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By J. K. Brimacombe

Since the Peirce-Smith converter was introduced to the non-ferrous industry in the early part of this century, there has been a paucity of research on process-engineering aspects of the reactor such as gas injection. This paper reviews studies conducted at UBC over the last decade on gas discharge dynamics, high-pressure injection, bath slopping, oxygen/bath reaction kinetics and out-of-stack heat transfer within the converter. The ultimate objectives of this work have been to extend refractory life and to increase converter productivity.

Jan 1, 1985

By Scott G. Britton

Planning is a management tool used to solve problems and provide data and decision alternatives for company growth, profitability, and direction. Strategic planning is defined as the efforts needed to accurately measure the risks of obtaining a result from future actions given a finite number of outcomes. The techniques of strategic planning are being applied more and more to underground mine design as a result of the fierce market conditions underwhich the industry is facing today, and the conditions they will likely face in the future. The objectives of strategic planning are centered on the ability of the operator or company to manuever its limited resources to the best position available under the given future scenarios. This paper briefly examines the most popular techniques for accomplishing these objectives, how these techniques fit into the current mine management decision-making, and what results to expect from these techniques in planning efficient underground mines.

Jan 1, 1985

By H. Sevim

In this paper, the research effort in simulating the operation of underground coarse-coal hydrotransport systems (UCCHS) is summarized. The equipment of the system to be simulated is already optimally selected by using an analytical optimization model. The purpose of the simulation model is to test the performance of the system and to obtain the distribution of the operating parameters such as water and power consumption, amount of slurry delivered to the preparation plant, etc. Knowledge of the distribution of these parameters is essential for the efficiency of the design and the operation of the system.

Jan 1, 1985

By Norman J. Gibbs, John Sroka

INTRODUCTION At the point a company decides to begin mine development and wishes to convince lending institutions that the proposed operation will return their borrowed funds, plus interest, over the terms of the loan, communications between lender and borrower are crucial. The importance of the mine feasibility presentation should not be underplayed, especially as new projects continue to increase in size, complexity, and cost. While the content and emphasis of a report to the lender will vary according to the particular project and type of debt financing sought, there is a general base of information upon which all such studies are built. THE PROJECT'S TECHNICAL ASPECTS Here, the object is to satisfy the lender that he will not be unduly exposed to technical risks as a result of the physical scope of the project. Reserves The feasibility report submitted to financial institutions should include an adequate description of the geologic setting, mineralogy, ore types, and reserves broken down into such recognized categories as proven/probable/possible or measured/indicated/inferred. Rather than a bald statement of reserves, lenders prefer to have detailed information on: History of exploration Drilling, both percussion and core, with core recovery, drill hole spacing, analyses, and continuity of mineralization Bulk sampling, with core assay comparisons Overburden, with stripping ratios Specific methodology of reserve calculation, and Geologic reserves vs. mineable reserves. As a rule of thumb, a lender would prefer to see that reserves in the proven class alone are sufficient to support operations at the design rates until the borrowed funds are repaid. (See also Schreiber above in this Chapter.) Mining The rationale for adoption of a particular mining technique should be presented as well as descriptions and justifications for: Preproduction development Preliminary mine plan, with forecasts of grades and material movements Geotechnical test work which influenced decisions Mining recoveries and efficiencies Major equipment, with type, model, rating life, spares, replacement schedules, utilization, and productivity Manpower requirements and work schedules Design assumptions Ore stockpiling and blending Environmental requirements, and Waste disposal Processing If a new ore body is to be developed or a new process used, it is important to provide details of test work, scale up, and extrapolation factors. A basic process description with a summary of the studies which justify the intended processing route should be included with the following data:

