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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 H. D. Mtegha

The Southern African Development Community (SADC) aims to harmonize mineral policies and regulatory regimes in the minerals sector. This paper provides a review of the progress made towards harmonization of mineral regimes in the region. It singles out only the mining fiscal environment, as this is normally one of the key issues of interest to potential investors as well as the host state. Indications are that the region is slowly progressing towards a more harmonized approach, and there is evidence that the ?race to the bottom? has been prevented, which is the basis for an integrated mineral sector that the region aspires to.

Jan 1, 2011

The proper understanding of the functioning of ground support under dynamic loading and the current approaches to designing of dynamic support are plagued by a great deal of uncertainty and lack of knowledge. This applies equally to the understanding of the support capacity as well as the demand placed onto the support due to dynamic loading. This lack of understanding currently leads to a case of design indeterminacy. This paper does not aim to solve this problem of design indeterminacy but to explore some of the issues that need consideration to obtain a better understanding of the dynamic demand on ground support systems. Keywords ground support, dynamic loading.

Dec 1, 2013

The peak in Sulphur price late 2008 caused again intensified investigation into the decomposition of sulphates and spend acid. One option is the recycling of sulphur from spend acid, which already started more than 40 years ago in the field of spend acid from organic processes in refineries and acrylic glass manufacturing. Since this acid couldn't be neutralized and discarded due to high organic contents, another source of SO2 to produce sulfuric acid is the decomposition of metal sulfates. The decomposition of metal sulfates was investigated at the next peak in Sulphur price in the 80?s. The first major scale pilot tests and studies of gypsum decomposition were carried out for clients in Florida. The decomposition of gypsum was quite often mainly influenced by the strategic decision of some countries to get own and independent acid production. In other cases the industry doesn?t have enough space to dump the gypsum. Therefore the company was also forced to convert the gypsum into ?saleable? products to avoid these residues. Other projects were made for the recycling of iron-sulfates from the pigment industry. The motivations for these projects were not only given by acid price. For the German pigment industry it was no longer permitted in the 80?s to dump the iron sulphate residues into the sea. These regulations forced the industry to develop new technology, which allows converting of the FeSO4-residues into iron oxide and acid. Therefore economical and mainly environmental factors influenced the decision of the companies to develop and to build these plants. Beside the above mention iron- and calcium-sulphates many other process exist, which produce metal sulphates as an intermediate product. These cases are not forced by environmental or strategic factors. In cases like Ni, Co or Mn-decomposition the main product of the plant is treated in the decomposition plant and later on used as ferrous-alloys. These final products are higher in price compared to e.g. CaO, which exclude the high-energy consumption for the endothermic chemical decomposition reaction. The reaction of SO2 generation based on acid or sulfate decomposition takes place in the range of 1000°C. The energy demand of the endothermic reaction is considerable and leads due to the high fuel-combustion off-gas stream to a diluted SO2 gas. Energy prices are usually increasing at the same time like sulphur. Sulphuric Acid based on decomposition is therefore more expensive than as acid based on sulphur combustion. The paper describes fluid bed technology and possible process concepts for decomposition plants. Additionally the thermodynamic background of the decomposition process and the main influence factors are provided to receive a better understanding of this technology.

Jan 1, 2009

By M. Kannenberg

When coal properties are estimated geostatistically for mine planning in the hardcoal industry, there is one important supposition which influences the reliability of prediction of economically profitable parts of the deposit. This is the fact that activities in hardcoal exploration and mine planning are characterized by distinct levels of information and knowledge upon which decisions of economic import must be based, for example, whether exploration should proceed or not, or which methods and strategies should be used to maximize search efficiency. To get more reliable results for mine planning, in particular, advanced kriging methods (e.g. conditional simulation) have to be introduced and checked for their reliability in historical analyses (post-mortem studies). By using this feedback, kriging results from underground samples or production data can be compared with results gained by advanced geostatistical methods from exploration boreholes.

Jan 1, 1987

By A. L. Edwards

A retrospective study was conducted on the Rand Mutual Assurance (RMA) noise-induced hearing loss (NIHL) compensation claims from 1998 to 2008 to determine if the 2008 milestone agreed at the 2003 Mine Health and Safety Summit was achieved. The number and costs of NIHL compensation claims in different commodity sectors and workplaces were collated. A secondary analysis of the ages of employees compensated after 2008 was conducted. A complementary retrospective analysis of audiogram data investigated the percentage loss of hearing (PLH) shift in different homogeneously exposed groups and occupations at two gold mines. The compensation claims analysis indicated a significant decrease in NIHL claims from 1998 to 2008, but the milestone was not achieved. The reason may be either that claims have not been submitted timeously as required by Instruction 171 and that the current submissions are a result of pre-2003 noise exposure, or that employees who were baselined are still developing NIHL owing to ineffective hearing conservation programmes in place in the mining industry. On the basis of best practice for hearing conservation, recommendations are made for leading indicators in hearing conservation programmes and for reducing the risks of NIHL in order to achieve the 2013 milestone.

