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By C. Nangolo

Mineral commodity prices comprise one of the key criteria in the selection of mining stocks. We contend that of the three principal elements of mineral commodity prices, spot price, forward price and long-term price, one has a greater impact on the share valuation processes used by investors. This research paper examines the extent to which each of these elements influences the valuation process. The intention is to provide investors in mining stocks with a greater understanding of how fluctuations of commodity prices over time affect the prices of the mining stocks they hold, or intend to sell or buy. Three mineral commodities, gold, silver, and copper, were used as case studies, since market data on these commodities is readily available in the public domain. Nine market indices covering all three mineral commodities were selected. These are based on clearly defined criteria with the intention of eliminating ambiguity and to test for correlation with the three sets of mineral commodity prices. Nine mining companies, which were not the primary drivers of the relevant indices employed in the study, were used to validate the results obtained from the indices in order to avoid duplication of the same correlation during cross-checking. Each commodity price was adjusted for operating costs. For each market index, an average operating cost was calculated from the companies comprising its basket, while each company?s annual operating costs were used for the stocks of the individual companies examined. The data was collected for the period January 2004 to October 2010. This period was further split up into three sub-periods to account for the Global Financial Crisis (GFC) period that started in mid-2008. We conclude that mining stock prices are correlated with mineral commodity prices, but with spot and forward prices exhibiting stronger correlations than long-term price. This finding should be useful for evaluation purposes. Where cash flow methodologies such as discounted cash flow or earnings per share are used to value ordinary shares and commodity prices are required to estimate future cash flows, the findings suggest that spot prices should be used as opposed to long-term prices. The work reported in this paper is part of a current MSc research study at the University of the Witwatersrand.

Jan 1, 2011

By S. A. Abdel Sabour

Strategic decisions in the mining industry are made under multiple technical and market uncertainties. Therefore, to reach the best possible decision, based on information available, it is necessary to integrate uncertainty about the input variables and model financial risk of the project?s merit measures. However, this provides few useful insights to decision-makers unless accompanied by modelling management responses to uncertainty resolutions. It is widely acknowledged that conventional decision-support methods based on static, no-change, discounted cash flow (DCF) techniques such as net present value (NPV) and internal rate of return (IRR) tend to provide inaccurate value estimates. This could mislead the strategic decision-making process and result in significant value losses. This paper aims to model financial risk related to uncertainty about market variables such as metal prices and foreign exchange rates. Other sources of risk that are related, for example, to geology and production costs are not considered in this work. The article outlines a flexible financial model that integrates uncertainty about market variables and management flexibility to react to uncertainty resolutions into mine project valuation using a real-options valuation technique based on Monte Carlo simulation. Significance of information generated from this simulation-based flexible valuation model to the strategic decision-making process is tested using an illustrative case study of a Canadian mining project. The project is a typical multi-metal, open pit mine that produces copper and gold. In this case, there are three uncertain market variables, which are: copper and gold prices and US$/CAN$ exchange rate. Financial valuations are carried out using both the conventional static DCF method and a flexible real-options model. In the flexible model, management flexibility to decide whether to go ahead with the next expansion or terminate production operations is integrated. Results show how the flexible financial model can enhance the decision-making process.

Jan 1, 2009

By C. M. G. Wortley

One of the major deliverables of the AMIRA P754 Project, which was sponsored by several major mining companies, was a code of practice and guidelines for metal accounting for the mining and metallurgical industry. These had the objective of improving the auditability and transparency of metal accounting from mine to product, thus assisting in good corporate governance. The overriding objective of mass measurement for metal accounting is to establish the mass of the particular material or component present at a specific time, or the mass flow of that component over a defined time period, to a defined accuracy suitable for metal balancing. As such, it is the first measurement in the chain that includes sampling, sample preparation and analysis, each of which introduces its own errors. Materials often contain moisture, the proportion of which must also be established in order to obtain the dry mass. They may also have to be measured as a volume or mass/mass flow of slurry, or in stockpiles or storage areas, in which case the relative density must be measured. Both the density and moisture measurement often introduce significant error. Whereas a great deal of effort has been directed at sampling, sample preparation and analysis to improve accuracy and establish the error, the same can seldom be said for the mass determination, including the moisture and density measurements. The possible major causes of error are highlighted and methods of reducing them discussed. Mass measurement can be classified into those measurements necessary for custody transfer and primary accounting of the input and output streams to a plant or operation, and measurements required for secondary accounting, or management control. The latter include intra company transfers and plant area performance, and those required for plant control only. This paper is concerned only with primary accounting measurements. The code and best practice state that the equipment should be certified (as sized) as is required for custody transfer. The most accurate and precise of the various possible methods is the static measurement of mass on a weighbridge, platform scale or a weigh bin. If static measurement is not possible, which is often the case for ore fed to a plant, possible alternatives are electromechanical conveyor belt weighers or in-motion weighing of rail trucks. In all cases the material must be adequately sampled to enable a representative moisture content to be determined to calculate the dry mass. Where material is flowing inside conduits, only certain types of the multiplicity of flow meters available may be used and, in the case of slurries, very few flow meters are suitable. As most flow meters measure volume or velocity, the density of the material must also be measured. The basic requirements in order to achieve satisfactory results for the mass, of the component of interest, are listed, as well as common problems and pitfalls encountered in practice. The measurement of the mass of stockpiles and in-plant stocks, often required for metal accounting, is often the largest source of error in metal balances. The reasons for this and methods for reducing and managing the effect are discussed.

