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By V. Tathavadkar

Worldwide TiO2is extracted from natural ilmenite, rutile, and anatase minerals via the sulphateand chloride processes. The sulphate process generates large volumes of less toxic wastes, whereas the chloride process, including the ilmenite-chloride process of DuPont, yields much lower volume of wastes, which are highly toxic and hazardous. The treatment and disposal of such hazardous chloride wastes is both expensive and difficult in terms of long-term monitoring. Besides the waste management and disposal, there is also a shortage of high-grade titanium dioxide minerals in nature, which consequently yields much larger tonnages of sulphate and chloride wastes. In the present investigation we report the results of an alternative titaniferous mineral beneficiation process based on soda ash roasting of minerals. Compared to the conventional processes for beneficiation of TiO2- ores, the alkali roasting of titaniferous offers several advantages including the zero process wastes. In the soda ash roasting process, the mineral is mixed with sodium carbonate and heated above 1023 K in air. The oxidative roasting of ores yields several complex alkali compounds, some of which produce a liquid mixture above 1123 K. In this paper, we have attempted to characterize the composition and physical chemistry of alkali-rich liquid phase. The phase equilibria in the Ti-(M:Fe)-Na-O system are evaluated and compared with the phases formed as a result of roasting reaction. The experimental results revealed that the composition of complex alkali liquid at the reaction interface plays an important role in determining the transport of O2-ions and decomposition of ilmenite. The roles of the crystal structure of mineral phases and their energetics are also emphasized in controlling their decomposition during alkali roasting. The presence of molten alkali in controlling the partitioning of water-soluble alkali salts and insoluble sodium titanate is also explained. Keywords: ilmenite, anatase, alkali roasting, phase equilibria.

Jan 1, 2004

By R. C. W. Webber

Mining up to depths of 5 000 m would be a world first and, accordingly, no previous experience in the determination of acceptable heat stress limits, criteria or indices is wholly applicable. However, some South African gold mines are already operating at depths beyond 3000 m and much of the knowledge gained in reaching and working at such depths will be helpful in making adequate provision for acceptable environmental control at the greater depths being contemplated. Accordingly, it is necessary to take cognisance of the industry?s experience in deep-level mining and of standards and regulations already established in South Africa and elsewhere in order to ensure acceptable working conditions and control standards, that compare favourably and defensibly with those in other mining industries. The local and international use of heat stress limits, criteria and indices were investigated as it was necessary to determine to what extent any other indices, limits or criteria would be applicable to South African deep mine conditions. In addition, it was necessary to establish whether there was a single heat stress index that could be used for South African ultra deep mining conditions. It was found that an appropriate combination of heat stress indices would be required in planning for and ultimately controlling thermal conditions in ultra-deep mining. The depths being contemplated and the concomitant potential heat hazard present too great a risk for reliance on a single environmental component of heat stress, such as wet-bulb temperature at present in common use locally. The study recommends that a heat stress index, preferably Air Cooling Power (ACP), be used to design an ultra deep mine?s ventilation system and that wet-bulb temperature be used to monitor and control the system once it is implemented.

Jan 1, 2003

By B. G. Tarasov

This paper proposes the further development of a recently identified shear rupture mechanism (fan mechanism) that elucidates a paradoxical feature of hard rocks ? the possibility of shear rupture propagation through a highly confined intact rock mass at shear stresses that can be significantly less than frictional strength. In the fan mechanism, failure is associated with consecutive creation of small slabs (known as ?domino blocks?) from the intact rock in the rupture tip, driven by a fan-shaped domino structure representing the rupture head. The fan head combines such unique features as extremely low shear resistance, self-sustaining stress intensification, and self-unbalancing conditions. Consequently, the failure process caused by the mechanism is inevitably spontaneous and violent. Physical and mathematical models explain unique and paradoxical features of the mechanism, which can be generated in primary ruptures and segmented faults. The fan mechanism provides a novel point of view for understanding the nature of spontaneous failure processes, including shear rupture rockbursts. The process explains, in particular, features of shear rupture rockbursts such as activation at great depths, generation of new shear ruptures in intact rock mass, nucleation of hypocentres at significant distances from the excavation, shear rupture development at low shear stresses, and abnormal rupture violence.

