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By C Tapia Cortez, C Sammut, S Saydam, J Coulton

‘Like every other commodity, the value of the metals is subject to variation’ (Ricardo, 1817). Mineral commodity price uncertainties have always been a significant issue in mining business due to the close relation between global economic conditions and commodity prices, which commonly generates significant and unexpected price fluctuations. Price forecasts have been driven by economic theory, which states that in the long-run market will be balanced and that prices tend to the marginal cost of production. However, this theory has been misunderstood in the mining industry and future prices through time, in real terms, are assumed to be unchanged. This is unrealistic due to regardless of the cycling nature of economy and the omission of uncertainties. Furthermore, using historical data in traditional price forecast approaches does not guarantee realistic predictions as past events will not necessarily be repeated at the same intervals and with the same intensity. Mining, finance and economic sectors have made significant research efforts to predict prices and control uncertainties through classic linear, Gaussian and probabilistic simulation approaches. However, by definition, uncertainties cannot be measured or accurately modelled. Uncertainties can be identified to measure and manage the associated risks; therefore, uncertainties in mining projects have been historically misinterpreted, erroneously measured and poorly controlled. It is widely known that supply and demand functions drive market prices. While technological development noticeably influences supply, demand is strongly driven by psychological factors, mainly related to customer preferences and lifestyle expectations. Thus, human behaviour is one, or if not, the most important variable to determine commodity prices in a competitive market. During the last decades, alternative methodologies have been used to study uncertainties in human, environmental and market behaviours. Chaos theory, fractals, artificial intelligence and econophysics have been widely and successfully used to investigate complex dynamic systems to address uncertainties over time in the fields of neurosciences, meteorology, aviation and market trading. The application of these techniques in the market suggests a more realistic approach to the business environment. Through the combination of the methodologies above a novel long-run price uncertainties simulation approach that emphasise the differences between risks and uncertainties is proposed in this paper. CITATION:Tapia Cortez, C, Saydam, S, Coulton, J and Sammut, C, 2015. Copper price uncertainties – chaos theory to manage risks in mining projects, in Proceedings Third International Future Mining Conference, pp 261–272 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 4, 2015

THOSE who dabble in mining are no exception to the general rule that persons who know a little of a subject are apt to think that they know all about it. Some colour may be lent to the belief that anyone may succeed in mining when we hear stories ofsuccessful diggers and others who have accidentally dropped on to something good through no foresight on their part; but we seldom hear the contra account of the far larger number who fail. Those who go more thoroughly into the subject, and take up mining as a profession, know very well that it is not one that can be carried out successfully by rule of thumb, but when they point this out to the public they are credited with trying to make it a closed profession; and outsiders are for ever trying to find out the "trade secrets," at the same time spurning the main one, which is hard study, experience, and the ability to apply their knowledge. The average mining man is not rich. When he amasses a fortune it is generally through speculation rather than professional work, thought no doubt his technical knowledge may have assisted...

Jan 1, 1910

By G M. Mudd

The growing popularity of platinum and platinum group metals (or PGMs, including palladium, rhodium and others) for a wide range of applications leads to some interesting issues for mining and sustainability. The uses for PGMs includes catalytic converters for air pollution control in vehicles, growing jewellery use, catalysts for various purposes (especially petroleum and chemicals processing), hydrogen fuel cells and many others. Given the growing importance of most of these PGM uses in more sustainable technologies or in making industrial processes more efficient, it is critical to understand the complex sustainability issues which surround platinum and PGMs. At present, South Africa is the dominant PGMs producer and holds about 88 per cent of estimated global resources, with important but relatively minor production and resources in Zimbabwe, Russia, Canada and the United States. Given the concentrated location of PGM resources, what are the likely trends in PGM mining with respect to environmental sustainability? That is, what are the costs in terms of energy, pollution, greenhouse gas emissions, water, land use impacts, social impacts, economic aspects associated with this globally important industry? This paper compiles and analyses a range of data on platinum-PGM mining, focusing primarily on South Africa. It synthesises a unique combination of data which relates typical production aspects such as ore grade and scale with sustainability aspects such as greenhouse, energy and water costs. The findings are critical in understanding the debate about the increasing environmental and social costs of some materials and technologies which are considered crucial for sustainable industries based on PGMs. Overall, the paper represents a valuable insight into the platinum-PGM sector, providing a range of useful data for understanding the environmental sustainability of this particular group of precious metals.

