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By G. Norman Owen, Roger E. Scholl

INTRODUCTION The analysis and design of underground structures to resist vibratory motion due to earthquakes has been of interest to engineers for several decades. The dynamic stability of a powerhouse cavern was considered in the 1960s (Campbell and Dodd, 1967). About the same time, the designers of the San Francisco Bay Area Rapid Transit system developed procedures for analyzing the subaqueous tunnels placed under San Francisco Bay and the tunnels excavated along the land portions of the alignment (Kuesel, 1969). Japanese designers developed fairly sophisticated procedures for analyzing subaqueous tunnels during the late 1960s and early 1970s (Kuribayashi et al., 1974). In the past decade, proposals to site important critical underground facilities in regions with moderate to high seismic activity have increased the interest in earthquake engineering of underground structures. Seismic designs or seismic studies have been conducted for rock caverns for storage of petroleum or location of power plants (Yamahara et al., 1977; Glass, 1976), buried tanks for fuels or rad¬ioactive waste (Fukushima et al., 1977; URS/Blume, 1976), tunnels for disposal of nuclear waste (Yanev and Owen, 1978; Wahi et al., 1980), and urban mass transit tunnels (Monsees and Merrit, 1984). One of the greatest drivers of the interest in seismic analysis and design of underground structures has been the proposals to dispose of high-level nuclear waste in mined repositories some 300 to 600 m (approximately 1,000 to 2,000 ft) below the ground surface. In 1979, the authors, in conjunction with Professor Tor Brekke, presented a paper on an evaluation and design procedure used in a study of a proposed nuclear waste repository (Owen, Scholl, and Brekke, 1979).

Jan 1, 1985

Initial coal production at Ulan was solely from underground mines. A significant increase in demand for steaming coal in the late 1970's emphasised the need to further expand production and led to the development of the open cut mine which commenced commercial production in June, 1982.During the initial stages of mine planning, feasibility and cost studies were undertaken to determine the most suitable method for coal haulage from the pit. The comparison between a conventional truck haulage system and an in-pit crushing system using a mobile crusher and moveable belt conveyor haulage confirmed that the mobile crusher and conveyor system was superior in every respect for the Ulan mining operations.Technical features and design parameters for the major items of equipment are outlined as well as operating, manning and performance assessments. Minor equipment problems were encountered during initial operation but these have since beenrectified and the plant is now capable of exceeding the design production. Maintenance and energy costs are considerably lower than originally estimated and production efficiencies are continually improving as operators develop new techniques and procedures in the handling of the equipment.

Jan 1, 1985

By D. A. Grieve

"Mineable coal seams in the East Kootenay region belong to the Mist Mountain Formation of the Jurassic -Cretaceous Kootenay Group. Three structurally separate coal fields (Crowsnest, Elk Valley and Flathead) are recognized, all of which are characterized by compressional tectonic features such as f aiding and thrust faulting, and by /ate-stage normal faulting. Tectonic history has greatly influenced coal mineability and quality. Coals range in rank from low to highvolatile bituminous, and reactive maceral content ranges from less than 60% to greater than 90%. A wide range of metallurgical and thermal coal qualities is found. Measured reserves (up to 1981) include 1.03 billion metric tonnes metallurgical and 165 million metric tonnes thermal coal. Introduction a) Location -Coal fields of the East Kootenays region occur in the Front Ranges of the Rocky Mountains, within 30 km of the Alberta -British Columbia boundary (Fig. 1). They extend over 175 km north from near the U.S. border, and occupy the regions of the Crowsnest Pass and Elk and Flathead River drainages. The deposits are accessible from Highway 3 (Fig. 1) and various secondary roads. The towns of Fernie, Sparwood, Elkford, Coleman and Blairmore serve the coal industry. East Kootenay coal deposits are contained in three structurally separate coal fields, the Crowsnest, Elk Valley, and Flathead coal fields (Fig. 1). Coal is currently being produced by B.C. Coal (now Westar Mining Ltd.) at Sparwood, by Fording Coal 20 km north of Elkford, by Crows Nest Resources at Line Creek 15 km southeast of Elkford, and by Byron Creek Collieries at Corbin. Westar Mining has also constructed a new mine on the Greenhills Range 8 km northeast of Elkford. Pre-requisite engineering and environmental studies have been carried out on the Elco Mining property, 35 km north of Elkford, and on the Sage Creek coal property near the U.S. border (Fig. 1). b) Coal land tenure -Coal rights in the East Kootenays are either held as freehold land, or are licensed from the provincial government. The former category includes lands acquired under the Railroad Act of 1890. Shortly after this the federal government also obtained 50,000 acres of coal-bearing lands from the Crown Provincial, the so-called Dominion Government Coal Blocks. Major holders of coal rights in the area are Westar Mining and Crows Nest Resources. Large blocks are also held by Fording Coal and related companies, Sage Creek Coal, and Canada Permanent Trust Company as trustee for Elco Mining, and small blocks are held by Byron Creek Collieries and Coleman Collieries. In addition the provincial government holds an area in reserve for possible future use of B.C. Hydro at the extreme north end of the Elk Valley coal field."

