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This paper examines some of the fundamental economics of mining - in particular, for optimisation studies, for production rate determination and for reserve estimates.It includes introductory discussion on the principles as to how economics drives mining investment decision-making, applicable to the optimising of pit shapes and production, or truck fleets, or any other part of the mine.The main part of this paper looks at the decision to start-up a mine and why the 'optimum' production rate to start-up a mine is not the point of lowest cost according to traditional discounted cash flow (DCF) analysis. The optimum production rate is usually substantially less than this rate. The paper recognises the difference between typical mining investments and investments in other industries that do not have the unique characteristics of mining and the problem of uncertainty resolution. It examines the marginal revenue effects, the marginal cost of capital and the value of a real option to expand pending uncertainty resolution as determinants of optimum initial production rates.The final part of this paper looks at applying these principles to renewable and non-renewable resources. It examines mine life and reserve estimates from an economic perspective.

Dec 6, 2010

By J P. Clark

Industrial minerals contribute about 50% of the NZ$1.2 billion generated annually by the minerals industry in New Zealand. The value is supplemented by a further NZ$500 million of minerals imported to supply our vital agricultural and industrial activity. As globalisation of the world's economy precedes, sources of minerals are being processed by fewer companies giving an ever-increasing control over global markets. If only to protect its primary production New Zealand needs to aggressively develop its mineral resources. The successful development of a deposit requires identification of the preferred market. While low-value aggregates dominate New Zealand industrial mineral production it is more specialised minerals supplied to the manufacturing and industrial sectors that provide more value per tonne. Minerals that have highly desirable intrinsic properties, or through value-added processing provide desirable properties, have the ability to fill niche markets both locally and overseas. Research and development towards enhancement or creation of desirable mineral properties could benefit New Zealand with both increased mineral potential and export of technological information. But, it is nearly always the market not the resource that dictates the viability of an industrial mineral and, with the globalisation of industrial mineral markets resulting in fewer but larger companies, any supplier must be ready to explore niche markets in order to compete on a more global basis.

Jan 1, 2000

By G Baird, M Seto

Reliable evaluation of in situ stress is an important phase in the analysis and design of underground excavations, particularly for evaluating the stability of underground structures to prevent failure or collapse. A technique for the estimation of the full stress tensor based on acoustic emission (the Kaiser effect) is being developed and trialed at the WA School of Mines. The result obtained compare well with the standard over-coring method. The advantages of the technique are that it is relatively cheap, non-time consuming and is applicable to in situ stress measurements at depth in remote regions.

Jan 1, 2002

Remote sensing, in general, is the recording of light and heat from a planet's surface within a certain range of the electromagnetic spectrum. For the Earth, systems capable of this recording are the MultiSpectral Scanner (MSS) and SLAR. The former is the recording system used in satellite and will be discussed in the next section. SLAR stands for Side Looking Airborne Radar. This device sends invisible radar waves which illuminate the Earth's surface. The reflected waves are subsequently recorded as images. The system can operate through darkness and dense cloud cover, and is particularly suited for the study of geological structures at both large and small scale (Wayland 1976). Remote sensing techniques are now widely being made use of in mineral exploration, especially for those last remote 'sanctuaries' where geological data are meagre or non-existent. For places like Borneo, West Irian, the Amazon Basin etc. remote sensing, in the form of both satellite imagery and SLAR, is of considerable help, in fact more often than not the only help, to delineate geological provinces, geotectonic domains and meaningful lineaments. In the case of New Zealand, well made geological maps at scale 1:250 000 by the Geological Survey are available to the public and these provide useful preliminary grounds for the selection of target areas. However, even in this case LANDSAT imagery can be of aid as will be shown later.

Jan 1, 1977

By M Simpson

Greywackes of the greater Auckland Region (Brynderwyn Hills to Hamilton), when considered on a regional scale, have characteristic ranges of physical, mineralogical and other properties. Some properties (eg density, porosity, crushing resistance, clay index) generally cluster and correlate with the basement greywacke facies, regions and terranes recognised by geologists, and their diagenetic/metamorphic level. Other local factors, particularly variations in mineralogical composition, nature of matrix cement, grain size, and degree of weathering may produce aberrant properties. Some of these local variations, when extreme, have the potential to affect the aggregateÆs performance in roading or the concrete industries.   Smectite and the zeolite laumontite are the major deleterious minerals occurring in fresh greywacke rocks of the Auckland region, although weathered rocks may contain halloysite, an expanding member of the kaolin clay mineral group. These minerals, when found in abnormally high levels in greywackes cause expansion effects in the aggregate. Currently there are inconsistencies in the detailed correlation of shrinkage, clay index, clay mineral content and intrinsic expansion data that need further research to resolve them.  

Jan 1, 2007

By T F. McConachy, B I. A McInnes, R A. Binns

Within the last decade, major research discoveries have been made in the submarine realm of magmatic and hydrothermal activity of arc-backarc systems in the southwestern Pacific. These include identification of numerous particulate-poor, gas-rich (CO2-CH4) hydrothermal plumes emanating from arc front volcanoes, actively forming porphyry-copper-gold style mineralisation, and new backarc spreading systems erupting alkali basalt-trachyandesite magmas. Major goals of these studies have been identification of modern analogs to ancient volcanogenic massive sulfide ore bodies, and quantification of the volatile fluxes though supra-subduction zone systems.

