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Who's Who in Mineral Engineering - The 1979 Directory of the Society of Mining Engineers of AIME

Jan 7, 1979

By Robert T. DeGavre

The $650 million financing for Into Ltd.'s Soroako nickel project is a story worth telling-not only because the project itself represents a significant achievement but also because there are certain important lessons that can be derived from our experience in financing the project. A critical appraisal of the methods and successes in the financing plan is presented in this article, in light of goals which Inco sought to achieve. A technical assessment of the project is not included, since Inco Ltd. has submitted a series of papers on this subject at the International Laterite Symposium as part of the 108th Annual Meeting of AIME in February 1979. Progress in developing and financing the project is encapsulated in the accompanying project factsheet.

Jan 3, 1979

By John T. Crawford

Open pit limit analysis techniques of various types have been utilized for many years to design ultimate pit surfaces. In the last 15 years there have been many advances in the development of sophisticated computer methods to aid this process. The extensive capability of the computer has led to multiple alternative approaches to problem solving. Computerized open pit limit analysis methods can be applied to a broad scope of long-range and intermediate-range mine planning and design questions. A single computer run develops a pit design from a set of data. A set of nonsequential runs is used to evaluate changes in pit slopes, property restraints, and mineral model variables. Ore reserve economic sensitivity and intermediate-range mining plans can be developed using sequential computer runs. Present value methods are incorporated by using iterative sequential techniques. Multiple ore processes, dump leaching credits, and the trade-off between open pit and underground mining can also be handled. Many of the applications described are representative of current practice. The remainder are suggested extensions.

Jan 1, 1979

Computerized financial models can be used in all phases of the mineral industry from setting exploration targets to projecting profit plans for producing mines. In this presentation, I will use the example of an exploration company entering a new district to trace the application of financial models through the following intermediate phases. 1. Hypothetical analysis and strategy 2. First encounter of mineralization 3. Preliminary drill results - decision process 4. Feasibility studies 5. Post-feasibility negotiations 6. Producing mine 7. Acquisition of producing mines or mineral properties. I will conclude with a brief discussion of the mechanics of the financial models that we use at Wright Engineers Limited. As we progress through the seven phases, the availability and accuracy of the data will parallel the complexity and application of the financial models. However, the same basic financial models are utilized throughout the seven phases. I will begin by suggesting that the exploration group is somewhat autonomous and has the mandate to explore in Western Canada.

Jan 1, 1979

By Glenn L. Krum

Inflation has received much attention due to its effect on capital budgeting, associated cost overruns, and declining real profits. This study focuses on the effects of inflation on the evaluation of a mining investment and the estimation of a mining project's revenues. The study indicates that the best method for estimating future returns is the fore- cast dollar scheme. In this scheme, the metal price was held constant, and the operating costs were "inflated" along a historical regression line. The conclusion was reached by comparing the "actual" performance of a 3000 tpd (tonnes per day) lead mine model with 'its estimated performance during four time periods (1950-1960, 1955-1965, 1960-1970, 1965-1975). The individual data files for each time period and estimating method (6 files by 4 time periods) were pro- cessed by a suite of cash flow computational and investment analysis sub- routines. The analysis presumed that the mine was part of a large corporation which could utilize the expensed, development and exploration costs and any investment tax credits, in the year that they were incurred.

Jan 1, 1979

By John Paul Gries

This Bureau of Mines study outlines the history of 11 major metal ore deposits or districts that are relatively new discoveries. The oldest operation is the White Pine mine, where major exploration was initiated in 1929. Discovery (delineation of ore bodies) dates range from 1948 to 1976. All but two of the deposits, Quartz Hill in Alaska and Flambeau in Wisconsin, are or shortly will be in major production.

Jan 1, 1979

By D. M. Carris

Since the Buffalo Creek incident in February, 1972, Federal and state environmental agencies have had the pressure on the coal industry in the Appalachian area to close the coal processing plant water circuits. In an attempt to comply with this requirement, Eastern .Associated Coal Corp. decided to install a vacuum disc filter system at its Kopperston plant to eliminate the tailings pond and reduce the amount of plant make-up water. It was recognized at the time that the plant static thickener tailings would be a very difficult slurry to dewater because of its unusually high clay content. The following is a case history of the Kopperston installation and the refinements Eastern has made in its vacuum disc filter operation to increase efficiency.

