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By A Van Kersen, J Hodson

Waihi Gold Mining Co Ltd [WGM], operated by Normandy Mining, has been internationally recognised for its achievements in environmental management at the Martha Mine at Waihi. In a proactive approach to dealing with community concerns regarding blast vibrations on the North Wall cutback, trials were performed using the Cardox System [Cardox], to determine feasibility of achieving economic fragmentation of andesite overburden whilst bettering management levels of 5 mm/s peak particle velocity. Cardox is a non-explosive pressure breaking system which uses high pressure CO2, Results against conventional Ammonium Nitrate/Fuel Oil [ANFO] using a variety of delays showed that conventional blasting techniques could produce marginal fragmentation within the management levels with occasional excursions, whereas Cardox produced the required fragmentation while not registering on the vibration monitoring equipment. Fragmentation to enable normal excavation by a Hitachi EXII00 hydraulic excavator was achieved with a yield of 16m3 per round. The trails indicated that fragmentation with Cardox at the yields required of over 18m3 per round was possible with further product development. The trial demonstrated that non-explosive pressure breaking is feasible and its application warranted where environmental concerns affect the cost-benefit economics of production blasting in sensitive areas.

Jan 1, 2001

By M K. Kapo, S C. Nzama

The success of a mining operation depends on the quality of data used in decision-making processes and the people involved in making operational decisions. At Olympic Dam, mine geologists form an integral part of the teams that make decisions at various key points in the mine operational value chain. Mine geologists are directly and indirectly involved in all stages of the mining process, namely, orebody definition and categorisation, mine design and planning, metallurgical processing, and reconciliation.Due to the sheer size and complexity of the Olympic Dam deposit, each mining stage has been divided into smaller units within which decisions are made in line with the overall mine operational plan. In each of these units, the decisions and inputs made by mine geologists has ensured that consideration of geological factors is made in the mining process. Over time, the mine geology team has demonstrated a systematic approach in the development and improvement of their processes in line with the mine’s operational needs, such as understanding the in-stope ore variability and maintaining a consistent ore feed to the plant. An understanding and interpretation of the mineralisation distribution, based on acquired data, has proven to be important in the definition of resource modelling parameters. These parameters in turn affect the quality of grade estimates and their downstream use in planning, production and subsequent reconciliation processes. The continual study of the geology of the deposit, and unravelling its complexity through research has been crucial to the metals extraction process. The involvement of mine geologists through each of the mine value processes places Olympic Dam in a favourable position to benefit from future opportunities that will take advantage of the increasing operational demands and production pressures, and the ever changing economic conditions.This paper reviews the role mine geologists play in the realisation of the Olympic Dam deposit, from ore to product, through their interaction and collaboration with other departments and stakeholders. This paper also highlights mining practices employed at the Olympic Dam mine.CITATION:Nzama, S C and Kapo, M K, 2014. Managing the giant – a mine geologist’s perspective to the mining of the Olympic Dam deposit, in Proceedings Ninth International Mining Geology Conference 2014 , pp 451–460 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 18, 2014

By G F. Johansen

The erratic and localised occurrence of economic gold grades is a common feature of high-nugget effect gold veins. The nugget effect is a consequence of small-scale geologically controlled enrichment, and the inclusion or exclusion of sparse gold particles because of the sampling process. Such deposits do not always contain visible or coarse gold, and can be characterised by fine gold particles. Economic grade accumulations are generally contained within discrete oreshoots, which are surrounded by barren to low-grade material. Problems are often encountered where small sample types (eg drill core or channel samples) often vastly understate in situ grade, due to their general inability to intersect rare gold particles. As a result, the definition of grade and its distribution is often challenging, and leads to substantial resource uncertainty. Proxies, or indicators for grade, can help the geologist gain a better understanding of grade distribution and grade potential. These are based upon geological (eg mineralogical, textural, etc) and/or geochemical (eg specific elemental ratios, fluid inclusion compositions, elemental correlations, etc) criteria. The paper discusses the use and application of such proxies through three case studies.

