and at a reasonable profit. Regardless of whether the operator is contemplating a new operation or merely considering expanding present facilities, market requirements, ability to make a product meeting requirements, probable costs and possible future changes in raw coal or finished product must be considered. In addition, such items as flow sheet, structural designs, storage facilities, etc, must be examined individually and collectively. In estimating preparation costs to meet predetermined market specifications, the operator must calculate the economics of present preparation practices to anticipate the increase to total production which results when the quality of the finished product is increased. The consumers of coal are continually seeking to obtain the best and most adaptable product for their money. Regardless of whether coal is used for coking, industrial requirements, electric power generation, domestic fuel or for other purposes, it will be scrutinized from such standpoints as delivered cost, suitability for utilization in certain equipment, ease of ash disposal, adaptability to material handling system plans and its potential for generating dust problems. Utilities, due to large capacity volume requirements, are generally in a position to select coal that will result in the lowest over-all cost per million Btu. Freight costs, paid by the utility, are important and are given utmost consideration when a coal is under consideration. Steel companies, whether producing or purchasing coking coal, are continually seeking coal that will result in lowering the cost of pig iron production. Since it is usually necessary to clean to lower specific gravities, say 1.40, to turn out a product meeting metallurgical requirements, it follows that a high ash "middling" product is created. These low quality middlings do not command a good price. Therefore, unless the metallurgical coal can command sufficient realization to carry or subsidize the middlings, the operator may be ahead economically to prepare steam coal at a higher specific gravity. While the "unit-train" rate reductions have been helpful to the economy of the coal industry, the establishment of these rates has made mandatory the installation of storage and rapid car loading facilities at mines and plants shipping utility coal (see Chapter 15). A study of the economics

Jan 1, 1968

By Donald D. Haas

Contract mining has a definite place in the mining industry, both in the United States and around the world. A mine owner should evaluate the utilization of contract mining in the devel­opment and production of mining properties. This evaluation of contract mining should be performed at various times in the life of a mining prope1iy from the development and initial operation of a new mining project, periodically throughout the mine's life, and at mine closure. Many factors must be considered in ana­lyzing and evaluating the potential of contract mining and those factors are both quantitative and qualitative. Quantitative factors are those factors for which costs or measures can be determined or estimated objectively; and qualitative factors are those factors for which costs or measures must be determined subjectively and do not lend themselves to objective determination or estimation. Some of the qualitative aspects may provide only yes, maybe, or no answers while others will provide a tendency or partiality toward one answer or the other without a quantified cost. The major quantitative aspects include operating and capital costs, monitoring costs, capital preservation, acquisition and disposal of new and used equipment, direct payroll and administrative costs, recruiting and training costs, and employment and termi­nation of staff and hourly personnel. The major qualitative areas include corporate philosophy, risks associated with capital and operating costs, financing the project, operating control, operat­ing flexibility, recruiting and training of personnel, employment and termination, administrative concerns, and owner/contractor relationship.

Jan 1, 1998

By Robert Sutton, Milan Sjaus

Conveyor pulleys are an important and integral component of a conveyor. Conveyors work in sequence to make up conveyor systems. Each conveyor system is only as reliable as its crudest component. If the pulley fails, then the whole material handling system stops. So what is the effect of this downtime? What are the costs of repair? How much are we willing to pay to solve the problem? What should we spend to prevent an unscheduled shutdown? Do we use the technological improvements at our disposal or do we ignore them to satisfy immediate cost savings? This study will focus on the cost of pulleys relative to the total conveyor cost, the cost of downtime, the maintenance costs and the costs for resolution of the problem. Some philosophic and design concepts are injected for illustration and discussion.

Jan 1, 2000

By Warwick Bullen

A hypothetical economic model has been developed for diamond projects in the Canadian Arctic using data from recent exploration and mining projects. The model reflects economic conditions as it applies to the diamond mining industry in the Canadian Arctic at the present time. The economic model captures pre-production expenditures, production data, and post-production costs. Before- and after-tax cash flows are derived from the data along with the relevant economic criteria. From the corporate perspective, the model provides guidance as to the minimum size and/or in-situ value per tonne requirements of targets being sought in order to ensure economic success and probable exploration and development expenditures. From the government perspective, the model provides an indication of income and mining tax revenues that can be expected from a particular diamond project. The model shows, on average, diamond projects in the Canadian Arctic are expensive to explore for and develop, but are economically robust. They generate great economic return for mining companies and significant amounts of tax revenue for governments. The fact that diamonds can be transported directly from the mine site by air makes them particularly attractive targets for mining companies that operate in the Canadian Arctic.