Jan 1, 1985

By William H. Breeding

The remarks that follow are based substantially on experience covering 45 years, 80% of which has been in placer work, rather than on a review of available literature. Most commercial placers have been deposited by the action of water. The richer and more- difficult-to-mine placers are those in the headwater areas where gradients are steepest. The most lucrative placers are generally in inter- mediate areas where volumes are greater, fewer boulders are present, and gradients are from 3% to 1-1/2%. The higher volume, lower grade placers are in the lower reaches of river systems where gradients are lower. Where gold-bearing rivers have discharged into the sea, wave action can concentrate values on beaches, past and present. Most of the rich, readily accessible placers were mined by our forefathers. Current opportunities exist: (1) in remote areas where infrastructure has been absent in the past, or development has been prohibited by adverse ownership - political or commercial; (2) in deposits that could not be mined by equipment available to our forefathers; (3) in deposits unidentified by our forefathers; (4) where the-price-of-product/cost ratio is substantially better than in earlier years; or (5) a combination of those factors. When I entered the placer business in the late 1930s, and subsequently, a prevailing opinion believed that glacial deposits should be avoided as irregular in mineral content and composition, and unrewarding to explore and develop; yet an operator has been mining a fluvio-glacial deposit profitably for the past 17 years. Rich buried placer channels, of ten called paleo-channels were worked in the last century, generally by hand methods, and under conditions that would be unacceptable today. Exploration and mining equipment now available make some of these channels attractive targets. Well-known examples are in California and Australia. The formation of a commercial placer requires a source of valuable minerals. Above primary deposits, there may be eluvial deposits formed by the erosion of gangue minerals and the concentration "in situ" of valuable minerals. Down slope from these deposits are the hillside or colluvial deposits, and below them are the alluvial deposits of redeposited material. Most of the great placer fields of the world are the result of several generations of erosion and deposition. Well-known examples are in California and Colombia. Gold is a very resistant and malleable material, and gold placers may extend for 64 or 80 km (40 or 50 miles) along a river system. Platinum is less malleable, but is very resistant to disintegration. Diamonds are extremely hard, and (especially gem diamonds) may be found over great lengths of a river system. Cassiterite is less resistant to disintegration, and tin placers seldom extend over two miles without resupply from an additional source or sources of mineralizaton. Tungsten minerals are generally more friable, and within a few hundred yards of the source disintegrate to the point that they are uneconomical to recover. Rutile, ilmenite and zircon placers generally result from the weathering of massive deposits, and may be encountered over extensive areas; most are fine grained and durable. What does a geologist or mining engineer look for in placer exploration? The old adage to look for a mine near an existing mine is still valid. You need a source of valuable mineral. Then you require conditions for concentration, which means a satisfactory gradient and/or other conditions that will permit heavy minerals to settle. Nicely riffled gravel, often called a shingling of the bars, is conducive to placer formation. Coarser gravel is logically associated with coarser gold. Excessive clay and/or high stream velocities in narrow channels can carry gold far downstream and distribute it uncommercially over a large area. When material is extremely fine, in situ weathering and concentration become more important. Placers frequently occur distant from lode mines, and one must remember that in a larger watershed the exceptional floods that occur once in a hundred or a thousand years can move great quantities of material long distances. The carrying power of water is said to vary with the fifth or sixth power of its velocity. I am not ready to disagree with Waldemar Lindgren and accept that many commercial placers are substantially enriched by the chemical deposition of gold from solutions; however, I have seen crystalline gold in clayey material quite distant from known sources of primary gold that is dif-

Jan 1, 1985

By P. B. Altringer

Searles Lake, CA, contains the largest known domestic tungsten resource. The brines in this near-dry lake bed, located in the Mojave Desert 130 mi northeast of Los Angeles, contain an estimated 135 MMlb of tungsten. However, the low concentration of tungsten (0.080 g/L W03) in the supersaturated brine makes selective tungsten extraction very difficult. Although many brine chemicals are extracted from the lake, tungsten recovery was an elusive goal prior to Bureau of Mines development of an ion-exchange technique. This publication describes the Bureau process. The following subjects are ad-dressed: ? The Searles Lake tungsten resource. ? General problems associated with tungsten recovery. ? Bureau research objectives. ? Synthesis of ion-exchange resins. ? Development of a two-stage ion-exchange tungsten extraction and concentration procedure. ? Product recovery and purification. ? Economic evaluation. Flowsheets for recovering three products (calcium tungstate, sodium tungstate, and tungstic oxide) are presented and evaluated, as well as a summary of the research effort and potential applications.