Jan 1, 2014

Visit to the Datsun Nissan Company's body pressing and assembly plant at Rosslyn, Pretoria, and the Claremont-Danville Tunnel on 27th February, 1970. The excursion arranged for the 27th February to the Datsun Nissan motor car assembly plant at Rosslyn, near Pretoria, in the morning and the Claremont-Danville tunnel in the afternoon was well supported by some 43 members. The visitors were met at the factory by Mr Rademeyer, the Industrial Relations Manager, and members of his staff and were taken to the artisan training centre for light refreshments. There is a well-equipped training section with an air-conditioned lecture hall; we were told that such training facilities were important because of the cosmopolitan nature of the artisan staff. The visitors were divided into small parties and taken to the tool die and jig-making section, which is perhaps the key department for a factory of this nature. There the many dies for the presses in the body pressing section, as well as the complicated jigs for body welding are made. The technique for making the castings for the dies is interesting. A polystyrene model of the casting is embedded in moulding sand. In a neighbouring foundry molten metal is pressed into the headers and burns away the polystyrene, which leaves no residue, and this exactly fills the space occupied by the model. This rough casting is then machined in large copying machines (costing as much as Rl80 000). An exact plastic model of the surface of the pressing required, set up in juxtaposition to this casting is traversed by a master stylus which operates the slave milling cutter, thereby machining the surface to close tolerances. The machined casting is cleaned up by hand and finally finished in large spotting machines, using a blue dye to show up high spots, to the fine degree of accuracy required. The body pressing section was next visited. There the large number of pressed parts which make up a vehicle body are pressed out of special deep drawing steel plate. Some of the largest presses were capable of applying a pressure of 1 200 tons and cost as much as Rl85 000 each. The visitors then followed through to the assembly section where jigs are used to hold together the many pressings, which are then spot welded into body frames. The frames go to an assembly line where they are finished to the stage for painting. The continuous crawl painting assembly line carries the frames through all the stages of prime coating with zinc phosphate sprayed on in a tunnel, followed by immersion of the lower parts in a priming bath, then drying and spray painting and baking in tunnels. The body frames, after painting, join another assembly line, where the doors, upholstery and many fittings are attached. After this stage the completed bodies are lowered onto and attached to the chassis units which are largely assembled from imported parts (engines, transmission units, etc.). From the end of the line the completed cars are driven off to the trial track and then pass through a tunnel with powerful water sprays to detect leaks in the body work. The proportion of locally made parts is just on 45 per cent. An interesting aspect of the assembly organization is that, of the 140 or 160 cars completed each day there may be included some of each of the Datsun model as well as some Renault and Alfa Romeo models models which are assembled by this company. The change from one model to another several times a day does not present any difficulty to the organization. Each section of the assembly plant 'buys' the units from the preceeding section and 'sells' to the succeeding section. This means that the responsibility of each section ends when the unit is sold to the next section. The cost of repairing any faults found subsequently is charged to the section where it is found, which puts a powerful emphasis on meticulous inspections between sections to safeguard their costs. After the tour the parties assembled at the lecture hall where a lavish cold buffet luncheon was provided by the company. After luncheon Mr A. R. C. Fowler, on behalf of the Institute, thanked the Managing Director, Mr W. J. Wilson and his staff for this most interesting and well organized visit. The party then left for the Claremont-Danville tunnel. The tunnel is being driven by General Mining Federale Kontrakteurs through the Daspoort Range, Pretoria, to link the suburbs of Danville, near Iscor, and Claremont, which at present can only be reached by a nine mile detour. It is estimated that some 6000 vehicles per day will use the tunnel. Before entering the tunnel a short talk was given by Mr Ross who is in charge of operations. He called on various officials and staff of the Consulting Engineering firm, Basil Read (Pty.) Ltd., to describe the tunnel and