Jan 1, 2009

By B.E. Hall

Maximizing shareholder value has become a common aim for mining companies. This paper discusses the results of a number of studies developing strategic mine plans, covering a wide range of commodities, styles of mineralization, mining methods, and processing facilities, for single and multiple deposits. It has become evident that traditional methods and conventional wisdom often do not in fact achieve these goals. Operating policies at many mines ensure that shareholder value is not maximized. Changing the overall strategy can provide significant value gains. Typically, the new optimal plan involves a significant increase in the cutoff grade, at least in the earlier years. An increase in the underground development rate or open cut stripping rate is often associated with this, at least in the short term, to establish the new strategy. Cost minimization is found to be counter-productive. Counter-intuitive plans are often found to be optimal. For example, optimal cutoffs for different parts of an underground mine may be significantly different, even if mineralisation and cost structures are similar. Sub-optimal strategies are also frequently found to have a significantly greater financial risk than optimal plans, which have been found in many cases to be relatively insensitive to changes in major value drivers, such as metal prices. This paper shows how identifying and then operating within the framework of an optimal strategic plan can have substantial benefits over being continually driven by short-term tactical issues.

Jan 1, 2009

By V. Léveillé

As new legislation drives metallurgical plants to lower SO2 emissions, plant managers face the challenge of keeping their costs under control. The Cansolv® SO2 Scrubbing System has been broadly adopted in the non-ferrous industry as a cost-effective solution for smelter operators to meet the new SO2 emissions targets. The Cansolv® SO2 Scrubbing System is an a mine-based regenerable process that selectively absorbs SO2 from a variety of gases, including dilute smelter gases, such as furnace and converter gases. The system produces a pure, water-saturated SO2 by-product stream, which can then be directed to the front end of a sulphuric acid plant for conversion to sulphuric acid. When deployed in a smelter complex, the Cansolv® SO2 Scrubbing System may also be used to process acid plant tail gas, allowing single absorption sulphuric acid plants to achieve emissions an order of magnitude lower than that of a double absorption acid plant with a lower capital investment. Depending on inlet gas temperature, SO2 emissions in the treated gas can be controlled to as low as 55mg/Nm3. This paper will describe some of the applications where customers have or are planning to use the Cansolv® SO2 Scrubbing System, as well as which features and cost advantages for the treatment of smelter gases were important in the technology choice.

Jan 1, 2009

By H. Moslemi

Metal sulphides are usually semiconductor and their electrical conductivity is low; therefore they are sources of electrons and promote electrochemical reactions. This phenomenon is of significant importance in sulphide flotation. The formation of a hydrophobic surface on the sulphide minerals is the result of various electrochemical reactions. Potential difference in the mineral-liquid interface plays an important role in the kinetics of the reactions, and consequently, on the flotation behaviour of sulphides. The value of the potential difference is influenced by different oxidation-reduction reactions at the interface area, and is measured by a two-electrode system in which an electrode is applied as reference electrode. In this study, we attempted to measure open-circuit potentials of pyrite, pyrrhotite, and steel electrodes with respect to the reference electrode. To verify the results, two reference electrodes, saturated calomel and gold, were used. Time-potential relations with respect to both reference electrodes show that the potential of both pyrite and pyrrhotite increases with time; however, this trend decreases for steel except when at pH 12. The results show a potential drop by an increase in pH value, except for steel, for which the opposite holds. This paper discusses galvanic interactions between minerals and grinding media in the grinding circuits, as well as among other minerals in the flotation processes.

Jan 1, 2012

By C G. Robinson, B. K. Loveday, J. C. Paynter

"A method of optimizing the design of a processing plant has been developed which minimizes capital and operating costs for average stripping ratios and ore characteristics. Models were developed to describe the operating characteristics and costs involved in various operations such as up-grading, leaching and solid-liquid separation.The options available in up-grading policy and the relation between the cut-off grade and the costs incurred subsequently in the treatment of the ore formed the basis of the optimization. To arrive at an optimum plant configuration and a set of operating parameters, the interrelation between grinding size, leaching temperature, leaching time, and various plant recycle options was investigated."