Jan 1, 2004

By J H. Kyle

Cyanide is a significant cost in gold processing, as well as an environmentally sensitive issue. It has been suggested that precipitation of cyanide from leach liquors as copper-iron-cyanide compounds such as Cu2Fe(CN)6 may account for part of the total cyanide consumption. This may be especially true for ores that are rich in both copper and iron minerals. Ammonia addition has been shown to decrease the cyanide consumption by copper. Cu2Fe(CN)6.xNH3 precipitates have also been postulated to form during conventional cyanide detoxification processes, using oxidants such as SO2/air, with ammonia arising as a breakdown product from the oxidation of free cyanide. The present work has examined the conditions under which such precipitates may form, particularly in gold plant process and detoxification liquors. Ammonia and pH were found to have a large effect on the extent of precipitation. The compounds that were formed were found to comprise mainly Cu2Fe(CN)6.7H2O, as well as a range of NH3-bearing variants. The stabilities of the various precipitates are important from an environmental perspective. The long-term stability of copper ferrocyanide precipitates in tailings dams may be a problem under alkaline conditions and when some free cyanide is present, elevating the measured total cyanide in solution significantly. Case studies including data from actual plants are also considered, and the importance of these effects is reaffirmed from these results.

Jan 1, 2000

By A Giblett, B Putland

This paper provides a simple guiding framework for grinding circuit optimisation, focussing on common themes in past optimisation success stories, the conditions for success and techniques that can be employed to identify and define opportunities. Many significant grinding circuit improvements have been reported for operating plants, based on recurring themes such as the optimisation of mill feed size, mill liner design, process control, critical size, grinding media and classification. The paper condenses these experiences into a set of simple questions for the operator to ask, and provides guidance towards identifying and achieving the optimisation goals.CITATION:Giblett, A and Putland, B, 2018. The basics of grinding circuit optimisation, in Proceedings 14th AusIMM Mill Operators' Conference 2018, pp 129–140 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Aug 29, 2018

By E Rubio, N Morales

A common practice in the mining industry is to decompose the planning process into different tasks, so the overall process and specific schedules can be constructed easily. Nevertheless, currently there are some adverse effects, such as not capturing the real value of a project by not taking into account the construction of several underground drifts and general infrastructure. Then the common practice is to compute mining sequence and cut-off grade profiles over the life of the mine without constitutively integrating the development schedule as a means to measure the constructability of a given mine design and sequence. Thus, the investigation summarised in this paper shows a novel, integrative way of treating an underground mine sequence and production schedule while considering drift development scheduling. Moreover, it is thought that, because of this original model, the whole underground production scheduling exercise must concentrate on combining the development and the production scheduling to compute a robust and a feasible production schedule.In order to quantify the effect of the conventional way of viewing the planning, the concept of the building information model (BIM) needs to be used, which was postulated by Charles Eastman and has been used extensively since the late 1970s. BIM takes other aspects of a project into account, considering at the same time the spatial relationships, quantities and properties of building components, but especially some kind of model visualisation, which is the advantage to be incorporated. This paper presents the basis for an optimisation model that allows for defining the sequence of the mining development so that the production plan can be achieved. For this, the model considers the space dimensions, time, pattern or strategy, cost or benefit, precedence and resources available. Tests were performed considering a block caving and sublevel open stoping method. Finally these tests showed the main conclusion, that production sequence changes when the building capacity is considered.

Sep 26, 2011

By B Darlington, L Sandberg, O Vallati

The D47 and D39 Mechanical Dynamic Extra bolts (D47 MDX and D39 MDX) have been developed in response to the ever-increasing demand from the mining industry for rock bolts with high dynamic capacity. To prove such capacity, Sandvik has performed numerous in situ dynamic testing with the unique Dynamic Test Rig (DTR) (Darlington, Rataj and Roach, 2019; Roach, Rataj and Darlington, 2019). To complement the collection of testing data, Sandvik, in collaboration with the Swedish Research Institute for Mining, Metallurgy and Materials (Swerim) have performed additional experiments in laboratory condition using Swerim’s new drop test rig. This rig utilises a momentum transfer method to apply a dynamic load to the bolt. The sample falls together with the mass until the support beam impacts stationary dampers and the momentum energy is transferred to the bolt. Part of the charged energy is released by the dumpers while the remaining portion is absorbed by plastic deformation and/or displacement of the ground support element. The D47 and D39 MDX bolts have been tested at Swerim’s test facility with different levels of input energy. Six tests were performed at the specification energy of 36 kJ and six tests were carried out with the maximum allowable energy from the facility, ie 44 kJ. The bolts confirmed their dynamic performance absorbing the input energy without failure. The D47 MDX bolt absorbed up to 33 kJ with 150 mm displacement while the D39 MDX bolt absorbed up to 35 kJ with 162 mm displacement. This work will present an overview of the drop test rig at Swerim’s facility and a collection of results of the test performed on the D47 and D39 MDX bolts. The test method and results will be analysed and compared to the tests carried out with the in situ DTR.

