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By M. T. Ityokumbul

Flotation columns and their variations are increasingly replacing conventional cells in mineral processing circuitry. While the operational characteristics of columns differ from those of conventional cells, the same scale-up methodologies are being employed in design. This practice may be attributed to poor understanding of the factors controlling throughput. The use of tall flotation columns is frequently justified on the requirement for increased particle residence time. It is shown that longer particle residence times in the column cell alone do not translate into increased recoveries. Throughput data from several industrial flotation column installations is presented. An attempt at using dimensional analysis to provide scale-up methodology for the factors controlling column throughput is made.

Jan 1, 1995

By Paul R. Thomas

This paper addresses the long-term cost and availability of primary gold production from the Republic of South Africa. Forty-four major producing or developing operations were evaluated. The analyses present estimates concerning 1) total refined gold potentially available from demonstrated resources, 2) annual production potential into the next century, 3) long-term weighted average total costs for underground mine production and surface waste reprocessing, 4) the expected annual decrease in gold production, and 5) the ability of other market economy countries to compensate for the anticipated decline in South African gold output. This paper draws upon the data and analyses of a recent Bureau of Mines, U.S. Department of the Interior, Minerals Availability Program appraisal that evaluated the worldwide availability of gold and silver from primary precious metal operations and as a byproduct of base metal production.

Jan 1, 1984

By Alfred A. Roetzer

In several sections of the country new demands are being brought bar cement users. Among these the demand' for truck shipments; and palletized loads present new problems that do not lend themselves to sample solution. In fact these demands have far-reaching effect in the way bagged cement might be marketed. Early solutions of palletized truck loads filled from existing packing and loading facilities have resulted in' slowdown in packing, additional labor and space for palletizing, considerable experimentation in type and construction of pallets, and usually far from optimum truck handling and loading methods.

Jan 1, 1961

By Len H. Steele

To date VMD have designed, built and supplied nine autoclaves to various mining companies in Canada, the US, and Papua New Guinea. Initially, completely fabricated and lead lined units were shipped. The logistics of Placer Dome's Porgera PNG Project necessitated fabricating and lead lining each autoclave in five sections for transportation to site, each piece weighing approximately 30.5 tonnes. Support equipment such as turning rolls, automatic and manual welding machines had to be set up on site to facilitate assembly of these units which was a challenge in planning. This on site erection programme was completed in three months.

Jan 1, 1992

Perhaps, after years of concerted effort at a mineral prospect, your company has reached the stage of feasibility study. Detailed target investigations, drilling, bulk sampling, land acquisition, and engineering analyses are complete, and the deposit still remains an attractive investment possibility. Your company, after long study, decides to begin mine development-now, how do you convince lending institutions that your proposed operation will return their borrowed funds, plus interest, over the term of the loan?

Jan 12, 1978

By E. Sehner, G. Van Weert

Metal chloride pyrohydrolysis is a fifty year old technology, operating satisfactory in many plants around the world, mainly on ferrous chloride, The capabilities and costs of its two equipment options (spray roaster and fluid bed pyrohydrolysis) are well known. Why is the technology not more widely used in mineral processing, beyond the production of MgO and upgraded TiO2slag? After briefly reviewing chloride vs. sulphate process characteristics and existing plant operations, this paper will discuss pyrohydrolysis options for the mine developer using the processing of ilmenite, siliceous zinc oxides and oxidic nickel / cobalt ores as examples.

