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By F. G. Tryon, F. E. Berquist

Our task is to make a prospecting trip over the whole field of mineral economics which other lectures of this series will explore in detail. The old timers who really understand mining warn us that its economic aspects are often neglected, and this we find to be true. We shall try to show that mineral economics deserves recognition as a separate branch of economic science with urgent and distinctive problems of its own; that to cultivate it requires a fusing of the viewpoint of economics with that of geology and engineering; and that the help of both economists and technical men is needed in exploring its problems and in training workers in the field. To save time, we shall pass over the familiar subjects of production, consumption, and distribution which bulk as large in the market analysis of the minerals as they do in other commodities. The existence of these problems may be taken for granted and attention centered rather upon those that differentiate mining from other branches of industry. What then is the case for an economics of minerals? Why set up a new compartment in a branch of knowledge that is already well subdivided? Do not the established principles of economic theory apply here as elsewhere? In pleading for recognition of mineral economics one often finds that

Jan 1, 1932

By Samuel H. Dolbear

THE value of a mine is basically dependent on its capacity to yield profits. Since the ore must be mined, treated, and sold, some of it in various future years. there is a risk involved as to future costs, selling price, and working conditions. It cannot be expected that the economic condition existing at the time of valuation will continue unchanged for long periods in the future. During the past 20 years, mineral production in the United States has been conducted under a changing economy in many respects more exacting than that applied to other businesses. There have been increased production incentives, technical aid, exploration of privately owned mineral deposits by government at federal expense, and liberal loans for development and equipment, with risk partially assumed by government.. Some of these benefits have been counterbalanced by price ceilings, consumption controls, and stimulation of competition from foreign producers who have been offered the same advantages extended to American operators. For the present, mines will operate under a government policy directed toward reducing federal aid and control. The tenure of this change will depend upon future elections and the status of foreign relations. War and threat of war are now of the most vital significance to the mineral industries. Other factors which influence cost of production, markets, and price of mine output might be classified as Acts of God or Acts of Government. In some countries expropriation and the difficulty of exporting earnings or investment returns are risks that must be considered by foreign capital. Recognizing that this retards American investment in foreign countries, the Mutual Security Agency offers insurance against such expropriation and guarantees the convertibility of capital and profits. Since it is impossible to predict with certainty either cost of production or selling prices of metals for long periods, some assumptions must be made as to profits in the future. The basic assumption must be that the price of the company's product will vary in proportion to changes in operating cost. There is often a lag in this reaction, however, for prices of minerals are generally more sensitive to declines and less sensitive to increases than are costs. This reflects in part the resistance of labor to downward wage revision and a corresponding alertness in realizing its share of price advances. Some labor contracts include automatic adjustments to metal prices. Notwithstanding the complexity of the, problems involved and the difficulty of weighing their effect on value, such risks may be appraised with reasonable accuracy and a rate of earnings adopted that is compatible with the risk. It is, of course, possible to revert to a yardstick of value such as the commodity dollar, which has been advocated from time to time, but while revaluation in 1933 disturbed public confidence, the theoretical gold dollar continues to be the standard of greatest stability. Its gain or loss in purchasing power is reflected ultimately in cost of production and selling price of the mine product. At present 35 dollars are allocated to one ounce of gold. Measurement of Risk In the application of the Hoskold and most other formulae, a yearly dividend rate commensurate with the risk involved is set aside out of annual earnings. If the risk is great, this rate may be 15 to 25 pct of the amount invested. The remainder is placed in a sinking fund invested in safe securities such as high grade bonds or conservative equities, and the interest or dividends from these securities are added to the sinking fund. The sum of these sinking fund payments and the compounded interest at the end of the mine life is taken as the value of the mine. Admittedly the decision as to the size of the risk rate is the most difficult element in valuation and one requiring the most exacting consideration. It is necessary to look years ahead in an effort to determine future costs, market prices, demand, competition which may develop, including that of substitutes, and other influences common to the mine and to the region in which it is situated. Another phase of risk is the enactment of unfavorable legislation, taxes, and what appears to be an alarming spread of nationalization and expropriation. Capital is sometimes borrowed from the government to finance strategic production. Such loans may be collectable only out of production and involve no liability otherwise. Valuation in these cases must recognize the effect of such a reduction in liability. Offsetting some of these risks are the possibilities of mechanization and other cost-reducing discoveries, improvements in mining and treatment methods, new uses for minerals and metals, and normal growth of markets. In this paper, the terms risk rate, dividend rate, and speculative rate are synonymous. Safe rate and redemption rate are also used interchangeably. These alternatives are used here because they are commonly found in the literature on mine valuation. In Michigan, the State Tax Commission has long employed a risk rate of 6 pct in its valuation of iron mines. There the outline of reserves is well established and operating costs and conditions are based on adequate experience. The following comment on rates appears in the report of the Minnesota Interior commission on Iron Ore Taxation submitted to the Minnesota Legislature of 1941.1 Most engineers agree that 7 percent for the specu-lative rate is "an absolute minimum". C. K. Leith in

Jan 1, 1954

By W. Keith Buck

This paper defines the discipline of mineral economics. By example, it describes the application of the tools of economic analysis to mineral problems - to problems in the areas of: mineral resource analysis and forecasting, mineral industry activity from exploration to distribution and marketing, mineral commodity analysis, and mineral policy analysis and policy formulation - all in a regional, national or international context.

