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By C. H. Lieb

ONE astounding fact in the production of petroleum is the comparatively recent realization by producers that flowing production is the cheapest crude produced. About 1910 or even later, operators actually endeavored to get a producing well to pumping as quickly as possible after completion. A well was not really considered to be completed until it was operating on the pump. Remarkable progress has been made since then. It was not until about 1920 that producers began to take a serious interest in pressures and to think a little about proper methods of handling oil wells. Pressure gauges were installed, and records of pressures maintained, which was quite an innovation. Desultory experiments were made with tubing of different sizes, as well as experiments with placing the bottom of the tubing string at different levels in the well. Probably the first important departure from customary procedure was about 1926, during the Seminole development, when gas lift

Jan 1, 1936

By C. Richard Tinsley

Like most minerals, coal is inherently a demand-limited commodity. The very sedimentary nature of its occurrence implies greater availability potential than demand. But this situation is overridden by economics among fuels, between coals, and within coal blends. Such considerations make coal forecasting a very hazardous profession indeed. THERMAL COAL If one thought that the lead times involved with a mining project were very long, one has obviously not been exposed to the planning process in the electric generation business - a process seriously confounded by shifts in load growth, environmental pressures, capital intensity, security of fuel sourcing, inter-fuel economics, and so on. But as a general rule, the near-term forecasts for thermal coal can reliably be based on a bottom-up, plant-by-plant analysis. Cement plant conversions can also be reasonably estimated next in order of reliability, although they have a much wider spectrum of coal qualities and fuel sources to choose from with a notably higher tolerance for sulfur and ash. Finally, industrial demand can be assembled from the estimates for conversions by pulp/paper plants, chemical plants, etc. The industrial sector is harder to estimate, since it may involve small boilers or dual-fired units. Assessing demand in the Pacific Rim is relatively a straightforward process in the near term because the major importing countries are all located on the Asian continent with either negligible or very minor (yet stable) indigenous coal production, (itself often operated on a subsidized basis). Furthermore, all imports are seaborne. These major importers are Japan, Korea, Taiwan, and Hong Kong with Thailand, Singapore, and Malaysia up-and-coming consumers. The suppliers to this market all have substantial reserves to back up decades of exports to these countries. Australia, the US, Canada, South Africa, China, and the USSR dominate the supply side. The second oil-shock of 1979/1980 has convinced the importers that reliance on oil can be expensive and eminently interruptible. Thus, they are determined to diversify away from oil' to nuclear and coal for generating electricity and for coal for other purposes where possible. This trend is seen to continue even in the face of the oil glut worldwide and oil-price reductions in early 1982. But the importers are also convinced that reliance on one coal source and, in particular, one infrastructure route for the coal chain from mine to consumer can be equally expensive and interruptible. Strikes in the US and Australia; excessive demurrage at certain ports; relegation of coal to a lower priority on multiple-use railroads in the USSR and China; and concern over escalation on high-infrastructure or high-freight coal chains are among the risks worrying the importers. As a consequence, Pacific Rim thermal coal purchases are being allocated among supplier nations, between ports, and within each country. An example of Japan's shift away from Australia and toward the US and Canada is shown in the estimates in Table 1. But the confidence of the import estimates deteriorates sharply beyond the plant conversion timetables and construction schedules in the near term. If part of the second generation of coal-fired power plants can handle lower-energy coals, the field of suppliers could widen to accept sizeable tonnages from Alaska, Wyoming, Alberta, or New Zealand resources. These supply sources generally have some infrastructure or freight advantage to compensate for their lower quality and to compete on a delivered energy-unit basis. These also offer diversification in sourcing. And the possibility of coal liquefaction in Japan further widens the sourcing network. A great number of Pacific Rim coal forecasts have been generated, especially for Japanese thermal-coal imports which are expected to grow strongly in the 1980's. Since the Japanese themselves have not yet settled their energy policy, the exact numbers are hard to call. Nevertheless, at 50 million tonnes of imports in 1990, Japan would consume 50-60% of the total Asian thermal coal imports as shown on Tables 2 and 6. The next most important consumers are the "island" nations of Korea, Taiwan, and Hong Kong (see Tables 3-5). All three are embarking on power plant developments usually with captive unloading facilities, capable of accepting more than 100,000-dwt vessels. Korea, with no-indigenous bituminous coal, is not especially enamoured with US coals, which are deemed too heavily loaded by freight and infrastructure costs -- up to 70% of the delivered price. Thermal coal contracts are presently split to Australia (70%) and to Canada (30%). Korea Electric Power Co. is already considering second-generation boilers capable of burning lower-quality coals than the present standard. Korea does burn domestic anthracite.