Jan 1, 2012

By D. Vogt

South African underground hard rock mines are typically managed using measurements made daily, weekly or even monthly of key parameters such as face advance, readiness to blast, blast success, temperature or dust levels. Safety and health can be greatly improved if a real-time measurement system can inform decision making. To enable this vision of widespread sensing, communication and decision support, CSIR has developed an open standard architecture for communication of sensor data, and a reference implementation using that standard. The standard is called AziSA, which means ?to inform? in isiZulu. AziSA provides an architecture that allows for connection of any type of sensor and that is particularly suited to wireless sensing. On the safety side, the CSIR is developing a suite of sensors specifically around the risk of rockfalls. Sensors such as an electronic replacement for the barring tool, or a thermal sensor that can detect loose rock, can already be used to identify potential hazards in the hangingwall. When these sensors are combined with location and time information in a single database, it becomes possible to build maps of risk and to extrapolate risk into unmined areas. It is also easy to confirm that routine safety procedures like barring are actually taking place. In the future, it is proposed that entry inspections will be made using remote techniques that will not place an individual miner at risk. While miners will still be required to bar or place support, they will do so with a clear idea of which portions of the hangingwall are safe, and which present risk. On the health side, if a network such as AziSA is deployed in the stope, it becomes much easier to monitor the condition of individual miners. The work strain experienced by miners can be monitored through heart-rate sensors, and their core body temperature can be monitored using various novel techniques discussed in the paper. Additional sensors can be added to quantify worker exposure to hazards such as noise or dust. Individual sensors allow for people who are at an unacceptably high risk of developing heat disorders to be treated timeously, and they also allow for team management based on objective measures. Over a longer period, position sensing and environment monitors, or personal dosimetry, provide a powerful management tool to prevent workers from being overexposed to hazards, and to confirm that management instructions are being followed. Cost-effective sensing in the stope is a major challenge, but one that can be overcome through technology like that used in AziSA. Sensing provides opportunities both to make immediate interventions when workers are exposed to unacceptable risk, and to manage the long-term exposure of workers to hazard.

Jan 1, 2010

By Timo Niitti, Antti Rinne, Janne Turunen, Klaus Schommarz, Sami Grönstrand

This paper captures the essential steps employed in developing Outotec?s new FloatForceTM mechanism. The development of a flotation mechanism essentially revolves around the efficient transfer of installed power, or capital cost, to optimum flotation performance. Optimum flotation performance will be achieved if a balance between metallurgical results, operating and capital costs is maintained. The development of the FloatForceTM mechanism was done by careful evaluation of each of these three areas. This paper focuses on how experience, CFD and laboratory equipment, pilot and plant tests are used to test and evaluate a new flotation mechanism. Validated variables include mixing profile, power draw and local air hold-up. Metallurgical and mechanical design considerations are not covered in this paper. Besides using the FloatForceTM mechanism in new flotation equipment, the FloatForceTM mechanism can be used in existing flotation cell installations, thus enabling improvements in the mixing profiles, solids suspension and metallurgical performance of operating flotation circuits. Results of several tests carried out in existing plant operations are presented.

Jan 1, 2007

By E. Dervaric

The main purpose of this paper is to introduce the main strategic restructuring aspects of companies that are directly (coalmines) or indirectly (companies that depend on coalmines) linked to coalmining. An attempt is also made to determine the principal factors required for the successful execution of a restructuring process in companies focused on the basic activities of coalmining, such as companies that provide supporting activities. The restructuring process exerts an influence on the whole area that relies on coalmining. So coordination of activities among the government, the local community, and the coalmine is very important. This is the major premise of this paper. The first section of the paper focuses on identifying and analysing the key factors in restructuring and a selection of key methods, drawing on past and present practice. The key factors to be considered in a model of enterprise restructuring in the coalmining sector are considered. The second section is dedicated to the actual design of the model of enterprise restructuring in the coal industry. The proposed model is based on positive experiences in the restructuring of coalmining companies in Europe, with an emphasis on Slovenia, successful approaches to crisis management in corporations, and identifying key areas in bringing about a strategic turnarounds in company operation. To support the argument for the key business areas, a brief summary of empiric findings has been included to demonstrate the applicability of the proposed model and the restructuring process. The summary is based on the survey done in both Slovenian coalmining companies (especially in Velenje Coal Mine) and their subsidiaries. The conclusion integrates key findings and outlines issues for further consideration and discussion. Keywords: restructuring, coalmining, Velenje Coal Mine, strategic factors, restructuring model.

