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By James A. Lewis

It is the purpose of this paper to show the importance of sand characteristics, when combined with other physical data, in evaluating production obtained by secondary recovery operations, and to indicate the benefits to be gained from the application of these principles to primary production. Introduction During the past 10 years there has been a growing interest within the industry regarding the movement of fluids through oil reservoirs. A number of research projects have been directed toward the development of the physical laws governing this movement. In the period 1933 to the present, correlations between laboratory analysis of cores, reservoir fluids and well performance have been established and have been applied to successful secondary water-flooding recovery operations; and to the completion, production, reconditioning and evaluation of wells in new fields. The application of these data to water-flooding, either natural or artificial, is comparatively new, but the principlcs involved were set forth in 1880 by John F. Carll,1 who said: The flooding of an oil district is generally viewed as a great calamity, yet it may be questioned whether a larger amount of oil cannot be drawn from the rocks in that way than by any other, for it is certain that all the oil can-not be drawn from the reservoir without admission of something to take its place. If one company owned all of the wells drawing upon a pool, and had accurate records of the depth and characteristics of the oil producing stratum in each well, it is quite possible that some system might be devised by which water could be let down through certain shafts, and thus the rocks be completely voided of oil and left full of water. As it is, however, no systematized plan of action can be adopted. The careless handling of one well. by which water is let down to the oil rock, may spoil several others belonging to different parties. A clashing of interests at once arises and is likely to result in disaster to the whole district. In judging of the probable effects of the intro-duction of water into any particular oil district several things are to be considered. (1st) The time of flooding—whether early in the progress of development, while yet a large percentage of oil remains unexhausted or at a later period after the supply has suffered from long continued depletion. (2nd) The structure of the rock—whether regular and homogeneous throughout, or composed of fine sand inter. bedding connected and irregular layers of gravel, sometimes lying near the top and at others near the bottom. (3rd) The shape of the area being flooded. (4th) The position of the point at which water is admitted. in relation to the location of the surrounding wells still pumping oil. (5th) The height (which governs the pressure) of the column of water obtaining admittance. (6th) The duration of the water supply. Although we may take exception to part of Carll's reasoning, particularly " and thus the rocks be completely voided of oil and left full of water," we must give him credit for pointing out the increased effectiveness of water encroachment in displacing oil from a sand and for his recording six of the present seven considerations necessary for evaluation of production of oil by water

Jan 1, 1942

By James A. Lewis

It is the purpose of this paper to show the importance of sand characteristics, when combined with other physical data, in evaluating production obtained by secondary recovery operations, and to indicate the benefits to be gained from the application of these principles to primary production. Introduction During the past 10 years there has been a growing interest within the industry regarding the movement of fluids through oil reservoirs. A number of research projects have been directed toward the development of the physical laws governing this movement. In the period 1933 to the present, correlations between laboratory analysis of cores, reservoir fluids and well performance have been established and have been applied to successful secondary water-flooding recovery operations; and to the completion, production, reconditioning and evaluation of wells in new fields. The application of these data to water-flooding, either natural or artificial, is comparatively new, but the principlcs involved were set forth in 1880 by John F. Carll,1 who said: The flooding of an oil district is generally viewed as a great calamity, yet it may be questioned whether a larger amount of oil cannot be drawn from the rocks in that way than by any other, for it is certain that all the oil can-not be drawn from the reservoir without admission of something to take its place. If one company owned all of the wells drawing upon a pool, and had accurate records of the depth and characteristics of the oil producing stratum in each well, it is quite possible that some system might be devised by which water could be let down through certain shafts, and thus the rocks be completely voided of oil and left full of water. As it is, however, no systematized plan of action can be adopted. The careless handling of one well. by which water is let down to the oil rock, may spoil several others belonging to different parties. A clashing of interests at once arises and is likely to result in disaster to the whole district. In judging of the probable effects of the intro-duction of water into any particular oil district several things are to be considered. (1st) The time of flooding—whether early in the progress of development, while yet a large percentage of oil remains unexhausted or at a later period after the supply has suffered from long continued depletion. (2nd) The structure of the rock—whether regular and homogeneous throughout, or composed of fine sand inter. bedding connected and irregular layers of gravel, sometimes lying near the top and at others near the bottom. (3rd) The shape of the area being flooded. (4th) The position of the point at which water is admitted. in relation to the location of the surrounding wells still pumping oil. (5th) The height (which governs the pressure) of the column of water obtaining admittance. (6th) The duration of the water supply. Although we may take exception to part of Carll's reasoning, particularly " and thus the rocks be completely voided of oil and left full of water," we must give him credit for pointing out the increased effectiveness of water encroachment in displacing oil from a sand and for his recording six of the present seven considerations necessary for evaluation of production of oil by water