Jan 1, 2003

By B. J. Arnold

Froth removal rate is perhaps the most important parameter in scaling up from laboratory tests to plant froth flotation circuits. The WEMCO froth factor, the percentage of the froth height over the lip of the cell, accounts for the difference between laboratory and plant froth removal rates. As laboratory tests are generally run with a high pulp level, laboratory results are directly comparable to plant results only when a high froth factor (high pulp level) is run in the plant. When a plant does not have a high pulp level, laboratory results must be modified by using a ratio between laboratory and plant kinetics to predict plant results. This ratio, which accounts for the froth factor is important in testing any new reagents or reagent dosage levels. CQ Inc. researchers have used predictive scale-up equations using this froth factor coupled with equations for kinetics and the residence time distribution in the froth flotation cells. These equations show that modifying the froth factor in the plant can have a large impact on flotation cell yield and reagent use. EQUATIONS DESCRIBING FROTH FLOTATION Scaling up from laboratory- to plant-scale coal froth flotation has been the subject of much research and debate over the years. Determining the proper rate equation to describe flotation kinetics and an equation to describe the residence time distribution in a bank of flotation cells have been particular areas of study. As shown in Tables 1 and 2, various rate equations and residence time distribution equations have been proposed in the literature. These equations consist of one or two parameters giving the rate constant(s) in units of time-1 and a parameter for recovery at infinite time, [Roo]. Dowling, Klimpel, and Aplan (1985) evaluated the rate equations in Table 1 for their ability to fit froth flotation kinetic data and found that all of the equations give reasonably low standard errors. Several of these equations, however, proved to have superior confidence limits for the parameters. Other equations have also been proposed to describe the recovery versus time profile. Most recently, Diao et al. (1992) proposed a first-order form with a sine wave distribution. As indicated in Table 2, investigators have suggested many equations to describe the residence time distribution in continuous froth flotation. To measure the water residence time distribution in a bank of cells, a soluble tracer is often used, with the level of tracer being measured over time at the tailings discharge. This response is then put on a dimensionless basis as described by Austin et al. (1984) in order to compare mixing behavior between cells or under different conditions. Coal flotation cells are generally of the flow-through or hog-trough variety allowing for some degree of backmixing and short-circuiting. While the water residence time distribution (see Figure 1) at the end of one cell in a bank of 1.4 cu ft WEMCO froth flotation cells may approximate perfect mixing conditions (Arnold, 1989), the water residence time distribution at the end of a bank of cells does not. Figure 2 shows the RTD for various flotation cell types compared to that for perfect mixers in series. To better describe the water residence time distribution in coal froth flotation cells, Van Orden (1986) used an equation similar to the perfect-mixers-in-aeries equation. This

Jan 1, 1993

By Jodie Robertson, Isabel Barton, Cristian Caro

Prior to mining, all rocks contained in a mineral deposit must be placed in one of several categories known as ore types. Each ore type describes a different way that the rock will behave in processing. The ore type determines which process stream a particular mined unit will be sent to, sets expectations for process engineers and metallurgists, and forms the basis for recovery predictions and production estimates. At first, ore types are assigned mainly by geologists based on visible geological criteria (dominant ore mineralogy, estimated grade, rock type, alteration type). As metallurgical tests are carried out and process data accumulate, the resulting criteria may be factored into the ore typing process, typically as assays and recoverable metal using the relevant process(es). Other variables may also be incorporated into ore typing at operations if they are particularly important, such as grindability, preg-robbing, gangue reagent consumption, and the presence of especially deleterious minerals such as talc or smectite. The mine operation department may also redefine ore types and/or process destinations based on economic criteria. A “best” ore type is designated that (in theory) best describes how the rock will behave in processing. Codes representing this ore type are entered into the drill-hole database, then interpreted on cross sections and level plans, and finally added to the block model. Ore types are iteratively reexamined and adjusted over the life of a project. Major difficulties in effective ore typing are (1) lack of communication between geologists and metallurgists, (2) the imprecision inherent in imposing clean categories on messy natural systems without discrete divisions, (3) the need for ore types to provide useful information for a wide range of processes, (4) difficulties in scaling up laboratory test results to mine production, and (5) conflict among geological, metallurgical, and economic criteria for ore typing.

Jul 1, 2024

By L. D. Tracy

"IntroductionOne of the problems which the coal-mining industry must solve in the next few years is the redaction of its ever-increasing timber bill. This includes pit posts, mine tees, timber sets, and brattice boards. As an example of this increase, the following table of timber prices from the records of a coal company in western Pennsylvania, in a district where the supply of most of the different kinds of timber used can be shipped from points within the State, is self-explanatory: Present conditions seem to indicate the continued upward trend ox the cost of mine timber, although the regrettable calamity that has visited the chestnut timber in Pennsylvania may temporarily hold the price of some types of mine timber on a level basis. On account of the chestnut blight, many farmers will undoubtedly begin to convert their chestnut trees into timber before they become a total loss. This may provide, for the time being, a sufficient supply of mine timber to check the steadily rising prices.The local lumber producers are turning their attention to the production of the larger sizes of timber and lumber on account of an unfavorable price on mine ties. From the foregoing table, it is seen that the average advance in the price of ties during the period 1914 to 1920 is 52 per cent, while timber sets and mine car plank increased in value 60 per cent. Amore striking illustration is the fact that a 6 by 8 inch by 6 foot tie sells for 42 cents or at the rate of $17.50 per 1000 board feet; yet mine car plank and timber sets have a value of $48 per 1000 feet, an advantage of $30.50 in favor of the heavier timber.The supply of coal in Western and Central Pennsylvania will last for a long period and it is for the possible future demand for timber that the coal companies must provide. While steel, concrete, and other materials may, in many cases, prove an acceptable substitute, there is no doubt that timber will always be in demand."