Jan 1, 1979

By Franklin J. Stermole

INTRODUCTION Economic evaluation of an open pit mine is similar to the economic analysis of any major investment project in any industry. It requires (1) taking into account all of the costs and revenues that are estimated to be incurred over the economic life of the project; (2) crediting the project with all the tax savings and tax credits that will be realized over the project life from tax deductions and credits related to various project costs; (3) charging the project with all taxes to be paid on taxable income over the project life; and (4) properly accounting for the time value of money for all project costs, revenues, taxes, tax savings, and tax credits when making the overall project economic evaluation. These considerations must be taken into account for any valid method of economic analysis such as discounted cash flow rate of return (DCFROR) or net present value (NPV) analyses. All economic analyses fall into one of two categories. ( 1 ) comparison of income-producing alternatives, or (2) comparison of service-producing alternatives. The analysis of alternatives in either of these categories can be made by using correctly any of five basic economic evaluation approaches which are. ( 1 ) present value, annual value, (3) future value, (4) rate of return (ROR) , and (5 ) break-even analysis. Of these evaluation techniques, DCFROR and NPV analyses are used most widely for evaluating income-producing alternatives while present worth cost and equivalent annual cost analyses are used most often for the evaluation of service-producing alternatives. In this chapter income- producing alternative analysis is emphasized, so DCF- ROR and NPV are utilized for evaluating the case studies presented.

Jan 1, 1979

By Gerald G. Johnson

The use of the Scanning Electron Microscope to characterize Coal Mine Dust has been possible because of two circumstances. First, the imaging process of the SEM allows multiple signals (secondary electrons, back scattered electrons, x-ray emission, etc.) to be viewed. Second, the use of a computer to analyze the signals and perform statistical tests on the results. The parameters described are size, shape, chemical composition, mass distributions, and particle thickness. Although the system is intended for particular systems, those of agglomerates (whether tile same or not) are handled by special aspects of the computer programs. The work on fibers is not completed at the time of this report. This work discusses the hardware (developed especially for this process) and software (both on an IBM 360/370 and a PDP 11/20). The latter system allows direct interaction between the operator of the SEM and computer for maximum information at the least time.

Jan 1, 1979

"Status of the Mineral Industries" provides a written and graphic view of the Nation's mineral position and its mineral industries. The report, issued annually by the Bureau of Mines, U.S. Department of the Interior, describes recent activities in mineral production, consumption, imports, exports, and uses of significant minerals and mineral raw materials. Charts profile trends for the past 28 years in supplies and uses of iron, steel, major nonferrous metals, primary nonmetallic construction raw materials, fertilizers, and plastics. Also included are current and historical financial data on the mineral industries, such as debt-equity ratios, asset-to-liability ratios, and plant and equipment expenditures.

Jan 1, 1979

By Kenneth K. Humphreys

INTRODUCTION What is automation? Why automate? Webster's New Collegiate Dictionary defines automation as "the automatically controlled operation of an apparatus, process, or system by mechanical or electronic devices that take the place of human organs of observation, effort, and decision." This definition gives an implied answer to the second question, "Why automate?" Automation, automatic control devices, and process control equipment receive their justification in supplementing or replacing manpower, which results in decreased operating costs. In the past, processes were operated with the minimum amount of instruments needed merely to guide operators. Processes were manually con- trolled by the operator on the basis of simple temperature, pressure, flow, and level indications on a panel. Today the tendency is to design a new plant to operate in a fully automatic manner according to a preset pro- gram utilizing a minimum of manpower. In addition to this direct cost reduction in manual labor, increased equipment capacity results from uniformity of flow and uniform control of process variables. This control eliminates or minimizes surges and permits equipment to be operated at or near its ultimate capacity and, for a given material throughput, permits the use of smaller process equipment. Automatic control, therefore, be it in the field of coal processing or in any industrial field, is simply a problem of economics. Control equipment is justified in terms of its contribution toward increasing productivity, increasing profit margins, or producing a new and salable product at a profit. Instruments and control devices can be divided into two general groups: (1) units which measure and (2) units which both measure and control a process variable.