Jan 1, 1942

By R. V. Colligan

[CONTENTS PACE Educating and Training Economic Geologists of the Future. By C. H. BEHRE, JR. (TP 2278, Min. Tech., Nov. 1948. Discussions by R. V. COLLIGAN and EVAN JUST) ....... I Mercury Industry in Italy. By EDWIN B. ECKEL. (TP 2292, Min. Tech., Jan. 1948. Discussion .............................. by C. N. SCHUETTE) 3 Chert in the Kingsport Formation at Mascot, Tennessee. By ARTHUR T. ALLEN. (TP 2299, ............... Min. Tech., Jan. 1948. Discussion by M. M. BUTLER) 5 Wall Rock Alteration at Butte, Montana. By RENO H. SALES and CHARLES MEYER. (TP 2400, Min. Tech., May 1948. Djscussions by C. D. HULIN, W. D. JOHNSTON, JR., and L. C. ................................... GRATON) 5] Educating and Training Economic Geologists of the Future R. V. COLLIGAN*-I can best illustrate my opinions by drafting another five year plan (Table 2). This plan is set up following the same stipulations outlined by Dr. Behre, namely: (I) the student is preparing himself for commercial work as a mining geologist; (2) he is attending an institution with a sufficiently broad curriculum (that is, engineering school and mining school as well as liberal arts college) to furnish the courses listed; and (3) he is not planning to continue his studies through to a doctor's degree before going into commercial work. A comparison of my study plan (Table 2) and that submitted by Dr. Behre (Table I) will at once point up the basic similarity, due to the obvious fact that there are so many essential courses which must be included in any outline of study. However, a more detailed analysis will show up certain differences, which, in fact, are only certain refinements on Dr. Behre's program. These I plan to discuss in order of their importance. The first and most important change is the addition of 12 hr of optional subjects, making a total of 24 hr of optional subjects as against a total of 12 hr under Dr. Behre's schedule. This of course entails the elimination of certain courses, which I shall discuss later. However, I wish to make it clear that I suggest eliminating these courses not because I feel that they are unnecessary, but rather because I feel the optional courses are more necessary to the complete education of the individual. I appreciate that Dr. Behre recognizes the importance of the cultural side of education, but I take issue with his thesis that the student will get it without credit and in his spare time. I do not think that the average college student, and certainly not the college freshman, is mature enough to know what he needs and where to get it in his spare time. I think it must be "spoon-fed"; he must be oriented through specific courses. University life (or should I say "college life") is too full of athletics, fraternity activities, dances, "bull sessions," and countless other enjoyable distractions, all of which contribute to the "full man." I fail to see how the average young American male can possibly sandwich in a necessary complement of "cultural activities" in his spare time. Since these latter activities do not fall within the pattern set by the "group," and show less promise of immediate return in enjoyment, or increased social status on the campus, they are bound to suffer in competition with the more popular, "group" activities. No doubt much of the criticism levelled against arts colleges, namely, that the cultural courses are useless, is well taken, for the culture

Jan 1, 1947

By J. Brian Eby

The Gulf Coast of southern Louisiana during the year of 1940 was subjected to an extensive exploration and development campaign, as a result of which 16 oil fields and about 38 new producing sands were found. Although this record of discovery appears in keeping with the rate of 1939 actually in amount of new proven reserves, it may fall short of that of the previous year. Only five or six of the discoveries rated as first-class or important fields at the close of the year. The most prominent new fields opened during the year were Neale field in Beaure-gard Parish, the West Cote Blanche field in St. Mary Parish, the Stella field and the West Bay field in Plaquemines Parish, and the Lake Salvador field in St. Charles Parish. There were many important oil-sand discoveries in proven fields, such as in the Bayou Perot field, the Golden Meadows field, the Iowa field, West Lake Verrett field, and the Venice field. During the year, 1047 weUs were drilled in southern Louisiana, of which 768 were completed as oil-producing wells, 17 as gas wells and 262 as dry holes. The Neale field in northwest Beauregard Parish is considered one of the most important discoveries of the year. The f~eld centers around the north half of sec. 26, 'Y.3 S., R.I I W., just north of the town of Neale. It was discovered by the Atlantic Refining Co., using reflection seismograph to locate the structure. Production was found in the second well drilled in the Wilcox sand on the downthrown side of a fault. The structure is known as the "Tepetate" type, being similar to that of the well-known Tepetate field. There were 12 oil wells and 3 dry holes drilled during the year. The Wilcox sand in this field occurs between 8350 and 8400 ft. and averages 30 ft. in thickness. The West Cote Blanche Bay field, in West Cote Blanche Bay, St. Mary Parish, is a 1940 discovery by the Texas Company, credited to reflection seismograph exploration. The oil is from two sands occurring at 3110 to 3140 ft. and from 4950 to 5020 it. Four wells were drilled during the year, three oil wells and one dry hole. The deepest hole drilled reached 9491 ft. without encountering salt or dome material. In Plaquemines Parish, south of New Orleans, the California company has a new field known as the Stella field. The sand was found at a depth of 7485 ft., and 5 ft. of perforations made a well capable of producing 486 bbl. of oil in 24 hr. through a 9.is-in. choke. The oil is 42" gravity. The discovery well was drilled to a total depth of 10,258 ft. and other producing sands were indicated. A good field appears assured, although only one well was completed within the year. The Lake Salvador field, in the center of Lake Salvador, St. Charles Parish, gives promise of being one of the most important discoveries of the year. The discovery well was perforated at 9775 to 9800 ft. making 850 bbl. of 33.7° gravity oil daily through a 1/4-in. choke. Three wells were completed in 1940 but few details have as yet been made available.he Gulf Oil Corporation apparently has a good field in its wildcat discovery in West Bay, Plaquemines Parish. This well found