Nov 1, 1926

The 1999 edition of the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (the æJORC CodeÆ) became effective in September 1999 and is the latest revision of a Code which was originally issued in 1989, but which has an ancestry dating back to the first JORC report released in 1972. The modifications introduced in 1999, which are briefly discussed in this paper, substantially improved the document, but did not materially alter the fundamentals of the Code, these being the Mineral Resource/Ore Reserve classification framework and terminology, and the requirements and guidelines for public reporting of Resources and Reserves. Codes or guides similar to the JORC Code exist or are under development in other countries, including the United States of America, Canada, the United Kingdom and South Africa. It is pleasing to note that the 1999 JORC Code has been used as a model by these countries in developing their latest standards, and has been a major influence in the formulating of international reporting standards. The JORC Code is primarily a document covering the reporting of the results of mining companiesÆ activities to the public. However, mining geologists are interested in practical assistance and guidance in carrying out their duties. The JORC Code provides this in four ways. It establishes a framework within which those preparing and publicly reporting Mineral Resource and Ore Reserve estimates must operate, by setting standards for the classification and reporting of Resources and Reserves and for qualifications of Competent Persons. It establishes the division of responsibility between the companyÆs Board of Directors and Competent Persons with respect to the preparation and reporting of Resources and Reserves, and empowers Competent Persons to materially influence how their Resource/Reserve estimates are reported to the public. It provides an extensive, detailed and practical check list of criteria to be taken into account in the preparation of Mineral Resource and Ore Reserve estimates. Finally, it provides a strong measure of due diligence protection in the event of litigation if it is followed with diligence and honesty.

Jan 1, 2000

The status of remote sensing data availability in New Zealand is outlined and discussed. Currently, two multispectral remote sensing satellites are providing regular data over New Zealand; aircraft scanner services are available from Australia.; operational radar satellite services are yet to materialise. The advantages and disadvantages of the various data types are compared and contrasted. Some image processing considerations are outlined.

Jan 1, 1993

By W. B. Plank

I HAVE been asked by the Chairman of the Engineering Education Committee to outline what the engineering colleges would like the mining companies to do with the young engineer just, out of college. It has been suggested that, because my own personal experience has been almost entirely within the coal industry, I handle this subject from that view- point. Many thoughtful engineering educators are today wondering what effect the present employment policies of many industrial companies are going to have on the young man just starting out in his profession. Since before the World War large industrial concerns, such as those in the electrical and mechanical industries, have gone to the colleges to interview 'likely graduates until today there has developed in most of our engineering colleges, especially in the eastern part of the country, what appears to be a lively competition on the part of these companies in bidding for the young graduate engineer. The employers of mining engineers, with one or two exceptions, have not yet begun to enter this competition. It remains to be seen how serious this situation will become, how it will affect the training of other engineers, and what effect, if any, it will have on the mind of the young man about to enter college who may be inclined to take up mining engineering, but who gains the impression from this well advertised employment service just mentioned that there is no opportunity for him in the mineral industry as com- pared with the opportunities offered in say civil, mechanical, and electrical engineering.

Jan 1, 1929

By M. Albrecht

In the mining industry and particularly in the processing plants, we use some large and unusual equipment. Understanding what it is and what it does is important to good operations, but how do you teach a new employee. When I started out in this field, the information on the processing equipment was easy to come by. Equipment manufacturers readily supplied it; their salesmen, often engineers themselves, knew how important the availability of this information was. Old engineers used their notebooks to train the new engineers. Over time this has changed. Equipment manufacturers have changed hands or gone out of business, and often the older engineers are gone. As a start in reversing this, this presentation will be an introduction to sizing, selecting, and operation of some of this equipment, in particular gravity separating equipment. Major portions of this have been excerpted from A Mining Engineers Notebook: Mineral processing (2).

Feb 23, 2014

By Randall M. Wheeler

Many of us have used a seismograph to measure peak particle velocity and frequency. But do we really understand why? Also, why do we measure particle velocity instead of displacement and/or acceleration? What is the vector sum? How do these items relate? Where does frequency fit in? This workshop will attempt to answer these and other questions. Some of the answers may surprise you, others may not.

