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By Robert J. Timko

In early June 1986, an underground fire of unknown origin erupted in one of several entries of a coal mine located in southwestern Colorado. For a time, mine personnel aggressively fought the fire. However, control of the fire was later lost. To prevent further damage and reduce the possibility of an explosion, all portals and shafts to the mine were sealed. The mine operator requested the U.S. Bureau of Mines' assistance in obtaining and analyzing mine fire gases taken from sampling ports placed through the mine seals, as well as down boreholes drilled after the fire. This report recounts activities within the first 2 years of the mine being sealed. It includes a description of gases analyzed and mine atmosphere status equations generated from the analyzed gases. The gases were analyzed by chromatography and included standard atmospheric gases as well as higher hydrocarbons that are found in postfire atmospheres. Nine equations were used to evaluate what was occurring within the sealed mine. Following a description of the rationale behind each equation, the 2-year trend is briefly analyzed.

Jan 1, 2010

By D. R. Cook, W. M. Shepard, H. T. Morris

The East Tintic district in central Utah has produced ores of gold, silver, copper, lead, and zinc valued at more than $120,000,000. All of this ore has been produced from blind ore bodies in Paleozoic sedimentary rocks that are concealed beneath hydrothermally altered volcanic rocks and cut by intrusive bodies of Eocene age. The Paleozoic rocks, which range in age from Early Cambrian to Mississippian form the core and limbs of a large, northtrending asymmetric anticline that is cut by low-angle thrust faults, high-angle transcurrent faults, mineralized fissures and faults, and normal faults that are both older and younger than the mineralized fissures. The ore bodies generally may be grouped into two classes: ( 1) massive replacement bodies that are rich in silver, lead, zinc and manganese and (2) fissure veins that are valuable primarily for their content of gold, copper, and silver. The replacement ore bodies are localized chiefly in the Middle Limestone Member of the Ophir Formation of Middle Cambrian age where it has been thrust-faulted against older or younger rocks and cut by northeast-trending mineralized fissure zones. The fissure veins primarily are productive only in the Lower Cambrian Tintic Quartzite. Extensive lowgrade deposits of lead-zinc-silver ore recently have been discovered in Devonian carbonate rocks in the Lower plate of the East Tintic thrust fault but as yet are unevaluated. The principal guides to ore include: ( 1) intersections of northeast-trending fissures and crossbreaking faults that brecciate the carbonate rocks; (2) zones of late-stage pyritic, calcitic, and sericitic alteration in the lavas; ( 3) primary geochemical anomalies in the altered rocks; and ( 4) mineral zoning patterns of the known ore bodies. The present development of the Burgin mine would seem to assure the continued productivity of the district for at least a decade.

Jan 1, 1968

By William B. Hetherington

Communities are the foundation upon which the whole structure of society rests and upon which the nation builds its hope for the future. They are not established to serve any one particular generation, nor any one element or group, but should be erected to render a lasting service to all who are to follow. They play a very vital and important role in the lives and welfare of the people, in their industrial, business, and social relations, and in the economy of the nation, of which they are the fundamental assets. Communities and civic governments are destined to be vital factors in the national welfare in the days that are to come. Any improvement in national or world conditions must have its origin within the communities. Any attempt at solution of the community problem must give some consideration to the fundamental elements which exist in every community, and to the underlying principles, and ways of life and thought, upon which community life is based. The community is, in its essence, a number of people living and working more or less closely together, sharing common rights, privileges, conveniences, and comforts, which would be impossible for the individual to obtain for himself by his own efforts alone, or in any other way than by the mutual exchange of persona! services and resources. In this way, men have increased the returns from their labour and commerce, have raised the standard of their living, with better social, educational, and recreational facilities, and enjoy a greater personal security.