Jan 1, 2008

By F. Bourgouin

Thirty-one years ago, African leaders met in Lagos for the drafting of the Lagos Plan of Action for the Economic Development of Africa, 1980?2000. The main objective of the plan was to increase Africa?s self-sufficiency and in this regard, the plan had a section pertaining specifically to redressing the ills of an unproductive mining and minerals industry and harnessing its potential for socio-economic development. However, if we look at the nature of this sector on the continent today, its characteristics resemble the diagnosis of the sector given in the plan back in 1980: lack of information on endowments of minerals; lack of value added in the sector; low development and use of those endowments that are not of interest to transnational corporations (TNCs); and most importantly, low contribution to socio-economic development. The primary consequence of the lack of visible benefits to African states, despite growth and development of the sector in terms of increased mining activity led by Foreign Direct Investment is that countries with mining industries are characterized by dysfunctional internal processes. Improvements in governance, monitored with indices such as those set out in the Extractive Industries Transparency Initiative, the Millennium Development Goals, and other such ?good governance? agendas, are being asserted. However, before we prescribe the introduction of initiatives or guidelines based upon highly subjective norms which we believe to fit this diagnosis, it is necessary to review how it is that we got to this situation that we are in today. How is it that, 31 years after the Lagos Plan of Action, we have not seen any major changes in the role the industry can play in socio-economic development, despite the vast increase in mining activity on the continent?

Jan 1, 2011

By H. A. D. Kirsten

Mining-induced seismicity is usually evaluated in terms of continuum elastic analyses, and is quantified in terms of energy release rate as state parameter and excess shear stress along particular features on which failure may be induced. Although both of these quantities are representative measures of potential seismic activity, elastic analyses do not enable the associated stresses and displacements in the rock in which failure occurs to be evaluated reliably. The paper compares the effect of depth, span, support stf1Jhess, field stress ratio, and discontinuity strength on mining induced seismicity determined from elastic analyses and from analyses in which discontinuities in the rock are allowed to fall. It is, accordingly, shown that the incidence and magnitudes of potential seismic events and the net excess shear as representative state parameter cannot be determined reliably from elastic analyses that do not account for the failure of ubiquitous discontinuities. The magnitudes of seismic events in rock in which ubiquitous discontinuities are allowed to fail are very considerably overestimated in elastic analyses. The extent of the seismic source region and the associated seismicity do not increase with depth, which, together with the improved containment of the concomitant rockburst damage by backfill is reassuring for mining at greater depth in future. For conventional support, the magnitude of potential seismicity increases for an increase in span in elastic rock, but remains unaffected in non-elastic rock. For backfill, the magnitude of potential sesmicity decreases substantially in elastic and non-elastic rock for an increase in span. Increases infield stress ratio very significantly reduce potential seismicity irrespective if the type if analysis, but effect the distribution if potential seismic events very differently in elastic and non-elastic rock.

Jan 1, 1994

By D. H. Diering

Definition of mineral resources and reserves forms the basis for effective mine planning and reliable public reporting of mineral assets. Historically, the mineral resource and reserves declaration process has been the domain of the geology and surveying disciplines, with the declaration of the reserves by the surveyor being based on the application of modifying factors to the declared resources available for mining. As part of an ongoing process to improve efficiency, reliability, and reproducibility of results, this approach has been revised and enhanced through the introduction of a revised process and reconciliation tools. The revised approach to reserve definition is based on the definition of scheduled resources, at an appropriate confidence estimate in the context of an approved business plan, over the anticipated life of the mineral asset being applied to define reserves. This planning and scheduling is developed, during the annual business planning process, by the mine planning department using tools such as CADSMine?. The scheduled area together with the application of revised modifying factors is tabulated in the BME (basic mine equation) and reflects the mine production plan over time. Simplification of the modifying factors to dilution and losses underpins the simple yet robust approach to improved definition of reserves in this process and in the basic resource to reserve equation (BR2RE). Dilution intrinsically affects grade but not metal content, whereas the losses reflect both the efficiency of mining and planning and are reflected in metal losses, area losses, or both. Reconciliation of the derived 'resource converted to reserve' area (which is based on the business plan from CADSMine?) versus the 'resource available for mining' (which is derived from Datamine?) underpins the robustness and auditability of the reserves declaration. This R&R accounting and reconciliation approach is transparent and facilitates interrogation of the logic and rationale of long-term business planning and project strategy. These numbers are processed and reported in the logic of the basic resource equation (BRE), which also addresses aspects such as white areas (future and historic), tail management, and partial extraction (non-scheduled pillars, etc.) in compliance with SAMREC definitions. Areas that do not have the necessary confidence and data support to be declared as resources find their space as pre-resource (outside the domain of public reporting), outlining existing potential for future extraction and reporting. Use of the BRE leads ultimately to a complete, refined accounting and reconciliation-oriented approach for all production entities. The revised resource and reserve process includes the discipline of mine planning as intrinsic to the definition and declaration of resources and reserves. Subsequent to the change in process, the resources and reserves have truly become the domain of the mineral resource management discipline. This paper defines the logic of the basic resource equations and outlines their application in the definition and reconciliation of mineral resources and reserves at Anglo American Platinum Limited.