Jan 1, 1985

By H. Nakazawa

Galvanic contact, occurring between electricall y conducting minerals in flotation pulps, may affect the nature of mineral surfaces and influence their floatabilities. Rest potential and galvanic current measurements were made on an electrode combination of pyrite and pyrrhotite under nitrogen, air and oxygen aeration conditions, and the results were correlated with their oxygen-consuming characteristics and flotation behaviors. The galvanic contact improved the floatability of pyrrhotite, but adversely affected that of pyrite. Auger electron spectroscopy, x-ray photoelectron spectroscopy and scanning electron microscopy indicated that the formation of hydroxide or oxide and sulfate species of iron on pyrrhotite decreased whereas that on pyrite increased when these minerals were held in contact. An electrochemical mechanism was proposed for the observed behaviors.

Jan 1, 1985

By Sam M. Pickering

Most high, purity silica is produced from crystalline quartz-generally from sand. However, there is a small area of southern Illinois where a porous, friable white chert rock is found which is very different in physical form from quartz sand. This microcrystalline material, commonly referred to as tripoli, is more easily ground to micron sizes than sand. Although of similar Moh's hardness, microcrystalline tripoli is less abrasive than either ground quartz sand or many synthetic abrasives. Location The southwestern corner of Illinois is underlain by extensive deposits of very porous chert; in some places the material is quite white. Two companies - Illinois Minerals Co. and Tammsco, Inc. - mine and process this white material. The Illinois Minerals plant is located at Elco, and the Tammsco plant is in Tamms, Illinois. Both companies mine from various locations within a ten mile truck haul of their plants. Production from this district has been continuous since at least 1915. Malvern Minerals Company mines and processes a generally similar microcrystalline, friable novaculite near Hot Springs, Arkansas.

Jan 1, 1985

By R. L. Roller

In recent years, there have been many articles and papers written on the use of specially designed belt conveyor systems in mining operations, either economic studies or actual experience. These papers generally conclude that the use of these systems can reduce overall costs from 10% to 40% over conventional methods using general purpose equipment (truck/shovel, scrapers, etc.). However, they also generally conclude that conveyor systems are inflexible and capital intensive. With the increasing cost of mobile equipment, the capital cost conclusion is losing steam, particularly when the costs of maintenance shops, road and ramp construction and other related start-up costs are thrown in. Attention here will be focused on answers to flexibility related questions, but first, a look at costs in general. Basic production economics tell us that when we have a small job to do, it is cost effective to use simple, low cost, general purpose tools which will have a minimum impact on total cost. It also tells us that when we have a large project, we can employ methods using special, relatively expensive production tools. Figure 1 illustrates what occurs on projects, of different sizes, with various quantities of production. With small quantities of work, the cost per unit of work starts out much lower using general purpose equipment, rather than using special purpose methods and equipment. However, at a relatively low quantity of work, the cost hits a lower limit and, regardless of how great the quantity of work, the unit cost can never go any lower.