Jan 1, 1943

By Dave Paul

Dam rehabilitation involves a range of design, construction, and operation risks, some of which are not encountered in new dam construction. These risks can have significant impact on project schedule and project budget. Owners, engineers, and contractors need to understand these risks. Existing dams typically were designed in an era of design and construction standards that have been upgraded and changed. Modern standards will impact the construction approach taken and involve understanding the earlier standards. Knowledge of historical standards/practices as well as current design standards and construction methods is valuable for developing and designing rehabilitation components. Construction records and as-built drawings are valuable when they are available. Rehabilitation projects often consist of older projects where as-built documents or construction records are not available. Where these records exist, many (most) times, they do not fully reflect the current conditions within the dam and appurtenant works. leading experienced practitioners to “expect surprises” both during investigation of the existing facility, as well as during construction. “Surprises” should be expected even when historical records of investigations, design and construction are available. Unknowns, be they known unknowns or unknown unknowns, can be planned for by developing an approach for the design and construction process to identify potential issues/problems, or at least alert the designer and contractor of potential issues. A Risk-Based approach applied for the entire life of the rehabilitation project can be used to alert the parties of potential “surprises” and provide direction for mitigating issues as they arise. This type of approach is particularly effective when the process includes senior practitioners with decades of design and construction experience in all aspects of dams. Minimizing impacts created by “surprises”, particularly during construction, can result in an improved project meeting budget and schedule goals and design standards. This paper identifies and categorizes risk types salient to dam construction, reviews the process of risk identification and analysis, discusses guidelines for risk allocation, reviews strategies to mitigate risks, presents several case studies where risk mitigation strategies were employed successfully (or unsuccessfully), and presents lessons learned. The paper concludes with a summary and recommendations for best practices for Project Risk Management and mitigation that can be used by: Owners; Design Engineers; and Construction Managers, in planning, design, pre-construction and construction phases of dam related projects.

Mobile mining equipment presents only a small portion (ten per cent mining project costs but the selected technology will determine to a large extent the mining performance and mine profitability. The actual performance of the selected mobile equipment technology will rely on the support functions, infrastructure, user interface and user acceptance. Optimising the technology to match the circumstances is an increasingly important phase in a mine feasibility study. Smartly done feasibility studies include the possible future needs of changing or building-up of the selected technology. In massive mining applications the machinery faces quite different challenges than in selective or small-scale mining applications. In massive mining applications the efficient and continuous move of large amounts of material has led to the use of increasing degree of automation. This higher degree of automation in a mining application, on the other hand, will be best applied to a smooth and streamlined mining process and operation. Mining methods like block caving support automated operation. Automated mobile equipment needs supportive infrastructure, monitoring and information transfer systems as well as well established working procedures. Too often the user interface and human factor is disregarded during the consideration of automation. Through the available supplier programming tools it is possible to see how much the selected technology provides flexibility in changing production or economical situations, when major rebuilds or replacements are necessary, and view the effects of all these on the mine economy. When adequate technology is available from various sources, the difference becomes from preparing for the future, managing costs and combining the best layout with the most suitable technological solutions.

Jan 1, 2000

By Clifford S. Gibson

THE Workmen's Compensation Ace defines Silicosis as "a fibrocic condition of the lungs caused by the inhalation of silica dust sufficient co produce a lessened capacity for work". This fibrocic condition muse exhibit a specific appearance in the X-ray picture of the chest-an appearance which is not characteristic of several lung conditions which can cause lessened capacity for work and which are not due co silicosis. The layman is sufficiently familiar with this subject co know chat, as far as our knowledge goes, quartz is one of the principal objectionable factors in the production of this condition. He should also know that silicosis respects neither geographical nor industrial boundaries. It is as much a factor in some industrial processes (e.g. foundry work, sandblasting) as it is in mines handling ores containing quartz. Its development co a recognizable stage is usually a matter of many years. As yet, its cure is unknown. Its prevention is possible in varying degrees. The layman should also know that the development of fibrosis may be accelerated by breathing in, or living in, any atmosphere containing dust. Few normal adults, particularly those above a certain age, have clear lungs, and fibrosis in varying degrees is noted in the farmer, the steel worker, the clerk, and many others in varied occupations. It is not restricted to miners. Medical and industrial journals, and at times the press, are crammed with data pertaining to this subject, much of which is misinformation. This is particularly true of certain !laces where the preventive and compensation measures for the good o those earning their livelihood in an industry in which silicosis may be contracted are not so far advanced as in our own Province. A great many of these publishings are alarming to the layman. They leave him with the impression that he is taking his life in his hands if he elects to work underground, particularly in a gold mine-that he has at once sold his heritage of health and chat sooner or later he will succumb to the ravages of this ailment. Nothing could be farther from the truth. Actually, under present conditions in Ontario mines, a very small percentage of the men employed ever become impaired by silicosis to the extent chat they must withdraw from the industry. I propose to tell you briefly something of this subject as it affects our mines.