Jan 1, 2009

The discovery since 1990 of four major orebodies in the Mt Isa Inlier - Century Zn-Pb, Osborne Cu-Au, Cannington Pb-Zn and Ernest Henry Cu-Au - only serves to enhance the already high stature of the Inlier in world mining importance. Currently the known mineral resources of the Inlier represent about 11 per cent of the world's Pb-Zn resources, five per cent of the world's Ag resources, and one per cent of the world's Cu resources. More can be expected to be added to these impressive figures given that two-thirds of the Inlier remains obscured by younger cover. Individually, projects such as Century and Cannington may ultimately achieve `world's best' status; Century's proposed production of 450 000 tpa of Zn metal would rank it close to number one with Cominco's expanded Red Dog project in Alaska. Cannington, with projected production of 660 tpa Ag, could become the world's biggest producer of silver. For comparison, Mt Isa produced 170 000 t of zinc metal and 335 t of silver in 1995. The apparent physical diversity of deposits in the Mt Isa Inlier is matched by a great diversity of opinion as to their origins. Because Ernest Henry is hosted by `porphyries', it is described by some as a porphyry copper deposit, despite mineralisation age possibly post-dating volcanic age by 200 Ma. Cannington Pb-Zn could be a Broken Hill-type (BHT) exhalitive deposit, or a late epigenetic replacement `regional skarn'. Mt Isa - Hilton Pb-Zn deposits appear to have experienced all deformational events and he syn-diagenetic in origin, or may have experienced little of the above and be epigenetic replacement deposits formed late in the major Isan orogeny, some 150 Ma after deposition.

Jan 1, 1996

Total mechanisation in the Western district of New South Wales is quite a recent addition to productive methods in that State, for it was only in 1940 that the first colliery was equipped for this method of winning coal. Now almost all mines either are totally mechanised or are planning to get their coal by these means.This marked change in recent years is explained by the salient features of the industry's history. Collieries in New South Wales had generally been subjected to low selling prices forced on them by over-production and severe competition. Little money was available out of profits to purchase machinery, and returns on capital were so poor that inducement to invest money in the industry was nonexistent.The second world war brought price fixing at the already low prices. It was not until the post-war period that there has been any inducement to mechanise.Much credit for mechanisation can be given to the Joint Coal Board, a government body formed in 1948. Pursuing a broad plan for the rejuvenation of the industry, this Board, purchased large quantities of machinery for use in, mines under hire-purchase agreement. These agreements encouraged machine mining, and this fact, together with the ensuing production economies, has improved the financial position of the industry.The Board has also been instrumental in the granting of increases in the fixed price of coal, so that the industry has been given an even greater boost in the direction of mechanisation.

Jan 1, 1954

This Institute, by nature of its charter, draws on various persons in the mining and metallurgical world of Australasia for its President from year to year, and consequently when the presidential address is given by one of these people the topic. which they generally select is a topic to which they are accustomed and on which they are able to speak with authority.As most of you know, my prime object in life has been concerned with steelmaking, so tonight you can steel yourself to the thought that you are going to be spoken to about steelmaking.Even if that were not the case, and were I not particularly interested in steelmaking, I think it would be appropriate to look at steelmaking in a broad sense on a basis of pure metallurgical interest, because the steel industry is going through as big a revolution today as it went through something over one hundred years ago when Bessemer made a theory become a fact.Bessemer, and as the Americans prefer to think Kelly, separately conceived the idea of blowing cold air through molten pig iron, and, contrary to the then general belief, this did not result in cooling of the metal but succeeded rather in heating it, and in burning out of the rather crude pig iron the impurities which prevented it from becoming a ductile metal.For many years before this, steel had been made in a very small painstaking way by what was known as the crucible process. Benjamin Huntsman is credited with having developed the crucible steel making process to a stage where it could make a reliable and trustworthy product, but he...