Jan 1, 1985

By F. C. Bond

History The breaking and shaping of rock was one of man's earliest occupations. In the Paleolithic Age long before the dawn of history, arrow¬smiths and the makers of stone axes, hammers, knives, scrapers, spears, and borers were highly respected members of society. In early historical times stones for building blocks, roads, and city walls were shaped by slaves and convicts, who also did most of the mining. However, great artists erected beautiful stone sculptures, while gifted architects planned imposing temples and monuments. Until well into the 19th century nearly all rock was broken laboriously by hand. The small rock required by John MacAdam for his macadamized roads in England in the 1820s was produced by women and boys seated alongside the roadside with hand hammers and legs wrapped with rags. Eli Whitney Blake, a nephew of the Eli Whitney who invented the cotton gin, developed the first successful jaw crusher before 1870. The gyratory conical crusher soon followed. Comparative tests established its large capacity advantage over the jaw crusher, as well as its greater cost for a given feed size. Both types have been in use for more than 100 years. Crushing rolls appeared before 1900. Thomas A. Edison made very large diameter rolls which were excessively long; they failed because of shaft deflection. Various types of disk crushers and edge runner rolls appeared about this time. The older methods of reducing rock were adaptations of other processes. The stamp battery of dropping weights effected crushing by simulating heavy hammer blows; the much earlier arrastre, in which heavy stones were dragged in a circular path over the ore by animal power, came from the prehistoric method of grinding grain between two rubbing stones, while the jaw crusher was adapted from simple squeezing devices. But the tumbling grinding mill was not just an adaptation; it was an invention, because it required thinking on a somewhat higher order-there was no prototype. Its nearest antecedents were probably the small closed tumbling drums used in England more than a century ago for cleaning and polishing small iron castings. The date of the first tumbling mill actually used to grind rock is unknown, but it was later than the American Civil War (1861¬1865). It was almost certainly a closed or batch mill in which rock was placed and rotated until it reached the desired particle size. It could have been operated either wet or dry. The first published refer¬ence to such a batch mill was one introduced by Alsing in England (1870) for the grinding of calcined flints for pottery work.21 There are several rather indefinite reports of grinding mills in the early 1890s, including an overflow ball mill in the Helena and Livingstone reduction plant in Montana which may have been the first of its kind. 11 Many of the first mills, which were called tube mills, used hard rock both as grinding media and as mill lining. The rock used was preferably stone from the Normandy and Danish beaches, when it could be imported. This remarkable siliceous stone was already widely used for grist mills throughout America, and its resistance to wear was greatly respected. The decade of the 1890s saw the development of tumbling mills with continuous feed and discharge and their extension into different industrial uses. By 1895 some experience had been accumulated. Iron grinding balls were being tested and the proper speed of rotation was being determined. The Clark Patent tube mill was featured in an E. P. Allis bulletin of 1890, which may have been the first published description of a tube mill. More than 1,000 Gates tube mills had been built by Allis-Chalmers before 1913. Many of these were used in gold mining, espe¬cially in South Africa. The 5 x 22-ft size was particularly favored for grinding portland cement; the use of tumbling mills in the manufac¬ture of cement began about 1900. A great deal of attention was paid to the mill lining. Metal was then relatively expensive, and the general approach was to trap some of the rock grinding media into mill lining pockets. This rock would then absorb the wear and protect the metal lining. In the first ten years of the 20th century there were several different types of pocketed liners, with different manufacturers advancing the superior claims of their patented arrangements. The Osborne liner, developed in South Africa, was probably the most successful. 21 Another item which attracted much attention was size classifica¬tion within the mill and in ancillary equipment attached to the mill and rotating with it. The Krupp type, with interior screens protected inside the mill lining, was developed quite early in Germany, possibly before 1890. The Dorr reciprocating rake classifier (1907) had not yet been invented, and many strange and impractical screening and classifying devices were proposed. In these unsatisfactory machines the two separate processes of size reduction and classification were combined into one operation. It was many years before recognition came that a machine is most efficient when it is designed for one specific purpose. There was much industrial wastage before the opera¬tions of grinding and classification were finally separated. After 1900 the grinding of portland cement raw material and of cement clinker required large numbers of tumbling mills. Most of the raw material was then ground dry. This was also the heyday of gold mining. The old stamp mills that were used in great numbers for grinding gold ore did not grind sufficiently fine to liberate all of the gold, and the new tube mills were installed following the stamps. After 1910 larger diameter tum¬bling mills with larger grinding media were developed. These could receive the finely crushed ore directly, and the inefficient stamp batter¬ies were gradually eliminated. The Rand in South Africa was the greatest gold producer, treating immense quantities of rather low-grade but consistently free milling gold ore. The first tumbling mills, or tube mills, went into operation there in 1904. They were so successful that within a few years no new stamp batteries were installed in the district, even though old ones continued to pound away until after 1950.3 The early tube mills on the Rand all employed Normandy or Danish pebbles, which had to be imported at considerable expense. Their reported wear was as low as 4 lb per ton ground. 4 Many of the mills were lined with the same tough Danish stone cemented into place, while others used the pocketed steel Osborne liner. It was in 1907 on the Rand that an important test was made using hard native ore for grinding media in place of the expensive imported pebbles. 3 This ore, called banket, did not wear as well as the renowned Danish pebbles, but the cost per ton of grinding was definitely reduced. Many of the tube mills on the Rand were soon grinding with native ore. This was the beginning of the development now called autogenous grinding, in which the ore grinds itself. This is treated under a separate heading. See Subsection 3C, Chapter 4. Gold mining was important in America also, and its grinding history follows that of the Rand. Danish pebbles were replaced by native ore in Santa Gertrudis, Mexico, in 1913, 4 and in Consolidated Gold Fields, Nevada, in 1914. 5 Other properties followed suit. However, it gradually became apparent that the capacity of a given mill could be almost doubled if rock grinding media were re¬placed by cast iron or steel grinding balls. In order to increase plant grinding capacity many rock media mills were converted to iron grind¬ing media in the second decade of the present century. In some mills the motor size was doubled; other mills were cut in two and another motor was provided for the second half. Grinding mills began to assume a more modern appearance. Crushing rolls were formerly much used following crushing in jaw or gyratory crushers and preceding grinding in ball mills. How¬ever, the roll surfaces wore rapidly, and skilled maintenance was required to obtain even wear. Rod mills could take feed of the same crusher product size and reduce it finer. The first rod mill was con¬structed by Mine and Smelter Supply Co. and was tested in Canada