Jan 1, 1941

By J. J. Beeson

For the past fifty years or more, the structural features of the Cordil-leran mountain system of western United States have presented some most interesting problems. Any geologist or engineer living in this region, or even making occasional examinations of the mines, will lose much of interest and importance if he is not familiar with the literature. Some of the greatest works on geology have been the result of studies carried on in sections of this region. Among the more important of the earlier works are those of Dutton,l King,2 Gilbert3 and Powell;4 of the more recent Lindgren,5 Ransome,6 Spurr,7 Butler8 and others have contributed much. Many of the papers are largely of scientific interest but even these lay the foundation for the commercial application of the broader features of the geology. I have read many of these works with the keenest interest and pleasure; in fact, some have been read until some of the more important findings seem to be my own. In this paper, however, it is my aim to accept credit for little more than the labor of assembling some of the ideas of others. This is done with the hope that an interesting and valuable discussion will be the result. If some of the ideas presented should

Jan 1, 1927

The Black Hills Mineral Atlas briefly summarizes all important data available on the mines and mineral deposits in the Black Hills that have been explored, developed, mined, or located. The purpose of the atlas is threefold; First, from available data the general potentialities of the Black Hills region can be determined, although it is not possible to calculate actual ore reserves; second, it will provide the necessary basic information regarding a given property or commodity for further detailed study; and third, the compilation is a comprehensive directory of Black Hills deposits.

Jan 1, 1955

By John G. Parker

The rare-earth elements, sometimes known as the lanthanides, comprise the series of 15 chemically similar elements with atomic numbers 57 through 71. Yttrium, with atomic number 39, is often included in the group, because its properties are similar and it more often than not occurs in association with the lanthanides. Thorium is included in this survey due to its close association with the lanthanides, particularly in the mineral monazite. The lanthanides were first recognized as elements around 1750 and were the subject of much study by chemists during the 19th century. The purely chemical methods then available failed to resolve the strange intimate relationships between these elements, and it was not until about 1920 that the full series was explained.

Jan 1, 1971

By Thomas Fraser

WHEN the Bureau of Mines initiated the program of large-scale research and development in the field of synthetic liquid fuels authorized in the Synthetic Liquid Fuels Act of April 5, 1044, the Coal Preparation Section was assigned the task of obtaining data on the preparation characteristics of the coal in large reserves that might be adaptable to use in this new industry. It is natural that, as the rapidly developing general research program brought about new concepts of raw-material quality, preferred geographical location, and the like, the orientation of coal-preparation investigations should have undergone some change. The first major assignment was the sampling and testing of a series of typical American coals deemed to he suitable for hydrogenation based on early research work conducted by the Bureau of Mines. This first series of tests has been completed and is reported in this paper.

Jan 1, 1950

By Karl J. C. Harries

Mineral Agreements and Royalties

Jan 1, 2003

By Charles W. Merrill

THE INDUSTRIAL strength and the security of the United States require an adequate, dependable, and continuing supply of raw materials, of which minerals constitute an indispensable segment. With an expanding population, a rising standard of living, and the instability inherent in a constantly changing international situation, the mineral supply outlook is a major national concern. Structures, roads, and machines are built largely of mineral products; the energy to heat the structures and to power the machines is derived mostly from minerals; agricultural out-put is sustained with the aid of mineral fertilizers; and the Nation's economic and military security both are founded ultimately on its ability to obtain and utilize essential metals, nonmetals, and mineral fuels.

Jan 1, 1965

By David B. Doan

This regional report covers 1993 mining and related activity in approximately 40 countries and territories of Canada, Latin America, and the Caribbean Basin. These countries of the Western Hemisphere, as with the United States, are endowed with a great variety of minerals, including metals, industrial minerals, and energy minerals. For most of these countries, such mineral production helps form foundations for their economies and earns export credits including hard currencies. Table 1 depicts an overall view of Latin America and Canada's production of its major mineral commodities in 1993; subsequent tables show the role of Latin America and Canada in world mineral production, trade, and import dependency on minerals from Latin America and Canada by the United States. Overall, the picture emerges of a rich mineral diversity throughout the hemisphere, attracting increasing interest and investment, and complementing the mineral resources of the United States.