Jan 1, 1985

By Rose L. Ballard

This chapter summarizes data on crude nonfuel mineral production for the United States, its island possessions, and the Commonwealth of Puerto Rico. Included also are the tables that show the principal nonfuel mineral commodities exported from and imported into the United States and that compare world and U.S. mineral production. The detailed data from which these tables were derived are contained in the individual commodity chapters of Volume I and in the State chapters of Volume II of this edition of the Minerals Yearbook. Although crude mineral production may be measured at any of several stages of extraction and processing, the stage of measurement used in this chapter is what is normally termed "mine output." It usually refers to minerals or ores in the form in which they are first extracted from the ground, but customarily includes the output from auxiliary processing at or near the mines.

Jan 1, 1985

By Donald A. Cranstone

"This paper provides a bird's eye view of the pattern of gold discoveries since 1823, the year of Canada's first gold find, up to 1983. Within this 160-year period, more gold was discovered in Canada during the last ten-year period (1973-1982) than during any previous decade. The record suggests that the potential for further major gold discoveries is high, which bodes welt f or the future of Canadian gold mining.IntroductionCanada has an impressive history as a gold producer. Since 1921 we have occupied second or third place among the world 's gold producing nations, after South Africa and most of the time the U.S.S.R. Canadian gold production over the last hundred years has added up to some 6 per cent of all-time world production.The sharp rise in the price of gold in the 1970s led to a surge of gold exploration, which in turn resulted in the discovery of significant quantities of gold in Canada. How do these recent discoveries rate in comparison with those of the more distant past? For example, are the quantities of gold in notable discoveries of recent year s, such as Hemlo and Detour, in the same league with the amounts of gold discovered around 1910 in the Porcupine and Kirkland Lake district s of Ontario? Can the combined gold content of the recent discoveries be likened to that o f the almost 40 major Canadian gold deposits, along with numerous smaller ones, discovered in Canada during the 1920s and 1930s? What are the implications of the more recent gold discovery record for future rate s of gold discovery in Canada?This paper attempts to glean answers to such questions from an overview of the period that begins in 1823, the year of Canada's first gold discovery. Gold deposits come in two major types: placer deposits and lode deposits in solid rock . Placer gold is distributed in sand and gravel. Gold in solid rock occur s mostly in gold ore filling fissures."

Jan 1, 1985

By H. Kim

"IntroductionThe Hat Creek coal field contains low-grade coal deposits which are the thickest in the world. The diamond drilling and geophysical surveys conducted by B.C. Hydro over the last six years have indicated in excess of 2 billion tonnes of sub-bituminous to lignitic coal. The coal field is in the Interior Plateau Dry Belt, about 240 km northeast of Vancouver, and contains two explored, nearsurface coal deposits amenable to surface mining (Fig. I). The No. I deposit contains approximately 740 million tonnes of coal at 17.71 MJ / kg, or 7,600 Btu/lb, at 34.82% ash and 24% moisture. The No. 2 deposit to the south contains appreciably more coal resources at somewhat lower grade, but it has not been explored so extensively because of its higher stripping ratio. Therefore most of the exploration activities to date have been directed toward the development of the No. I deposit. The No . I coal deposit has been selected as the source of fuel for a proposed thermal powerplant to be built about 5 km east of the deposit. The purpose of this paper is to summarize the data obtained from the diamond drilling and the geophysical logging in the No. I deposit between 1974 and 1979. An attempt is made to explain the depositional environment of the Hat Creek coal measures. Because the understanding of the depositional environment in.a particular basin is essentially an evaluation of all the geologic properties of the area, the available geological information in the No. I deposit has been compiled on the basis of consistent criteria. This includes data on the lithology of the coal measures, thickness and areal distribution of the elastic sediments, and on the changes in the megascopic stratigraphic profile based on geophysical correlation. The palynopetrographic relationship and detailed sedimentological aspects are not examined in this paper. Such studies should provide important information relating the causal vegetal and chemical responses of the coals to -environmental changes. Extensive deposition of surficial materials during de-glaciation left most of the area of the Upper Hat Creek Valley devoid of bedrock exposures. Structural and stratigraphic features are hidden beneath glacial deposits and/or post-Eocene volcanics. As a result, the geological interpretation of the Hat Creek coal basin has been based primarily on drilling and geophysical data. Because of this, any explanation of the depositional environment details is tentative until the deposits are stripped for development."

