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By W J. Dyck

Past attempts to establish an integrated steel industry on the West Coast of Canada have been unsuccessful for at least three reasons: (a) insufficient reserves of a suit-able iron ore supply; (b) a relatively small local market for iron and steel; and (c) the non-availability of an economical process to produce primary iron on a small scale. Today, the reserves of economically mineable ore deposits are ample to support a steel production of 100,000 to 200,-000 tons per annum. The local market has increased so as to be able to absorb most of this capacity. With-in the next few years, a small integrated steel plant, including the "H-Iron" direct iron ore reduction process for electric furnace charge stock production, will be able to show a profitable operation. Introduction

Jan 1, 1963

By G. Plascencia, C. López, J. González, D. Jaramillo, M. A. Barrón

Air jet and molten matte interaction within a Peirce - Smith converter is analyzed during the first stages of blowing using Computational Fluid Dynamics (CFD), by means of the Large Eddy Simulation and Reynolds Stress turbulence models. Jet velocities ranging from 5 to 150 mis, which involve the bubbling and open jet regimes, were considered in 2 and in 3-D numerical simulations. As a result of the computer simulations, it was found that low velocities results in gas bubbling in the molten copper, whereas higher gas velocities results in well defined plumes. The consequence of such different behaviours results in an increment in the rate of refractory wear or in copper splashing respectively. The analysis of the results may lead to improve the design of the tuyeres currently used in copper converting. Bottom blowing of air is also explored in this work. Numerical results show a strong non-linear parabolic behaviour of the jet velocity on the average velocity of copper; which means that beyond certain jet velocity, the copper de-accelerates thus reducing its velocity. This may be due to the open nature of the jet, which prevents the momentum transfer from the injected gas to the molten copper.

Jan 1, 2007

By Dave Rose, David G. Meadows, Mike Westendorf

"Copper Mountain’s concentrator was commissioned in May 2011. The circuit consists of a 34’ x 20’ EGL SAG mill, a Raptor 900 pebble crusher and two 24’ x 39’6” ball mills. Each mill is equipped with a 2 x 8500 HP dual pinion drive system. The plant was designed to process 1585 mtph of SAG feed. From startup, the mill struggled to meet the required production rates. Over time, a major initiative that involved blasting and fragmentation, optimization of the SAG mill in terms of discharge grates, ball size and slurry density, and operation of up to three mobile pre-crushing plants resulted in significant increases in throughput. In parallel, a number of modeling tools, including JK SimMet, were run based on plant benchmarking exercises. Samples collected at the mine site during ramp up confirmed the very competent nature of the ore with drop weight - A*b values of less than 24 being recorded on a variety of plant feeds and lithologies. After due consideration including demonstration of proof of concept, a new pre-crushing circuit incorporating an XL2000 cone crusher and associated screening equipment was designed, constructed and commissioned at the site in August 2014. This paper reviews the history of the original circuit design, the various optimization steps taken and impacts, together with the final pre-crushing circuit and net results.IntroductionThe Copper Mountain Mine is located approximately 20 km south of Princeton, British Columbia, Canada (refer to Figure 1). The region has a long history of copper mining dating back to 1923. The Copper Mountain camp occurs in the 'eastern volcanic belt' of the Nicola Group (Monger, 1989). It is an alkali copper-gold deposit in which the volcanic strata are intruded by early Jurassic dykes, sills, irregular plugs and zoned plutons (Woodsworth et al., 1992). The stratified rocks are relatively fresh with slight metamorphism in the local contact regions."

Jan 1, 2016

By B. Voyzelle

The deterioration of highway and bridge infrastructure has received considerable attention in recent years because of the billions of dollars needed for repair and rehabilitation. A major factor contributing to this problem is the corrosion of steel reinforcement. Reinforcing steels with good corrosion resistance and relatively low price are therefore essential for maintenance, cost reduction and service-life extension of the steel-reinforced structures. This article describes the development of low-alloying steels that offers good corrosion resistance with reasonably low cost. Topics include steel microstructures, mechanical properties, corrosion performance, industrial applications and economic aspects.