Jan 1, 1937

By DOOLITTLE E. M.

(Canal Zone Meeting, November, 1910.) The following notes are contributed, not with the idea of offering a complete history of the development of this very important process as applied to the Leadville district, but with the hope that the practice, as it was carried out in the Bi-Metallic Smelter, may still be of interest to others. The Bi-Metallic Smelter, at Leadville, Colo., was the first to make a commercial success of the process described in the following pages, which consisted essentially of smelting raw silver- and copper-bearing sulphide ores in blast-furnaces to form a matte, which was generally re-smelted with siliceous ores for a second high-grade matte. Robert Sticht, in his excellent monograph on the subject,1 has outlined briefly the plant belonging to this company. He says, in effect: The Boulder, Mont., enterprise set the example for others with whom the patentee (w. L. Austin) had been negotiating, and the old La Plata lead-smelter at Leadville, Colo., was fashioned into a crude, temporary experimental plant for the Bi-Metallic Company, and the feasibility of the process demonstrated by a trial run. Subsequently, the plant was considerably improved, and, being supplied with very favorable ores, continued to run without interruption from August, 1892, to June, 1893. In September, 1893, smelting was resumed in a completely remodeled establishment, some $200,000 having been expended upon the new work. Thus, aside from the Montana experiments, which, under the direction of W. L. Austin, began as early as- 1885 2 at Toston, and continued with indifferent success for six or seven years, the Bi-Metallic plant at Leadville may be said to have * Formerly Superintendent, Bi-Metallic Smelting Co. + Formerly Chief Assayer and Chemist, Bi-Metallic Smelting Co. 1 Modern Copper Smelting, E. D. Peters, 7th ed., p. 415 (1895). 2 Trans., xvi., p. 259 (1887-88).

Dec 1, 1910

By R M. Arellano, D M. W Harney, M Makhuvha

Mineral resource and ore reserve estimates are founded on two sources of data: tonnage and grade. The tonnage is a product of volume and density; both of which are estimates. Density impacts numerous operational factors, which include, but are not limited to, mine design, mine planning, equipment selection and operational performance. Hence, density is a significant parameter and its determination requires similar care as the measurement of grade. Selecting an appropriate method to determine density, and ensuring its rigorous application, thus reduces risk and can improve operational performance, which in turn increases profit margin.Different Anglo American sites use a variety of practices and protocols to determine density, which is highly dependent on the physical characteristics of the orebody, local conditions and historical practices. Also, individual sites sometimes execute the same method in a slightly different way, which may also affect the outcome of the measurements. In order to gain a better understanding of how density is determined at Anglo American projects and operations, a review of these techniques was undertaken. The objective of the study was to identify and share good practices across the company, as well as to look for improvement opportunities, where applicable. Ten different methods of measuring density, applied to nine different commodities, were identified and described. An additional technique was recently developed by Anglo American Technical Solutions. The core pycnometer is a large gas displacement pycnometer capable of measuring density at high accuracy on full pieces of intact core.This paper provides an overview of methods used to determine density within the Anglo American Group, including quality control and quality assurance aspects. It is not the purpose of this paper to identify a preferred method, but to highlight the importance of choosing the best suited practice for a project or mine site. In addition, a case study comparing two different density determination methods applied to the same rock samples from the Los Bronces Copper mine was undertaken and the results of that study are presented here.Selecting the most appropriate method to determine density and comparing results from two or more techniques against each other, together with other suitable quality control procedures, is considered to be of utmost importance for all mining operations and exploration projects.CITATION:Makhuvha, M, Arellano, R M and Harney, D M W, 2014. Determination of bulk density in Anglo American plc, methods and impacts, with a case study from Los Bronces Mine, in Proceedings Ninth International Mining Geology Conference 2014 , pp 85–96 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 18, 2014