Jan 1, 1985

By A. J. Fejes

The purpose of this Bureau of Mines report is to provide mining industry personnel and regulatory authorities with a subsidence-reference list and annotated bibliography that will aid them in locating subsidence information and in developing their own subsidence information sources. Over 700 references are listed in the Bureau's subsidence information center bibliography; approximately 600 of these references were obtained for assessment. Of these 600 references, 167 were selected to be rated, categorized, and annotated. All literature referenced in this report was published prior to 1984. Table 1 is a cross - referenced index that classifies and rates selected references with respect to specific keywords. References are rated not on quality of content but rather on applicability to given subject areas. Appendix A is an annotated bibliography of the references listed in table 1 and provides further information of each article to aid the user in selecting articles for specific areas of subsidence technology. Appendix B is a copy of the subsidence information center bibliography.

Jan 1, 1985

By K. A. Grace

"An ore is a rock regardless of its rarity or value."* The application of geology does not cease with the discovery and delineation of a mineral resource, but continues in the calculation of the economic parameters that determine reserves. Reserve determination, reduced to essentials, is the determination of the cost of production of a mineral commodity from a resource. This cost comprises mining, processing, waste disposal, reclamation and marketing costs. Geological input is vital in the calculation of the individual cost parameters from mining to reclamation, and even has some impact on marketing. Geology thus has a critical role in the determination of reserves.

Jan 1, 1985

By C. Y. Chen

In order to put an end to the uneven environmental standards and enforcement established by various coal mining States in the United States, the Congress passed and the President signed the Surface Mining Control and Reclamation Act (Public Law 95-87 or the Act) on August 3, 1977. Within one year after passage, the Secretary of the Interior was directed to promulgate permanent program regulations implementing Title V provisions of the Act. These regulations were to form the basis for State regulatory programs under the Act and to allow States to assume primary regulatory responsibility. In order to implement the underground mining provision of the Act, the Secretary is directed in section 516(a) of the Act to promulgate rules, but ones which take into consideration the distinct differences between surface coal mining and underground coal mining. The regulations developed by the Secretary and promulgated on March 13, 1979, with respect to subsidence control, included (1) a subsidence control plan as part of the permitting process, (2) substantive provisions establishing performance standards for subsidence control, and (3) provisions providing for the prohibition of mining under perennial streams, impoundments larger than 20 acre feet, and certain public facilities and urban areas.

Jan 1, 1985

By Thomas J. Keefe, O&apos

The effects of cobalt, B-naphthol, glue and antimony on the polarization behavior of zinc sulfate electrolyte were investigated. It was found that B-naphthol was beneficial in reducing the detrimental effects of cobalt while antimony and excess glue were each harmful. Since the nu cl eat ion over potential was insensiti1ve to coba1t, other regions of the polarization curve were used to indicate electrolyte balance. The low? current density area occurring in the reverse or anodic sweep direction was? often an indicator when an ?unstable condition existed. The two parameters evaluated were the degree of inflection in the polarization curve in the low current density region during scanning and the rate of current rise observed when the sample was potentiostated at -0.781 Volts (SHE). Using this technique, a two-additive system was shown to be desirable to control cobalt and antimony containing electrolytes. The structure of the deposits was examined using scanning electron microscope techniques.