By C. G. Anderson

"As demand for copper and precious metals continues to grow, the need to develop new supplies increases. In the imminent future, the new large global ore bodies are more complex, with enargite, tennantite and tetrahedrite as the abundant contained mineralogy. These resources also contain considerable gold and silver. As such, direct treatment by conventional smelting is prohibitive due to the potential environmental impacts and copper quality issues. This paper outlines the effective application and associated economics of industrially proven Alkaline Sulfide Leaching (ASL) hydrometallurgical technology to an enargite concentrate for selective removal and recovery of arsenic, antimony, gold and silver, leaving a clean high-grade copper concentrate. The fundamentals behind the technology are described, along with those of hydrometallurgical arsenic fixation and stabilization. Flowsheets and unit operations are elucidated, along with an in-depth economic analysis. INTRODUCTION Hydrometallurgical methods can be employed for treatment of gold-, arsenic-, antimony-, tin- and mercury-containing materials, concentrates and ores, as well as complex ones containing any number of metals (Conner & Anderson, 2013). The alkaline sulfide leaching (ASL) system is one of these. It is essentially a mixture of sodium sulfide and sodium hydroxide with other meta-stable alkaline species as required. This is a unique hydrometallurgical system beause it is a very selective lixiviant for the distinct leaching of tin, gold, antimony, arsenic, tellurium, silver and mercury (Anderson, 2000, 2001a, 2001b, 2002, 2003, 2012, 2014; Anderson & Twidwell, 2008a, 2008b, 2010; Anderson et al., 2004, 2005; Glazkov & Tseft, 1961; Gnatyshenko & Polyvyanni, 1961; Nadkarni et al., 1975; Nadkarni & Kusik, 1988; Polyvyanni, 1963). Worldwide, ASL technology has been employed industrially in the former CIS, China and the United States for the production of antimony (Anderson et al., 1992, 1994; Anderson & Krys, 1993; Holmes, 1944; Kaloc, 1967; Nordwick & Anderson, 1993; van Stein, 1971)."

Jan 1, 2015

By D. S. Richards

Computers have revolutionized the collection of data on modern mines. Never before has it been possible to collect data from all aspects of the mining value chain at rates now common. With this has come a new challenge. Deriving information from these copious amounts of data and disseminating it. This problem is being exacerbated by technical software systems, which use proprietary and binary data formats that severely inhibit the flow of data and information both across departments and the larger organization. Generally this had led to data duplication and data redundancy. The Gemcom Enterprise Mining System (GEMS) makes use of industry standard, secure and open databases for all its data objects. It manages multiple users accessing the same bits and bytes in the database, preventing data duplication and redundancy. Developed in the Microsoft BackOffice ® environment, GEMS is also able to leverage the enormous amount of tools available in this environment, whether it’s for e-mail notification, reporting or data capture. Microsoft’s® Active Server Pages are one of these tools. These are standards used to create dynamic and interactive web pages with links into databases and many other objects. The real example outlined in the text, demonstrates how a user anywhere in the world is able to login to a web page and run a query that returns a report with vector plots of performance for the user-selected time frame. As integration is tightened between the various components of the mining value chain, the importance and reliance on ASP pages will grow as the need for management information tools develops. Keywords: mines, computers, ASP, GEMS, integration, Microsoft, Management Information.