Jan 1, 1961

Before presenting this address I desire to express my appreciation of the honour which has been conferred on me by my election as iPresident of The Australasian Institute of Mining and Metallurgy. At this stage it might not be out of place to recall that Broken Hill was the birthplace of The Australasian Institute of Mining and Metallurgy, originally formed as the Australasian Institute of Mining Engineers in 1893.In selecting for my address the topic of "The Broken Hill Mining Industry and its Contribution to the Economy of Australia" I realise it is impossible to cover fully every aspect of the nation's economy which owes all or part of its origin to the Broken Hill field. Nevertheless, I feel that some attempt should be made to give credit to the Broken Hill mining industry for its part in the progress which Australia has made over the past seventy years.. If we care to reflect for a moment it soon becomes apparent that, not only is the Broken Hill mining industry an important producer of base metals for domestic and overseas consumption, but its profits have provided the means whereby many of Australia's leading secondary industries have been established or built up. Examples which come to mind are the founding of the iron and steel industry by the Broken Hill Proprietary Company; the establishment of plants at Port Pirie in South Australia, and at Risdon in Tasmania, for the production of metallic lead and zinc; and also at Port Kembla for the smelting of copper ores. From profits derived from operations at Broken Hill, capital has also been provided to assist other new essential...

Jan 1, 1956

To form a true picture of the early history of Queensland, we must think of white settlement advancing like an incoming tide, wave by wave; each wave lapping ahead a little further than the last. The credit for opening up the country belongs to a large number of pioneers, each of whom pushed out just a little further than his predecessors.Contrary to what one might expect, Rockhampton district was settled by overlanders from the south and not from the ocean side. When the Archers, the pioneers of the Rockhampton district, reached Gracemere in 1853, settlement had already made its way down the valley of the Dawson River; for it was from Leith Hay's station at Rannes (a few miles below Mount Morgan) that the Archers advanced northward into the unknown, to find the river that the explorer, Ludwig Leichhardt, had told them must enter the sea somewhere near the Tropic of Capricorn.The Archers travelled northward from Rannes up the valley of the Dee, coming out on the edge of the Razorback Range not very far from the point at which the Dawson Valley Highway drops over into Poison Creek. (Their diary records the bearings from a lookout point to various peaks around Rockhampton, and to-day, by plotting back from these peaks, we can determine the exact spot at which they descended on to the Fitzroy Flats.) We can be certain, then, that they must have been the first white men to set eyes on Mount Morgan; though to them it would have seemed to be nothing more than an insignificant hill...

Jan 1, 1939

A key driver to the success of a tunnelling project (the project) is the management of hydrogeological risk. The hydrogeological risk, if not managed, may cause significant impacts on the overall performance of the project. Impacts may include groundwater quality impairment due to contaminant transport and acid drainage from disturbed geology to groundwater, and groundwater lowering. The groundwater lowering and quality impairment may cause tunnel failure, with consequences such as injury to humans, as well as reduced property and environmental values, potentially costing millions of dollars to sponsors of the project. Depending on the nature of the contaminants and level of hydraulic connection of bedrock fracture along the length of tunnel, the contaminant transport may reduce structural strength of the tunnel due to corrosive action of contaminants such as acid drainage. The groundwater lowering can lead to varying degrees of ground settlement, posing threat of tunnel collapse. The management of hydrogeological risk includes:detection of potential pathways for contaminants into and around the tunnel,identification of factors responsible for the lowering of groundwater, and development of strategic measures to control groundwater lowering and contaminant transport. The paper presents an in-house hydrogeological risk management model named Vedanta-THRM (tunnel hydrogeological risk management). The model uses Risk Management Standard AS/NZS 4360:2004 (Standards Australia, 2004), Pressure State Response framework developed by Organisation of Economic Cooperation and Development, and Interaction Matrices. The Vedanta-THRM identifies important characteristics, processes and events of potential hydrogeological risk and develops control measures for managing hydrogeological risk throughout the life cycle of the project. The Vedanta-THRM was applied for a project in the early stages of planning and found to be useful in assessing, evaluating and reducing the hydrogeological risk in a managed approach that potentially increased the performance of the project. The application results also provided management options for use by project sponsors and insurance industry, which included tunnel risk financing options and options for equity investors to choose among various returns under different tunnel credit ratings.