Jan 1, 1982

By Paul M. Tyler

MUCH information concerning pegmatites which was thought to be true a few years ago has been proved false, and what is now actually known about some pegmatites is not true of many others. The erratic and seemingly unpredictable structure and variable composition of this class of mineral deposits has been widely emphasized. Even parts of the same pegmatite body exhibit marked differences in texture, mineral composition, width, and attitude. Constructive geological thinking in respect to pegmatites now aims to establish general laws rather than to stress the confusing diversity of features having no special economic significance.

Jan 9, 1953

By Henry Hebley

IN preparing this paper it has been the aim of the writer to keep the problems of both producers and consumers in mind. Until now, no attempt has been made to familiarize each group with the other's practice and limitations. This paper is an effort to acquaint the readers with some of the factors pertaining to the problem and cost of mining and preparing steam coal, and also to the economics of producing steam with such coal. In recent years all lines of endeavor have turned to intensive mechani-zation in order to lower the unit cost of production. The average fuel consumption in steam electric generating stations has dropped in 20 years from 4.0 lb. to 1.4.1b. per kilowatt-hour; while the modern power station can generate 1 kw-hr. on a fraction under 1 lb., or 13,000 B.t.u. coal. Also, the amount produced per man has in that same period risen from 3.8 to 8.2 tons, owing to the use of modernized equipment below ground for coal cutting, drilling, shooting, loading, hauling and hoisting. Unfortunately, the rapid speed of 5 tons per minute of operation at which the coal is loaded mechanically precludes any appreciable removal of impurities at the coal face, so that the raw coal is hoisted containing a markedly higher percentage of impurities than the hand-loaded coal, which was subjected to the scrutiny of the miner during loading. Also, during the past 20 years, certain seams of coal lying close to the surface have been made economically available by the improved design of electrically operated shovels and draglines for the removal of overbur-den running as high as 56 ft. This strip coal frequently contains so much ash in the raw state (Table 1) that it would have no sales value. There-fore, coal preparation must be adopted to beneficiate the raw product. Some seams in the United States have a decreasing ash content with decreasing size, owing, in all probability, to the fact that the coal is friable while the impurities are hard, causing a concentration of the low-ash material in the fine sizes. Illinois No. 6 coal being rather hard, naturally the reverse is true.

Jan 1, 1937

By Joseph Pogue

PRORATION in the petroleum industry has come to mean a method for curtailing the production of crude petroleum by artificial effort, and it is in this sense that the term is employed throughout this paper. Although a contrived curb on supply has been invoked at various times in the past in particular fields and to meet specific situations, it is not until the past few years that this procedure has become general and assumed a dominant role in the oil business. In the sense that we now understand it, proration had its inception in the Seminole area of Okla-homa in 1927, from which time and place the practice spread to include practically all the flush oil fields of the country, especially those of California, Kansas, Oklahoma and Texas. At present there is perhaps no phase of the oil business that commands more attention than proration, nor one that engages more time and effort on the part of executives in the business. The practice of proration, indeed, has not only become an integral part of the policy of most companies and operators, but it has also taken on the aspects of a "movement" involving two schools of thought with considerable feeling, and at times some bitterness, on both sides. In this atmosphere it is difficult to find calm, dispassionate consideration of proration, for most discussions are either vigorous exhortations by its proponents, or else sharp condemnations by its opponents; although it appears that the majority of the industry is clearly "in favor of" proration. It is hoped that this analysis will be taken as an attempt to appraise the movement as an economic force, without bias and without regard to the incidence of the conclusions upon any preconceptions that the industry may entertain.