Jan 1, 1997

By Floyd D. Varley, C. M. K. Boldt

Toolbox training is often described as short, informal training conducted at a worksite by technically competent persons for the benefit of a work team. The key feature of toolbox training is the focus on a work team and what is important to that group in its workplace. Toolbox training conducted by peers can connect miners and establish the feeling that the hazard is a real threat to them. This feeling can bridge the gap between delivery of a safety message and behavioral changes that can prevent an accident. Toolbox training is a popular form of "maintenance" training that should not be used to teach a new skill. The 10- or 15-minute toolbox session is simply too short a time to teach or learn a new skill and test for skill development. However, the toolbox format is an excellent way to inform workers of changes in workplace rules, conditions, or hazards by bringing the discussion of change to the level of the work group and suggesting how a change will affect the way workers perform their jobs. Toolbox training should be structured to address a very specific hazard. That is, the hazard source should be identified and the effect of the hazard on the worker described. The temptation to discuss a safety subject in broad terms will result in an equally vague result. For instance, discussing "equipment guards" is inappropriate for a 15-minute training session. There simply is not enough time to cover all the hazards and their remedies. A more appropriate topic would be "placing guards on a conveyor return roller" or "hazards of cleaning a conveyor return roller." Each topic is concise enough to allow the trainer time to define a particular threat to the safety of miners and discuss ways to defend against that threat. The clearest way to a safe workplace is to identify hazards methodically and eliminate them. This cannot be done with sweeping, generalized training. Some best practices that will protect a worker from the hazard should be presented, and the hazard should be located at the specific worksite. Toolbox training is an opportunity for the work team to participate in learning and share experiences and knowledge, often through storytelling. Storytelling is an ancient form of passing along information in an entertaining way. It is entertaining because it draws the listener in with imagination and creativity. Stories told within work groups are a way for miners to exchange experiences in which they made mistakes that resulted in an accident or a near-miss and learned a valuable lesson. Thus, co-workers can learn from others without the pain or fear that accompanied the storyteller's learning path. To encourage these shared experiences, the people in the group must be comfortable with one another. Participation doesn't stop with listening to a near-miss story or informing the group of an unsafe work practice. Participation by sharing experiences, knowledge, and skills should lead toward action in changing the unsafe tool, practice, or machine (Wallerstein, 1992). This power to change is called empowerment. Empowered workers use toolbox training sessions to discuss a problem; direct their own knowledge, experience, and talents in the context of their work environment to solve the problem; and put into practice what they have learned by sharing (Baker, 1992). A worker is much more likely to implement changes they have contributed to creating than changes forced upon them. Toolbox training functions best when the group size is small (under 20) and composed of workers with similar job functions. While combining all workers on a shift or multiple shifts may be convenient, the level of participation will drop dramatically as group size increases and participants are less connected. Similarly, when the work group participants are from different job functions, keeping the materials relevant to the individual becomes more difficult. The role of management in the toolbox training system is to communicate among various groups so that all groups at a mine site are hearing the same message. In very small operations, combining work groups can be productive if the trainer can promote open discussions and lead the group to solutions that address the needs of all and not let one group or individual dominate the discussion. WHY USE NARRATIVE METHODS An effective communications tool is to use stories as a means of describing a hazard and its consequences. Historically, using stories to transfer knowledge between individuals of the same and different generations is well established. All good stories share the same elements required to communicate safety principles. Stories require a setting (the part of the workplace), a plot (the circumstances that lead to a hazard), the solution (best practices), the lesson (what can happen), and the result (what will be done to prevent the hazard) (Dennehy, 1999).

Jan 1, 2002

Two separate but closely related projects now under construction on the St. Lawrence River- the Seaway and the St. Lawrence Power Project- are providing the impetus for what may become one of the most significant economic expansions in the Northeast. By 1959, or even earlier, electric power will be flowing from the largest single hydroelectric installation east of the Rockies. Simultaneously there will come into existence a great new commercial waterway which will provide cheap transportation from the farm and industrial heartlands of the U. S. and Canada to the markets and resources of the world. When the Seaway is completed, vessels with five to ten times the capacity of those now using the Canadian canal system will be able to move from the Atlantic Ocean to Lake Superior.