Jan 1, 2008

The mining industry continues to be a major driver of the Australian economy generating over A$130 billion in export earnings in 2008/2009. However, the industry has been cited as a significant contributor to green house gas emissions. Australia's proposed carbon trading scheme, the Carbon Pollution Reduction Scheme (CPRS) will financially impact on mining operations; this calls for a holistic planning approach for mining operations taking into account the impact of the emissions trading scheme. Since carbon trading is a new area of study, particularly within Australia, the quantitative effect of the CPRS on the mining industry is uncertain and current mine planning practices do not directly consider emissions. This paper presents results of the study into the impact of the CPRS on a hypothetical large scale open pit operation, using a spreadsheet model based on linear programming and simulation. By varying the production rates, life of mine (LOM), carbon price and ore grades among other variables several scenarios were simulated to determine the impact of emissions trading scheme on the net present value of the project. This study found that the adoption of the proposed Carbon Pollution Reduction Scheme could impact mining operations in Australia by a three per cent to six per cent reduction in net present value, for carbon credit costs of $25/t to $50/t respectively. While the six per cent reduction in net present value for a mining operation is significant, rising fuel prices have had a similar effect in recent years. The most energy-intensive processes are the milling circuit and the flotation concentrator circuit. These processes are jointly responsible for up to 60 per cent of the total emissions, depending on the production rate and the level of offshore processing conducted. Clearly, the introduction of the CPRS makes it is imperative for mining companies to assess the impact of carbon emissions on a mining project during mine planning.

Dec 6, 2010

The commercial development of the shallow (2200 ft2 400 ft) Windalia sand reservoir at Barrow Island provided the opportunity to conduct an intensive drilling programme using equipment and techniques designed for optimum performance.During the initial exploratory and reservoir delineation phase, 12 specific Windalia test wells were drilled using drilling equipment with an optimum depth range of 6QOO ft - 8000 ft and a 9 5/8 in by 7 in. casing programme was employed. The average time from commencement of move-in to rig release exclusive of coring for five representative wells was 187 hr during this phase.Development drilling commenced December 1966 with one rig, with the second in operation January 1967.As of January 1 1968, 168 development wells had been completed. The two rigs employed are drive-in units equipped with a telescoping .gelf raising doubles mast.Optimum depth range with 4 1/2 in. drill pipe is 2500-4000 ft. Casing programme is 8 5/8 in. by 5 1/2 in. Efficient performance was achieved immediately. The average time from commencement of move-in to rig release for 15 wells drilled early in the development programme was 99 hr.By application of experience and further modification of techniques, performance was improved to an average time of 72 hr per well for 15 wells recently completed.The major drilling problem on Barrow Island is surface hole drilling due to the very hard surface limestone combined with complete loss of circulation at sea level.In this operation, significant improvements have been effected. During the exploratory phase drilling, 12 1/4 in hole to set 9 5/8 in. casing, average penetration rate was 23 ft/hr. At the commencement of the development programme penetration rate, drilling 10 5/8 in. hole to set 8 5/8 in. casing, was 28 ft/hr for the 15 early wells considered, improving to 55 ft/hr for the 15 recent wells considered.This programme is a team effort and much credit must be given to the enthusiastic co-operation of the two drilling contractors.The current field record is 2 days 4 hr with a 4 1/2 hr move including the drilling of mousehole and rathole.

Jan 1, 1968

By H W. Wu, D Humphreys

The structure of a comprehensive research project into mine fires study applying the Ventgraph mine fire simulation software, preplanning of escape scenarios and general interaction with rescue responses is outlined. The project has Australian Coal Association Research Program (ACARP) funding and also relies on substantial mining company site support. This practical input from mine operators is essential and allows the approach to be introduced in the most creditable way. The effort is built around the introduction of fire simulation computer software to the Australian mining industry and the consequent modelling of fire scenarios in selected different mine layouts. Application of the simulation software package to the changing mine layouts requires experience to achieve realistic outcomes. Most Australian mines of size currently use a ventilation network simulation program. Under the project a small subroutine has been written to transfer the input data from the existing mine ventilation network simulation program to æVentgraphÆ. This has been tested successfully. To understand fire simulation behaviour on the mine ventilation system, it is necessary to understood the possible effects of mine fires on various mine ventilation systems correctly first. Case studies demonstrating the possible effects of fires on some typical Australian coal mine ventilation circuits have been examined. The situation in which there is some gas make at the face and effects with fire have also been developed to emphasise how unstable and dangerous situations may arise. The primary objective of the part of the study described in this paper is to use mine fire simulation software to gain better understanding of how spontaneous combustion initiated fires can interact with the complex ventilation behaviour underground during a substantial fire. It focuses on the simulation of spontaneous combustion sourced heatings that develop into open fires. Further, it examines ventilation behaviour effects of spontaneous combustion initiated pillar fires and examines the difficulties these can be present if a ventilation reversal occurs. It also briefly examines simulation of use of the inertisation to assist in mine recovery. Mine fires are recognised across the world as a major hazard issue. New approaches allowing improvement in understanding their consequences have been developed as an aid in handling this complex area.

Jan 1, 2005