Jan 1, 2005

In this study, we develop a detailed model of the likely future carbon footprint of primary copper supply. We develop a peak copper production model, based on a detailed copper resource data set, and combine this with a comprehensive life cycle assessment model of copper mining and milling to predict greenhouse gas emission rates and intensities of Australian and global copper production up to 2100. By establishing a quantitative prediction of both copper production and corresponding greenhouse gas emissions of Australian and global copper industry, we then analysed the emissions intensity of various energy input scenarios, such as business-as-usual, solar thermal electricity and solar thermal electricity with biodiesel. The Australian Government has an aspirational goal for long-term greenhouse gas emissions of an 80% reduction from the 2000 level by 2050. For the copper sector, this means moving from about 12.6 Mt CO2e in 2000 to a goal of some 2.52 Mt CO2e in 2050 (assuming equal emissions reductions across the economy). Based on the energy sources modelled, only the solar thermal plus biodiesel scenario was capable of achieving this goal at about 0.15 Mt CO2e, since the solar thermal alone scenario still includes normal petro-diesel as a major source of emissions. Overall, it is clear that there are abundant resources which can meet expected long-term copper demands, the critical issue is more the carbon (and environmental) footprint of different copper supplies and use rather than how much is available for mining. It is clear that the switch to renewable energy can have a profound impact on the carbon intensity of copper supply, even allowing for increased energy intensity as ore grades decline, and a complete conversion to renewable energy will position the copper sector to meet existing annual greenhouse gas emissions targets and goals.

Aug 1, 2013

By J. W. Bawden, J. Nantel

"The mine operator has two prime objectives when he operates a mine: (l) the mine must be safe, and (2) the mine must operate with the lowest possible costs. The operator constantly faces a dilemma; if he is over cautious with regard to safety, his costs may be very high, and if he is over-zealous in trying to reduce costs, the safety of his operation may be jeopardized.Modern bulk mining methods rely heavily on high productivity non-entry stoping techniques (e.g. open stoping, VCR, etc.). Such techniques have the advantage of removing the operator from the active and sometimes dangerous mining face and ofminimizing costly development. On the other hand, this generally results in a certain loss of flexibility in following irregular ore-waste contacts. If stopes are opened too large and/or are inadequately supported, severe dilution with resulting escalating costs usually results. If initial access drift support is inadequate for latter mine induced stresses high rehabilitation costs may also be incurred.Optimization of stope dimensions should logically occur as part of a general mine rock engineering program, within the over-all mine planning context. The same program should help highlight those areas where drift rehabilitation may be a problem.Whenever successful mining is performed, rock engineering is being applied, either by design or by chance. The cost implications of planned practical rock engineering as an integral part of mine planning and design can be very significant to the ultimate mining ""bottom line"". At Noranda Minerals Inc. allowable stope dimensions are derived using a combination of numerical stress analysis and empirical design techniques. This paper discusses the use of the above techniques and their limitations as tools for rock mechanics based stope dimension optimization. The potential cost implications of such design efforts within the general mine planning context are also addressed."

Jan 1, 1989

By R. M. BUCHANAN

The segment of Canadian industry based on smelting of alum in um and manufacture of consumer products is based entirely on imported alumina and bauxite. In the absence of Canadian bauxite deposits, consideration of anorthosite, a less desirable aluminous rock, is being undertaken as one alternative in maintaining assurance of supply. Anorthosites in Canada cover many thousands of square kilometres of the Precambrian Shield. Although compositions vary widely among Canadian anorthosites, many appear to exceed the specified minimum of 25% A I 20 3 in bodies containing more than the required JOO million tonnes. A lthough most Canadian anorthosites are of Precambrian age, one located in British Columbia has been identified as being Middle _Cretaceous.

Jan 1, 1984

By B. K. Gorain

"Mining of low grade deposits along with the necessity to design and operate flotation plants with high throughput presents unique metallurgical and environmental challenges that need to be addressed to reduce project risks, improve project economics and to sustain the profitability of operations over the life of a mine.Some of the key challenges include poor recovery of valuables and concentrate quality issues due to complex mineralogy, the need to use poor quality water such as brackish or sea water, reduce environmental impact from the process, integrate flotation with hydrometallurgy to maximize precious metals recovery, escalation of capital and operating costs, use of unproven technology and constant use of larger equipment, high ore variability, worldwide constraints on resource availability and an ever increasing need for reliable metallurgical input to financial models to evaluate economic viability of projects.The need to develop effective solutions to these problems in a short time frame is becoming a key to the success of any new project and for sustaining the profitability of a mining operation. An integrated multi-disciplinary approach to problem solving is crucial with the need for a more lateral thinking along with strategic partnerships and collaboration involving the right players. This paper presents some of the key findings based on experiences from a large number of challenging projects and operations focused on solving complex flotation problems.INTRODUCTIONThere are various challenges to successful development of mineral resources. Most of the ore bodies being developed worldwide are of lower grades requiring high throughput to be economical. Many of these lower grade ore bodies have significant occurrences of deleterious and penalty elements that could render a deposit unworthy of development unless there are technological solutions to process them economically in a sustainable manner with minimal environment impact. Even in a high metal price scenario, the economics for some of these low grade ore deposits is marginal. From a metallurgical perspective, these ore bodies have complex mineralogy and use of any off-the-shelf technology is not always effective. Development of innovative processes are often required, which is expensive, time consuming and sometimes risky.This paper will provide a broader perspective on the steps involved in solving flotation problems for operating plants and for greenfield development projects. In addition, some of the key challenges in flotation of complex low grade ore bodies along with the economic benefits in developing solutions to these problems will be presented."