Jan 1, 1995

By Roy A. Lindgren

SINCE the year 1643, when the first blast furnace in America for treating iron ore was built at Saugus, Mass., out of mica schist quarried in the neighboring district, the procurement of a suitable refractory for furnace lining has been a problem of concern to the operators of furnaces. The stacks built of mica schist continued to smelt iron ore until about 1836, when, according to F. H. Norton, the first firebrick were produced', at Queens Run, Pa. Other writers speak of brick having been molded and burned in Massachusetts about the year 1834. In 1841, Andrew Russell began to produce medium refractory plastic clay brick near East Liverpool, Ohio, that were used for lining blast furnaces'. The well-known Kentucky clay-producing district was not opened up until the year 1871, but since then it has produced a large percentage of the linings for iron blast furnaces. While some strides have been made by the refractories industry during the 100 years that have passed since the first firebrick were produced, it has been only during the last two decades that any real progress has been made towards bettering the product, even though the method of production had improved. Perhaps the fault lies with the user of the brick rather than with the producer, for not sooner demanding a supe¬rior product. During the past 15 years the tonnage produced per lining has increased from 500,000 gross tons to 1,000,000 gross tons, and now some furnaces are producing 1,600,000 gross tons and better on a single lining. It is true that enlarged capacity of furnaces and improved practice have accounted for some of this increase in tonnage, nevertheless better quality in firebrick must be given credit for its share. However, we are not yet ready to say that we have reached a maximum life of furnace lining. We believe that a better product can be produced and that the refractories industries of America will, through their extensive research depart-

Jan 1, 1937

By Rodney G. Ravenscroft

Leasing is not a new phenomenon. Experts have identified its origins as early as biblical times. It is a method of finance that has grown rapidly and is now used in most countries, including those of South East Asia, South America, the Middle East and even the People's Republic of China. Internationally, the leasing world divides fairly easily into two groups and this is determined, by and large, according to whether a country has Anglo-Saxon origins or not. Most of the Anglo-Saxon countries have seen tax-oriented leasing become a sophisticated means of financing the acquisition of large and costly items of equipment and large projects. Countries such as France, Spain and Japan have a highly developed leasing industry but it is not tax-oriented. This paper will not address leasing of this kind. LEASING - THE CONCEPT Wide acceptance of leasing as an alternative for financing capital equipment has grown with the recognition by the users of equipment that it is use and not ownership that generates profits. Whilst this seems obvious, memories of repossession of assets during the Depression and attitudes towards leasing as "last resort financing" have raised strong philosophical resistance that has only recently begun to be overturned. A financial lease is a commitment by way of contract between a user of equipment (lessee) and a financial owner (lessor) under which the lessee makes a series of payments in return for use of the equipment. The lessee is acquiring economic value associated with ownership but not ownership of the equipment itself - that remains with the lessor. A lease is a method of financing the use of an asset; other methods finance the assets themselves. It is the taxation aspects that then become important. The lessee is giving up some or all of the taxation benefits of ownership such as depreciation and investment tax credits. The lessor claims these benefits, as he is entitled to do as owner, and takes them into consideration when determining the level of lease payments that are necessary to generate his required rate of return. These lease payments are, of course, lower than they would have been without those taxation benefits. The lease payments themselves are fully tax deductible. This is tax shelter leasing. The lessor is acquiring taxation deductions that are applied fully and immediately against his other taxable income so as to reduce the amount of tax he is to pay to the revenue authorities. It is this concept that makes financial leasing work. Governments provide incentives by way of tax concessions to encourage capital investment. Governments presume that prudent capital investment will offer employment opportunities, generate sales and streamline economic activity. These, in turn, will lead to the collection of government revenue. It makes no difference at all whether these incentives are claimed by a commercial or industrial owner/user or by a financial owner who makes equipment available for use by industry. Rather, the issue is to ensure that if an incentive is available, it is used so as to achieve its desired results. No greater or lesser incentive is available for leasing and leasing does not misuse the taxation aspects of equipment ownership. The critical issue is whether the full value