Jan 1, 2014

By M. Dworzanowski

The difference in the magnetic properties of minerals is the basis for magnetic separation. All minerals can be generally classified as ferromagnetic (strongly magnetic), paramagnetic (weakly magnetic) or diamagnetic (non-magnetic). Magnetic separation can be conducted dry or wet. The majority of the applications of wet magnetic separation in the mining industry are based on the wet drum magnetic separator. The wet drum magnetic separator has been in use for over 50 years and its design is based on a rotating drum installed inside a tank. Inside the drum are stationary, permanent magnets arranged in an arc to provide the magnetic field. These magnets can be of the ceramic ferrite type providing a low intensity magnetic field or of the rare earth type providing a high intensity magnetic field.

Jan 1, 2010

By Ronald J. Roman

All mining and milling complexes can, within limits, operate at a variety of production rates. Factors of economic importance that are affected by production rates are costs per unit production, recovery and product grade. Once the relationship between the production rate and cost is established, dynamic programming techniques can be used to define the optimum production schedule (that is, the production schedule that maximizes the present worth of the operation) for the life of the deposit. In general, assuming that the capacity and efficiency of the physical plant remain unchanged throughout the life of the deposit, the optimum production rate is not constant for the life of the deposit, but declines gradually as the deposit is being exhausted.

Jan 1, 2014

By Y. Zhang, F. Zhu, Y. Zhao, L. Dong, Y. Li

In order to obtain a more suitable separation medium for fine coal, in this paper a pulsed fluidised bed was used to measure the pressure fluctuation, density characteristics, bubble diameter and rising velocity of Geldart A and B particles in the bed by controlling the pulsation frequency and gas velocity, in order to study the fluidisation effect and two-phase distribution of the bed. The results indicated that with the increase of pulsation frequency, the breakthrough point on the fluidisation characteristic curve caused by particle adhesion disappeared, and there was an optimal frequency, which made the minimum fluidisation velocity of particles reach the minimum. In addition, the bubble rising velocity was also simulated. The relationship between them was established using a model, and the error was within 5%. This provides an effective way to predict the bubble velocity, study the distribution of bubble phase, and improve the stability of bed density. Keywords：Frequency, flow velocity, pressure fluctuation, bed density, bubble

Jan 1, 2020

By V. E. Cogho

Optimum Coal Mine comprises numerous defunct, active, and future mining sections. The mine is primarily a large opencast coal mine; however, underground mining activities will be increasing steadily over the next five years. Opencast and underground mining activities have a significant impact on surface and groundwater resources. To ensure that the mine will be able to continue with its mining operations in the catchment, the extent of this impact requires that substantial intervention and mitigation measures need to be implemented to ensure the environmental integrity and economic use of the catchment's water resources. In developing a sustainable long-term mine water management strategy, numerous scenarios had to be analysed. The various scenarios are a combination of water and land management activities. The main components of the mine's integrated water management strategy include: ? Management of water recharge by continual and appropriate rehabilitation of disturbed land ? Beneficial re-use of impacted mine water for coal plant process water and mining operations ? Reclamation and desalination of remaining excess impacted mine water to potable standard. From the mine's long-term water balance, it is evident that the continued implementation of numerous water management actions is required to mitigate the water resources impact in a sustainable manner. In addition, the installation of a water reclamation plant at Optimum Coal Mine (15Ml/day) is a key step for the mine to achieve a zero impact target.

Jan 1, 2012

By M. H. Tyeb, C. Banerjee, A. K. Majumder

The primary requirement from a hydrocyclone is the classification of the feed solid particles. Particle classification occurs inside a hydrocyclone by virtue of the relative radial distribution of the suspended particles, based on their size and specific gravity. The particle classification behaviour in a hydrocyclone is experimentally studied in this paper. The phenomenological features of the air core at different feed solid concentrations and the distribution of the solid concentrations in the hydrocyclone are also analysed by the theoretical study of flow features in a steady Rankine vortex. Semi-empirical models for predicting the hydrocyclone performance in terms of flow split ratio, and cut size have been developed using the background knowledge of convoluted hydrodynamics. In addition, to validate the classification performance of a smaller diameter hydrocyclone, the potential of the present model is extended for envisaging the same for larger diameter hydrocyclones. A comparison between the model predicted values and the measurement data shows a good match. Keywords: Hydrocyclone, classification, Rankine-vortex, air core, modelling