Jan 1, 1985

By P. Somasundaran

Almost a decade has elapsed since the problem of fine particles processing was first discussed at the National Science Foundation workshop in Arden House (Somasundaran and Fuerstenau, 1976). Problems involved in processing fines are as enormous now as they were then. We still lose 20 to 50% of mineral values during the processing of many ores. While the problem's magnitude has remained at as high a level as ever, our perspective on the causes for the difficulties, I believe, has changed. While we do not yet see any grand unified solution to all the problems in this area, I do feel that we are beginning to get an understanding of the basic reasons for the behavior of fines. I would like to share my views on the fundamental reasons for the problems we face. They are based essentially on results obtained during the last few years. A decade ago, I presented the reasons shown in the [Fig. 1] as the causes for the difficulties in separating fines. We have seen the same type of information discussed by others during the years since then. I now believe that these are not the only primary causes. Indeed, they do contribute, but there are other major reasons we ought to recognize. Mass certainly would have its effect, but since microorganisms and even ions can be separated from each other using flotation, provided correct conditions are used. I do not believe that fines 10,000 times bigger suffer fundamentally from their smallness or lightness. Similarly, the surface energy increase cannot be as important a fundamental factor since, theoretically, we should not see significant changes in surface energy until we get down to particles a hundred times finer than we are concerned with. Increase in surface areas, again, cannot be a primary problem except for an increase in reagent consumption. What possibly could be the reasons? I have added these three items to the list in [Fig. 1]: morphology, mineralogy, and surface chemical composition. Differences that I believe are partly responsible for the behavior of mineral fines are those due to alterations in morphology or mineralogy and surface chemical composition with decrease in size.