Jan 1, 1985

By V. R. Degner

Comments Summary It is very interesting to review the technical changes which have occurred in the industrial practice of minerals flotation over the past two decades. In 1972, worldwide industrial flotation was dominated by 'mechanical' flotation machines having an individual cell volume less than 500 cu.ft. Manufactures, such as DENVER Eqpt. Co., OUTOKUMPU, WEMCO, GALIGHER (AGITAIR), AKKER, and later DORR-OLIVER, produced flotation machines featuring a mechanical rotating impeller which served to mix pulp and air, prior to flotation, and to keep the solid ore particles in suspension. While sharing this common mechanical impeller feature, the machine design of the various manufactures differed in detail; particularly in regard to the vertical location of the impeller in the cell and the means by which flotation air was brought into contact with the pulp within the rotor mechanism. A review of the existing technical literature in 1972 would identify academic research studies, particularly at Columbia University (N. Arbiter, C, Harris ...) aimed at comparing flotation cell design concepts, of the various machine manufactures, on a hydrodynamic basis. These research studies were confined to very small, laboratory bench size, flotation machines, and the benefits of incorporating hydrodynamic considerations in the scale-up of the existing 300 cu.ft. mechanical flotation technology to larger cells was not commonly practiced industrially. Technological advances in minerals flotation, over the past two decades, have been influenced by a variety of economic factors including the increasing development of lower grade ore bodies, the attractions of producing a higher grade final concentrate, and the economy of tails retreatment to improve overall plant recovery performance, and flotation system “optimization" became increasingly important through the 1970-80 time period. The trend toward processing lower grade ores led to higher tonnage mill operations, and stimulated the development of the very large capacity mechanical flotation machine for roughing and scavenging duty. In 1972, the 500 cu.ft. size flotation machine was being pilot tested and introduced to the industrial market. Today, 1993, individual cell volumes of 1500-3000 cu.ft. are operating successfully throughout the world, and well planned plant test programs have concluded that the very large flotation machine can achieve the same metallurgical performance level of its smaller predecessor. The large flotation machine development record clearly credits the incorporation of internal cell hydrodynamic considerations in guiding the scale-up of the mechanical flotation machine to large sizes. This guidance eliminated, or reduced significantly, costly in-plant prototype machine changes which increase Dramatically with increasing flotation machine size. Early in the 1980's, at approximately the time that flotation machines in the 1500 cu.ft. class were being introduced into the market, it became evident that the availability of the very large mechanical flotation machine brought with it the need for a systematic means to "optimize" the flotation system by relating flotation cell size, row length (i.e. number of cells per row), and flotation rougher, scavenger, and cleaner system configuration to the economic objectives of the concentrators' operating management. Flotation system optimization consists of quantifying the flotation process performance using a suitable model which relates the kinetic response of the trace specie and the gangue material to the cell overflow, and produces a numerical relationship between product grade and value recovery. The computer analysis technique has proven to be an invaluable tool in determining the kinetic model coefficients which characterize a given application, and is also used to apply the resulting model to a proposed minerals beneficiation situation seeking to "optimize" the flotation system by relating metallurgical grade-recovery performance, flotation cell size, and circuit arrangement, to plant space, installation, and operating costs. It is interesting to note that these same computer based kinetic flotation analysis techniques can be easily applied to quantitatively evaluate the effect of different chemical reagent strategies, and flotation air transfer, on process performance for a variety of candidate feed ore types.

Jan 1, 1993

By Derek J. McCracken, William G. Holroyd

Emery is a rock that at one time held a large share of the abrasives market. The introduction of synthetic abrasives, however has forced it to settle for only certain niches in the marketplace. This loss of market share is due mainly to the higher amounts of impurities and weaker internal structure that naturally occurring minerals have compared to manmade materials. The use of rocks and minerals as abrasives dates back to early man, who used flint, quartz, and other natural materials to fabricate various tools. During the 19th century, with the Industrial Revolution imminent, the character of the abrasives industry was changed forever as synthetics were introduced. Frank B. Norton is credited with producing the first manmade abrasive when, in 1855, he manufactured a vitrified grinding wheel using emery grit and clay. Before Norton's accomplishment emery had been the only commercially available abrasive. The latter part of the 20th century has seen synthetics capture an increasing share of the abrasives market from natural materials. The term emery is believed to have been derived from the words emeri (French), smeriglio (Italian), and smiris (Greek). The term corundum, for the principal mineral of emery, seems to have originated from kauruntaka, the Indian name for the mineral. GEOLOGY Emery is a gray to black, granular rock comprised of various minerals including corundum (A1,0,), an iron-bearing mineral (usually magnetite-Fe,O,, hematite-Fe,O,, or hercynite- FeAI,O,), and several trace impurities such as mullite, titania, silica, and magnesia. The hardness of emery normally ranges between 7 and 9 on the Mohs scale, depending on its mineral com- position and level of impurities. Corundum, the hardest mineral in emery, typically has a hardness of 9. The specific gravity of emery ranges from 3.2 to 4.5, also depending on mineral composition and purity. The crystallography of each mineral contained in emery differs somewhat. Corundum exhibits an hexagonal crystal structure, whereas magnetite forms within the isometric system, frequently as octahedral crystals. Hercynite, an iron spinel, is also isometric. Hematite has an hexagonal structure but often is found as botryoidal and reniform masses. Principal deposits of commerical emery are found in the United States, Turkey, and Greece. In the United States two emery producers in the Westchester County-Peekskill area and one in the Cortlandt County area of New York closed their mines in the late 1980s. Commercial production in the United States now comes only from the western Cascade Range in Oregon. The emery in New York has a typical A1,0, content of 41.5%. Most of the rock is not true emery because it contains a mixture of spinel and magnetite but very little corundum. The deposits are of Late Ordovician-Early Silurian age and consist of veins in which emery is mixed with olivine, pyroxene, and hornblende. The veins evidently were formed by contact metamorphism and are surrounded by Precambrian schists that contain mica, sillimanite, cordierite, garnet, and quartz. The deposits in Oregon were formed during Miocene time by the contact metamorphism of ferrunginous bauxite by intrusive lamprophyric dikes and plugs. Emery is found in thin layers bordering these tabular dikes, which are usually oriented perpendicular to bedding, and in "surficial placer deposits. The emery deposits in Turkey occur as small, massive, lens- shaped bodies and as surficial placers. They are believed to have formed during Permian and Triassic times. In Greece the principal site of emery production is at Cape Emeri on the Island of Naxos. These deposits consist of lenticular masses of emery surrounded by marble. They originated during Mesozoic time, evidently by metasomatic replacement. Smaller deposits on several other Aegean islands were formed by the metamorphism of bauxite or other alumina-rich materials.