Jan 1, 1985

By F. A. Gates, Bengt Samuelson, James E. Edmunds, S. McCune, Neil Hario, Norman L. Weiss, J. M. Bertram, A. M. Cavaliere, F. M. Jr. Stephens, D. D. Chiang

DESIGN BASIS Size of Project The size of the project generally is expressed in tons of ore milled per day, but company policies differ widely in this respect with a few adhering to this set figure but many expecting the design capacity to be liberal. To some companies that follow the latter practice a 25,000-tpd milling plant that cannot reach 30,000 or 35,000 tpd with¬out major additions is a disappointment. The engineers responsible for planning the operation must know what is intended. Other projects are sized according to the tonnage of product rather than of mine ore; examples are iron ore mills that express size in terms of tons per year of pellets or high-grade concentrates, heavy minerals plants in tons per year of rutile or ilmenite, cement plants in barrels per year, potash in tons per year of muriate, phosphate in tons per year of washer rock and flotation concentrate, and others. However, tons per day milling rate is also the common denominator in most of those instances because the major equipment has to be selected on that criterion. Equally important are operating schedules, particularly the number of operating days per week and shifts per day for ore delivery, crushing, grinding, and processing. Hours per shift also are an impor¬tant factor in design, particularly in the case of ore delivery, and the lost time expected for maintenance, cleanup, inspection, preventive maintenance shutdowns, and many others, has to be taken into ac¬count. Frequently, the ore deposit will vary in hardness and grade to such a degree that the capacity of the mill will vary widely from year to year and cannot be expressed as a fixed figure, but rather as an average over a calculable period, such as ten years, or as a specific daily capacity over the first two years, next four years, etc., or some similar projection. A good example of this kind of situation is Asarco's Mission operation 15 miles southwest of Tucson, Ariz., described by Weiss and Vincent,1 where the major rock types differed widely in hardness, so that a change in the proportion of these types in the mill feed could have imposed difficult design problems if a constant tonnage rate had been expected. Expected Life The life of a mining operation depends upon the size of the deposit and the rate of mining. The latter is a policy decision based on an economic analysis2 which, in turn, is based on many factors. From the point of view of mill planning, the estimated life of the operation determines many criteria and affects many decisions on strength of structures and degree of protection of men and materials, the quality of the materials-handling and process machinery, the type of delivery systems for ore to the mill and concentrates to the smelter or market, environmental considerations, and many others. Costly installations that may be excellent investments for a 20-year project may be waste¬ful for a 5-year operation. An example is the comparison of different methods of crushing or grinding. Take single- vs. multiple-stage grind¬ing-the former may be found more economical for a 5-year operation, and the other, more costly method more economical for a 15- to 20-year life. Mining and Ore Transportation The mining method and the means of transportation of the ore to the first crushing stage have far-reaching effects upon mill design, particularly the crushing sections, and upon site selection (see Chapter 2, Situation of Mill). Consequently, mill design cannot advance until the mine planning has reached at least tentative decisions concerning these important matters, or reach the final stages until much is known about the ore that may be expected month by month and year by year for a reasonable period. Methods of ore transportation used in over 90 underground and open-pit mines are listed briefly in Section 32 (Table 1), and more detail is found later in this section and in Section 10, Storage and Transport. These methods include surface railroad, trucks, conveyors, surface skips, underground skips, and tramming from hoist or tunnel. In surface mining, transportation of the uncrushed ore by rail or truck to the primary crushing plant-conveniently located for lowest overall cost-is most common. Rail transportation provides low perton-mile costs. Truck transportation, though in some cases less eco¬nomical, is more flexible and more adaptable to mountainous terrain; furthermore, recent improvements have reduced the operating costs to keep trucks competitive on low-grade ores. The design of the primary crushing plant will be essentially the same whether delivery is by truck or rail, but the location of the plant is subject to more rigid restrictions in the latter case because of grade limitations, and these in turn may adversely affect the selec¬tion of the mill site as well. The influence of truck haulage in reducing the stripping ratio in open-pit mines is an added reason for predicting a minor role for rail transportation in the future. The use of conveyors to transport ore from the pit to the milling plant involves (in most cases) crushing the ore to a reasonable size (10 to 20 in. maximum with today's crushers) before conveying. The Twin Buttes system3 which went into operation in late 1969, utilizes primary crushers (two) and conveyors to receive rock waste, ore, and low-grade stockpile material from trucks, then transport them to the appropriate destination. Flexibility is dependent upon the porta¬bility of the primary crushers. In the face of this development, inclined skip hoists are no longer important to the mill designers. Underground mines generally pose fewer problems of design; these will be discussed in Chapter 2. Character of Deposit The degree of homogeneity of the ore in various parts of the mine is an important factor. The characteristics that concern the millman (approximately in order of importance) are: hardness, assay, metallurgical response, size distribution,4 and moisture content. Under metallurgical response may be included degree of oxidation, mineral¬ogy, clay content, and reagent consumption, as well as process re¬sponse in general. Short-term variations-hour-to-hour, day-to-day, or even week-to-week-make operation of the plant more difficult, require greater flexibility of process design and, perhaps, also require more instrumentation and manpower. Uniformity of the ore in the characteristics noted previously and