Nov 29, 2022

By T Kon, K Ohno

Slag foaming is an important control item in the process of refining molten steel. This study aims to investigate the factors controlling slag foaming by observing the bubble formation behaviour resulting from the chemical reaction between iron oxide and Fe-C alloy in the slag. In this study, 0.06 g of Fe- C alloy was introduced at the bottom of a BN crucible, and 6.0 g of slag (SiO2:CaO:Fe2O3 = 40:40:30) was placed on top of it. The crucible was positioned inside an infrared image heating furnace, where the temperature was rapidly raised to 1370°C at a rate of 1000°C/min in a nitrogen stream, and then held at that temperature for a predetermined time before rapid cooling. Following rapid cooling, the internal structure of the sample was examined using a high-resolution X-ray CT device. The spherical equivalent volume was calculated based on the number of observed bubbles and their equivalent circle diameter. Additionally, the relationship between the volume ratio of small bubbles in the slag volume and the distance from the bottom of the crucible was determined, along with the calculation of bubble density and volume ratio. Under various experimental conditions, numerous bubbles with equivalent circular diameters ranging from 200 to 300 μm were consistently observed. The density and volume fraction of bubbles with circular equivalent diameters between 200 and 500 μm showed a tendency to increase as the distance from the bottom of the crucible increased. Bubbles with equivalent circular diameters of 500 μm or more consistently exhibited lower bubble densities, regardless of their height within the crucible. The formation of larger bubbles is attributed to a decrease in iron oxide concentration within the slag as the reaction progresses. However, this is believed to be due to their higher buoyancy, resulting in shorter residence times within the slag and a reduction in the number of encapsulated bubbles.

Aug 21, 2024

By S Döpp

Commencing with early experiences in iron ore beneficiation made at Beeshoek Mine, the paper follows through the process of extensive mineralogical and metallurgical investigations carried out during feasibility study. The paper will discuss the design process and logic followed over the last years, the challenges and decisions the design team faced in order to draw the conclusions that ultimately resulted in today’s value add approach at Assmang’s Khumani Operations.As integral part of the benefi ciation concept, a focus is set on the jigs, explaining the plant concepts, planned expansions and their contribution to the overall value add approach at the mine.The case study is intended to describe the outcomes of the design versus the actual achieved and the further value add projects to be implemented. As for future prospect, the incorporation of Wet High Intensity Magnetic Separation (WHIMS) demonstrates Assmang Khumani’s pursuit to maximise productivity and overall recovery.DMS was evaluated as an alternative to jigging within a comparative test work study, but in conclusion the option had to be excluded due to its inability to achieve the high density cut point required to achieve the sales specifi cations. In contrast, the investigation on producing an additional middlings fraction on the lumpy ore jigs prove to be an adequate option for further improvements of overall mass yield. With further liberation, a saleable product will be achieved by secondary beneficiation on Fines Jigs and WHIMS.Concluding, jigs are considered the most viable and cost effective benefi ciation process for off-grade ore +0.8 - 32 mm at Beeshoek as well as at Khumani, while WHIMS is the process under consideration for super fines recovery.

Jul 11, 2011

By Hommert P. J, Brown B

Early attempts at estimation of stress wave damage in blasting by use of finite element analysis met with limited success due to numerical instabilities that prevented calculations from being carried to late times. An improved damage model based on microcrack growth in tension allows finite element calculations which remain stable at late times. Estimation of crater profiles for blasting experiments in granite demonstrate successful simulations with this model.