By JOHN HOMER, Jacob L. Carr, Jonathan K. Hrica, Kathleen M. Stabryla, Iman Benbourenane, Jennica L. Bellanca

Given the recent focus on powered haulage incidents within the US mining sector, an appraisal of collision avoidance/warning systems (CXSs) through the lens of the available research literature is timely. This paper describes a rapid review that identifies, characterizes, and classifies the research literature to evaluate the maturity of CXS technology through the application of a Technology Readiness Assessment. Systematic search methods were applied to three electronic databases, and relevant articles were identified through the application of inclusion and exclusion criteria. Sixty-four articles from 2000 to 2020 met these criteria and were categorized into seven CXS technology categories. Review and assessment of the articles indicates that much of the literature-based evidence for CXS technology lies within lower levels of maturity (i.e., components and prototypes tested under laboratory conditions and in relevant environments). However, less evidence exists for CXS technology at higher levels of maturity (i.e., complete systems evaluated within operational environments) despite the existence of commercial products in the marketplace. This lack of evidence at higher maturity levels within the scientific literature highlights the need for systematic peer-reviewed research to evaluate the performance of CXS technologies and demonstrate the efficacy of prototypes or commercial products, which could be fostered by more collaboration between academia, research institutions, manufacturers, and mining companies. Additionally, results of the review reveal that most of the literature relevant to CXS technologies is focused on vehicle-to-vehicle interactions. However, this contrasts with haul truck fatal accident statistics that indicate that most haul truck fatal accidents are due to vehicle-to-environment interactions (e.g., traveling through a berm). Lastly, the relatively small amount of literature and segmented nature of the included studies suggests that there is a need for incremental progress or more stepwise research that would facilitate the improvement of CXS technologies over time. This progression over time could be achieved through continued long-term interest and support for CXS technology research.

Jun 17, 2022

By T. D. Arnold

The Barrick Bullfrog underground mine was established as an afterthought to the main open pit. As open pit ore dwindles, the underground mining becomes increasingly more important as an ore source, and to the overall economics of the project. This situation is similar to many other mines, and there is a strong move towards underground mining in the United States today. There are inherent problems in starting and operating underground mines in the shadow of any open pit operation, and at the Bullfrog there were several attempts at productive increases that were both successful and unsuccessful.