Nov 1, 1955

By James M. Barker

Marketing is the linchpin of the industrial-mineral (IM) industry. Without markets and consumers for IM products, all other associated IM activities are superfluous. The simple existence of an IM deposit does not mean that it can be exploited. A dynamic interaction between exploration (geology), mining, processing, transport, marketing, sales, and consumers is required for profits. Geology dictates the existence of a deposit, but markets dictate its development, and transportation provides the connection. This is true to such an extent that marketing commonly is called the exploration phase of IMs. Marketing is strategic and includes long-range market-development and planning activities, whereas selling is tactical and more focused on day-to-day consumer interactions. Each will help the other when properly done. Many producers of IMs have failed because of inadequate marketing skill, information, and practice. Over many years at the Montana Bureau of Mines, the many developers seeking technical assistance to find an IM deposit, but who had no marketing plan, always failed. In contrast, the few who sought assistance first on marketing, with the IM deposit to be found later, always succeeded (Richard Berg, personal communication, 1998). Marketing has many facets helped by geologists who must be aware of what marketing is attempting to do. A geologist needs to understand many aspects of IMs: location (deposits, plants, consumers), processing (specifications), transportation (truck, rail, barge, ship), competition (local, regional, national, international), substitutes, pricing, and new developments and market forces of all kinds. Some needed skills are not taught formally to geologists, so well-rounded self-education and on-the-job training are the way a geologist normally enters into IM marketing. The IM geologist generally is associated with marketing either by helping to prepare a market study or by acting on the results of one. Preparing a market study is a two-part process. The first part is relatively simple but requires a time-consuming collation of data into an IM survey (mostly past-and present-oriented). The more difficult and much more important second part entails expanding the IM survey into a market evaluation (mainly future-oriented) that emphasizes forecasting, timing, location, and specific products. A market evaluation generally boils down to formulating the right questions to ask of the right persons. One very good question to ask is, "What could be the market for this specific IM?" while thinking for yourself without excessive recourse to gossip, rumors, promoters, developers, or (at times) IM experts. The evaluation must prove that market potential exists and suggests a marketing plan. Effective marketing is an ongoing process, with the initial marketing plan modified over time, using wide and continuous input to avoid tunnel vision. Industrial-mineral markets are based either on commodity (lower-priced, basic-processing) minerals or specialty (higher-priced, value-added) minerals. IM marketing methods are either product-driven (commodity minerals), a more traditional approach, or market-driven (specialty minerals), but these are neither mutually exclusive nor is one always better than the other. Focusing too much on specialty minerals can lead to problems. A blend of commodity products with specialty products commonly lowers risk and enhances long-term profits. The highest profits occur in specialty minerals at the cost of higher risk and complexity and require intelligent marketing, versatile technical services, and creative research and development. Industrial minerals are best served by an industrial-marketing approach rather than a consumer approach. Modern industrial marketing emphasizes the consumer using the "marketing concept." The marketing concept focuses all management and operational activities on total consumer management and satisfaction similar to the total quality management approaches to excellence.