Jan 1, 1994

By Anna H. Connard

SUMMARY The discussion focusses on developments in the debt/equity swap market since the Marte project was negotiated in early 1988. It emphasises carrying forward the recent market trends to anticipate the breadth and scope of debt/equity conversions for mine development in the 1990s. Secondary market prices of LDC paper, conversion values and political influences in the host countries and the use of near debt and commodity-based instruments as components of mine financing in debt/equity deals will be placed in the perspective of recent trends and expectations for the future. THE MARTE PROJECT The Marte mine is a gold porphyry deposit in Chile's high Atacama, for which financing was put together at the beginning of 1988. The Marte project was financed by a combination of common equity and loans. It was unusual that the equity infusions were made under different programs. Some of the international equity was infused with fresh funds via DL 600. Other common foreign equity was provided through the conversion of Chilean bank debt under Chapter XIX. On the loan side,. export credits for the import component of machinery and equipment were sought. Local bank financing was negotiated for the remainder of ' the project's anticipated cost. The debt conversion market in Chile was at its apex in terms of interest, activity and government support when the mine financing was arranged. The price of Chilean paper in the secondary market hovered about 62 to 66 cents per U.S. dollar of face value. Meanwhile, the Chilean government was negotiating conversion redemptions significantly closer to full face value. The government differentiated between debt paper exchanged for corporate investors who had sourced that paper in the secondary market, and debt paper held by bank investors who would incur a transaction loss in the conversion. The use of a combined DL 600lChapter XIX equity financing created different yield calculation bases for the various investors. Chapter XIX prevents remittance of profits before year 5 and capital repatriation before year 11. Investors choosing this vehicle have either for a corporate policy in the target project not to declare dividends until repatriation is allowed, or they have to seek uses for the peso liquidity that would be generated through dividend declarations in the early years. However, DL 600 investors face no such waiting period on dividends, nor do they have restrictions imposed on cashing out of the investment before the 11th year. Therefore, any equity structure with components of both investment mechanisms will have inherent differences in cost basis and future income flows for the various participants. This equity imbalance is defensible if the investment motivations of the parties are analyzed: a mining investor using fresh funds looks for a hurdle return on equity calculated at conservative commodity prices, with as much flexibility to reap upside benefits as possible; a mining investor choosing to invest through a debt conversion mechanism will realize a modest short term gain on the conversion, reducing his effective cost basis, but sacrificing some return because of the waiting period on repatriation of dividends. INVESTMENT OBJECTIVES A bank investor exchanging his own paper for an equity participation in a mining project realizes a conversion loss on the transaction. He seeks a risk adjusted acceptable hurdle rate of return to recoup that loss over time. Motivation for the bank investor to take that loss may be derived partly from a strategy to diversify its existing portfolio by internal policy and externally regulated guidelines. The bank will compare yields on its loan portfolio to that country with anticipated dividend flows discounted back at a risk adjusted rate. It will analyze the project with return objectives of yield enhancement over time and with