Jan 1, 1996

By D. A. Lucero, J. E. Brockmann, L. A. Mondy, K. L. Rubow, D. J. Rader

"Department of Mechanical Engineering, University of Minnesota, Minneapolis, MNExperimental and correlated stage responses (the fraction of particles entering an impactor that are collected on a stage) are presented for the Andersen Mark III and Marple personal cascade impactors. The impactors were operated upright and fully assembled so that interstage interference and wall losses could be properly studied. The observed stage responses showed maxima that fell significantly short of unity, meaning that a monodisperse aerosol is never collected exclusuvely on one stage, but is distributed among several stages and internal losses. Correlations for the stage responses are presented so that the experimental results can be used to determine size distributions with available data-inversion algorithms. Simulations with log-normal distributions show significant differences between dpa50 histograms and the more accurate distributions that result by taking the response functions into account.Cascade impactors are widely used for the measurement of aerosol size distributions; their ruggedness and simplicity of operation make them an attractive choice for a variety of environments. In one common application, the aerosol of interest is drawn through the impactor, and the amount deposited on each stage is determined gravimetrically. The primary objective is to extract as much information as possible about the initial size distribution from the resulting set of weights. Unfortunately, the reconstruction of contin-uous size distributions from finite data sets is an ill-posed problem. Not surprisingly, a variety of such reconstruction techniques are presently in use; the success of each method depends on the particular nature of the aerosol sample and the instrument response.Inversion of impactor data by any of these techniques requires that the response functions for each stage be known. The stage response function gives the fraction of particles entering the impactor that deposits on that stage. Values of the response function range from zero to one, and depend on impactor operating conditions (e.g., geometry, flow rate, and gas properties) and particle properties (e.g., diameter, density, and shape factor). As interstage interferences and particle losses will affect each stage's response, experimental determination of stage responses should be made for fully assembled impactors. Unfortunately, impactor stage response functions are rarely reported; rather, single-stage efficiency curves are given that provide an incomplete description of impactor performance.This paper presents experimental stage responses for two fully assembled cascade impactors: the Andersen Mark III and Marple personal impactors (model 298, Andersen Samplers, Inc., Atlanta, Ga.). These calibrations were performed with monodisperse liquid droplets for both impactors and also with monodisperse solid spheres for the Marple personal impactor. The calibration results for the Mark 111 impactor presented here have been previously reported in the response-function format (Rader et al., 1989). The calibration results for the Marple personal impactor, however, were originally presented in the single-stage efficiency for¬mat (Rubow et al., 1987) and have been reanalyzed in this work. Losses within both impactors are considered, and their treat¬ment within data inversion techniques is dis¬cussed. In addition, correlations for each impactor's response functions are presented so that these calibration results can be easily included in data-inversion algorithms. Size distribution inversions using these response correlations are compared with the standard cut-point method for two lognormal test dis¬tributions."

Mar 1, 1992

By Jr. Gabler

World resources of platinum-group metals appear ample for the foreseeable future; however, political and economic events in the last two decades have caused concern over the availability and reliability of an uninterrupted supply. Because of this concern, the U.S. Congress requested that the U.S. Bureau of Mines initiate a study of the flow of platinum-group metals in the economy that would delineate and quantify the production areas in which metal values are lost. As a result, the Bureau has developed a computerized commodity flow model for strategic and critical materials. Major attributes of this flow model are as follows: (1) it is generic and applicable to most commodities and (2) it can be updated as supply, demand, and/or production data change. The original model developed for cobalt, with slight modifications, was used to track the flow of platinum-group metals. This report follows the flow of platinum-group metals through their metallurgical, catalytic, and chemical applications and highlights areas in which significant losses occur because of downgrading, export, or disposal. The study indicates that materials containing about 63,426 kg of platinum-group metals were lost or could not be traced in 1989, representing about 63 pct of U.S. domestic consumption.

Jan 1, 1991

By C. R. Kuzell

IN COMPARISON with recent years 1932 has yielded much less tangible evidence of progress in copper reduction and refining. The industry has been extremely quiet, especially in the United States. Design and construction has been throttled by lack of new capital expenditures. The excess producing capacity of the whole industry and the extremely gloomy outlook for the future have made it unwise to tie up more capital except under special conditions. The plants built during the previous year have, however, been placed in operation. Older plants have been abandoned, temporarily shut down, placed on part time operating basis, or continue to operate at a low percentage of normal capacity. In the United States the Phelps Dodge Corporation at Douglas, Ariz., has completed the remodeling of the former Calumet & Arizona smelter. A new roaster and Cottrell plant chimney was completed this year. Though operations have been limited the new equipment has been found to justify all expectations. The reverberatory plant addition consists of two furnaces 26 by 107 ft. inside dimensions, with a high arch, and modern steel binding of excellent design. Natural gas fuel gives good results. One of these furnaces will treat 1000 tons of solid charge per day with a fuel consumption of approximately 3,000,000 B.t.u. per ton. The larger converters have not only yielded the expected lower costs, but have simplified operations in the converter department. One of the noticeable results is the greater cleanliness in the environment and the absence

Jan 1, 1933

By J. L. Parks

Designs, installation procedures, and performance characteristics of martensitic cast steel concaves are reviewed. Longer wear life, fewer pieces to install, and eliminating the need to scarf joints are the principal benefits of using martensitic steel to replace austenitic 12% Mn (Hadfield's) steel, the traditional concave material for large gyratory crushers. Installation procedures that reduce the risk of breakage are described. Operating practices that affect concave performance are also discussed.