Jan 1, 2003

By S. Ndlovu, M. Malatse

"The Witwatersrand Basin is the heart of South Africa’a gold mining industry. The cluster of gold mines located in the Witwatersrand Basin generates a significant amount of mine tailings, which have adverse effects on the environment and ecological systems. In addition, disposal costs are very high. The exponential population growth in the Witwatersrand area has resulted in pressure on the reserves of traditional building materials. Quarrying for natural construction material is very expensive and damages the landscape. This work therefore examines the use of gold mine tailings in the production of bricks.Different mixing ratios of gold tailings, cement, and water were used. The resulting bricks were then cured in three different environments - sun dried, oven dried at 360°C, and cured in water for 24 hours. The bricks were then tested for unconfined compressive strength, water absorption, and weight loss. The results showed that the mixture with more cement than tailings had a compressive strength of approximately 530 kN/m2. It was also found that the best brick curing system was in a water environment. Bricks made from tailings cost more than conventional bricks because of the higher quantity of cement used, but the manufacturing process consumes less water. Overall, the results indicated that gold mine tailings have a high potential to substitute for the natural materials currently used in brickmaking.Paper written on project work carried out in partial fulfilment of BSc. Eng. (Metallurgyand Materials Sciences)"

Jan 1, 2015

By M. W. Hildyard

A blast was engineered close to a tunnel in a deep-level mine with the purpose of studying the wave interaction with the tunnel. Numerical modelling of seismic wave propagation was used in both the forward planning and the back-analysis of this experiment. This paper presents the forward analysis. A likely model for a propagating blast was investigated and developed. This model predicts the influence of the velocity of detonation of the blast and the rise-time of the blast on the radiation pattern, and hence on the expected positions of maximum velocity at the tunnel surface. An attempt was made to quantify the parameters of the blast model, using waveform data from two other blast experiments. The blast model caused particle velocities which were an order of magnitude lower than these measured velocities. Large values for blast pressure were required to match the amplitudes of the recorded velocities. An alternative ?effective? source with a similar mechanism but increased diameter was proposed to account for the higher velocities. It was established that distant velocities scale with the square of the borehole diameter. A calibration blast at the experimental site was also modelled. Agreement in the waveforms was not sufficient for conclusive statements to be made about the validity of the source model. However, the modelled waveforms show an encouraging correspondence with some measured waveforms. This gave confidence that the model could be used to examine wave propagation around the tunnel, and allowed a scaled source to be developed for forward analysis of the main experiment.

Jan 1, 2001

By B. Larsen, S. Z. Nascimento, K. Fidje, J. P. M. Amaro, H. Gran

Safe and good operation of Søderberg electrodes is dependent upon high quality electrode paste coupled with correct electrode operating procedures. Good electrode performance depends further on proper melting and densification of the electrode paste. The melted paste should form a dense and viscous layer that prevents gasses from the baking process to move upwards. Both paste cylinders/blocks and briquettes can be used, but the procedures may differ between the various types of paste products. For briquette columns the formation of the important viscous layer is obtained through melting and densification of the briquettes. By basic rheological studies of electrode paste and by laboratory tests of briquette beds at isothermal conditions we have achieved a better understanding of the melting process. The effects of temperature gradients, pressure and friction between the briquettes and the electrode casing have also been evaluated qualitatively in pilot scale experiment and in industrial scale tests. The paper shows that melting and densification starts at a considerable lower temperature than the pitch softening temperature. It is concluded that the formation of a briquette electrode column depends on parameters as temperature, briquette column pressure and the friction. Operating conditions influencing the above parameters should be defined and established for each specific furnace operation. Such factors are e.g., charging and slipping procedures, column heating and electrical conditions.

Jan 1, 2004

By L. du Preez, J. D. Steenkamp

This paper introduces the concept of clean steel production from a pyrometallurgist’s perspective to the broader metallurgical community. A simplistic overview of the steelmaking process from iron ore to car body manufacturing is followed by an introduction to the South African steel industry and the technologies that it utilizes. The process is illustrated by an overview of the flow sheet and technologies for the production of clean steel at Saldanha Steel, South Africa.

Jan 1, 2015

Virtual Reality (VR) simulations are excellent tools for training, education, simulation of abnormal and dangerous conditions in mines and solving complex problems. Although the concept of VR has been around for nearly half a century, it has taken recent advances in hardware and software to bring this technology to within the budgetary reach of ordinary users and researchers. VR is now successfully being used in the minerals industry for: data visualization, accident reconstructions, simulation applications, risk analysis, hazard awareness and training. The Institute of Sustainable Minerals Industry, Advanced Computer Graphics and Virtual Reality Research Group (SMI-VR) at the University of Queensland, established in late 2000, has been involved in developing VR applications for the minerals industry in conjunction with various research centres. This paper illustrates the benefits of using advanced computer graphics and VR techniques in the minerals industry with some examples of applications developed.