Jan 1, 1932

By E. C. Wright

FOR many years the cost of making pig iron and steel in the Birmingham district has been about the lowest in the United States. The close proximity of the important raw materials such as coal, iron ore, limestone, and the large available scrap supply made it possible to assemble all of the important ingredients necessary for steel- making with only nominal costs for transportation. Both iron ore and coal were being mined in this district at one time for about $1 per ton from underground operations. At that time mining wages were low everywhere and the labor rate in the South was considerably below that of other mining districts. This situation persisted until the emergence of labor unions as an economic and political force, emigation of southern labor to northern plants, and continued growth of industry in the South in the years following the depression of 1932. Since that time union organizing of miners and steel workers throughout the nation has increased labor costs in mining and steelmaking. This influence has been felt particularly in underground mining operations since the proportion of labor cost to total cost is still high. The previous advantage in basic labor rate in the South has been almost entirely eliminated by the equalization of labor rates in basic industries by national unions. Since 1945 these influences have been especially noticeable in increasing the cost of mining coal and iron ore in the South. The northern steel districts are still being largely supplied with iron ore from the Minnesota open-pit mines and the cost of this ore has not increased nearly as much as the cost of ore obtained from underground mines in Birmingham. A similar situation exists in coal mining; the thinner seams in Alabama are not so amenable to mechanization as the northern mines and, as a result, the output per man-day in southern mines is only about three tons of coal as compared to five or six tons per man-day in the large captive mines of West Vir-

Jan 1, 1950

By Howard M. Graff, Sidney C. Bouwer

The economics of mining has traditionally been viewed quite apart from the economics of blast furnace operations. It was realized, of course, that blast furnaces would operate best with good raw materials, but the shipping grade of ore, for example, was decided by a sort of collective bargaining process between the ore producers and the blast furnace operators. The mine operators had to keep their costs down, and were usually successful in convincing management that the ore in any particular deposit was endowed by nature with a certain iron content and that the mine grade could not be raised beyond a certain economic limit. The blast furnace operators would have liked a better grade, but as long as they were able to make a fairly good showing it was more or less accepted that they had to take the ore as it came. The mine operators were able to ship to the nation's blast furnaces thousands of tons of iron ore that would be completely unacceptable by present-day standards. As late as the early 1950's, the major steel companies were witnessing an actual decline in the iron content of their incoming ore supply as the mining companies mined progressively leaner material and upgraded it only enough to pass competitive market requirements

Jan 8, 1965

By D. B. Gillies

IN 1938 the Republic Steel Corp. announced that it had leased the ore mines and other property of the Witherbee Sherman Corp. at Port Henry, N. Y. The announcement brought forth an interesting reaction. Two questions were asked repeatedly: (1) Is the iron product high grade? (2) Is there a substantial reserve? The answer to both questions was and is a decided and emphatic "Yes."

Jan 1, 1943

By C. P. McCormack

THE Cuyuna manganiferous iron ores can be a principal source of manganese for the iron and steel industry in the United States, provided metallurgical methods as a whole are adjusted so as to use run-of-mine ore. The use of manganese in steelmaking is growing. Increasing amounts of impurities in raw materials call for more manganese, a constant cheap supply of which is wanted. There are few deposits of ore in the United States carrying over 35 per cent. manganese that can be mined and marketed at a profit in normal times. We are largely dependent on foreign ores. The small domestic deposits should rightly be held in reserve for an emergency, such as a war, when importation might cease. Even the production from lean ores, concentrated it may be, might not carry us through a protracted stringency. The Cuyuna district is, therefore, during normal times capable of supplying a large total of manganese. The ores are iron ores containing 5 to 25 per cent. of manganese with the inverse range of 52 to 28 per cent of iron. The manganese costs no more per unit in the ore than the iron, because cost of mining, largely by open-pit methods, is not affected by the manganese content. The manganese units should, perhaps, command a higher price, but as their value is contingent on metallurgical practice, a higher price may be justified only when a shortage in manganese occurs. Manganiferous iron ores can never entirely supplant straight manganese ores though methods are employed that will permit them to do so partly. For the manufacture of ferromanganese, ores carrying above 42 per cent. manganese are needed. Ores with manganese running between 20 and 42 per cent. are used for making spiegeleisen. But established practice in certain plants, based on the admixture of manganiferous iron ores to straight iron ores has greatly lessened the consumption of high-priced, scarce, manganese alloys with good results.