Jan 1, 1992

By J. Frederick Stampfer

Current certification testing of self-contained breathing apparatus includes tests with human subjects wearing the apparatus while exercising. During these tests, certain apparatus variables are measured during rest periods. Because of concerns that the present tests may not accurately simulate the stresses to which an apparatus is subjected in the field, the Bureau of Mines proposed new human subject tests. It was also felt that different measurement techniques would supply more reliable data on the apparatus response to these stresses. The Los Alamos National Laboratory was asked by the Bureau to evaluate the proposed tests and monitoring techniques. The major conclusions derived during this study are these: (1) The proposed tests are not too physically demanding. (2) As long as human test subjects are used, a minimum subject weight should be required for certification tests. (3) Important apparatus variables are the breathing resistance, temperature, and carbon dioxide and oxygen concentrations of the inhaled gas. (4) Continuous monitoring should be used, rather than monitoring only during rest periods. (5) New pass/fail criteria based on realistic estimates of the user's physiological requirements, as tempered by present and future engineering limitations, are needed. (6) When available, breathing machines, rather than human subjects, should be used for most certification testing. (7) A more realistic ergonomics test than that proposed is needed. (8) A gas leak test for the system and a facepiece leakage test are also needed.

Jan 1, 1983

By S Robertson, I Buitrago

Mine life cycle planning and enduring value are taking centre stage to meet corporate goals and deliver socio-economic outcomes for communities over the life of a mine. There is a general agreement in the literature about mining-induced effects on locals adjacent to mining operations and subsequent closure. In response, international regulatory bodies, through the implementation of global agendas, encourage exploration and mining companies to embrace the concept of corporate social responsibility. This concept is designed to provide sustainable outcomes and maintain a social license to operate over the life of a mine. This paper proposes a practical application of the sustainable livelihood approach as a tool for international planning. With this approach as the governing framework, this paper proposes an innovative tool for mine life cycle planning. Based on the findings, this paper discusses the socio-economic impacts of mining and mine closure. It also argues that transferring some of the benefits from mining to create lasting value for communities needs to be considered at the initial stages of planning for the mine and the community. Findings also indicate that conditions such as a strong local government, good governance arrangements, relevant capacity-building for sustainable livelihoods and a diversified economy are important to transferring some of the benefits from mining to create lasting value for communities. The paper is based on a mixed research technique for data analysis and a case study methodology. The case studies were conducted in Australia and Colombia.CITATION:Buitrago, I and Robertson, S, ?2014. Mine life cycle planning – creating lasting value for communities, in Proceedings Life-of-Mine 2014 , pp 301–312 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 16, 2014

By Corwin L. Cooper

This vapor, which describes mining and milling methods and costs at the Knob Hill gold mine, is one of a series being prepared by the Bureau of Mines on gold mining and milling practices in the United States. The mining properties owned or controlled by Knob Hill Mines, Inc., are situated in the Eureka mining district on a country road 2 miles up Eureka Gulch from the town of Republic, county seat of Ferry County, Wash. The district is about 140 miles northwest of Spokane by road and 35 miles south of the international boundary line. The altitude at the mine office is 2,700 feet.

Jan 1, 1940

By Armstrong A

Queensland is Australia's second largest mining state with world-class deposits of coal, base metals, bauxite and magnesite. The total value of Queensland's mining production is about $5 billion per annum, and coal accounts for around 55 per cent of that total. The environmental issues which arise as part of management and regulation of the industry are resolved within the EMOS process. The Environmental Management Overview Strategy is the cornerstone of the policy 'Environmental Management for Mining in Queensland' developed jointly by the Queensland Department of Minerals and Energy and the mining industry. The Gordonstone Coal Mine is the largest underground mine to gain approval under the new policy. Accordingly, Gordonstone has a well planned environmental management program which takes into account site-specific factors and provides for continuous compliance with the provisions of the Mineral Resources Act in a self-regulatory context.