Jan 1, 1985

By D. C. Fuller

"CoaLiquid, Inc. (CLI) has been in the coal-oil-mixture (COM) business for over five years. The initial pilot processing facility was replaced by a 2000 barrel per day commercial production facility in August 1979. For over two years CLI has been expanding its efforts and conducting large-scale production and combustion demonstrations successfully in many locations across the United States. To facilitate the marketing effort, CLI has recently constructed a special trailer containing all equipment needed for a temporary COM retrofit.CoaLiquid has conducted commercial-scale combustion demonstrations in the following types of combustion units: kilns, calciners, industrial boilers, blast furnaces and driers.IntroductionCoaLiquid, Inc. officially dedicated its plant on August 31, 1979, at a ceremony presided over by the then Governor of Kentucky, The Honorable Julian Carroll. The dedication marked the culmination of over three years of research and development work and marked the beginning of a new era of coal-oil-mixtures as a commercial commodity in the marketplace. As the first such plant in the United States, it set the tone for construction to follow.CLI was originally owned and managed by a group of entrepreneurs from Kentucky who had developed the process and constructed the plant on purely private investment and conventional financing. Beginning in late 1976, with a pilot-scale operation, also located in Shelbyville, Kentucky (near Louisville), CLI began producing a stable mixture of 50070 coal, 30% to 40% oil and 10% to 20% water by weight. The technology employed was developed by Eric C. Cottell of Long Island, New York and is covered by U.S. Letters Patent No. 3,941,552. Since the pilot plant operation, CoaLiquid has made many refinements to its process and in fact has added new technology to its portfolio of patents and patents pending. Further refinements to the product now produce a stable mixture of 50% coal, 40% No.6 fuel oil and 10% water by weight."

Jan 1, 1985

By Michel Garon

"Several years ago computer control of the flotation process was successfully implemented at the Matagami concentrator of Noranda Mines Inc. At that time this was the first computer application being installed at this operation. The last few years have seen an extensive use of programmable controllers in areas such as the copper and zinc dewatering circuits and the lime preparation system. With the aid of such instruments, these areas have attained a high level of automation and as a result, a high degree of efficiency. The controllers have proven to be very dependable and easy to use.IntroductionThe Matagarni Division of Noranda Mines Inc. operates two mines in the Matagami District of northwestern Quebec which is located about 650 km northwest of Montreal. The mines ship ores to a central concentrator whose throughput averages 95,000 tonnes of ore per month. Metal contents of the mill feed average 0.9 per cent copper and 5.0 per cent zinc. Concentrate outputs are approximately 3,200 tonnes of copper and 8,200 tonnes of zinc per month.The concentrator commenced operation in 1963. An on-stream X-ray analyzer was installed in 1968, providing analyses of several samples in the flotation circuit without the aid of a computer. In 1974, control of the circuit by computer was added to the system. As a result, zinc flotation efficiency improved considerably and reagent costs decreased through the reduction of copper sulphate consumption.In the past few years it was realized that significant improvements could also be made in other parts of the operation . Copper and zinc dewatering circuits and the lime preparation system were identified as major areas that could drastically benefit from automation. In 1982, programmable controllers were seriously considered as an attractive alternative for achieving the company 's goal. Because of their relative lowcost and their high degree of flexibility, they were selected for implementing automation and, for improving the efficiency in each of these areas."

Jan 1, 1985

By N. Rowlands

The importance of mineralogical and chemical characterization of fine particles in the fields of mineral and metallurgical processing is discussed. Emphasis is placed on electron beam analysis techniques including electron diffraction and energy dispersive analysis with special reference to the scanning trans- mission electron microscope. The correct choice of instrument depending upon particle size, composition and nature of sample is stressed and the analytica1 capabilities of different types of instruments are evaluated. Recent applications of electron beam equipment to processing problems are presented and the paper concludes with a review of new developments in the fields of surface analysis and micro-diffraction.

Jan 1, 1985

By Charles George, Ronald Faul

The cementing process has been used in approximately 2.5 million oil and gas wells to seal, protect and isolate various downhole formations against communication. It has been adapted to other more specialized situations such as solution mining and sealing salt storage reservoirs. The technical literature contains very few papers specifically dealing with the cementing process for these applications, yet there have been many special projects in various parts of the world that are novel. These will be highlighted in this review. This paper also presents a comprehensive review of the various techniques used in cementing wells drilled for the recovery of soluble salts and brines. It also covers the application of cementing techniques to a large number of wells drilled for the storage of hydrocarbons in South Louisiana.