Jan 1, 1985

By Keith L. Harris

Economic activity in the United States picked up in the third quarter, according to the latest estimate released by the Department of Commerce. Real gross national product (GNP)--the Nation's output of goods and services--grew at a seasonally adjusted annual rate of 4.3%, or $17.6 billion, compared with a rate of 1.9% for the second quarter of 1985 and 1.6% for the third quarter of 1984 (table 1). The 4.3% rate is one percentage point above the preliminary estimate reported in the August/September issue of Minerals and Materials. Most of the upward revision was due to the change in business inventories and Government purchases, while the figure for net exports was revised downward substantially. The 4.3% growth bettered by 1.5% the average rate of growth in GNP from 1974 through 1984 and was 1.1 % above that of the period from 1975 through 1984 and 0.7% above that of 1980 through 1984. Of importance to the minerals industry was the $14.4-billion growth in personal consumption expenditures, $10.2 billion of which was for durable goods (especially domestically produced automobiles) and the growing residential investment. The net export deficit continued to grow, however, and investment in nonresidential structures, producers' durable equipment, and business inventories declined. Prices, as measured by the GNP fixed-weighted price index, increased at an annual rate of 3.1% in the third quarter, compared with 3.9% in the second quarter. The slower rate of inflation resulted mainly from a decline in energy prices, following second-quarter increases. Fourth-Quarter Prognosis Many of the economic data available for October and November indicate that the economy is growing modestly and will continue to grow over the next 3 to 6 months. The composite index of leading indicators, designed to predict economic activity within 3 to 6 months, rose 0.3% in October, the sixth consecutive monthly advance, according to the Department of Commerce. Six of the 11 available leading indicators were positive: Stock market prices rose, as did sensitive material prices, credit outstanding, and manufacturers' new orders for consumer goods and materials; initial claims for unemployment insurance decreased, and firms were getting slower delivery of goods. Four of the indicators were negative: Business formations, homebuilding permits, contracts and orders for plant and equipment, and money supply all declined. The average hours worked per week, already at a high level, remained unchanged.

Jan 1, 1985

By Dan Nilsson

Rock from underground mining has a size-distribution, that varies from mine to mine, depends on rock conditions and mining method and on how much explosives etc, that is used. Because at the high costs, associated with full-scale studies of the size-distribution of blasted rock in a mine, detailed information is seldom published about such size-distributions. However, some facts can be noticed. Rock from tunnelling and other types of development work has a fine fragmentation. Cut-and- fill mining is a method that normally results in blasted rock with an advantageous size distribution. Block caving on the other hand often results in large amounts of boulders, since blasting of the rock is normally not used.