Apr 1, 2005

By W. Bullen

A hypothetical economic model has been developed for diamond projects in the Canadian Arctic using data from recent exploration and mining projects. The model reflects economic conditions applicable to the diamond mining industry in the Canadian Arctic at the present time. The economic model captures pre-production expenditures, production data, and post-production costs. Before- and after-tax cash flows are derived from the data along with the relevant economic criteria. From the corporate perspective, the model provides guidance concerning the minimum size and/or in situ value per tonne requirements of targets being sought in order to ensure economic success and predict exploration and development expenditures. From the government perspective, the model provides an indication of income and mining tax revenues that can be expected from a particular diamond project. The model shows, on average, diamond projects in the Canadian Arctic are expensive to explore for and develop, but are economically robust under the present conditions. They generate great economic return for mining companies and significant amounts of tax revenue for governments. The fact that diamonds can be transported directly from the minesite by air makes them particularly attractive targets for mining companies that operate in the Canadian Arctic.

Jan 1, 2006

By C. Hutton

"SynopsisThe last commodities supercycle (2003 to 2011) was characterized by a belief in volume at any cost, where absolute output was deliberately prioritized over productivity considerations. This practice fuelled overoptimistic forecasting and planning, which in turn contributed to the economic crisis that followed. The sudden collapse of commodity prices has resulted in mining companies scrambling to find the right balance between optimizing current operations and preserving sufficient flexibility to grasp future opportunities. The runaway costs of building and operating mines have almost squeezed out profit margins, while lower ore grades are inflating production costs. Mining companies therefore need to look at the business with fresh eyes, and develop strategies to attract equity capital as traditional approaches are simply not working anymore. This is especially so in the context of a dwindling investor base that continues to demand greater returns, despite a significantly lower appetite for risk. This paper revisits the micro-economic concepts and demonstrates how pressure from shareholders to prioritize output contributed to spiralling costs and value destruction. Practical techniques are described to model cost curves to optimize a Mineral Resource endowment and address the need to rightbalance a business and preserve agility.IntroductionHenry Lazenby (2014) for the Mining Weekly writes, ‘Bruised and battered, the global mining industry today is undergoing a sea change. Practices and policies that might have worked wonders in the past are not as relevant today, and new approaches to running profitable mining operations need to be found.’ One significant practice the mining industry had during the last commodities supercycle (2003 to 2011) was chasing volume at any cost; absolute output was deliberately prioritized over productivity considerations (Goldsmith, 2013). Lazenby contends that in the face of falling and volatile commodity prices, many mining majors ‘across all commodity groups are currently grappling with sagging profits and low company valuations. This is often regarded as the result of the were in pursuit of growing their output at all costs in a high commodity price environment.’ Lee Hodgkinson, KPMG’s Canadian mining industry leader and quoted by Lazenby, says that ‘mining companies are now trying to find the right balance between optimizing current operations and preserving their agility to grasp future opportunities. The runaway costs of building and operating mines have almost squeezed out profit margins [whilst] lower grades of ore are inflating production costs. Mining companies need to look at the business with fresh eyes, and develop strategies to attract equity capital as it seems clear that some of the traditional approaches to the mining business are simply not working anymore."

Jan 1, 2015

By Ronald G. Schmidt

AND SOME RIN UP HILL AND DOWN DALE, KNAPPING THE CHUCKY STANES TO PIECES WI' HAMMERS, LIKE SAE MANY ROAD MAKERS RUN DAFT. THEY SAY IT IS TO SEE HOW THE WARLD WAS MADE. Sir Walter Scott St. Ronan's Well - 1824 In the minds of many, geologic exploration has advanced little since the early nineteenth century. In truth, despite the development and refinement of new and potentially valuable technological tools, the approach or philosophy of the explorationist has received meager attention in professional literature. In many areas, the explorationist relies upon experience, subjective judgement and general intangible inspiration, often traveling together under the misleading pseudonym of "art," in achieving both an exploration plan and in making the myriad day to day decisions necessary to the execution of that plan. Without a solid, objective basis for decisions, exploration under this concept is little more than guesswork largely by intuition, and it is small wonder that many exploration programs flounder in a sea of over-expenditure inefficiency or fail to fulfill their expected goals within the funding which has been provided. From a rational management point of view, such a state of affairs is frustrating and inconsistent with the application of the same scientific principles which are presumed to be the basis for the exploration methods which are used. This somewhat presumptuous point of view cannot be extended as a general condemnation of the many exploration programs which are both technically and economically successful. On the other hand, the

Jan 1, 1968

By Richard C. Harris

Substantial economic benefits exist today for fine coal preparation and improved technologies coupled with more stringent air quality standards should increase those benefits in the future. The costs of cleaning can be determined with reasonable certainty with proper consideration given to mining methods, plant feed characteristics, refuse disposal and marketing impact. The benefits cannot be as accurately determined but include impact on generating capacity, plant maintenance, emission standards, slagging, fouling, transportation, and handling. Site specific cleaning offers particular benefits in some situations to tailor the preparation plant facility to boiler characteristics. Improved communications and methodologies need to develop to allow the coal producer and the coal user to clean coal to the degree that results in the lowest overall cost for electrical generation.