Jan 1, 2013

Ground support audits are sometimes necessary in ageing underground mines. Usually, the purpose of such audits is to assess the state of the ground support in various parts of the mine, identify areas that require attention and establish rehabilitation requirements. In 2005, Brunswick Mine, located in Bathurst, New Brunswick, Canada, completed a comprehensive mine-wide ground support audit. The areas examined included excavations in several mining blocks, as well as ramps, shaft stations, garages, shops, etc., throughout the mine. A vast amount of data was collected over a period of two weeks by multiple auditing teams. The audit was followed by a data digitisation exercise, and the creation of a data management system to store audit results and keep track of subsequent rehabilitation activities as they occur. One aspect of the data management system was the incorporation of a function for reporting on ground rehabilitation progress, along with the capability of updating mine level plans for easy visual presentation of this progress. This article describes the approach implemented at the mine to carry-out the audit, as well as the database constructed to manage the results.

May 1, 2009

By A. Azizi, P. Blatter, A. Bouajila

"Due to the high reactivity of sulfide minerals in alkaline cyanide solutions, some parasitic reactions inflict a heavy gold surface passivation and excess cyanide consumption resulting in a dramatic decrease of the gold leaching rate. Atmospheric pre-oxidation was shown to be an effective tool to enhance gold extraction by preventing a passive film from forming on the surface of gold grains. This work aims to highlight efforts undertaken to determine: (1) how gold cyanidation is limited by passivation; (2) what are the reactions and mechanisms involved during gold cyanidation; and (3) how a better understanding of fundamental issues can be used to design a proper pre-oxidation strategy. INTRODUCTION Precious metals (PM), gold in particular, naturally occur in contact within a wide range of sulfide mineral systems. Hence, one of today’s most challenging R&D tasks consists in accounting for the presence of sulfides on the cyanidation behavior of gold. An important body of knowledge reveals that metal sulfides display a range of reactivities in alkaline cyanide solutions (Marsden & House, 2006). Such reactivities are acknowledged to inflict additional utility costs and loss of profits because they are accompanied with higher consumption of cyanide and/or formation of undesirable by-products that are often detrimental to gold leaching rates. Gold recovery in cyanidation is hampered by a multitude of factors, among others: (1) consumption of excess cyanide as a result of the formation of thiocyanate and dissolution of transition (Cu, Fe, Zn, etc.) metals (Habashi, 1967); (2) gold surface passivation by solid reaction products, e.g., Fe(OH)3 (Guo, Deschenes, Pratt, Fulton & Lastra, 2005), sulfur (Dai & Jeffrey, 2006; Jeffrey & Breuer, 2000;) or oxo and thiooxo (SbO33- SbS33-) salts in alkaline solutions (Guo et al., 2005). Because of their energy structure, most of the sulfide minerals exhibit semiconductor properties (Marsden & House, 2006). Therefore, the contact between constitutive sulfide minerals inside complex sulfurous ores entrains electrochemical phenomena in which sulfide dissolution is a genuine corrosion process (Azizi, Petre, Olsen & Larachi, 2010). For instance, galvanic interactions could be initiated between the various constituents within the ore and could substantially increase or decrease the reactivity of some of the associated minerals."