Jan 1, 1972

By John J. Schanz

INTRODUCTION The two prior Seeley W. Mudd books on mineral economics devoted their final chapters to themes having to do with the future. In 1932, the last chapter in Mineral Economics8 was "The Future Value of Mineral Property" by J. R. Finlay. Both the first edition (1959) of Economics of the Mineral Industries7 and the slightly revised second edition (1964) closed with "Minerals and Man's Future" by Zay Jeffries. We are not inclined in this third AIME volume on mineral economics to ignore the tradition of the prior volumes. Moreover, it always is fitting and proper to close a book about the mineral industries by examining in a rather general way the challenges and uncertainties that are perpetually strewn in our path as we pick our way into the future. Unlike its predecessor volumes, which were written to acquaint the nonspecialist with the economic characteristics of mineral resources and to provide data about the mineral industries, this edition was also designed with the mineral economics student and practicing specialist in mind. Thus it is anticipated that it will be both a reference as well as suitable for use as a textbook. Consequently, this closing examination of our changing perspectives about mineral resources devotes some space to the past events and current status of mineral economics as a field of study. The fears and forecasts of the past can be a perceptive and usually deflating way to begin an examination of the future. As we look up and down the track of time from the 1975 platform, we find that many of the past views of the future were transient in character, others were imperfect in their prognosis, while others were based on fears that now seemed unfounded. But down through the years some of the observations or expressions of concern have a persistency which perhaps reflects some elemental characteristics of mineral resources. On these "truths" rest our contemporary understanding of the economics of the mineral industries. The uncertainties and priorities for the next 25 or more years, not surprisingly, have a somewhat different mix than those that seemed most compelling to our predecessors in 1932 or 1959. So it is appropriate that we review how the perspective of the mineral economist has changed over the span of a half century. In light of the particular interest of AIME on the role technology must play, it is fitting that we close with some observations on that topic. THE EMERGENCE OF MINERAL ECONOMICS AS A FIELD OF STUDY The publication of Mineral Economics by the AIME in 1932 as a Seeley W. Mudd volume marked the end of emerging interest in

Jan 1, 1976

By Elmer W. Pehrson

NINETEEN FORTY-SIX was an eventful year for the mineral industries. Perhaps the most significant development was the socialization of industry in Great Britain, initiated in 1945 but carried to fruition in the coal industry in 1946. On Jan. 1, 1947, management of the coal industry will be vested in a National Coal Board, responsible to the Ministry of Fuel and Power. A sum of £164,660,000 has been provided to compensate private owners for assets transferred to the Board. The British coal industry has been a problem for many years. Production has declined to a point where serious shortages of fuel for domestic needs have developed. Exports have dwindled to a small fraction of the previous trade. Costs have increased greatly, and quality has deteriorated. The industry's physical plant has not kept pace with the rapidly mounting wage scales in recent years. Some claim that the best and most accessible coal reserves of Britain are heavily depleted. The industry has been harassed by difficult labor problems, including bad morale among the workers and a shrinking labor force.

Jan 1, 1947

By Arthur Notman

THE year 1937 started off most hopefully for the metal industry but the prices for nonferrous metals declined after reaching a peak in the first quarter. E. & M. J. average prices for March were: -electrolytic copper f.o.b. refinery for domestic delivery 15.775c., lead 7.19c., and zinc 7.38c. There was the usual talk of shortages and the accompanying peak in the market prices of securities of producing companies. In retrospect it now appears that this was the peak of general security prices as well and of most commodity prices. On Dec. 1 copper was back to 11c., lead to 5c., and zinc to 5.5c. At the same time metal security prices had fallen to less than 40 per cent of their March highs. This has not been a purely domestic phenomenon. Metal prices have followed a similar course in London, in spite of the fact that in all three metals a tariff wall separates the domestic market from the foreign. There is nothing in the record to suggest that planning has so far had any stabilizing effect on prices. It is doubtful whether anybody will he found to claim credit for the planning. Strong evidence supports the conclusion that domestic demand for these and the other metals has been dammed back by the uncertainties confronting those who are considering long term construction commitments. This is particularly true with the public utilities, who are the largest consumers of copper and lead. If the plans were designed to maintain employment rather than to maintain political control of the Government, it would appear that they should be discarded. The course of the steel industry has been followed so closely in the press that no comment is necessary to indicate its similarity.