Jan 1, 2003

The AMIRA Code of Practice and Guidelines for Metal Accounting was developed in response to demand from a number of sponsor companies, including one major platinum producer. Since its publication in 2007, the Code has become widely accepted in the mining industry world-wide as a guide for best practice in metal accounting. With the changes in the structure of the platinum mining industry in South Africa over the last 10?15 years, in particular, the starting up of a number of small platinum producers who must have their concentrate smelted and the contained valuable metals refined by third parties, the need for metal accounting systems that are accurate and have an acceptable level of precision has become even more critical to the success of a platinum-producing operation. The current state of metal accounting in the industry is discussed, and possible areas for improved accounting and associated metallurgical efficiencies are identified.

Jan 1, 2013

By E. Machaka, A. Cornah

"Mineral resources are typically informed by multiple data sources of varying reliability throughout a mining project life cycle. Abundant data which are imprecise or biased or both (‘secondary data’) are often excluded from mineral resource estimations (the ‘base case’) under an intuitive, but usually untested, assumption that this data may reduce the estimation precision, bias the estimate, or both.This paper demonstrates that the assumption is often wasteful and realized only if the secondary data are naively integrated into the estimation. A number of specialized geostatistical tools are available to extract maximum value from secondary information which are imprecise or biased or both; this paper evaluates cokriging (CK), multicollocated cokriging (MCCK), and ordinary kriging with variance of measurement error (OKVME).Where abundant imprecise but unbiased secondary data are available, integration using OKVME is recommended. This re-appropriates kriging weights from less precise to more precise data locations, improving the estimation precision compared to the base case and to Ordinary Kriging (OK) of a pooled data-set. If abundant secondary data are biased and imprecise, integration through CK is recommended as the biased data are zero-sum weighted. CK consequently provides an unbiased estimate with some improvement in estimation precision compared to the base case."

Jan 1, 2015

By W. I. van Drunick

AngloGold Ashanti Metallurgy has recently been involved in the successful installation of intelligent, expert control systems on the milling circuits. The benefits of expert systems in these highly interactive circuits are obvious. Existing comminution tools, which have been developed and can now be incorporated into online control, include improved modelling techniques and understanding, robust and competent simulation methods, sampling techniques, and optimization methods. The minerals processing industry has seen the benefits of predominantly research-based centres turning their focus to commercial applications of comminution circuit modelling packages, which in turn can be utilized within expert control systems. Expert mill control has been successfully installed at AngloGold Ashanti South Africa?s Mponeng and Kopanang Gold Plants. Expert control has also been installed at AngloGold Ashanti?s West African Sadiola Mine operation. The implementation of the systems has produced a number of positive outcomes. Plant surveys usually result in the identification of sub-optimal areas, and the control philosophy is then configured to ensure that these areas (along with the entire circuit) are optimized and maintained. Outdated PID loops have generally resulted in oscillatory control with large amplitude deviations from set-point. Significant improvements in SAR Metallurgy operations have been realized, firstly through achieving stability in the load and cyclone control, and secondly through online identification and implementation of optimized set-point conditions for mill mass, discharge density, etc. Soft sensors are configured to accurately estimate parameters that were historically not measurable, viz. breakage rate, mill load condition, onlinekWh/t-75 microns, mill discharge density and cyclone overflow grading. The Mponeng Plant system achieved circuit stability and improved overall grind. The Plant was able to pay back the control installation after 3 months, based on the additional recovery obtained from the finer grind. The system at Kopanang Plant has also resulted in enhanced plant recovery as a result of a finer grind and a lower residue gold content. The payback for this system was calculated at approximately 6 months. AngloGold Ashanti Metallurgy is currently expanding the installation of expert control to its other operations. It is also evaluating the performance of various suppliers of advanced control systems.