Jan 2, 1925

By D. P. Harris

The construction of a model to associate probability of occurrence of some measure of mineral wealth with the geology for each subdivision (cell) of the area is postulated. The questions (1) are the observations made in reconnaissance geology sufficiently related to mineral wealth to distinguish the cells of high value from those of low value, and (2) can this geology be related mathematically to mineral wealth and probability are answered in a case study of 97,000 square miles in Arizona and New Mexico. Measurements on mineral wealth and geologic variables of 243 cells were made. The geologic variables, valued in counts, percentages and lengths, quantified the theoretical concepts of the model. It was found that multiple discriminant analysis and classification analysis by Bayesian statistics and multivariate normal probability function constitute a two-phase probability model that associates probabilities with geologic information and mineral wealth. The cells of explored area must be allotted the value class indicated by their cumulative production and estimate reserves (given well-defined geological relationships in a mineral wealth area), and a discriminant and classification analysis must be performed in which probabilities of the cell belonging to each of the value groups are generated as a function of the geologic variables. This determines whether high value cells can be distinguished from low value cells by their geology as well as indicating those cells misclassified by the model into a higher value group than warranted by their known mineral wealth. The second use of the model is for extrapolation. It is demonstrated how geologic information on an explored area can be utilized in guiding exploration in an unexplored area. Exploration decisions can be predicted on explicitly determined measures of uncertainty (the probabilities). SUMMARY This study postulates the construction of a model to associate probability of occurrence of some measure of mineral wealth with the geology for each subdivision (cell) of the area. Such a model will distinguish those cells deserving further exploration on the basis of their geology: The basic postulates of this study are as follows: v = Q(R,S,F,A) P(V) = G(R,S,F,A,V), where V = a measure of mineral wealth P(V) = the probability of occurrence of V R = age and type of rock F = rock fracturing A =age of igneous activity and contact relationships. There are really two questions to be answered: 1) are the observations made in reconnaissance geology sufficiently related to mineral wealth to distinguish the cells of high value from those of low value, and 2) can this geology be related mathematically to mineral wealth and probability? In order to answer these questions, an area of about 97,000 square miles situated chiefly in Arizona and New Mexico was selected as a case study. This case study area was divided into 243 cells, each 20 miles square, and measurements were made on mineral wealth and geologic variables. Crude geologic variables valued in counts, percentages and lengths are constructed to reflect the above postulated variables. These measurement variables thus provide quantified values defining the theoretical concepts of the model. It was found that multiple discriminant analysis and classification analysis by Bayesian statistics and the multivariate normal probability function constitute a two-phase probability model that associates probabilities with geologic information and mineral wealth. Given the availability of an area that is well explored and upon which the relationships of mineral wealth to geology can be adequately defined, there are two ways in which the analysis outlined in this paper can prove beneficial. First, the cells of the explored area must be allotted the value class indicated by their cumulative production and estimated reserves, and a discriminant and classification analysis must be performed in which probabilities of the cell belonging to each of the value groups are generated as a function of the geologic variables. Such an analysis determines whether cells of high