Jan 1, 1938

By Arthur Notmon

WORLD production of the three major nonferrous metals, copper, lead, and zinc, in 1939 will aggregate about 6,050;000 tons, compared with the all-time peak of 6,237,944 tons in 1937, and the previous peak of 5,679,442 tons in 1929. The United States will furnish 30.9 per cent of the total compared with 30.4 per cent in 1937 and 41.3 per cent in 1929. Table 1 gives the details of the three metals.

Jan 1, 1940

By AIME AIME

FOR the mineral industry, as for many others, the year 1944 brought to fruition the seeds planted in previous war years. Accomplishment in attaining ends in the production of minerals has given more time for the consideration of postwar problems, such as plans for resuming production for civilian uses and measures to prevent possible mass unemployment. The hectic atmosphere in production circles lessened during the latter half of 1943, conditions becoming static during 1944 as peak production rates were reached. Withdrawal of deferment of young men from the mining districts by Selective Service connotes that man power at the battlefronts became more important than the persistence of pressure for metal production. This is in contrast to the return of soldiers in 1943 to augment the labor ranks in the mining districts. The year ended in the midst of changing needs. Over-all metal production in the United States in 1944 will record a lessening, compared with the previous year owing to labor shortages which affected both development work and ore output.

Jan 1, 1945

By Ross R. Bhappu

In 1989, William A. Vogely created the Mineral Economics and Management Society (MEMS). He did this after SME disbanded the Minerals Resource Management Committee, a group dedicated to technical programming of minerals economics and management issues. A few years later, SME reinstated this committee. MEMS held its fourth annual conference "Mineral resources: Managing dilemmas and opportunities," in Boulder, CO March 9-11, 1995. Some of the MEMS programs are similar to the Minerals Resource Management Committee programs. However, MEMS conferences cover more diverse issues. These include minerals policy, environmental legislation impacts on the minerals industry and minerals economics issues. The 1995 MEMS conference included six sessions and three distinguished speaker addresses. Papers topics included US and Canadian mineral policy, financial strategies for managing mining companies, Latin American mineral investment opportunities, quantitative economic modeling and the impact of environmental interest groups on the minerals sector in the United States and Canada. One session was dedicated to students who competed for $1900 in prizes for outstanding papers.

Jan 1, 1995

Established as a Division December 15, 1948 Evan Just, Chairman Richard J Lund, Past Chairman Granville S. Borden, Vice-Chairman J K Richardson, Vice-Chairman S H Williston, Vice-Chairman Allan Matthews, Secretary-Treasurer National Security Resources Board 17th and Pennsylvania Ave, N W Washington 25, D C

Jan 1, 1952

Established as a Division January 15, 1932 John C Calhoun, Jr, Chairman O Cutler Shepard, Vice-Chairman J R Van Pelt, Jr , Past Chairman Thomas A Read, Secretary-Treasurer Dept of Mining and Metallurgical Engrg University of Illinois Urbana, Illinois

Jan 1, 1956

By Charles H. Fulton

FOR some time it has been thought that there should be > closer relationship between the members' of the Institute engaged in education in the mining schools, the mining, metallurgical, ceramic, and geological departments of universities, and the members of the Institute actually engaged in the production of mineral products and the operation and direction of works. The American Society of Chemical Engineers and the American Ceramic Society have for some years past devoted especial attention to the educational matters of their respective fields. The Engineering Foundation, representing the great engineering societies of the country, is deeply interested in technical education and maintains a Committee on Educational Research.

Jan 1, 1932

By T. R. McMillan, R. D. English

An engineer's education is a lifetime pursuit, a fact which the Society of Mining Engineers of AIME recognizes through its Education Board. Created in 1977 and comprised of six standing committees, the Board addresses several broad areas of responsibility: Continuing education; professional accreditation; statistical reporting; career guidance; scholarships; and educational publications.

Jan 9, 1979

By E. A. Holbrook

AT the meeting of the Committee on Engineering A Education of the Institute at the New York meeting last February, it was brought out that the number of men graduating in mining engineering from our colleges at the present time is not sufficient to meet the ordinary needs of the mineral industries. Following the meeting, Samuel S. Wyer, consulting engineer of the Fuel-Power Transportation Educational Foundation of Columbus, Ohio, prepared a pamphlet called "Mining Engineering's Appeal to High School Seniors." Under the auspices of this Foundation the pamphlet is being sent to every high school in the United States. The pamphlet does not in any way paint glowing word pictures of the profession; rather it is a statement of the importance of mining engineering in our present-day civilization, together with the requirements in young men who are looking forward to an engineering career.