Jan 1, 1985

By T. H. Jeffers

The Bureau of Mines conducted a laboratory investigation of copper electrowinning from electrolytes produced by solvent extraction. The purpose of the research was to gain a better understanding of the fundamental relationship between copper electrowinning conditions, anode corrosion, and cathode purity. Processing variables were evaluated in a cyclic semicontinuous system in which the depleted electrolyte was used to strip copper from loaded organic extractant. For the production of high quality copper cathodes, the electrolyte was dosed with cobalt and stripped of organic solvent extraction reagent. An optimum cobalt addition of 60 ppm, and removal of the entrained extractant with activated carbon provided the best conditions for electrowinning copper containing the least amount of lead and controlling anode corrosion. As little as 13 ppm of the entrained organic extractant, LIX 64-N, significantly accelerated anode corro-sion. However, the addition of 1,000 ppm of organic diluent kerosine did not affect anode corrosion. After cobalt dosing and removing the entrained extractant, cathodes containing less than 2 ppm lead were consistently electrowon at widely varied current densities, electrolyte copper and acid concentrations, and temperatures. Dosing of the electrolyte with selected impurities including magnesium, aluminum, manganese, and iron did not affect the cathode purity. However, 0.05 giL of chloride ions markedly increased anode corrosion and the sub-sequent transfer of lead to the cathode copper.

Jan 1, 1985

By R. A. Cummings

From before the turn of the century until as recently as the 1950s, relatively shallow coal reserves near the margins of the Illinois Basin were extracted by room- and pillar methods. Subsequent development has, in many cases, extended onto ground with high subsidence potential. The same state of affairs exists in many other historical coal mining districts, as well as in Illinois. Pit subsidence in Illinois is particularly common in the towns of Streator, Carterville, and Herrin, although there are others. Pit subsidence is characterized by distinct circular or oval depressions and normally is associated with shallow mining and thick soil relative to the thickness of rock.

Jan 1, 1985

By P. R. Jochens

SYNOPSIS This review article first highlights the past performance of the industry and discusses the manner in which the development of the industry has followed a logical progression from mining to the production of mineral and metal products of specification purity. Then the numerous constraints against a greater contribution by the industry are enumerated. Attention is drawn to the extent of further processing that can be undertaken in the context of mining and metallurgical processing, not only to indicate the benefits that can be derived from the added-value conferred on a mineral or metal commodity during each stage of its further processing, but also to point out some important corollaries of further processing. The many opportunities and challenges for an increased contribution by the minerals and metals industry are then reviewed. This major section includes a list of commodities for which increased penetration of export markets could be sought because the increasing resistance level (a term developed in this paper) has not been attained; a list of commodities that are imported at present, many of which could be produced locally on the basis of identified resources and expertise; a list of commodities for which additional uses should be developed so that South Africa, which possesses the largest reserves and is the largest exporter, can increase its production rate; and examples of commodities for which further processing is still at an early stag*..

Jan 1, 1985

By R. D. Rein

The Henderson mine is a large continuous panel caving operation in central Colorado. The orebody is roughly 760 m by 910 m and will be extracted from two production levels. Each level is divided into three north - south panels 244 m to 317 m wide. The general arrangement of a production level and its associated undercut drifts is shown in Figure 1. The production drifts (3.6 m by 3.7 m) are spaced 24 m apart center to center and have undercut drifts (3.4 m by 3.8 m) 17 m directly above them. The production drifts are interconnected with drawpoint crosscuts (4 m by 4.3 m) driven on 12 m centers. Drawpoint crosscuts receive substantial brow steel and concrete support prior to undercutting. The brow steel is a 15 cm by 46 cm wide flange beam with a 2.5 cm wear plate to box in the 'cave' side of the beam. The concrete is a minimum of 0.3 m thick and the batch design results in 27 500 kPa strength. The finished drawpoint opening is 3.7 m by 3.2 m with a choke area of 3.7 m by 2.4 m. (Figure la) Undercutting and bell formation is accomplished by blasting rings of 7.6 cm holes drilled from the undercut drifts. The rings have a burden of 2.0 m and six rings develop one complete bell.

Jan 1, 1985

By John F. MacDonald

This paper describes the driving of a 400 m long by 25 m diameter highway tunnel through sensitive, overconsolidated silts and clays. The design concept requires the construction of the permanent support system, consisting of 24 concrete filled perimeter drifts, before excavating the mass core. General construction procedures used during the construction of the perimeter drifts are described.

Jan 1, 1985

By M. K. McCarter

A unique telemetry system was developed to monitor potentially unstable natural slopes above a residential area. Continuous interpretation of data transmitted from remote movement-sensitive devices and immediate communication of signficant changes to emergency personnel were made possible by a readily available "home" computer. Even though the computer based system was originally developed for a non- mining application, it could be used with little or no modification to monitor ground control instrumentation in open pit and underground situations.