Jan 1, 1990

By R Pinksen

The Iron Ore Company (IOC) of Canada Mining and Operations Departments expressed an interest in reducing the amount of oversize material (>1 m × 1 m × 1 m) being produced and its subsequent downstream effects including in-pit sorting and reduction, damage to mobile equipment, and significant delays in the loading pockets and the primary crushers. To achieve this goal an oversize reduction project was undertaken by the mine and to date has significantly improved upon baseline measures.One key approach used to reduce the amount of oversize was the implementation of thicker emulsion. The introduction of a thicker emulsion into the blastholes provided more resistance to the forces created by dynamic water and reduced the infi ltration of the emulsion into the cracks and fissures of the rock mass. Blast results showed reduced amounts of oversize and more consistent fragmentation throughout the muck piles. Additionally, a significant reduction in nitrates leached into the mine water discharge has been realised.To determine the effectiveness of the oversize reduction project, IOC used shovel based camera technology to assess fragmentation presented to the shovel at the digging face. A digital vision system (DVS) was installed on one of the shovels to capture images that were stamped with global positioning system (GPS) locations. A large population of digital images was analysed to produce a robust fragmentation distribution baseline that was used as one of the mine key performance indicators (KPI). Changes to blasting practice were subsequently measured against the baseline KPI to assess effectiveness.

Jul 11, 2011

To enable ammonium nitrate-fuel oil (AN-FO) to be used on an equal weight basis with nitroglycerine explosives, smaller diameter bore holes became necessary with consequent modifications to drill steel and burden on holes. Detonation of AN-FO in small diameter holes proved successful both with and without primer charges but some alterations were required to adapt anoloders to the smaller holes.Important factors in training all operators in the new charging method were the retention of improved fragmentation, avoidance of excessive overbreak and keeping wall rock dilution to an absolute minimum. The successful storage of ammonium nitrate in climatic conditions with daily temperature fluctuations above and below the critical 90°F has been achieved.INTRODUCTIONTechnical aspects of ammonium nitrate-fuel oil (AN-Fa) blasting agent are well covered in recent literature. This paper deals primarily with the manner of its introduction as the principal explosive underground at Great Boulder Gold Mines Ltd. and with the many problems encountered in the process. Following reasonably successful experimental firings in June 1962', using granular ammonium nitrate and an anoloder, permission was granted by theWestern Australian Mines Department to carry out test work in selected areas of the mine. The permit allowed for fuse firing only, and for a mixture of AN-Fa containing between 5t and 6 per cent fuel oil, with an adequate primer.The use of AN-Fa on an equal weight basis with nitroglycerine explosives, involved smaller diameter holes with alteration to ground burden and modification to drill steel.Initial tests indicated that it was apparent that AN-Fa could not replace gelignite on an equal weight basis if the...

Jan 1, 1965

By M N. Mian

The Cayeli volcanogenic massive sulphide deposit is located in Black Sea region of Turkey. Cayeli Bakir Isletmeleri (CBI) was formed as a joint venture between Inmet (Canada) and Eti Holding (Turkey). CBI is processing complex copper/zinc sulphide ores. The Cayeli concentrator was commissioned in 1994, with a design capacity of 600 000 tonnes/year. The grinding circuit was a classical rod mill/ball mill combination. The rod mill was converted to a primary ball mill in May 1997. The reasons for conversion were to use mill power more efficiently and eliminate feed interruptions during rod charging. The grinding circuit now has a primary ball mill in open circuit, and a secondary ball mill in closed circuit with hydrocyclones. Classification was originally done in two stages with hydrocyclones. Both mill discharges were combined and pumped to a primary cyclopack having two, 500 mm diameter cyclones. Primary cyclone overflow was pumped to a secondary cyclopack for further classification. The secondary cyclopack had ten, 200 mm cyclones. Both unit underflows were fed to a secondary ball mill by gravity. The secondary cyclone overflow, typically 62-64 per cent passing 36 ¦m, at around 42 per cent solids (w/w) was fed to flotation circuit. In order to increase circuit capacity to 1 000 000 tonnes/year and to improve control over the grinding circuit, it was decided to convert the classification circuit from two stage to one stage. For this purpose, six Warman Cavex cyclones having 400 mm diameter were installed. Now, the combined primary and secondary ball mill discharge was classified in single stage with the Warman cyclones in closed circuit with the secondary ball mill. The cyclone overflow goes directly to the copper rougher circuit as flotation feed. The grinding circuit is producing a flotation feed of 70 per cent passing 36 ¦m. The change over to single stage classification at Cayeli was successful. A mill throughput of 1 000 000 tonne/year is being achieved with better control over classification, and improved grind size. Results and comparison between the two classification circuits are presented in the paper.