Jan 1, 2005

Models are used in engineering to reproduce reality as faithfully as possible so that the expected response of a system for given actions or inputs can be determined. In the field of rock engineering, both empirically based and numerical models are widely used to determine the likely response of the rock surrounding excavations. Many of the empirical models are developed from statistical analysis of case histories or from direct observation; however, empirical models are limited because they should be used only within the range of conditions of the observational database. Synergy exists between empirical and numerical models, because empirical models can be used to calibrate and validate numerical models. The empirical approach can benefit from the capability of numerical models to investigate specific mechanisms, which would not be possible using observations alone. Two cases are presented in which the synergy between empirical and numerical models is demonstrated. The first case examines the analysis of discontinuity effects on the strength of slender pillars in limestone mines, and the second case evaluates the effects of stress orientation on coal mine entry stability. It is concluded that numerical model calibration and verification comprises an important first stage in the successful application of models in rock engineering design. Application of numerical models allows mechanisms and interactions of various parameters to be analysed, greatly improving the understanding of the system. The improved understanding can be used to extend the application of empirical design methods, resulting in improved safety and efficiency of rock engineering designs.

Jan 1, 2014

By S. E. Olsen, T. Færden, G. Tranell, T. Lindstad, J. Lubetsky

The authors are lead authors for chapter 4.3 ?Emissions from Ferroalloy Production? in ?2006 IPCC Guide-lines for National Greenhouse Gas Inventories, Volume 3?. The paper discusses the methods to calculate and report emissions from the production of ferrosilicon, silicon-metal, ferromanganese, silicomanganese and ferrochromium alloys, as well as the basis for the methods and choice of emission factors. CO2 is the main greenhouse gas emission from ferroalloy production, accounting for about 95 % of the total CO2-equivalents. The most accurate method of determining emissions is to base the calculations on reported amounts and analyses of reducing agents and carbonate ores used in the process. If analyses are not available, typical CO2 emission factors for the different reducing agents are recommended. If neither reliable amounts nor analyses of all reducing agents are known, default generic CO2 emission factors for the type of ferroalloy multiplied with amount produced, can be used. The CO2 produced from bio-carbon (charcoal and wood chips) should be reported but will not be accounted for in national emissions. If any bio-carbon is used, the default generic CO2 emission factors cannot be applied. CH4 accounts for less than 1 % of the total emission of CO2-equivalents. Default emissions factors for CH4 are given for the production in open or semi-closed furnaces of silicon-metal and ferrosilicon. In the production of FeMn, SiMn and FeCr in closed furnaces the gas containing CO,CO2 and volatiles can be combusted in boilers and N2O may be formed. While reporting is not required, IPCC Guidelines recommend that the N2O-content in the off-gas is measured.

Jan 1, 2007

By J. Björkvall, S. Ångström, L. Kallin

In this paper results from industrial trials of CaC2 injection during stainless steel production in an electric arc furnace at Sandvik Steel is presented. The main purpose of the investigation was to analyse the effect of the injection on slag foaming and final chromium oxide concentration in slag. The results show that both an increase in slag foaming and a decrease of the final chromium oxide could be obtained during the charges with CaC2injection. On the basis of the results, the economical requirements are also discussed. Both the technical and economical requirements could be achieved for steels alloyed with Mo. In order to secure the economical requirements for all steel grades of interest, the injection technology must be further developed. It would also be important to utilize the positive effect of the slag foaming on the electric energy consumption. The work has been performed as a part of MEFOS frame research programme with participants from Sandvik Steel, AKZO Nobel and Avesta Polarit. Keywords: stainless steel, EAF, slag foaming, injection, CaC2