Jan 1, 1930

By William B. Plank

THE growing dependence of our vast industrial civilization (:n mineral products demands today, as never before, the highest technical skill in those who produce these product-;. That the duty of training the engineers, whose responsibility it is to produce these mineral products efficiently and in sufficient amount, falls directly on the schools of mining is beginning to be more fully recognized. The Institute, realizing this fact and that its future membership depends largely on the annual accretion of young men, is showing a keen interest in the problems of the mining schools and in the work of its Committee on Engineering Education. The Committee has, during the past several years, considered the problems connected with the training of men for the mineral industry, whether these have been problems of college training, or placement of the young engineer in the industry, or personnel training after he enters the industry. The field of interest and discussion has been as broad and varied as the mineral industry itself. Coal mining, metal mining and metallurgy have been discussed and the papers on these subjects have been outstanding contributions to the literature on mineral education.

Jan 1, 1931

By Ferron A. Olson

Occasionally it is good to consider the past, assess the present and project the future. Curriculum, enrollment, matriculation of graduates and changes in industry which influence mineral education are all relevant for determining what changes will be needed in educational institutions to support growth and development in the United States. It would appear likely that with environmental pressures, energy needs with present stress in fossil fuels and general societal needs for metals and minerals that mining and metallurgical engineering faces a period of growth and may be on the threshold of a new era with a vitality that has not been enjoyed for several decades. The following information is based on material obtained through questionnaires received from twelve schools accredited in mining or mineral engineering (out of 18 in the U.S.), 2 not accredited and 5 which no longer have mineral engineering disciplines. The schools presented do not include the smaller nor larges of the undergraduate programs in mining engineering.

Jan 8, 1972

By Andrew J. Freyman, George S. Barry

"Mineral endowment in northern British Columbia and the Yukon Territory was assessed on the basis of geological opinion which was gathered in a quantitative framework of subjective probabilities. The survey area encompassed 364,000 square miles and was divided into 310 cells having dimensions of one degree of longitude by one-half degree of latitude. The response solicited related to tonnage, grade and number of deposits of a particular mineral in each cell. The questionnaire sought an expression of mineral endowment down to mine-able depth as distinct from economic expectations. Details on the questionnaire and responses are presented in a series of contour maps on individual commooities, which illustrate the collective occurrence picture of the respondents. The approach is largely dependent on the cooperation of an adequate number of geologists familiar with the region being examined. This approach to an assessment of the mineral endowment of a region has a wide range of applicability, from the focusing of exploration effort to aiding government and development bodies in the formulation of regional strategies and the planning, for example, of road, rail and power facilities."

Jan 1, 1970

By William B. Plank

For the first time in four years the number of mineral engineering students in the 228 engineering colleges of the U. S. and Canada exceeds 10,000. According to figures just released by the American Society for Engineering Education, the current enrollment of all engineering students is 222,178. The total of 10,274 mineral engineering students, undergraduate and graduate, is a 4% pct increase over a year ago. Total engineering is 11 pct larger than last year, about the same as in 1949-50, and 24 pct above 1950-51.

Jan 4, 1955

By Kazimierz St. Sztaba

"Mineral processing – the first technological stage of utilization of mineral – has a very long history. In particular, it revealed and reveals the continuous development and perfection of technological operations and process organization, comprising not only new design solutions and exploitation procedures but also, for example, perfected systems of control and automation as well as methods of process description and result evaluation. During the recent decades the attitude to mineral raw materials was clearly changed, both to the primary ones, i.e. minerals, and to the secondary ones, such as side products and waste, formerly considered useless and at present more commonly used. This results both from the appearance and growth of demand for more and more numerous components of mineral raw materials and also from the necessity of protection of natural resources, constituting the integral part of the system of sustained development of society.These circumstances, and especially the requirements concerning gaining some components which cannot be separated by means of “classical” (used for many years) technological processing operations and aiming at increasing the technological procedures, evoked the necessity of using new technological solutions, applying other basic operations, also the ones characteristic so far for other processing technologies, i.e. chemical, biotechnological and others.These development tendencies, in general commonly perceived, allow us to formulate an opinion that the former state of tasks and processes of mineral processing is being transformed into a qualitatively new form. It can be assumed that this process was signaled by a situation in which, due to the growing role of technological operations based on physicochemical phenomena (flotation and others), magnetic and electrical ones, etc., one should have observed that the former term of “mechanical processing” became inadequate for the real content of the notion determining the discussed stage of mineral utilization, so the adjective “mechanical” disappeared in most languages."

Jan 1, 2003

Mineral exploration is the business of finding and defining ore deposits. Ore bodies are developed into mines and mines supply every mineral and metal upon which our society is built. Whether it be steel for our bridges, cement and aggregate for our concrete, coal for our power stations, copper for our wire, phosphate for our fertiliser or gold for our jewellery it first must he found, then mined and processed before we can use it. There is no other way.

Jan 1, 1993