Jan 1, 1990

By B. Thomas Mansbach

INTRODUCTION The Overseas Private Investment Corporation ("OPIC") is a U.S. Government agency mandated to promote the economic development of the less developed countries ("LDCs") by assisting U.S. private investment in the Third World. Generally, investment decisions turn on the optimism or pessimism of the private sector's financial analysis of a project, with market price of product a major unknown in a very chancy set of projections. Discussions with American mineral companies, however, show that, more often than not, in developing country projects it is the political risks of investing in mineral exploration and extraction that pose the most serious deterrent to investment. In several of the projects described here, investments would not have been made if OPIC had not been involved providing support to the project sponsors and their funding sources. Clearly it is not OPIC's business to promote U.S. investment in a project which is not commercially viable, but OPIC's programs can neutralize the political uncertainties which act as disincentives to investment in otherwise commercially viable projects. That is to say, OPIC's programs are designed to reinforce market decisions and not distort them. Although OPIC is an independent agency of the U.S. Government, it is managed by a Board of Directors, the majority of whom come from the private sector. This, coupled with the statutory requirement that it be self-sustaining and operate with due regard for the principles of prudent risk management, requires that it operate on a business-like basis. Although established as a development agency, to the business public OPIC is both an insurance company and a lending institution, with two major programs which are available to U.S. investors in the minerals sector: its political risk insurance program and its finance program. Each has been specially tailored to the meet needs of the mining industry. The insurance program provides coverage against four basic types of political risk: Currency Inconvertibility, Expropriation, loss caused by War, Revolution and Insurrection and Interference with Operations as a result of an act of War, Revolution or Insurrection. Coverage against the risks of Civil Strife can be added to both War, Revolution and Insurrection coverage and Interference with Operations. Inconvertibility coverage provides protection against a deterioration in an investor's ability to convert local currency into U.S. dollars. This deterioration can be the result of either active or passive delays. Active delays consist of a change in exchange laws or regulations that leads to inconvertibility delays of 30 days or more. For example, if the exchange regulations at the time of contract execution allow an investor to transfer earnings equal to 18% of its registered capital per annum and the government of the host country later changes the law to allow conversion of only 12%, the insured would convert the 12% transferable under the new exchange regulations with the government foreign exchange authorities, delivering the remaining 6% to OPIC for conversion at 99% of the then prevailing rate of exchange. (OPIC does not cover devaluation risks.) Upon delivery of the local currency to OPIC, normally at the U.S. Embassy in the project country, the insured's account in the U.S. would be credited with dollars. Delays can also result from what is termed passive blockage, which includes administrative delays of more than 60 days (sometimes longer) caused by the bureaucratic tie-ups or pigeonholding of transfer requests, as well as delays suffered simply because the government of the host country does not have sufficient foreign exchange. The transfer procedure is the same as with active blockage - the local currency is delivered to OPIC in the project country and OPIC provides dollars in the United States at the then prevailing rate of exchange. The second coverage -- Expropriation -protects not only against the loss of the investment due to the well-known risks of expropriation, nationalization or confiscation by the host government, but also against

Jan 1, 1985

By Jan H. Hommen

TRENDS IN MINE FINANCE Reviewing historical trends may help in dealing with future funding strategies. The first trend is the increase in the use of debt to fund corporate America. Surprisingly, when comparing that with other corporates in the global marketplace, the U.S. does not look too poorly. Japanese, in particular, but also German companies, are much more leveraged than their U.S. counterparts. Note that in Japan and Germany the government and the consumer have shown substantial restraints when it comes to credit. Not so in the U.S. where the savings rate (4%) is much lower than that in Japan (20%) and in Germany (14%). As a result, the cost of leverage is substantially lower in Japan and in Germany than in the U.S. Lower debt costs in these countries allows one to obtain more of it for the same price. The close relationships between financial institutions, corporations and governments in Japan and Germany also make the risk of leverage more bearable and understandable. Also note that interest rate volatility in these countries is more subdued. The investor base in common stock is also changing. Private pension funds have been net sellers of equities during the last few years while public pension funds have been net buyers. Individuals are basically out of the market. It is estimated that over $330 billion of equity was retired in the U.S. through 1986-1988. The reasons are well known: restructurings, buy-backs, takeovers, mergers, and buy-outs. This de-equitization is likely to continue as the cost of equity capital is higher than the cost of debt capital, even on a before-tax basis. Because there has been no market for equity since October 19, 1987, junk bonds have replaced equity capital in the corporate finance structure. The non-investor-grade borrower has access to the public markets through high-yielding debt securities that often look like senior equity. Deregulation has also provided 24-hour markets; securitization can now liquify assets that before were rusting on balance sheets; information processing and communication tools give facts that are instantaneously available, creating the need for products to cover risk and exposures unknown before the start of the information and technology explosion. Thus we now have swaps, options, futures, options on futures, caps, as well as program trading, portfolio insurance, index funds, etc. Globalization will be unstoppable. Today's environment demands it. Corporations are now global competitors, even though they may have never shipped a product off-shore. Boundaries are disappearing and impediments have been removed. Stocks can be issued in a global offering with distribution in all major financial centers of the world. The high leverage of Japanese companies has made common stocks very scarce, which with the high savings rate, makes equity capital inexpensive in Japan. If markets were perfect everyone would issue stock in Tokyo and buy it back in New York. This would certainly stop the bleeding on the balance of payments. With the deficit balance of payments in America, it is no surprise that the cost of money is expensive here. The risk-return relationship on U.S. equity is not favorable enough to appeal to Japanese equity investors. The Tokyo-market, helped by a stronger yen, surpassed New York as the most important equity market in the world. The question is, will the Tokyo market hold up when Japanese domestic consumption increases at the expense of savings? In the U.S. debt markets, the plain vanilla debenture is making a comeback after a period of absence. Commercial paper has replaced short term bank borrowings for working capital funding by larger corporations. The banks have made an interesting comeback with loan sale programs that will continue to attract borrowers. There will be a continuing