Jan 1, 1985

By James L. Poole

INTRODUCTION Companies in the mining industry are subjected at times to currency exchange rate risks and interest rate risks. The former occurs any time a firm deals in more than one currency. The latter occurs anytime a firm is financing itself with borrowings that have a floating interest rate (although a fixed rate can be a problem at times). FOREIGN EXCHANGE RISKS There are two general reasons why exchange rate risks (FX risk) can occur: First, a firm may be building a mine or plant in another country where financing for the plan is denominated in funds other than the country hosting the plant. For example, if a Canadian firm is building a smelter in another country which is being financed with Canadian dollars, the C$100 million for labor, which must be paid in the local currency, has subjected the firm to a C$100 million FX exposure risk. If after the cost estimates were made the local currency appreciates 30% against the Canadian dollar, the cost of labor has increased to C$130 million. (Of course, the local currency could also devalue during this period making the labor cost component less than estimated.) The other reason exchange rate risk arises is due to the fact that the costs of production in one country producing minerals may be incurred in one currency while the production is sold in another currency, such as coal being exported from Canada to Japan under contracts denominated in Yen. In this example, the Canadian firm is exporting coal to Japan and being paid in yen in 30 days at a contract price of 100 Y per ton. Furthermore, assume that the mining firm anticipates a depreciation of the yen against the Canadian dollar of 5% in the next 30 days. Therefore, the mining firm stands to lose 5% of the value of its shipment in a month's time not including carrying costs. In both cases, the mining company risks an adverse change in the exchange rate, that is, the currency the company holds may decrease in value relative to the other currency. There are a number of ways to mitigate the exposure to foreign exchange which can be utilized by the mining company. Optimally, a company should try to match all their inflows and all their outflows in the same currency. For example, if a Canadian firm has mining costs and debt service costs both denominated in Canadian dollars then 100% of their receipts would need to be in Canadian dollars. If a Canadian firm has 70% of its cash outflows in Canadian dollars and 30% of its cash outflow in American dollars in the form of a loan amortization then their receipts would need to be 70% in Canadian dollars and 30% in U.S. dollars. This general principle of matching cash receipts and cash costs in the same currency works fine in a perfect world but what of the real world when these cannot be matched? In actual practice, however, the financial markets have developed a number of ways in which foreign exchange risks can he managed or reduced. FORWARD MARKETS One method is to use the forward markets which are made on a world-wide basis by the commerical banks for foreign exchange. If a firm wanted to lock in the current exchange rate for the receipt of a foreign currency at some point in the future, they could do so by contracting on the forward market with a bank selling that foreign currency at the current rate at the future date. For example, assume that a Canadian firm is exporting coal to Japan which would pay yen in 90 days. If a firm wanted to lock in today's exchange rate they could contract with a bank to sell on the forward market yen in 90 days. When the yen was received the contract would be executed by selling the yen to the bank and receiving the previously agreed upon number of Canadian dollars. Generally speaking, the forward market can be used to sell forward about 12 months. The costs of selling (or buying) forward

Jan 1, 1985

By D. G. Collins

As part of its effort to develop ways to maximize resource recovery, the Bureau of Mines investigated the extraction of vanadium from Western phosphate beneficiation tailings with H2S04 and/or H3P04. Dissolution of the vanadium was accomplished by digesting a mixture of acid and a 50-pet-solids, tailings-water slurry. In the most effective method investigated, vanadium and phosphorus were leached by digesting the slurry at a constant boiling temperature (1000-1100 C) in a stirred reactor. In batch tests, maximum vanadium dissolution was 95 pet. In continuous-circuit tests designed to further evaluate vanadium dissolution at con-stant boiling temperature in a continuously stirred reactor, vanadium dissolution ranged from 70 to 85 pet. An economic evaluation of the process demonstrated that H2S04 consumption is the major cost factor. Based on the value of the vanadium product with no allowance for a phos-phate product, the cost of producing the V205 is more than twice its value. The potential for profit would depend upon the value of the phosphate fertilizer produced from the impure H3P04 remaining after vanadium extraction.