Jan 1, 1999

By Lourens Scheepers

Mining induced seismicity and rockbursts have been part of the deep level gold mining industry in South Africa for many years. One could be forgiven for thinking that we should know everything there is to know by now to have rockbursting under control to a level that it has minimal impact on safety and production. Well, we don’t… There are things we know that we know, and they are implemented, or should be. There are thigs we know that we don’t know, and they are researched, or should be. There are things we don’t know that we don’t know, and, well, we don’t know… We know that seismicity and the associated potential for rockbursts generally increase with an increase in stress (increase in mining depth and/or mining span and creation of remnants) and proximity to faults and dykes. We know there are a number of potential sources of events in a mine; that is: mining abutments, pillar abutments, mining faces and geological structures (faults and dykes). We know there are a number of event mechanisms associated with these sources; that is: slip on a geological structure, shear through intact rock and bursting of the rock near the edge of a mining excavation. One of the tools used more and more and with increased success to identify event source mechanisms is Moment-Tensor analysis (MT). This typically assist in differentiating between three event mechanism components: volumetric deformation component, axial deformation component and slip / shear component. The insight gained from MT assist greatly in identifying the most likely event source to assist in understanding the rockmass response to mining. We know that the seismic response in our mines are mining induced (not natural). This may seem trivial, but it is important to realise that we influence the seismic response with the way we mine, and by how much we mine (extraction ratio). Therefore we put design rules and strategies in place to reduce the seismic hazard and we install rockburst support in our mining excavations. We know the seismic response to mining is influenced by the properties of the rockmass, including strength, stiffness and brittleness, but quantifying its influence is typically more difficult than expected. We know numerical modelling can improve the engineer’s understanding of the potential rockmass response associated with designed mining layouts and strategies. For our environment (narrow, tabular large area) elastic boundary element modelling remains the most convenient and practical approach, but it overestimates the stress at mining abutments and underestimates the stress further away from these abutments. Adding a crushing (based in limit equilibrium) modelling approach vastly improves the boundary element modelling ability to simulate the deformed (interpret fractured) zones and associated redistribution of stress. We don’t know how to quantify what an acceptable seismic risk is. We don’t know if we can mine remnants at an acceptable seismic risk. Some remnants are extracted surprisingly easy, others serve us with devastating rockbursts. The limit equilibrium modelling shows potential to significantly improve our ability to quantify the rockburst risk. We don’t know if large-scale preconditioning is possible and will be effective to significantly reduce the seismic risk associated with remnant and pillar mining. Research is required (and has been initiated). Vast areas of ground have been extracted historically in the South African gold fields. Most gold reserves are now in deeper ground (4000 m) and historic remnants (areas left before due to mining difficulties) as well as pillars (regional stability pillars). If we cannot find ways to extract these reserves at acceptable risk levels, the future of the South African gold mining industry is very short.

Apr 26, 2022

By H. Lyn Bourne

This is the sixth annual tabulation that gives mineral royalty information. This tabulation, like the previous editions, includes all of the earlier data plus more than 100 new entries. In addition to the royalty information, some entries show the cost of purchased reserves. An article in the December 1984 Kentucky Coal Journal could have far reaching applications. It explains that a banking firm examined the "reserve risk" as one of six factors for analysis when financing a coal project. The firm concluded that coal reserves in Kentucky are worth an average of $0.29/t ($0.26 per st) in-place. The banking firm based this in-place value on its examination of more than 50 leases. In-place value is especially important when trying to establish a mineral value for a given deposit. Ernie Lehman wrote to this author after last year's column appeared and he quoted the lease rates for lead and zinc on federal land. He states, from first hand information, that the leases are based on a percentage of net smelter return as follows: 4% for the first five years, 4.5% for the next five years, and 5% thereafter. The figures used in last year's column ($ per st) came from dividing reported royalty income by reported production. The information reported last year merely translates the results of the net smelter return (as written in the lease) to royalty income per ton to the US Government for the various years. Statistics from the Minerals Management Service of the Federal Government show that oil and gas account for 40% and 53%, respectively, of the Federal royalty income. Coal accounts for about 4% and all other minerals, the remaining 3%. Oil and gas leases are mostly at 12.5%. Most of the coal leases are at 12.5% for surface mining operations and 8% for underground mining. Many of the other commodities are leased at 5%, which has been true for decades. Relative to Federal leases, this year's table shows some percentages and some costs per ton. This was done to give information about the leases and also to show income produced by various commodities. Note that some commodities have a variation in $/ton even though the royalty percent is the same. These variations result from a combination of factors that influence the value of a mineral commodity. The same caveats that have appeared in previous columns relative to factors that influence the value of reserves are restated. The data in the table serve as a general reference and are not intended to present an absolute scale of reserves costs. Several factors influence the value of any mineral commodity. The factors include: • location/transportation (especially significant for most industrial minerals); • market conditions both for the commodity and the company acquiring the right to mine it; *quality or grade of the deposit as it reflects the amount of processing/beneficiation necessary to produce the finished product; and • legislative restrictions and conditions for mining a given material at a given site. These and other factors will significantly influence the cost of reserves. The table shows the range of royalties and the variations in the basis of computing the fees. In a few instances, it gives the cost of acquired reserves based on purchase price and quantitative estimates of the material in place. The table lists the commodity in column 1, and the subsequent columns give the location - either by state, US geographic area or Canadian province; the cost - R for royalty and P for purchased cost; and the year in which the lease or purchase agreement occurred. The last column offers either comments or gives a footnote number for more information. The cost column requires more explanation. The units may refer to cubic yards (/yd), cubic feet (/cu ft), tons (/T, 2000 lbs) or acres (/A). 1 cu yd = 0.7646 m3 1 cu ft = 0.2832 m3 1st=0.9078t 1 acre = 0.4047 hm or m2 In several cases, the royalty is a percentage of the sales price of the finished product and is levied against either the amount produced or the amount sold. We thank those who contributed information for the table: G. Anderson, B. Brown, R. Ganis, K. Hauser, E. Lehman, and S. Sims. Their help is appreciated as are the contributions by those who asked to remain anonymous. This column requires additional information each year. That data must come from people in the minerals industry who have royalty information. What appears in the table is only a very small fraction of the cost information relative to the various commodities and the geographic areas for which there is royalty information. If you find this column of interest and possess information write the author at the address given in the author's box or call 313-462-0005.