Jan 1, 1967

By P. N. Nikiforuk, M. C. Zoerb

An analog computer model has been developed of a large, walking dragline. This model permits changes in the configuration of the dragline, or changes in its digging cycle, to be readily investigated on a computer. As a result, it is possible to determine ways of improving the dragline performance without having to carry out many expensive experiments on the actual machine. This model can also be used as a simulator for dragline operator training. INTRODUCTION The movement of large volumes of material is always a costly operation and the increasing trend towards the use of large capacity equipment does not necessarily produce the economy desired. This problem is of particular concern to the mining industry in its open-pit operations where large draglines are used to remove the overburden. Since this operation often forms a very large part of the total cost of open-pit mining it is particularly important that it be kept as economical as possible. This requires that the dragline be operated at its maximum possible productivity. In order to optimize the operation of a dragline it is desirable that a suitable model of the dragline be available for study. Once such a model is available the effects of changes in the configuration of the dragline, or changes in its digging cycle, could be readily investigated on a computer and methods of improving its performance could be determined without having to carry out expensive experiments on the actual machine. Such models would be of use not only to dragline users, but also to the manufacturers of draglines for design purposes. Presumably studies of this type could eventually lead to computer-con trolled stripping operations. As far as can be determined very little work1'2 has been done on the derivation of dragline models. Such models must be derived before work of the nature indicated in the previous paragraph can be carried out. As a small contribution to this field this paper describes work that has been carried out by the senior author during the past few years on the derivation of one such model. This model describes the drag, hoist and swing operations of a 35 cu yd, commercially available, walking dragline. This model was derived for use with an analog computer and can be used either for optimization studies, or for the training of dragline operators. DESCRIPTION OF DRAGLINE General: The particular dragline for which an analog computer model was developed is owned by the Great West Coal Company of Estevan, Saskatchewan. It is a walking dragline and its function is to remove 40

Jan 1, 1967

By P. T. Allsman

INTRODUCTION The honor of being the recipient of the Mining Society's Daniel C. Jackling Award for 1966 imposes on me the responsibility to search for the subject that I would be best qualified to discuss. It seems that my experience in the mineral industry — nearly 15 years in private and 30 years in public employment — should uniquely qualify me to comment upon the relationships between the mining industry, mineral engineering as a profession, and government, and the changing economic, technologic, political and social changes that dictate their relationships. Such conditions, the increasing knowledge of the world mineral resource base, the greater demands of an expanding population with a rising standard of living, shall be evaluated with respect to our profession — mineral engineering. In all of these forty or so years, I have been in close touch with many phases of the mineral and energy resource industries, especially those of the United States. Particularly during the past 10 years, I have had a ringside seat at the "goings on" in Washington. During all of this period I have observed and analyzed many of the problems of the industry and its relations with the government. During the past few years, I have had increased opportunity for doing research and have found a need to learn something about the mathematical techniques that are undergoing such a revival since electronic computers were developed. One of these techniques is multivariate analysis, which is a system for correlating a large number of complex variables. By applying this technique to the seemingly chaotic present-day situation, there emerges a course of steady improvement in the minerals resource industries that wars, depressions, and political strife have failed to obstruct for long. In short, I advocate a need for new concepts in mineral engineering to cope with the changes, pos- sibly adding many more specialized areas on one end of the spectrum, and broad engineer-generalist approaches at the other. The meeting place shall be where the intricate mineral resource problems at the frontier of knowledge merge into the socio-techno-logical problems of the world. HISTORICAL INVOLVEMENT OF GOVERNMENT IN MINERAL RESOURCE PROBLEMS Involvement of government in mineral resource problems undoubtedly is as old as government itself. But passage of the Mining Act of 1866, superseded by the Act of 1872, was the first major entry of our Federal Government into the problems of mining. Passage of the law was necessary to resolve many conflicting claims and disputes in mining. The General Mining Law of 1872 and the Mineral Leasing Laws of 1920 apply to millions of acres of public lands and to certain privately owned land on which the mineral rights have been reserved to the Federal Government. The extensive involvement of government in the mineral industry business today often comes as a shock to the mineral engineer who has begun to climb the ladder to the top in his company. He is often poorly prepared to cope with the situation and becomes frustrated and even hostile. Better knowledge of the role of government perhaps would ease his situation. In our political system, private industry is responsible for producing minerals. To make certain that the production is adequate for a peace-time economy, and to guarantee the Nation's security in an emergency, the Federal Government finds it expedient to develop policy and engage in regulatory, educational, and research activities. A few examples will illustrate the varied role of government in relation to mineral problems. In varying degrees many agencies of the Executive Branch of Government have responsibilities that influence the functioning of the mineral and energy industries. In addition, of course, Congress, the Judiciary, and State and local governments exercise great influence. The Department of the Interior is primarily responsible for activities to promote the development and conservation of mineral and fuel resources, and the