Jan 1, 1988

By Edgar A. Scholz, Attilio G. Spat

The rapid worldwide increase in labor costs, prices of goods and services, and the rising tide of economic nationalism do not bode well for the future of mineral exploration and the mining industry. The increasing complexity and difficulty involved in finding economic mineral deposits makes these trends particularly significant. A comparative cost analysis of domestic and foreign exploration projects which developed into mines during the period 1960-74 may be useful in indicating the general nature of exploration expenditures as these trends continue. This analysis is based on a survey of 18 US and Canadian mining companies. Due to the inexact nature of exploration expenditure data, plus the fact that no two mining companies follow the same system of cost allocation, the results of the survey must be considered quite general in character.

Jan 6, 1977

By J. J. Jakosky

The strategic importance of the metallic minerals in our industrial economy, and the declining rates of discovery have focused attention on means of exploration for new mineral deposits. A consideration of exploration techniques leads to an attempt to evaluate the effectiveness of geo- physics as a tool for mining exploration. One means of evaluation will be to compare the use of geophysics in petroleum exploration with its possible uses in mining.

Jan 1, 1949

By Donald Towse

Geothermal heat might become an important fuel for several reasons: (1) To substitute for other scarce and critical fuels. (2) Because it may be less costly to the user than alternate fuels. (3) Because its production may be more profitable than production of other fuels. (4) Or for a number of other more or less non-economic reasons such as convenience or because of less environmental impact. In competition with conventional and other non-conventional fuels, geothermal heat must score well on one or more of those points. This study first considers projections of energy needs in several United States economic sectors and the technical possibility of geothermal heat substituting for other fuels in those sectors. Then, reported and projected costs of energy from geothermal heat are compared with costs of other fuels to show the relative costs of fuels in several economic sectors. Relative costs are reported from a sample of real and hypothetical geothermal projects. The actual cost of energy will vary with each application and the particular circumstances of each geographic location.

Jan 1, 1975

By Firoze E. Katrak, John R. H. Black, Paul R. Ammann, Michael J. Loreth, Servi. Italo S.

Germanium is produced primarily as a by product from zinc concentrates. The important sources of gallium are alumina ores (bauxites) and zinc concentrates and residues from zinc processing. In addition, gallium as well as germanium may soon be recovered from a depleted copper mine near St. George, Utah. The major uses for germanium are in semiconductors, lenses in infrared optical systems, catalysts, and gamma radiation detectors. The major markets for gallium are in light-emitting diodes, solar cells, laser diodes, integrated circuits, microwave devices, and magnetic bubble memories. CRA projects a healthy growth in the demand for both metals. However, the role of scrap metal will continue to be important over the next decade, thus decreasing the overall demand for primary gallium and primary germanium. This paper summarizes the key elements and the economics of the markets for germanium and gallium. Much of the information, such as plant-by-plant costs of production and estimates of consumption by end use for various countries is from proprietary databases of Charles River Associates.

Jan 1, 1986

The economics of gold differs from that for base metals mainly because a large component of gold demand is investment or stock demand whereby the metal is purchased and stored for monetary or anxiety motives rather than fabricated into industrial products.The second major component of gold demand is fabrication, principally into jewellery but also, to some extent, into industrial products.Supply to the Western private- gold market comprises non-Communist mine production, Communist sales (chiefly from the USSR), and, finally, net sales by the Western Central Banks, which have total stocks of about 35,000 tonnes and which are sometimes net buyers as well as sellers.The different components of demand and supply fluctuate from year to year.

Jan 1, 1984

By R. S. Shoemaker, R. M. Darrah

Expanded markets for copper in the past few years and a consequent search for new ore bodies have revitalized the widely known but seldom applied method of producing copper called heap leaching. Heap leaching is defined here as the process applied to oxide ores which have been mined solely for the purpose of leaching. In this case, all costs of mining the ore become a part (and a substantial one, as will be shown) of the cost of the copper produced, whereas in dump leaching the mining cost has already been accounted for as a stripping cost for the sulfide ore. Of course, with newly opened ore bodies, stripping costs may be divided through accounting procedures, between the copper produced by the mill and that obtained by leaching, but in general this type of operation must be economic on the basis of the sulfide ore alone. Heap Leaching Requires Low Capitalization Heap leaching, as a beneficiation method, is unique in that it is the only process used for the recovery of a metal in which the time involved from mining the ore to metal production is measured in months instead of hours or at the most, days. Then too, after the ore body has been depleted and mining has ceased, metal production will continue for some substantial period of time. Heap leaching is also unique because unlike any other method of beneficiation, metal recovery cannot be accurately forecast ahead of time and recovery will never approach that of a conventionally milled sulfide ore or even that of a vat leached oxide ore. Counter-balancing this drawback, however, is the relatively low capital expenditure necessary to put a heap leaching operation into production and the consequence that smaller ore bodies which would not support the higher capital cost involved in a vat leaching plant can be made into producers. Stated more simply, in heap leaching the operator accepts low recovery in exchange for low capital costs and low break even point. Whether the operator chooses vat leaching with its higher recovery and higher capital costs, is a mater of economics which depends in part on the nature of the ore to decide. For instance, an ore that will vat leach in 7 to 10 days using 7 pounds of sulfuric acid per pound of copper produced might use double or triple that amount of acid during the months that are required for heap leaching.