Jan 1, 2003

By Matsuhisa Y, Sakurai W, Shimazaki H, Peiming H, Fukahori Y

Oxygen and carbon isotope mapping of hydrothermally altered wall rocks was applied to the blind ore prospecting of skam Pb-Zn deposits in the Kamioka mining district, central Japan, where the wall rocks consist of heterogeneous rock units. The results (8180sMow of -1.1 to +17.3%o and 613CPDB of -5.0 to +4.8%o for limestones, and 8180SMOW of -0.8 to +12.5%c for silicate rocks) show isotope zonations of the wall rocks with depletions in heavy isotopes (180 and 13C) toward the center of mineralization. The isotope zonations likely formed by interaction of migrating thermal waters with the wall rocks during the mineralization. The heavy-isotope depleted zone, which indicates higher temperature or higher water-to- rock ratio of the system, occurs in the footwall of a fault, indicating that the fault played the role of main conduit of the ore-forming fluids. A heavy-isotope depleted zone was also found in an area, where significant mineralization had yet to be identified. Recent drilling in this area has intercepted a zone with a grade of 16.0% Zn, 0.8% Pb, and 35g Ag per metric tonne at a depth of about 360m.

Jan 1, 1995

By L Salvestro

Ventilation on demand (VOD) has been demonstrated to significantly reduce operating costs for ventilation fans, by reducing fan output to meet demand. The most effective method for reducing operating costs is to use variable speed drives to adjust the speed of ventilation fans as required – this achieves significantly larger power savings that damper or vane control alone.However, this mode of control will significantly increase the number of speed cycles the ventilation fans will experience. Fabricated impellers have a limited number of start stop cycles based on the materials and method of construction, and the operating stresses due to centrifugal forces. This means that fans experiencing constant or regular speed changes will experience a reduced fatiguelife compared with fans that are run at constant speed.The fatigue life of fans operated under various speeds using VOD is difficult to predict, as it is dependent on the magnitude of speed changes, and the frequency, which will be varied to meet demand. It is important to be able to estimate remaining fatigue life to assist in maintenance planning and avoid unplanned maintenance activities.This paper will review extensive VOD data on fan operating conditions from two primary mine ventilation fans. This paper will demonstrate how this data can be used to calculate accumulated fatigue and predict the remaining fatigue life, and how this compares with fixed speed or non-VOD controlled fans.The increased maintenance costs for the impellers will also be estimated, and compared to the operating cost savings using VOD, to determine if the savings outweigh the additional maintenance costs.

Oct 12, 2022

By M Saghaeian, V Sheikhzadeh, R Hejazi

Mining dilution is one of the most important factors affecting the economy of mining projects. Instead of quantifying dilution in mining studies, it is common to assume a general dilution such as 5 per cent for massive deposits. Dilution increases the operating costs in the plant by increasing the tonnage of material to be milled. It prolongs the mine life by reducing plant’s effective capacity. It also reduces the feed grade. In most cases, lower feed grade means lower plant recovery. Dilution also increases the cut-off grade, which in turn reduces the overall ore utilisation of a mine. In this study has been investigated applying pre-concentration by dry magnetic separation for decreasing of dilution impact on reserve estimation and open pit design in low-grade iron ore mine. Based on the preliminary open pit design and assumption 3 per cent as dilution factor, the mineable ore in life-of-mine (measured + indicated) has been estimated with Fe = 25 per cent, SiO2 = 49.7 per cent. Based on the experimental test work on the ore, by dry low intensity magnetic separation of dry HPGR product grinding circuit, it is possible to remove diluted waste material and liberated gangue before concentrate plant, so that around 34 per cent rejected and Fe grade increase from 25 per cent to 33 per cent and by weight recovery 66 per cent. The results of the test work showed that this methodology could decrease largely the impact of dilution in the feed to the plant. It also slightly effect on the reducing of dilution factor impact for open pit design and optimisation and leads to increase the mineable tonnage in the low-grade magnetite iron ore mine.

Aug 24, 2022

By Oda Y, Hashiuchi M

In the smelting section, flexible fuels such as coal or coke are used in place of heavy fuel oil in order to utilize energy sources more efficiently. Heat recovered from the off gas of the furnace has been converted by the waste heat boiler into steam, which is used for self power generation and for heating or maintaining various temperatures. The amount of the recovered steam in the smelter is currently increasing due to maximum utilization of powdered cokes. The heat source required to maintain the temperature of the electrolyte in the tank house is electric power and steam. However until recent year this steam was provided by its own heavy oil combustion type boiler in the tank house since the amount of steam consumed in heating the electrolyte is large. Though experimental work over the last few years has shown the advantages of reducing steam in the tank house by fully covering the cell, the implementation of the full cover can lead to other operating problems. However various improvements, mainly the covering of the cell with a simple device, have led to greatly reduced steam consumption. As a result, steam for the tank house is now provided by the waste heat boiler only bringing more efficient energy usage.