Jan 1, 2012

By R. F. Pilgrim

"This first chapter of the SPOC Manual 1s intended as a general introduction to all the other chapters in which the mineral process evaluation and optimization methodology is presented. This chapter also provides a brief description of available software for mainframe and m1crocomputers and provides information on its distribution by the Technology Information Division. CANMETRESUMECe premier chapitre du manuel SPOC est un guide général qui présente les autres chapitres ou l'on traite de la méthodologie d'évaluation et d'optimisation des procédés miméralurgiques. Le lecteur y trouvera aussi une description sommaire des programmes de calcul développés pour ordinateurs centraux et pour micro-ordinateurs ainsi que la façon de les obtenir de la Division de l'information technologique du CANMETComputer simulation of mineral processes has slowly emerged as an established branch of activity in A&D centres and in several teaching institutions after decades of slow progress. Substantial efforts to develop application software based on years of research on process modelling are being pursued in many countries ( 1 .2,3,4.5). The late BO's should see a flurry of success stones about significant leaps of productivity achieved in several plants through systematic process evaluation and computer simulation studies.In Canada. the SPOC project (Simulated Processrng of Ore and Coal) was initiated at CAN MET in 1980 with the obJective of developing and transferrrng to the mineral rndustry a computer-based methodology for process evaluation and optimization. The proiect deliverables include:- an engineering manual covering most aspects of off-line computer simulation:- a bank of FORTRAN software accessible through data communication lines for user familiarization and distributed at a nominal cost in source form by CANMETThe yearly progress reports of the project contain detailed information on the project elements since 1980 16). The context of SPOC can be summed up by quoting Gordon Agar""s 1975 statement during a workshop on research needs in the mineral industry: ""What is needed is a joint effort between the academic community and one or more enliglitened industrial concerns. The effort will have to be an iterative one with data collection followed by testing the model modification of the model (s), more testing prediction, modification. data collection and so on (7). A few parallel in1- t1atives had been reported in papers or research contract reports (8, 9) but there was an obvious need for CANMET to bridge the gap between the R&D and the production sectors by undertaking a project that would document past applications and induce a new generation of initiatives through the consol1dat1on and transfer of suitable manuals and software. The effort took shape as the CANMET SPOC pro1ect in which methodology transfer was to play a key role (10)."

Jan 1, 1986

By F. Flores

With the World Summit for Sustainable Development planned for 2002 in mind, nine of the world's largest mining companies decided to initiate a project to examine the role of the minerals sector in contributing to sustainable development, and how that contribution could be increased ? the Mining, Minerals and Sustainable Development Project (MMSD). This project assumed from the start that sustainable development could provide a useful framework to guide the minerals sector which main goal was integrating economic activity with environmental integrity, social concerns, and effective governance systems. The broad steps of MMSD project strategy can be grouped into four major categories: increase understanding of sustainable development; create organizational-level policies and management systems for implementing the principles of sustainable development; collaborate with others with common interests to take joint steps towards sustainable development, and; increase our ability to work towards sustainable development at the local, national, and global levels. In opinion of the article's author, to go ahead with the MMSD strategy and achieving the sustainable development objectives, it is necessary to consider the concept of self-organization, fundamental of the emergent new scientific paradigm, and the consequent epistemology and values that conform a supporting culture for sustainable development.

Jan 1, 2007

By Mohsen Amir-Rahmat

The ore of Sarcheshmeh copper deposit that has been located in the south ?east of Iran, contains four type of rock that they have their specific hardness and strength according to their alteration type and mineralization. Blasting of these various types of mine rocks prepares various types of size for the product of mine as the feed of concentration. Along the crushing of this feed a few factors effect on the efficiency of the crushing unit. The aim of this project has been the consideration of the effect of ore size on the efficiency of crushing unit. For this investigation along the year 2000 A.D., six sample from feed and six sample from product of crushing unit have been prepared. The results of the screen analyze of these samples has shown that the size of feed has been lesser than the primary plan and the size rate of the product has been bigger than the primary plan. Also in this research the effect of feed size on the quality of product size has been considered.

May 1, 2003

By W. R. Green, B. W. Barde

"Geological exploration involves the collection and analysis of a wide variety of information. A basic problem in interpretation is to determine the interrelationship s of the different data. A number of statistical methods can be applied to this problem, provided that subsets of data can be selected.We have recently developed a set of interactive computer programs which provide the cap ability to quickly examine a large set of data, and may be used by people with little previous computer experience. There are two main stages in using this system. First is selection of subsets of data , by applying various tests on the values of given items. This includes matching specific entries in descriptive fields, and minimum - maximum tests on numeric fields. The second stage is basic statistical analysis and data display , including histograms, 2-D scalier plots, probability (cumulative frequency) plots, and correlation matrices. All output can be viewed on a computer terminal, and important parameters changed to produce the most effective display for use in interpretation.This system has been applied to a number of different exploration problems. An example was the determination of the nature and extent of mineralization of a gold prospect in the Queen Charlotte Islands, from drill-hole data. With the aid of the computer programs , a mineralized zone was defined, and locations for further exploration identified."