Jan 1, 2020

By J. Zwartendyk, A. Azis

"Every nation must decide how it should exploit its mineral resources so as to contribute most to its national objectives. It is argued that the present value of the future corporate income tax flow derived from mineral exploitation may serve as a useful indicator in moving toward a taxation policy that would contribute optimally toward the greatest public benefit.The future stream of corporate income taxes depends largely on the mineral endowment, consisting of deposits now being mined, known unmined deposits, and unknown deposits.Unknown deposits may be estimated by geological inference. Both known and unknown deposits can be categorized according to grade and size, and divided into economic and uneconomic deposits on the basis of certain prices, costs, rate of return and taxation levels.Computer simulations can be run of discounted cash flow models at various taxation levels to show the impact of taxation changes on future tax revenues."

Jan 1, 2014

By G. C. S. Burns

"A system has been developed to simulate the mining of the Mufulira orebody. The main output from the system is a picture-gram from which the start date and effective life of all proposed mining faces can be measured. This information provides schedule dates for the completion of major capital development projects and stope preparation activities.The orebody must be divided horizontally into main levels and vertically into blocks of equal interval. Ore reserves are defined by specifying the tonnage contained in each block and main level. Mining faces are defined by their co-ordinates, and may themselves be split into sublevels. The simulation maintains an echelon between contiguous sublevels. Other face parameters control the speed of mining, the availability and relative priority of the face.The required production from each crusher/shaft system is specified. The technique of simulating the mining process in order to achieve the required production is described."

Jan 1, 2014

By G. R. Marchant, B. K. Loveday

"A mathematical model has been developed for flotation circuit simulation. This model was designed to investigate the effect of varying the circulating loads and to determine whether an improvement in overall efficiency could be gained by a size separation prior to flotation.Model parameters were obtained by regression to plant data. Highly correlated parameters in the model were combined to reduce the number of parameters so that the need for excessive data gathering was eliminated. Mass balance smoothing was used to obtain a consistent data set for regression.The results of the simulation indicate that for the same grade of concentrate, an increase in copper recovery of 0.6 per cent may be Possible by increasing the circulating loads. The results of the simulation also indicated that recleaning of the plus 200-mesh material may be beneficiaL."

Jan 1, 2014

By C. O. Aksoy, G. G. U. Aksoy, A. Fisne, I. Alagoz, E. Kaya

Coal produced in underground mines is transported to the surface by means of conveyor belts throughout long roadways. The combustion of belts puts a large number of employees at great risk. Underground collieries differ from other underground mines -due to the combustible nature of the product. The most prevalent cause of belt fires in underground coal mine is spontaneous combustion due to oxidation of the coal, which also enables the conveyor belt to burn over time. In 2014, a belt fire in an underground coal mine in Manisa-Soma, Turkey caused 301 fatalities. A study has been conducted on this accident for approximately 3 years, consisting of combustion tests in a purpose-built research gallery, comparison of the test results with mine records of the accident, and CFD modelling of the mine environment. The intensity of the fire was sufficient to redirect the air flow underground, causin large amounts of toxic gases to fill almost the entire mine in approximately 15 minutes. It is recommended that CFD analysis be used in planning emergency action strategies in underground mines.

Dec 13, 2023

By A. J. Dickson, A. M. Starfield

This paper reviews the progress made to date in the development of computer models of heat and moisture transfer from rock surfaces to the ventilating air in deep-level mines. The application of these programs to ventilation planning and design is discussed.

Jan 1, 2014

By N. C. Joughin

A simplified economic model is derived for the financial return from a new gold mining project. The model is used to analyze the effects of changes in the mining rate, capital costs, working costs, value of the reef and the stoping width. The most effective avenues for improving the return from a new project are indicated. It is shown that those technological innovations which would improve the return significantly, and therefore make it possible to open more mines, are the use of smaller mines, means for improving the mining rate to capital costs ratio for smaller mines, planning and control of mines by computer simulation, an improved mine valuation procedure and means for mining at a decreased stope tramming width.

Jan 1, 2014

By Gordon Chunnett, Ron Sheets, David Grant

[Power-Point Presentation]

Jan 1, 2005

By N. C. Joughin

Potential for the mechanization of stoping in gold mines by N. C. JOUGHIN B.Sc. Eng., Ph.D. (Rand) (Member) The basic requirements for stoping machines are identified first by examination of the mining rates and productivities attained in conventional stoping, and then by examination of a series of problem areas associated with the shape of the reefs, rockbreaking, rockhandling, and the support and design of the machines. Some of the more important machines being developed are described briefly, and their principal features are compared with the basic requirements identified in the first part of the paper. An estimate of the potential demand for the different types of machines is given.

Jan 1, 1976