Jan 1, 1967

By E. P. Pfleider

Important economic planning by industries, companies, financial firms and governments is predicated on estimates of future growth potential. Prior to the passage of the Taconite Amendment by the people of the State in November 1964, various admittedly conservative forecasts were made of the future of Minnesota's iron ore industry. Since that date, 3 new taconite plants are under construction, 2 are being expanded, one has just gone "on stream," and a seventh is in the design stage. These plants have a total capacity of about 35 million tons of pellets annually. The pessimism of 1964 today is being replaced by unbounded optimism. In the light of such recent developments, it becomes essential to update forecasts related to production, employment and capital investments. New projections show 50 to 58 million tons of pellet production from Minnesota by 1975. This tonnage, together with some 6 to 8 million of natural ores, should provide an annual full-time employment of 15,000 by the mining companies, plus 700 in related railroad and power producing activities and 1000 in plant construction. Total capital investment in new plants should reach $1.5 billion by 1975 and $2 billion by 1990. These current estimates indicate that the conservative goals as set in 1964 for the year 1990 should actually be achieved by 1975 or 1980. BACKGROUND Various forecasts1,2,3 have been made of the future consumption and production of iron ores within the United States. The most recent of these is by Harrison,1 delivered at the American Mining Congress meeting in Las Vegas in October. His estimates reflect the latest iron ore developments on a world wide front as well as the accelerating trend toward pellets. Minnesota's Natural Resources council prepared a detailed report in 1964 outlining the various factors that affect the future of Minnesota's iron ore industry. It presented estimates predicated on the

Jan 1, 1967

By James Boyd

Scientists and engineers must concern themselves not only with technical problems, but with the socio-economic difficulties of our scciety. The author states that raw materials are basic to the economic process and that mineral raw materials occur naturally in nearly limitless quantities. He feels that the economic pocess will provide sufficient raw materials for man's needs, and discusses in some detail the world economic environment. As our society grows in complexity, it becomes more urgently incumbent upon scientists and engineers to bring their experiences to bear on the solution, not only of technical problems, but also on socio-economic difficulties. It is to this field that I have directed a large part of my energies. RAW MATERIALS BASIC TO THE ECONOMIC PROCESS There are certain premises, frequently overlooked, which bear emphasis. As economics concerns the production, distribution, and consumption of goods, so our whole society is based on raw materials. Without the basic extractive industries of agriculture and mining, there would be no economic problems with which to deal. This principle has been expressed as "All productivity is based on three factors: 1) natural resources, whose form, place, and condition are changed by the expenditure of 2) human energy (both muscular and mental), with the aid of 3) tools.77* It seems strange that such an obvious statement needs to be made. It is forgotten by all of us, however, at one time or another when we get involved in the complicated theories of economics dealing with the financial and fiscal policies of the various governments, in the financing of enterprises, in marketing, and in labor relations. Unless decisions in all of these fields are made with this, and the rest of the "Ten Pillars of Economic Wisdom," consciously in mind, the resultant policies are doomed to eventual failure, whether these are policies of individuals, companies, or governments. The economic process is basic to society. But economics and the social aspects of humanity are inevitably intertwined. If human needs are not provided for within the basic economic structure, conflicts arise to disrupt the most carefully laid social plans. Similarly, it is the failure of society to cope with basic economic prerequisites that leads to discord within the body politic and thus to eventual economic disaster. We who are engaged in the various aspects of the mineral industry, therefore, have a large part to play in society's future development. MINERAL RAW MATERIALS OCCUR NATURALLY IN NEARLY LIMITLESS QUANTITIES Throughout my career in and out of government, I have formed my decisions on two principles: 1) Fundamentally, all mineral raw materials exist within the earth's crust in quantities greatly exceeding man's needs; 2) Any problems of supply of these materials are primarily economic in nature. With respect to my first assumption, analyses by geochemists enable them to estimate the quantities in which each of the known elements exist in the earth's crust. One of the most cautious and famous suggests that the average copper content of the lithosphere to a depth of ten miles is about 55 ppm. If this is valid, then the lithosphere contains about 1.4 quadrillion (1.4 x 10 ") tons of copper metal — an unimaginable quantity. This is 8,500,000-fold that which has been consumed by man in his existence. To illustrate further, consider that the deepest copper mine in history went to about 9000 ft below the surface; the present copper mines of the world now average less than 1500 ft in depth. We can assume that in most continental land areas of the world it is technically feasible to mine to a depth of at least one mile. The land areas of the world to an average depth of one mile, then, contain 343 billion tons (343 x 10') of copper metal, or 2000 times that which has been extracted to date. I don't believe man will ever expend his energies to extract copper from rocks which contain only a few parts per million, but he knows that each element