Jan 1, 1994

By Nilufer Kursunoglu

Despite being crucial for meeting the world’s energy demands, coal mining operations present considerable health risks, especially when it comes to exposure to coal dust. Longwall coal mining, an advanced technique, has considerably enhanced production but made dust control more difficult. Due to its explosive nature, coal dust continues to be a serious and dangerous concern in the industry despite developments in safety technology. This study aims to comprehensively assess the risk of coal dust explosions by integrating fuzzy risk matrix and Pareto analysis methodologies, offering precise risk ratings for various root causes. A fuzzy risk matrix was developed to assign exact risk ratings to identified root causes. Additionally, a Pareto chart was used to identify the main reasons and suggest particular preventive measures. 17 significant causes were determined for underground coal mines based on the study’s methodology, and some preventive measures were suggested. In accordance with fuzzy risk rating values, root causes were divided into six categories. The root hazard with the highest risk rating was identified as ‘accumulation of inflammable gas/gases’. The proposed approach was used to examine incidents caused by coal dust explosions in Turkish coal mines in order to demonstrate the effectiveness of combining the fuzzy risk matrix and Pareto analysis for assessing coal dust explosions. This study gives not only a solid framework for risk assessment but also critical information for classifying the risks associated with coal mine dust explosions. The results highlight the critical necessity for proactive and preventive actions to reduce the hazards of coal dust explosions and protect the safety of mining workers.

Nov 16, 2023

By Karl J. C. Harries

"11.1. INTRODUCTIONA royalty is the most common form of interest retained by an owner who is disposing of his property or by a joint venturer who ceases, voluntarily or otherwise, to participate in the joint venture.1 Rarely does a non-participating party have a direct interest in the property and/or assets of a project, except during the period when a non-participating joint venturer may be having his interest diluted.2 In fact, it is most unwise to permit a non-participating party to have such an interest. It may give rise to significant problems that could prevent or substantially delay the development of an orebody and require a considerable amount of time, effort, and money to correct.3In negotiating a royalty, it is important to be aware that there is no law or convention that says, “You just don’t do that in a royalty agreement.” As with any agreement, inventiveness and flexibility on the part of the negotiator are not just assets, but virtual necessities. It is also for this reason that it is essential to read the royalty provisions, particularly the definitions, fully and carefully, especially if you are the recipient. On the other hand, if your inventiveness and flexibility cause your accountant to question the advisability of one of your ideas, pay close attention to him.4 He will, no doubt, have had experience with many royalties, and no competent professional adviser disparages a client’s ideas without good reason. Besides, he will probably be the person who will be determining the royalty or certifying the determination of it. At the very least, he will be auditing your general financial statements, which must, of course, reflect the royalty determination. Heeding his advice not only may make the determination easier but also will probably save you money in professional fees later on. Nevertheless, do not simply accept his comments or recommendations without understanding what they mean, why they have been made with respect to your royalty agreement (sometimes professionals have comments that they make as a matter of course and, even though they may be valid, you should require them to be justified to you), and how they will affect your royalty determination.It is surprising how many corporate payors insist that their standard royalty provisions5 be used as a matter of policy, thereby effectively tying the negotiator’s hands. It is even more surprising, and to professional advisers frightening, how many of the senior employees who insist that such a policy be adhered to, virtually without variation, do not know what is in the standard provisions and would be hard-pressed to explain them to a property owner. If standard provisions are appropriate, by all means use them, but do allow experienced and sensible negotiators some flexibility and make sure that everyone within the corporation who may have to use such provisions – negotiator and supervisor alike – knows what they contain and why they are as they are. For example, there are often good and convincing reasons to describe a deduction in a certain way or to include a certain specific type of deduction. On the other hand, quite often the answer to the question “why?” is that “it has always been there”; this is, or should be, an unacceptable answer. In any event, if you, as the negotiator, appear to know what you are talking about, are familiar and comfortable with your royalty provisions, and are backed up by your boss with the same words or reasoning, a property owner cannot help but be satisfied that you are knowledgeable, even if he still does not agree with your provisions. Finally, if you do use standard provisions, make sure that they are reviewed and updated regularly."

Jan 1, 2003