Jan 1, 2004

By A. S. Macfarlane

The South African Institute of Mining and Metallurgy was approached by the Australian Institute of Mining and Metallurgy to present a paper on the current practice in terms of the valuation of mineral projects and properties, given the development of a Code for the Valuation of Mineral Properties, developed in Australia (the VALMIN Code), and a similar Code in Canada (the CIMVal Code).This paper is the result of research and investigation into the matter, in terms of the reporting of Mineral Resources and Reserves, financial reporting practice, the Listing Rules of the Johannesburg Securities Exchange, and various practices in valuation. The paper establishes that a strong linkage has already been established between the SAMREC Code for the reporting of Mineral Resources and Reserves and the Listing Rules, and that, for completeness, a Code for Valuation needs to be developed. This Code will be similar to its international counterparts, with the necessary inclusions which are relevant to South Africa, and will provide guidelines and definitions on matters such as transparency, materiality and competency in valuation. It proposes that a multi-stakeholder steering committee be established under the auspices of the SAIMM, to deliberate and design a process for establishing such a Code.

Jan 1, 2002

By Braam Blom

PK2 Ventilation shaft is part of Paardekraal No 2 twin shaft system that is being developed to replace depleting Merensky reef production at Paardekraal shaft complex. The sinking team at this shaft faced considerable challenge of improving the total sinking cycle in order to be able to deliver the fully equipped shaft on time and on schedule. The cladding support cycle was identified as the tedious and time consuming activity in the overall shaft sinking operation. Reduction in the time required for handling and setting up the support installation equipment, and the time required for subsequent installation of the necessary support has a direct impact on the overall cycle time, and consequently the overall productivity and efficiency of the sinking operation. This reduction in support cycle was achieved by making use of machine carousel. The objective of this paper is to describe the support methodology that was used during the ventilation shaft sinking and the use of the machine carousel to reduce the cladding support cycle. The machine carousel replaces the traditional use of machine kibble in conventional vertical shaft sinking and has been designed specifically for installation of sidewall support at the shaft bottom during the sinking process.

Jan 1, 2009

By C. Hutton

"SynopsisThe last commodities supercycle (2003 to 2011) was characterized by a belief in volume at any cost, where absolute output was deliberately prioritized over productivity considerations. This practice fuelled overoptimistic forecasting and planning, which in turn contributed to the economic crisis that followed. The sudden collapse of commodity prices has resulted in mining companies scrambling to find the right balance between optimizing current operations and preserving sufficient flexibility to grasp future opportunities. The runaway costs of building and operating mines have almost squeezed out profit margins, while lower ore grades are inflating production costs. Mining companies therefore need to look at the business with fresh eyes, and develop strategies to attract equity capital as traditional approaches are simply not working anymore. This is especially so in the context of a dwindling investor base that continues to demand greater returns, despite a significantly lower appetite for risk. This paper revisits the micro-economic concepts and demonstrates how pressure from shareholders to prioritize output contributed to spiralling costs and value destruction. Practical techniques are described to model cost curves to optimize a Mineral Resource endowment and address the need to rightbalance a business and preserve agility.IntroductionHenry Lazenby (2014) for the Mining Weekly writes, ‘Bruised and battered, the global mining industry today is undergoing a sea change. Practices and policies that might have worked wonders in the past are not as relevant today, and new approaches to running profitable mining operations need to be found.’ One significant practice the mining industry had during the last commodities supercycle (2003 to 2011) was chasing volume at any cost; absolute output was deliberately prioritized over productivity considerations (Goldsmith, 2013). Lazenby contends that in the face of falling and volatile commodity prices, many mining majors ‘across all commodity groups are currently grappling with sagging profits and low company valuations. This is often regarded as the result of the were in pursuit of growing their output at all costs in a high commodity price environment.’ Lee Hodgkinson, KPMG’s Canadian mining industry leader and quoted by Lazenby, says that ‘mining companies are now trying to find the right balance between optimizing current operations and preserving their agility to grasp future opportunities. The runaway costs of building and operating mines have almost squeezed out profit margins [whilst] lower grades of ore are inflating production costs. Mining companies need to look at the business with fresh eyes, and develop strategies to attract equity capital as it seems clear that some of the traditional approaches to the mining business are simply not working anymore."

Jan 1, 2015