Jan 1, 1968

By David B. Brooks

Identified potential resources of lead and zinc are lower, relative to reserves, than the same ratio for other metals, Either there is little material below present grades or, if it exists, there are no data on it. The author examines both these factors in detail, and also introduces a third possibility. In their 1961 monograph, The Future Supply of the Major Metals, Bruce Netschert and Hans Landsberg noted that identified potential resources (that is, known but submarginal resources) of lead and zinc were much lower relative to reserves (that is, known and supermarginal resources) than was the same ratio for other metals.' Put another way, it seemed that for such metals as iron, manganese, copper, and aluminum, slightly more favorable economic conditions or modest advances in technology would greatly increase reserves by permitting the exploitation of vast quantities of leaner or deeper or otherwise less valuable mineral deposits. But for lead and zinc, Netschert and Landsberg concluded that either: "(1) there is relatively little material below present cutoff grades; [or] (2) such material exists, but for some reason there are no data.'12 This situation, which they called "the lead-zinc anomaly'' has been subsequently discussed by other authors. The purpose of this paper is to carry the discussion further by examining the evidence in favor of (1) and (2) and by advancing a third alternative. There are at least two reasons for devoting time to the lead-zinc anomaly. First, while it is unlikely that we shall have to turn to alternative lead or zinc resources in the near or middle-term future, the longer run resource picture for the two metals is not so certain.3 Both within the United States and for the world as a whole, new discoveries will have to come at a fair pace to keep up with growing rates of consumption. Thus, it is important to see whether there exist lower grade or nonconventional potential sources of two such useful metals that we could turn to at some time in the future. The second reason for studying the lead-zinc anomaly is also related to resource adequacy, but is of more general significance. Depending upon whether the anomaly is technologic, geochemical, spatial, or temporal in origin, we shall be able to draw some conclusions about the resource picture for other metals. Can we expect the apparent pattern of lead-zinc resources to be repeated? If so, will technologic advances in either exploration methods or mineral processing be able to alter the pattern? Or is the pattern unalterably set by geochemical distribution? Most important, are metals characterized by what seems to be an anomaly, different in any way from metals for which low-grade or nonconventional sources already have come to be exploited, as the porphyry deposits have for copper. In sum, investigation of the lead-zinc anomaly represents a case study combining both physical and economic aspects that may open up a neglected area in evaluating mineral resource adequacy. WHAT IS THE LEALLZINC ANOMALY? There are two dimensions to evaluations of the potential of any mineral resource? The first involves the degree of certainty that we ascribe to the estimate: how much do we know about the size of the resource as a result of geological mapping, exploration, and mine development? This dimension is expressed by the terms measured, indicated, and inferred reserves (and, if you wish, 'undiscovered reserves'), all of which terms carry with them the implication of exploitability under current cost-price conditions. The other dimension to evaluations of a mineral resource involves the economic limits of the estimate: how will the size of the resource vary with different (usually more favorable) cost-price conditions? (This economic dimension should be understood broadly to include all factors bearing on the cost-price relationship. In this sense it subsumes technology because any resource is exploitable at some cost; the role of technology is to bring cost down.) The latter dimension is expressed in the terms potential or sub-marginal 'ore,' and is logically quite independent of the former. For example, we have relatively good measurements of the tonnage of manganese in low-grade deposits in this country, though they are too lean to be considered reserves; on the other hand, we are much less certain of our measurements of new lead and zinc deposits in Missouri, though there is no question but that there is a sizable reserve. Thus, it may be uncommon but is not a contradiction to talk of measured submarginal ore or inferred potential ore.