Jan 1, 1985

By Michael Bradbury

INTRODUCTION A major change in financing exports in recent years has been the decreased importance of subsidized export credits, following the commitment of the OECD countries to eliminate the subsidy element. Subsidized export credit rates are now often more expensive than market rates as the financing for exporters has decreased in volume and importance. The forfait market, in recognition of this decreasing importance, provides a rapidly expanding source of nonrecource finance for exporters. The following is a step by step guide to what it is, how it works, its benefits and problems. WHAT IS FORFAITING? Forfaiting is not new. It has been used in Europe for about 25 years to provide export finance for both capital goods and commodities without recourse to the exporter. Although long the preserve of exporters in Germany, and more lately Italy, forfaiting is now used increasingly by exporters in Great Britain, the United States, Canada and Scandinavia. It is a fairly simple operation with easy straight-forward documentation. The transaction involves the purchase by the forfaiting bank of a bill of exchange or a series of bills without recourse to the exporter. These bills will have been drawn by the exporter, accepted by the importer, and will usually bear the unconditional guarantee of the importer's bank. They are normally drawn payable at intervals during the credit period agreed between importer and exporter and are purchased at a discount by the forfaiter. The exporter thus obtains his cash payment and the importer receives his credit period. The forfaiter collects the amount of the bills as they mature directly from the importer. Credit periods vary, depending upon the type of goods and the country and commercial risk of the importer. The period is generally between one and five years with six monthly maturities. The usual forfait currencies are US dollars. Deutschmarks and Swiss francs and others, such as sterling, French francs, and the Scandinavian currencies are being used more frequently. CHOOSING FORFAITING Most types of financing require the continued involvement of the exporter in the financial side of the transaction during the credit period. Forfaiting has certain comparative advantages. In particular, it is possible to forfait 100 percent of the risk without recourse to the exporter, unlike government sponsored export finance schemes, where some retention of the risk by the exporter is required. In addition, exports from country sources do not present problems and forfaiting can also cover trade within the EEC. Other benefits for the exporter are: (a) The exporter's balance sheet is improved; debts are turned into cash thus improving the liquidity of the company and enhancing its cash flow. And there are no contingent liabilities for bills of exchange. (b) If the sales contract is in a foreign currency forfaiting removes the risk to the exporter of adverse movements in foreign exchange during the credit period. (c) Fluctuations in interest rates during the credit period can be ignored since in forfaiting the transaction is usually done on fixed interest rate terms on a discount basis. (d) The political and transfer risks are taken by the forfaiter. (e) The commercial risk is taken by the forfaiter. (f) The costs of administration and collection etc. during the credit period are removed.

Jan 1, 1985

By John R. Morgan, Peter Graham

"Onakawana Development Ltd. and Mana/ta Coal Ltd. have completed feasibility studies on a large lignite deposit located in the James Bay lowlands of northeastern Ontario. The mining plan described in this paper would supply coal for approximately a 33-year period with peak production in the early years of approximately 6.5 million tonnes per year then declining to 1.2 million tonnes in year 33. This paper describes the geology, resources, lignite quality, mine planning and related topics. LocationThe Onakawana lignite deposit is located in northeastern Ontario in the James Bay lowlands (Fig. l). The Ontario Northland Railway crosses the property and links it to Moosonee, JOO km further north, and Cochrane 180 km south. The area is crossed by latitude 50° 37', the approximate latitude of Calgary. Toronto lies 800 km south of the study area. History of Development The deposit has been known since the late 1600s when early English settlers extracted limited amounts of lignite for use at Moose Factory. The deposit has undergone sporadic periods of exploration activity in the late 1920s and early 1930s when the Ontario government drilled 116 holes, sunk two exploration shafts and published several technical and economic studies. Interest in the property was reactivated from 1939 to 1945 when the Timiskaming and Northern Ontario Railway Ltd. drilled 182 additional closely spaced holes, excavated a test pit adjacent to the rail line and installed a boiler for testing purposes. In 1965, Alberta Coal Ltd., the predecessor of Manalta Coal Ltd., first became involved. Since then a further 182 holes have been drilled and coied, and the existing test pit reopened for sampling. In 1980, various reassessment studies were launched, including geology, mine engineering, conceptual design and environmental assessment studies. The following discussions have been drawn extensively from these reports."

Jan 1, 1985