Jan 1, 1979

By D. M. Doyle

A study of the various components contributing to energy costs and their relationships to generally trended operating data, such as tonnage, operating costs, etc., over progressively shorter time periods provides information for an energy audit. A study of annual data gives some insight into the importance of various energy components. As the time frame of the study progresses through monthly, daily and, finally, into quarter hourly data, the variations become more evident and, most important, strategies develop to minimize energy costs. The results of an audit conducted during the summer of 1978 at Wesfrob Mines Limited are reported to illustrate this important phase, prerequisite to a meaningful energy cost avoidance program. The balance of the paper deals with the energy conservation program at Falconbridge Nickel Mines Limited's Sudbury operations, the metering and control equipment, the commitment, the new energy accounting practices and, lastly, the policies. Examples of successful energy conservation endeavours include automatic peak electrical load control, waste heat recovery from mine air and compressor cooling water, energy reductions resulting from lower building temperatures and curtailment of idling loads. The use of pulse meters to measure the flow of gas, steam, compressed air and electrical energy, with their signals interfaced to process computers, allows monthly, daily and, if necessary, immediate reporting of energy and energy per unit of production information The program so reported at Falconbridge's Sudbury Operations is credited with an annual cost avoidance of .9 million dollars in a 14.0-million-dollar annual energy account

Jan 1, 1979

By R. D. Brown

On November 16, 1978, Finance Minister Chretien delivered his second formal budget in the House of Commons. Over-all, the provisions of the budget should provide moderate stimulus to the Canadian economy. With respect to the mining industry, the budget offers some welcome changes in the form of' improved write-offs for development expenses and social assets; higher investment tax credits; and a reduction in federal sales tax. On the other hand, income bond financing of new mineral ventures may be restricted.

Jan 1, 1979

By Rodney D. Rosenkranz

The Bureau of Mines evaluated the potential supply of primary copper from domestic mines and deposits and found that increases in copper price will be required in order for many domestic deposits to continue production. As part of the study, a tonnage-price relationship was developed indicating the quantity of copper that could be produced economically from known deposits at various copper prices and at various rates of return on the required capital investment. Costs of production are based on estimated capital and operating costs for mining, concentrating, transporting, smelting, and refining. Direct and indirect operating costs, recovery of investment, and return on investment have been included in the smelting and refining costs. Capital and operating costs are calculated in January 1978 dollars, and byproduct credits are based on January 1978 prices. Known domestic copper mines and deposits contain nearly 92 million metric tons of copper in about 14 billion metric tons of demonstrated mineralized material. These tonnages represent the current domestic copper reserve base. Approximately 74 million metric tons of copper are recoverable from the reserve base using existing technology. Of this quantity, slightly more than 50 million metric tons are economically recoverable assuming a price of 51.00 per pound of copper, credit for the recovery of byproducts, and a 15-percent rate of return on capital investment. Approximately 60 percent of the copper occurs in mines that were producing at the time of the study.

Jan 1, 1979

By Karl E. Starch

This Bureau of Mines report is a background study of severance taxes on mineral production. The rates, bases, and other features of State severance tax legislation as of March 1978 are presented, as are the amounts of State severance tax collections for fiscal year 1977, Some statistical comparisons between severance tax collections, total State tax collections, and total value of mineral production in the States involved are presented to portray the relative importance of severance taxes both in State tax revenue systems and in mineral industry revenues. A general discussion of the purposes and principles of taxation, the unique nature of a mining enterprise, the various types of taxes imposed on mineral production, and the character and rationale of the severance tax and its impacts on mining firms sets the severance tax in perspective. A bibliography of materials on the severance tax is included.

Jan 1, 1979

By J. A. Eisele

The Bureau of Mines has reviewed the literature related to the recovery of A1203 (alumina) from coal ash. A small amount of unpublished data is also reported. Of the processes studied, the alkaline-sinter process is the most promising from a technical standpoint. However, owing to the high cost of processing coal ash, the dispersed location of powerplants, and the domestic availability of higher grade alternate materials, coal ash does not rank as a primary source material for replacing imported bauxite.