Jan 1, 1984

By Marco Lombard, Paulus Kapolo, Christopher J. Greet

"The conversion of a concentrator from one grinding media type to another is a major undertaking in terms of both financial and technical risk. So, a strategy of completing sufficient laboratory and field tests to mitigate this risk, and give the operation confidence that advancing to plant trial will give a high probability for success.The objectives of this paper are twofold: to provide the reader with a strategy for mitigating risk prior to undertaking a plant trial; and to provide a statistical basis for analysing plant trial data. That is, when employing an electrochemically inert grinding media in the primary grinding circuit it is possible to change the pulp chemistry of the system and improve the metallurgical response of the ore.This paper tracks the changes in pulp chemistry and metallurgical performance of Rosh Pinah Zinc Corporation’s silver/lead/zinc concentrator as the primary ball mill was converted from forged steel grinding media to high chrome grinding media. The changed in metallurgical performance are correlated to the shift in pulp chemistry.INTRODUCTIONTheoryBruckard et al (2011) recently published an article describe the effect of the grinding environment on the flotation of copper sulphides. While this paper confined its discussion to copper sulphides the arguments presented apply equally to other sulphide mineral systems. Broadly, these studies indicate that most sulphide minerals are more noble than the grinding media used during comminution. Therefore, the sulphide minerals are cathodic with respect to the forged steel grinding media, and the following reactions apply:Cathode (sulphide mineral): ½O2 + H2O + 2e- ? 2OH- (1)Anode (grinding media): Fe ? Fe2+ + 2e- (2)A galvanic couple between the grinding media and the sulphide mineral(s) exists, which increases the corrosion rate of the forged steel media. The corrosion products of the grinding media, iron oxy-hydroxide species, invariably precipitate on to the surfaces of the sulphide minerals thereby affecting their floatability (Johnson, 2002).The application of more electrochemically inert grinding media to “real” ore systems at an industrial level to improve metallurgical performance has not gained universal acceptance. The aim of this paper is to provide a protocol for conducting laboratory and plant test work that clearly demonstrate that metallurgical benefits are not only possible, but measureable, by way of example. In this case, the work conducted at Rosh Pinah Zinc Corporation in Namibia is described."

Jan 1, 2013

By G. H. Gale, M. A. F. Fedikow, L. B. Dabek

Abstract-Rare earth element (REE) data are reported for ores, sulfide-bearing rocks and host rocks from massive sulfide deposits and barren sulfide facies iron formations in Proterozoic volcanic rocks of the Flin Flon-Snow Lake area, Manitoba. Some of the rare earth elements (e.g., Eu), are selectively leached in zones of intense alteration and redeposited together with the sulfides and silicates in the uppermost parts of the alteration zones and at the rock-water interface. Chondrite normalized REE profiles of layered sulfide ores and exhalites proximal to the deposits typically have positive europium anomalies and are enriched in light REE. In contrast, barren sulfide facies iron formations exhibit negative or ‘normal’ Eu profiles. REE data are useful to explorationists in determining the presence of ‘off-hole’ metal-bearing sulfide zones, in distinguishing metal-poor sulfidic layers related to ‘economic’ hydrothermal activity from barren sulfide facies iron formation and in some instances as a means of establishing ‘ore-equivalent’ strata.

Jan 1, 1997

By Carlos Avalos Casillas, Saul Ortiz Landeros

The current work shows metallurgical results obtained at the Centro de Investigación y Desarrollo Tecnológico (Peñoles CIDT), as a continuation of the work first published in February 2012. With the aim of optimizing the economic values of the products, ores from San Julian (Fresnillo) were selectively floated to produce a lead concentrate and a zinc concentrate containing high silver values. In the laboratory, this included regrinding of the rougher and scavenger lead concentrate to increase the liberation of mineralogical species and thus lower zinc recovery. Cyanide leaching bottle tests were conducted to improve the value of the silver. It is proposed to leach the silver contained in the zinc concentrate and then recover the silver using the Merrill Crowe process. The results show a reduction of zinc recovery in the lead concentrate from 11.3% to 2.0% after regrinding to a P80 of 10 microns, improving the metallurgical quality and economic value of the lead and zinc concentrates. Also laboratory and pilot scale cyanidation tests showed that about 65 to 80% of silver will be leached from the zinc concentrate, after regrinding to a P80 of 10 microns. The proposed processing increases the economic recovery of silver from 72.7% to 78.8%.