Jan 12, 1968

By R. S. Shoemaker

Expanded markets for copper in the past few years and a consequent search for new ore bodies have revitalized the widely known but seldom applied method of producing copper called heap leaching. This term should be differentiated from dump leaching in that the latter is applied to dumps of mixed oxide and sulfide ores (although either may predominate) that have been too low grade to beneficiate and have, therefore, been stripped off the higher grade underlying sulfide ores. Heap leaching is defined here as the process applied to oxide ores which have been mined solely for the purpose of leaching. In this case, all costs of mining the ore become a part (and a substantial one, as will be shown) of the cost of the copper produced, whereas in dump leaching the mining cost has already been accounted for as a stripping cost for the sulfide ore. Of course, with newly opened ore bodies, stripping costs may be divided through accounting procedures, between the copper produced by the mill and that obtained by leaching, but in general this type of operation must be economic on the basis of the sulfide ore alone. Heap leaching, as a beneficiation method, is unique in that it is the only process used for the recovery of a metal in which the time involved from mining the ore to metal production is measured in months instead of hours or at the most, days, Then too, after the ore body has been depleted and mining has ceased, metal production will continue for some substantial period of time. Heap leaching is also unique because unlike any other method of beneficiation, metal recovery cannot be accurately forecast ahead of time and recovery will never approach that of a conventionally milled sulfide ore or even that of a vat leached oxide ore. Counter-balancing this drawback, however, is the relatively low capital expenditure necessary to put a heap leaching operation into production and the consequence that smaller ore bodies which would not support the higher capital cost involved in a vat leaching plant can be made into producers. Stated more simply, in heap leaching the operator accepts low recovery in exchange for low capital costs and the break even point, that is, where the operator should go to vat leaching with its higher recovery and higher capital costs, is a matter of economics and also, to a great extent, a matter for the nature of the ore to decide. For instance, an ore that will vat leach in 7 to 10 days using 7 pounds of sulfuric acid per pound of copper produced might use double or triple that amount of acid during the months that are required for heap leaching.

Jan 1, 1968

By John J. Borkert, Carl E. Gerity

In situ mining offers a new and proven method of exploiting sedimentary uranium deposits. The feasibility and economic evaluation of exploiting a uranium reserve by either open pit or underground mining should also include a similar study for in situ mining. This report compares the economics of mining several hypothetical uranium deposits at various depths, grades and reserve sizes by open pit and in situ mining. The evaluation process evolved establishing, where possible, common geological and logistical parameters to both methods of mining. The various assumptions that are unique to either open pit or in situ mining were also drafted, where possible, as equal and common functions to be used in each economic evaluation of the reserve models. After the various parameters were defined, they were programmed to an economic analysis of the various hypothetical uranium deposits by the selected mining method. From the vast array of cost evaluations, total capital and operating cost per pound U308 produced, DCF-ROI, and total net profits before State and Federal taxes were selected as the most meaningful results to compare. From the various geologic parameters used, it was determined that the economic viability of a mining venture is most sensitive to a depth-grade thickness ratio. The three selected evaluation products were plotted against the various depth-grade thickness ratios of the hypothetical uranium deposits. The results of the economic cost analyses show in situ mining generally to be a better method to maximize total net profits and to maximize return on investment.

Jan 1, 1979

By Scott A. Stebbins

Cost evaluation models constructed specifically to evaluate the economic potential of an individually motorized railcar system of ore and waste transport demonstrate that the approach may be considerably more cost effective than traditional rubber-tired haulage methods. The system design places a motorized drive unit on each railcar, as opposed to the more common configuration in which a series of un-motorized cars trail behind a single locomotive. These motorized railcars are directed to various load and dump points by a computerized dispatch system, and as such have the advantage of operating unmanned. In addition, the tractive effort of the rail-type drive system is noticeably more efficient than that of the rubber-tired mode of transport. The savings are realized primarily through comparative reductions in the requirements for labor and, to a lesser degree, energy.

Nov 1, 2011