Jan 1, 1985

By C. Richard Tinsley

INTRODUCTION The economic analysis (Chapter 3), the engineering studies (Chapter 10), the credit structure (and the consequential funding sources) - Chapter 11, and the overall feasibility structure for any venture are all directed to determining one major decision element: How much and how certain is the reward for taking these risks? Risk assessment is a surprisingly weak area of analysis and is usually addressed in a checklist fashion. It is much preferable to deal within a risk system so that the inevitable tradeoffs among risks are correctly made. DEFINITION The first step toward risk definition must be to ascertain all of the risks to which a project or a company is exposed; otherwise one will remain ignorant of the possibility of a financially crippling loss until it occurs. (Carter and Crockford, 1974). However, simply stating what "risk" is can lead to debate. For example, risk could be (adapted from Vaughan, 1982): -the chance of a loss - uncertainty of loss -possibility of loss - uncertainty -dispersion of actual from expected results - probability of an outcome different from the one expected - possibility of an occurrence of an undesirable contingency -a condition in which a possibility of a loss exists. For the minerals industry financier, the last definition is probably the most appropriate. However, from a mineral company's point of view the definition might well include the possibility of not achieving the expected financial return. RISK CLASSIFICATION Risk identification will be readily agreed as the all-important first step. There are five major "branches" of risk classification. These are: -Statistical -Modellers -Checklist -Project Financing -Insurance The Statistical set discovered probability theory and any risk discussion soon deteriorates into a mathematical jungle (Megill, 1977; Hartman, 1976; Reutlinger, 1970; and Pouliquen, 1970).Their use of terminology tells its own story: coin toss (binomial distribution), gamblers' ruin, delphi (oracle) techniques, monte-carlo simulations, random walks, etcetera. These techniques inadequately represent the judgements necessary in an increasingly complicated and interrelated world. The risk Modellers have turned to the computer to handle these inter-relationships but soon find barriers because of "simultaneity". Certainly the computer has its uses to conduct various analyses (marketed as "sensitivity" analyses) but very often one finds that this involves changing one or two variables at a time, all other things being equal. Unfortunately, in a modern and complex world all other things do not remain equal. The statisticians will, no doubt, jump to their own defence by citing this

Jan 1, 1985

By Richard L. Gordon, William A. Vogely

ENERGY POI.ICY-PRINCIPLES AND THEIR PRACTICE Persistently, at least since the end of World War 11, governments have intervened broadly, deeply, and incoherently in major energy markets. If we take a broad definition of energy that encompasses gas distribution and electric power, we can observe regulations of even older vintage. This trend, of course, is not unique to energy. Expansion of government controls has occurred in many areas. The relevant basic question about energy regulation, therefore, is not why is energy special, but whether any general principles exist to explain the wisdom of existing regulations. This review takes place at a time, the middle 1980s, in which a massive onslaught is being undertaken against government regulation. However, the present chapter is influenced primarily by my observations of the failures of energy regulations and not by any inspiration from those ideologically opposed to government intervention. Several subquestions arise in policy appraisal. A primary need is to establish clear objectives and determine the consistency between these goals and the policies imposed. Thus, the first step is to set objectives. The next is to outline ways to attain these goals. However, it should be recognized that many apparently distinct options are economically equivalent. When the goal is to charge producers or consumers for something, it is possible to attain the same result through either government ownership or taxing private transactions. The tax can raise the price to the level the government would have charged if it were the owner. Creation of a Department of Energy is not necessarily any different from having separate energy agencies well coordinated by some small supervisory body. Thus, a distinction should be made between substance and form in policymaking. The critical substance concerns such matters as whether the government imposes financial penalties, incentives, or rules to attain a goal. Then, there can be many equivalent ways to implement the basic policy form. The second prior illustration suggests that one favorite question is how to attain proper integration of policy. At various times, voices on either (or even both) sides of the Atlantic have called for a coordinated energy policy. The U.S. Paley Commission made this a primary goal for future policy. The western European governments that were the founding members of the Coal and Steel, Economic, and Atomic Energy Communities spent much time in the middle fifties and much of the sixties trying futilely to agree on an energy policy. (See Gordon, 1970 for an annotated review). The energy price rises of the 1970s rekindled United States interest in coordination. However, astute observers of the problem such as O. C. Herfindahl of the United States and Maurice Allais (1 962) in France warned the discussions confused form with substance. The crucial issues were what were the goals and what were the best types of policies to attain such goals. Policy suffered, not from poor organization, but from discord about the goals and how to attain them. All this suggests that we need principles to guide policy appraisal. The branch of economic theory known as welfare economics concentrates on providing guidance about the problems of policymaking. The theory examines both what

Jan 1, 1985