Jan 1, 1968

By AIME AIME

THE petroleum economics session," held on Wednesday morning, Feb. 20, 1929, presided over by Campbell Osborn, chairman, proved to be of un- usual interest and resulted in serious and constructive discussion of the papers presented. The first paper on the program, "Gasoline Economics and Refinery Operation," was by H. J. Struth, petroleum economist of the Gulf Publishing Co., Houston, Tex. While this paper was intended to cover the re- finery situation, it also presented the author's reasons for believing that the oil producer should give cognizance to gasoline demand as a most reliable barometer by which to parallel the production of crude petroleum. The discussion which followed brought out some interesting points in connection with the immediate outlook for the industry as a whole during the present year. Some advanced the opinion that, regardless of the out- come of proration efforts, the refiner is in a position to conduct his operations on a reasonably profitable basis, provided that he exercises control over them. This would mean running less crude and resorting to wider utilization of cracking to produce the gasoline demand. Thus, if the refiner uses diligent care in scheduling his still runs, the producer will be obliged to carry over a large stock of crude this year, unless he is able to keep production below the limits prescribed by the demand for gasoline.

Jan 1, 1929

By Reamy Joyce

CONDITIONS in underground mining are so variable that in approach-ing the problem of the economies effected by the use of pressure-treated mine ties and mine timbers, it is necessary to secure specific data for each mine. Facts must first be dug out to show the service life of untreated timber and the reason for its failure. Generally speaking, decay is the usual cause of failure, but in some mines mechanical destruction is an important factor. Occasionally the two causes combine to produce fail-ures, and it is difficult to determine positively which factor is responsible. In making comparisons, it is always necessary to start with the cost in place and for this reason there must be accurate information covering the labor cost of installation and the labor cost of renewals. When treated timber is used, it is necessary to know the specifications for the treating process, whether the timber was painted, dipped, treated open tank, or impregnated under pressure according to standard specifica-tions. It is also necessary to know the preservative used and the amount of the preservative that was retained by the timber after treatment. It is also well to know whether the timber was thoroughly air-seasoned before treatment or was green at the time it was treated. The kind of timber available, both untreated and treated, must be known and all of the factors listed above must be taken into consideration in the study of any problem.

Jan 1, 1939

By Robert F. Winkle

A detailed breakdown of mining costs, available to management on monthly and year-to-date bases, is mandatory for a controlled and efficient mining operation. A simple lump sum reporting of costs may indicate a profit or loss differential, but it does not allow an effective search for areas of possible cost reduction. Moreover, functional reporting is necessary on a timely basis so as to note trends of increasing costs In specific areas, which in turn allow possible preventive action by management. Definitive cost information helps to eliminate the tendency to overlook areas where cost Improvements can be made. A good cost control system points out salient operational weaknesses by: ( 1 ) allowing comparison of functional costs with similar costs of other mines and (2) pinpointing sudden increases over unit empirical costs within the organization. In general, the cost accounting structure is relatively uniform within large open pit mines, but surprisingly some systems will overlook the need for detailed breakout in comparatively high cost areas. In some other systems, unrelated costs will be lumped together, preventing careful analysis of cost accrual.

Jan 1, 1979

By Franklin J. Stermole

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

Jan 1, 1979

By Roderick K. Davey

Introduction in any business, it is essential that we select those alternatives which are not only technically feasible, but will be the most profitable to the business m terms of corporate objectives Some of the studies and activities requiring support of financial analysis to select the alternatives which most closely satisfy the management objectives and technical considerations are as follows 1 ) Cutoff grade determination. 2) Ore reserve estimation. 3) Production forecasts (long- and short-term) for an operating mine, development of a new mine, or expansion of an existing mine. 4) Evaluation of haulage alternatives. 5) Evaluation of equipment.

Jan 1, 1979