Jan 1, 1979

By Peter A. Hacquebard

Recent drilling programs have shown that the in-situ coal resources of Nova Scotia are very substantial. The grand totals of the measured, indicated and inferred categories amount to 232 m, 646m and 993 m tons, respectively. This vast quantity of coal occurs essentially in five main fields: Sydney, Mabou, Port Hood, Pictou and Springhill. The largest resources (84% of the total) occur in the submarine area of the Sydney coalfield. With a 65% recovery rate, there are at present 150m tons of proven, recoverable coal in Nova Scotia. At a predicted maximum annual production of 5 m tons, this amount equals a lifespan of 30 years. However, additional drilling, particularly in the Sydney offshore area, holds promise of increasing the recoverable reserve tonnage to at least 350 m tons. This figure may be compared with the 484 m tons production obtained during 191 years of mining (from 1785-1976). The geological appraisal of the remaining coal resources in the five fields mentioned is presented in three-dimensional diagrams, per individual seam and corresponding reserve area. In addition, the submarine extensions of the Sydney and Mabou coalfields are discussed in light of results obtained from off shore oil exploration wells. The terminology and standards of coal resource calculations are pointed out, and the phenomenon of seam splitting and its prediction from geological data is illustrated. The availability in Nova Scotia of either thermal or metallurgical coal is considered in relation to rank and sulphur content. This paper was presented in June 1977 at the 90th Annual Meeting of the Mining Society of Nova Scotia. The coal resource estimates, however, have been updated to include the results obtained with the offshore drilling in the Sydney Coalfield to November 1977.

Jan 1, 1979

By M. Adnan Goksel

A blast furnace test of approximately 5,000 tons of PelleTech Corporation (PTC) cold bond pellets was successfully run at Kaiser Steel Corporation (Kaiser) Steel Manufacturing Division at Fontana, California. The pellets were produced from mill scale, BOF dust and blast furnace flue dust. A 15 day base period, during which time the metallic burden was 2/3 heat indurated pellets and 1/3 sinter, preceeded the test. During the test period the metallic bur- den was 10% cold bond pellets, 56.7% heat indurated pellets and 33.3% sinter. A 15 day post test base period followed during which the PTC pellets were replaced by conventional pellets. The pellets were produced in the 3.C Semi-works Facility located on Kaiser property. The facility incorporates the Michigan Technological University Hydro-Thermal Agglomerating Process.

Jan 1, 1979

By J. L. Kearns

The importance of optimizing equipment replacement decisions becomes more critical each year due to the rising costs of buying new equipment versus maintaining old equipment. Replacing equipment when it is physically worn out, or replacing it too soon or too late relative to its Economic Life (when it is economically worn out), is very costly. After extensive literature review and research, Kennecott has developed its Equipment Replacement Guide (ERG) system which identifies, evaluates, and justifies the replacement of uneconomical equipment. The system considers such critical factors as inflation, decreasing work capability, increasing maintenance/repair and operating costs, taxes, time value of money, return on investment, salvage value, and investment tax credit. These factors are used in a system of equations which balance the costs of new equipment against the total operating costs of old equipment. The solution of the equations determines the Economic Life of equipment. Replacement of equipment at the determined Economic Life will earn the specified, required return on investment that is used in the calculation of the Economic Life.

Jan 1, 1979

By Michael J. Magyar

The Federal Bureau of Mines has developed a hydrametallurgical method to recover aluminum, aluminum oxide, and fluxing salts from aluminum salt slags. The slag is leached with water at room temperature to produce a saturated brine slurry. Screening of the slurry yields an aluminum-rich fraction that can be returned to the dross furnace. The remaining slurry is vacuum filtered, yielding a clear brine solution and an aluminum oxide filter cake. Evaporation of the clear filtrate produces a high-purity fluxing salt for reuse in the dross furnace. Over 80 pct of the metallic aluminum is recovered in the aluminum-rich oversize fraction, while essentially all the fluxing salts are recovered by evaporation. This report contains the final results of an investigation on a process research unit scale, an economic evaluation of the method, and recommendations to further improve the process.

Jan 1, 1979