Jan 1, 2013

The 114th Annual General Meeting of The Southern African Institute of Mining and Metallurgy was held at The Country Club, Johannesburg, Napier Road, Auckland Park on Thursday, 11 August 2011. Welcome The President extended a special welcome to the guests and representatives of our sister institutes and other associations, and also to recipients of awards, senior members of industry, Honorary Life Fellows, past-presidents, our members and other guests, among them the following: F. Cawood, President, Institute of Mine Surveyors of South Africa C. Roode, President, Mine Metallurgical Managers' Association of South Africa M. Cresswell, Chairman, South African Coal Processing Society A. Hay, Immediate Past President, South African Institute of Electrical Engineers L. Gardner, President, South African National Institute of Rock Engineers J. Krynauw, President, The Geological Society of South Africa (GSSA)

Jan 1, 2011

By J. P. Beukes

The production of ferrochrome alloy from chromium bearing chromite ores is conducted at high temperature under highly reducing conditions. However, albeit completely unintended, it is impossible to completely exclude oxygen from all high temperature process steps, with the corresponding possibility arising for the generation of small amounts of Cr(VI) species. Certain Cr(VI) species are regarded as a carcinogenic, with specifically airborne exposure to these Cr(VI) species being associated with cancer of the respiratory system. With approximately three-quarters of the world?s viable chromite ore reserves located in South Africa, and annual ferrochrome production approaching almost half of total annual global output, aspects of Cr(VI) generation and control are of particular relevance and importance to the local industry, and naturally to the global industry at large. This paper seeks to examine theoretical and practical aspects associated with Cr(VI)generation (based largely on experience within the local South African industry, but considered to be generally encountered in the broader global industry context), together with mitigating measures that can be applied within the context of the production processes. From the discussions it is clear that significant improvements in various Cr(VI)-related aspects have been made by the South African ferrochrome industry. However, it is also evident that several areas of uncertainty still exist, which require further research in order to better quantify risks and enhance the efficacy of mitigating steps. Keywords Hexavalent chromium, Cr(VI), ferrochrome production, South Africa.

Jan 1, 2010

By W. J. Kempson

As a result of the rising electrical energy costs in South Africa, a method was sought to reduce the overall electrical consumption of typical shaft systems. A typical shaft configuration was analysed and the primary energy consumers were identified. The ventilation fans for this system were found to consume 15% of the total energy of the shaft system. It was calculated that more than 50% of this energy is consumed by the shaft itself, more specifically, by the pressure losses that occur in the shaft as the ventilation air passes through it. In order to ensure that the theory being used for the evaluation of these shaft systems is accurate, a total of five shafts were instrumented and the actual pressure losses over the shafts plotted against time. These shafts were then analysed from a theoretical perspective. Finally, in order to ensure a thorough understanding of the behaviour of the ventilation air in shaft systems, the systems were simulated using computational fluid dynamics (CFD) techniques. There were significant discrepancies between the theoretical analysis and the CFD simulation during the initial comparisons. This discrepancy lessened as the complexity of the CFD models increased, until when the complete shaft was modelled using the full bunton sets, the pipes, and the flanges, the difference between the theoretical evaluation and the CFD simulation was small. This result demonstrates that the theory is insufficient and that the interrelated effect of the buntons and fittings has not been fully appreciated by current theory. The final phase of the work presented here was to evaluate the costeffectiveness of using different bunton shapes and shaft configurations. It is shown that the increase in the pressure losses and therefore the direct operating costs of the shaft can vary by as much as 80%, depending on the bunton configuration chosen. The placement of the piping in the shaft can increase the pressure losses, and therefore the direct operating costs of the shaft, by as much as 12%, depending on the placement of the piping in the shaft; this effect includes the use of flanges. The use of fairings on a large cage can reduce the resistance that the cage offers to the ventilation flow by as much as 30%. This, however, does not translate into a direct saving because as the cage moves through the shaft, the overall effect is transitory. These savings can be significant when the items highlighted in this work are applied correctly. Keywords shaft design, ventilation, energy consumption, modelling, CFD.