Jan 1, 2014

By G. H. Gale, M. A. F. Fedikow, L. B. Dabek

Rare earth element (REE) data are reported for ores, sul?de-bearing rocks and host rocks from massive sul?de deposits and barren sul?de facies iron formations in Proterozoic volcanic rocks of the Flin Flon-Snow Lake area, Manitoba. Some of the rare earth elements (e.g., Eu), are selectively leached in zones of intense alteration and redeposited together with the sul?des and silicatesin the uppermost parts of the alteration zones and at the rock-water interface. Chondrite normalized REE pro?les of layered sul?de ores and exhalites proximal to the deposits typically have positive europium anomalies and are enriched in light REE. In contrast, barren sul?de facies iron formations exhibit negative or ‘normal’ Eu pro?les. REE data are useful to explorationists in determining the presence of ‘off-hole’ metal-bearing sul?de zones, in distinguishing metal-poor sul?dic layers related to ‘economic’ hydrothermal activity from barren sul?de facies iron formation and in some instances as a means of establishing ‘ore-equivalent’ strata.

Jan 1, 1997

By Sibabrata Patnayak

A major problem during shovel excavation in oil sand mining is the variability of material diggability resulting in varying mechanical energy input, cycle time, energy consumption, wear, and stress loading of shovel dipper-andtooth assembly. This variability greatly influences the mining equipment performance. Different approaches such as empirical ground classification systems, analytical methods, and performance monitoring that are used to determine diggability of groundmass are reviewed. It is concluded that the existing empirical diggability classification systems are site specific and mostly based on rock and therefore, cannot be used for shovel excavation in oil sands. The O&K wedge test is a simple and useful index test for establishing correlations between cutting resistance and geotechnical properties of coal and other soft rock overburden material. But this test, when performed on small size unconfined oil sand samples, may not give reliable indication of diggability because of the boundary conditions on the specimens. Digging predictions made using analytical and laboratory digging models need to be verified with performance monitoring data to better understand the digging effort in oil sands.

Apr 1, 2005

By Robert T. McKnight

"Traditional techniques for valuing resource projects companies have been primarily based on discounted cashflow methods (DCF) or by comparison to similar projects with an apparent market capitalization. Many resource projects are really forms of options to invest rather than a future cashflow stream. Employing the DCF method to value a resource project which is really an option to invest, can dramatically underestimate the real value of the project. The analytical tools required to evaluate options, while more complicated than the usual spreadsheets used for DCF, are becoming more easily available and usable by managers. This paper will discuss the background of options valuation and some of the tools which will make it easier for managers to estimate the value of projects and companies which have significant real option values.ResumeBob McKnight is a graduate of the University of British Columbia in Geological Engineering, supplemented by an MBA from Simon Fraser University. Following several years in the oil patch with Cities Service and Brascan, Bob returned to Vancouver in 1979 to work for Wright Engineers. He subsequently went on to work for Cassiar Mining, Getty Resources and Endeavour Financial before joining Pincock Allen & Holt Ltd. in 1998. His experience ranges from exploration to feasibility studies, financial evaluations of mining and oil & gas projects, due diligence, project finance, valuations and mergers and acquisitions. He has extensive international mining experience pertaining to such countries as Chile, Mexico, Uruguay, Thailand, Indonesia, Angola, Papua New Guinea, Kazakhstan.What are Options?Options have been around for centuries. They were familiar to Roman and Phoenician traders who were shipping cargoes from Mediterranean seaports. In the financial world, options are types of contracts that generally include the right, but not the obligation, to buy or sell a share, currency or commodity. The underlying commodity price or share price changes are assumed to be lognormally distributed. In this context, options are of two general types, ""call"" options and ""put"" options. Call options have the characteristic of having the right to buy a tradable commodity or currency at a predetermined price for a specified period of time. For the owner of call options, they become more valuable as the price of the underlying commodity increases. For the seller of call options, these options become an increasing liability as commodity prices rise, since there is the obligation to sell the commodity at a predetermined (perhaps lower-than-market) price. This characteristic of call options recently became high profile with the sharp rise in gold prices last year. The value of gold call options sold by certain producers increased their associated liabilities to the point where margin calls were made."

Jan 1, 2003