Jan 7, 1988

By H. Lyn Bourne

This is the seventh annual tabulation of royalty information. It is also the first year in which some data have been deleted to make room for new data. The concept of royalties evolved from a time when the government owned all of the land, including mines, to the situation where free miners won the right to claim minerals but paid a portion of their production to the royal treasury. Today, a mineral royalty is a payment to the owner of the mineral rights for the privilege of producing the mineral commodity. However, some people incorrectly believe that the selling price and the royalty are the same thing. The contract between the owner (lessor) and the mining company (lessee) is the mineral lease. Some clauses that are common to mineral leases include: identification of property, granting clause, reservations, definitions, royalty rate, taxes and title, indemnity, termination, inspection, assignability, successors, and reclamation. There often are variations in royalty rates for a given commodity that reflect differences in location, quality, market conditions or public versus private ownership. History In the time of ancient Rome, the government owned the mining properties by virtue of conquest. It would lease the mines to favored citizens who would pay rent to the State. Various conditions of sovereign ownership of both land and mineral rights continued in Europe until the Renaissance. As the laws evolved for land ownership by private citizens, the concept that minerals belonged to the State (King, Crown, sovereign) continued until about the 15th century. Free miners challenged the notion of sovereign ownership and won the right to discover and claim minerals. But a portion of their production had to be paid to the sovereign - a royalty. So, the original concept of a mineral royalty was a tax on production that was due to the Crown or Church. The term mineral royalty, as it is known today, is a payment to the owner of the mineral rights (formerly the royal owner) for the privilege of mining and producing the mineral commodity. The owner of the mineral rights, the lessor, and the mine operator, the lessee, enter into an agreement to mine the property. The agreement is the lease. While this concept is common, there are some who do not understand that the royalty is a portion of production paid to the owner as agreed on in the lease document. This author has seen reports where the selling price of a commodity has been quoted as the royalty. ("They get 70 cents a ton royalty at their pit and the guy down the road only has a 65 cent royalty.") These reports have been authored by people not familiar with the mining industry. Lease clauses In addition to the amount to be paid the lessor, there are several other items to be addressed in the lease agreement. The following list may not be all inclusive, but briefly describes most of the common clauses any good mining lease should contain. Identification: This opening clause names the owner (lessor) and the operator (lessee), the address of each, and gives the legal description of the property. Granting clause: This part of the lease gives the time period or duration of the agreement and information about renewal periods. It also has language about the exclusive right of the lessee to mine the property. Reservations: If the owner wants to exclude any portion of the property or set some specific conditions about the operation, there needs to be a clause that describes these reservations. Definitions: This section should address some of the technical terms that the lessor may find confusing - short tons versus cubic yards, dollars versus percentage of average selling price, any escalator indices such as consumer price index or producer price index, and material mined versus material sold. Royalty: This section spells out what the royalty rate will be, how often it will be paid, if there is an annual minimum, the pay dates, and how the records will be kept. This section also describes the conditions under which the lessee is exempt from the annual minimum - natural disasters, strikes, governmental actions, or other causes referred to as force majeure. Taxes and title: The lease needs to identify who is responsible for the property taxes, severance taxes (if applicable), and other taxes that relate to the mining activity - taxes on equipment, improvements, or stockpiles. This is a good place in the lease for the owner to certify his ownership of the property and its mineral rights and also certify that no other leases are in effect. The lessees may want language that allows them to pay mortgages or other debts on the property to keep their lease in effect. Indemnity: This portion of the lease identifies that the lessee assumes the risks for lessee's mining operation. Lessor should expect indemnification by the lessee through standard insur¬ance policies - workers compensation, liability and property damage. Termination: Both the lessor and lessee want language that will allow them to terminate the lease. This section of the lease describes the conditions under which one of the parties may terminate the lease (failure of the

Jan 1, 1989