Dec 1, 2013

By J. van Zyl Visser

The advancement in Information Technology has resulted in a change in workflow practice in our Mineral Resource Management (MRM) offices on the mines and at our corporate office. This paper discusses the AngloGold approach in defining an IT strategy for MRM, a brief overview of systems usage and benefits. AngloGold has gone through a transformation phase and has positioned itself as a world-class, low cost producer. To support this objective, an initiative has been launched to provide the MRM division with an integrated MRM technical suite of systems with support of a Management Information System. Technical systems for a tabular orebody are not freely available and hence it took AngloGold almost seven years and a significant amount of capital to develop an integrated suite of technical systems. AngloGold MRM IT adopted the typical Zachman framework (value chain) approach in the analysis process and formulated the final deliverable in terms of AngloGold’s strategy. Major benefits have been realized through the ability to change planning scenarios in a short period of time and hence be able to increase reserves and NPV. The development of MRIS, which will become the flagship in AngloGold’s portfolio of systems is in phase two and this system will allow AngloGold to publish Resources and Reserves as per SAMREC and the JORC Code at will. The availability of information at all levels of the operations has made making decisions easier and hence some specialized reports such as the Basic Mining Equation were developed from the Corporate Data warehouse and from the MRM reporting database. Decision Support Systems(DSS) such as Business Objects and Oracle Express are now being used to assist in the process. The decision to use Business Objects to replace SAS reporting as the core reporting tool has resulted in the empowerment of the user and major cost saving as far as the use of consultants to set up standard reports.

Jan 1, 2003

By A. L. Hinde

A review of real-time particle size analysers A. L. HINDE,. B.Sc., A.R.C.S., D.I.C., Ph.D. The physical principles of different sizing techniques are critically examined in order to evaluate the suitability of the techniques for real-time particle size assessment. Examples of both successful and unsuccessful attempts at producing an acceptable real-time sizer are described in order to delineate the difficulties involved in making rapid and accurate size measurements. Only two of the examples described have proved to be suitable for on-line particle size monitoring, namely the "MintekjRSM Onstream Slurry Sizer" manufactured by Cartner Group, Ltd., and the "PSM System 100" made by Autometrics Co. Both these commercial systems are capable of assessing particle size with an accuracy comparable with that obtained by routine sieving and weighing. The "PSM System 100" has been used successfully for automatic control of grinding circuits. Economic benefits derived from this system, operating under rigorous plant conditions for several months, have proved that real-time size analysers are of significant value to the mining and metallurgical industry.

By M. Thurston

This case study shows that for a set of lognormal data with a low coefficient of variation the semi-variogram of the logs has almost the same shape as the semi-variogram of the raw data. This means that the variogram of the logs, which is numerically more stable, can be used to krige the raw data. This technique is tested on samples from a sedimentary gold deposit and the results compared to those obtained from ordinary and simple lognormal kriging.

Jan 1, 1987

By P. T. Slatter

The role of viscometers for rheological characterization in the hydraulic transport of solids is discussed, and rheological models and phenomena pertinent to the hydraulic transport of backfill material are reviewed. The two main branches of viscometry (rotational and tube) for the measurement of mining slimes rheology are compared. The effects of solids concentration, particle size and chemical additives and the practical application of rheology in backfill system design are presented.

Jan 1, 1988

A method, based on the macroscopic population balance equation allowing the dynamic simulation of a multistage adsorption plant given an arbitrary rate expression, is described. The partial differential equations resulting from this method are simplified using the method of characteristics. The simplified equations can then be solved using standard ODE integration techniques. The procedure is illustrated by means of data typical of a CIP application. Requirements for data structures which allow the incorporation of the carbon-in-pulp (CIP) model (and other unit models) into a general metallurgical simulator are described. Based on these considerations, it is concluded that more generality in the description of distributed quantities such as loading and particle size is provided by the use of mass density at fixed class boundaries, rather than discrete masses within fixed classes as has hitherto been used by ore-dressing simulators.

Jan 1, 1987