Jan 1, 1987

By W Patton

Investment decisions in the mineral resources sector are made on the basis of an assessment of the economic potential for a mineral deposit. Given the supporting information for the location, scale, and quantity of the commodity of interest, miners and investors aim to make risk-informed decisions when considering further investment. The objective of resource classification is the synthesis of various types and quantities of geologic information used in resource model construction to assign confidence categories to the estimated mineral resources, which can then be used to support informed economic decisions. In this paper a risk-based classification scheme for iron ore mineral resources using conditional simulations is presented. The method involves categorisation of each block according to a confidence level, considering expected recoveries from a kriging model over mining production volumes. The realisations of the simulated model are used to assign risk-based confidence categories to zones of the ore deposit. One motivation for this work is to assess the sensitivity of the scheme to geologic uncertainties. Specifically, that which uncertainty in the layout of mineralising alterations and weathering overprints influence variabilities of associated rock properties and the likelihood of obtaining expected ore recoveries. It is shown these risks have material implications for a project’s economic potential. How the scheme can be extended to the grade control context and the value subsequent grade control activities is also quantified.

May 24, 2023

Traditionally, the development of a mineral resource project goes through a fairly set pattern of decisions from what commodities to search for; where to look; how to locate; what are the reserves; how can they be exploited with optimum returns for all stakeholders; where are the markets and what will be the price received; what financing arrangments? However, due to the unique nature of most mineral resource properties, the relative significance of individual parameters on the ultimate development decision will vary from project to project. Sensitivity analysis in its formal sense is most frequently related to the economic analysis of a project particularly in conjunction with the ultimate development decision making process, and acknowledges the uncertainty of the actual values with their impact on the corporate decision making yardsticks. In many cases, this analysis merely adds more values to confuse the decision makers who may well opt for some subjective rationale to overcome the numeric confusion. However, sensitivity analysis should be used more frequently to exploit the development dollar to its maximum, THROUGHOUT the phases leading to the development decision. It is essential to identify the critical inputs to the various decision tiers in a project as early as possible and direct the funds to ensure that these parameters are determined as accurately as possible. Examples are used to illustrate the need for an even-handed quantification of the parameters which affect the outcome of decisions en route to the final one while minimising the risk in making an optimum assessment in relation to development funds Available.

Jan 1, 1983

By R Razanatsimba, A Galli

A mining company has entered into contractual commitments to supply certain quantities of its product to clients in each time period. Failure to fulfil its obligations would damage its reputation as a reliable supplier. The planned production would normally be sufficient unless major problems such as highwall failures, roof falls, natural disaster, or strikes that interrupt production or delays in obtaining environmental permits, occur. To overcome these difficulties, the company may be able to obtain more of the commodity: from its strategic stockpile (if there is sufficient there); by buying it on the spot market; or for some commodities such as gold and uranium, by leasing it. Two sources of uncertainty, the spot price of the commodity and the occurrence of serious incidents that interrupt production, are considered. For simplicity it is assumed that the commodity price follows a geometric Brownian motion, that productions incidents have a binomial distribution, that they are independent from one time period to another and that they do not affect prices. A branching tree structure is used to model the joint evolution of prices and production incidents. The aim of this research project was to evaluate the companyÆs options for fulfilling its contractual commitments. When evaluating these options, multi-stage stochastic programming with recourse was used to solve this problem because in addition to providing the dollar value of the project, it gives decision-makers the æroadmapÆ to reach the optimal value. That is, how much material should be bought/sold on the spot market, how much to add to/subtract from the stockpile, how much to lease and in the worst case what the shortfall would be, for each time period as a function of the current spot price and breakdown status. A case-study over a five-year period is used to illustrate the proposed procedure. In this study the production would be sufficient to cover the companyÆs contractual commitments unless production incidents occur. Focus is on evaluating the impact of the quantity initially in the stockpile on the value of the project when the commodity market is tight, that is, when only small quantities can be bought on the spot market or by leasing.

Sep 26, 2011