Jan 1, 1990

By Sue Sawyer

In October, November and December, teachers at the National Science Teachers' Association (NSTA) area conventions were lured to visit the Minerals Education Coalition (MEC) booth by the promise of free rocks, video tapes, and literature on earth science topics. Teachers were content to stand in lines that at times took as much as an hour and a half to progress through the exhibit. Adding to their interest was the opportunity to converse with people from the minerals industry who were staffing the booth. The MEC was formed by a group of associations and companies in the minerals industry. They felt the need to educate the public about the current-day minerals industry and how it affects everyone's life. The American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. (AIME) underwrote the major expenses of exhibit space and exhibitor services at all three conventions in 1997. SME members have been active in staffing and chairing the NSTA exhibit booth. But they represented only about one-third of the volunteers for the booth. Additional volunteers were drawn from local minerals companies, associations, interested teachers and other support groups. (See donors list on page 64.) In 1997, the conventions were held in Pittsburgh, PA, Denver, CO and Nashville, TN. The local SME GEM Committees chaired Pittsburgh and Denver and The Rogers Group Inc. supplied the chairperson in Nashville. Each exhibit relies on a local committee to plan and run the booth. Support is available from the GEM Projects Coordinator at SME headquarters. Usually the chair of the committee is drawn from the local SME membership. It is easy to see why the MEC booth is so popular. Free literature, videos, posters, workshop packets and rock specimens were handed out to about 5,500 science teachers at the three sites. Feedback from the attending teachers was overwhelmingly positive: "Who do we thank for these great materials?" Some of those great materials included Caterpillar's outstanding donation of Common Ground videos and teacher packets for Pittsburgh, Denver and Nashville for every teacher expected to attend. Placer Dome sent enough What's a Mine coloring books and It Comes from a Mine activity books for teachers at all three sites. Newmont supplied all teachers with an excellent poster describing gold processing. Women in Mining Education Foundation had plenty of its classroom activity handouts. The American Coal Foundation provided a list of its educational materials that are given out free to teachers who request them on school letterhead. The National Mining Association had its Facts About Minerals and Facts About Coal available. US Borax provided the funding to reproduce the NMA black and white posters that were published as inserts in Mining Voice magazine. In addition, each site had other materials chosen by the local committees to round out their selections. At each exhibit site, committees raise between $8,000 and $12,000 in cash donations from industry to support the high overhead of producing this exhibit. Usually, there are between 12 and 18 different rock specimens representing a range of mineral ores from aggregates to the metal ores. The committee arranged to have these donated (along with the freight charges to ship them to the site). Literature is also donated by the industry. It covers a diverse spectrum from basic information on rocks and minerals to posters, flow charts, videos and coloring books. Other donations include storage space before the event, haulage of items to the hall and door prizes. These exhibits could not have been staged without the network of SME Local Sections and the able chairs and committees at each site. At this time, credit should be given to their extensive donation of time and effort.

Jan 1, 1998

By Gregory M. Rumbaugh, Christopher Mark

"The proliferation of unconventional gas well development in the Northern Appalachian coalfields has raised a number of mine safety concerns. Unconventional wells, which extract gas from deep shale formations, are characterized by gas volumes and pressures that are significantly higher than those observed at many conventional wells. The gas is composed largely of methane as well as other hydrocarbons. Hundreds of planned and actively producing wells penetrate protective coal pillars or barriers within active mine boundaries, including chain pillars located between longwall panels. Gas released from a well damaged by mining-induced ground movements could pose a risk to miners by flowing into the mine atmosphere. The mining-induced ground movements that may cause well damage include conventional subsidence, non-conventional subsidence (e.g., bedding plane slip), pillar failure, and floor instability. This paper describes the known risk factors for each of the four failure mechanisms. It includes a framework that can guide the risk assessment process when mining takes place near gas or oil wells.INTRODUCTIONSouthwestern Pennsylvania has served for centuries as a producer of coal, oil, and natural gas. Coal mines were first developed in the Pittsburgh Coal Seam in the 1760s, with the first recorded mine in 1761 being the Fort Pitt Mine (Edmunds, 2002). Natural gas was introduced to the region when the Haymaker Well in Murrysville, Pennsylvania experienced a blowout on November 3, 1878. Although it was originally drilled prospecting for oil, it produced an estimated 30 million cubic feet per day of natural gas. Without well controls or pipeline infrastructure in place, it burst into flames and lit the night sky for over a year. Soon after, the Penn Fuel Company continued development of the Murrysville gas field and is credited with making Pittsburgh, Pennsylvania the first major city in the U.S. to have natural gas supplied for home and industrial uses. “Natural gas is king in Pittsburgh,” proclaimed an October 18, 1885, article in the New York Times headlined “Value of Natural Gas, Its Use Clarifies the Atmosphere at Pittsburgh” (AOGHS, 2018). By the early 1900s, coal, oil, and natural gas production had reached the southern extents of Pennsylvania in Greene County. The county had first produced oil in 1886, and shortly after began producing natural gas in 1890. By 1906, over 1,300 wells had been drilled (Stone and Clapp, 1906)."

Jan 1, 2019