Jan 1, 2002

Flotation Research on Cassiterite of Tailings

Sep 13, 2010

In November 1969, New Zealand Steel Ltd pioneered the commercial use of the SL/RN solid fuel direct reduction process to make sponge iron as a feed material for electric arc furnaces. Serious process problems with the use of green balls and coal injection were progressively overcome. The process was developed by New Zealand Steel along a radical route, of feeding the fine grained raw ironsand concentrate and coal directly to the kiln. Contemporaneously with this development of direct reduction, steelmaking process innovations were made that enabled the arc furnaces to operate successfully with the high volumes of acid slag. The further expansion of New Zealand Steel's primary steelmaking capacity to replace the currently imported hot and cold flat rolled products is under consideration. The requirement to produce about 600 000 tonnes of steel slabs will be an opportunity to further modify iron and steel making plant and processes to optimise the economics. The conceptual and preliminary engineering selection of options is described.

Jan 1, 1980

The history of mining is rightly proud of its achievements in improving productivity and cost improvements over the years. No matter what measure is used, tonnes per manhour, cost per tonne, etc vast improvements have been made over the last hundred years. In fact over the last ten years in Australian coal mines raw coal output per employee has increased by 60 per cent. When one examines why these improvements have taken place the principal reasons have been technological advancement in mining equipment, excavator and dump truck capacity increases, longwall and continuous miners continually improving in reliability and size. Of course all these improvements are correlated to an increase in capital cost. Even with the above-mentioned advances the pressure for increased performance is as strong as ever. The international mining and mineral-processing sector is currently operating in a recessive market with some traditional commodities, eg gold trading at 20 year lows. During recessive times senior management will demand greater returns on capital employed: the obvious choices being reducing costs or increasing throughput. In addition, head office environments will often place a capital freeze on operational management so the opportunity to take advantage of technological change is not available. The challenge is, therefore, to increase throughput and cut costs without the need for capital. The answer is to optimise the existing labour and plant. If done systematically a result in productivity improvement, in our experience, as high as 45 per cent can be achieved with the average across South East Asia and Australasia being 21 - 23 per cent. The intention of this paper is to present a systematic approach to labour and machine utilisation thereby gaining the greatest possible return on the existing capital base.

Jan 1, 1999

Adsorption of Starch on Kaolinite Surfaces

Sep 13, 2010

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

Future metal prices play a direct role in both the economic evaluation and short to medium planning of a mine scheduling sequence. It is difficult to predict with accuracy the future price of volatile metal commodities, however, it is possible to fix some future metal price, outside of long term contracts by the selling of futures contracts through a commodities exchange. The futures contract represents a fixed amount of a specified quality of a commodity for future delivery at a predetermined price. Several different types of hedging are possible, one in particular which is best suited for mining companies. There are relative advantages and disadvantages when trading in futures contracts and particular reference is made to gold contracts on the Sydney Futures Exchange.

Jan 1, 1980

The dissolution of the naturally occurring mineral zircon (ZrSiO4) is examined after ball milling it with magnesium oxide for up to 100 hours in a laboratory mill. There was little effect on the solubility for the initial two hours where size reduction of the zircon was considered to be the dominant effect. Beyond two hours the dissolution increased as a function of the square root of milling time. X-ray diffraction of the powders did not reveal the identity of the soluble phase. However, a nanocrystalline phase was present after milling and this is thought to be the soluble phase.

Jan 1, 2000

By D Wiseman, D Weedon, T Akroyd

Models of the size specific processes of particle collision, attachment and detachment have been combined in a form suitable for analysis of a full-scale flotation plant. The model is based on a first principal approach to particle collection by bubbles. Parameters considered include particle size, bubble size, particle contact angle, energy dissipation, entrainment and froth recovery. Using data structures configured within an Excel spreadsheet using æLimn: The Flowsheet ProcessorÆ, the model has been incorporated into a description of the individual cells within a simple roughing and cleaning flotation circuit. Simulated feeds of varying particle size distribution, feed tonnage and varying mineral hydrophobicity representing different mineral phases are presented to the model to produce predicted final concentrate grades and recoveries. Practical techniques for measuring many of the parameters included in the model are now becoming readily available. However, relating the terms included for contact angle, energy dissipation, entrainment (ie water recovery) and froth recovery to measurable parameters in operating plants remain as continuing challenges for research.

Jan 1, 2004

Sustainable development is a critical discussion topic in the mining industry today. The topic is necessarily broad and complex, covering an entire spectrum of related areas, from geology to end-use products. The objective of this keynote address is to focus on the chemicals and chemistry aspects - especially research and technology transfer - in sustainable mineral processing. Chemicals came to play a critical role in mineral processing during the last century, and they will play an equally vital role in confronting the sustainability challenges of the 21st century, particularly in the areas of greener chemicals, water efficiency and water resource management; waste reduction and remediation; minimising environmental impact, safety and health risks (meeting and exceeding the requirements of regulations); energy efficiency; and converting mineral resources into reserves. This keynote address argues that the current research framework is no longer adequate to serve the goals of sustainable mineral processing. The problems studied are often too narrowly defined or irrelevant, while the research efforts are fragmented and the methods and approach employed are often too reductionistic to produce useful knowledge. A new framework for research is needed. This address further argues that a new framework based on a holistic or systems approach can best tackle the challenges of sustainable mineral processing. Central tenets of this approach include a recognition that, in complex systems, the behaviour of the whole system is more than the sum of the individual contributions, and that interactions occur in real time, often in subtle and complex ways. The focus is thus on the behaviour of the whole system. Indeed, a comprehensive understanding of the system through large-scale measurements should precede a study of parts or of idealised models of the complex system. The result will be a sound knowledgebase, better solutions to the challenges of sustainable development, and improved technology transfer. Developing such a framework will pose a formidable challenge, requiring significant time and effort as well as a confluence of diverse specialties and strategic collaboration. Fortunately, recent developments in the context of reagent optimisation provide us with a prototype of a holistic approach. We can also draw upon methodological innovations in the biological sciences, where the critical need for a systems approach is well recognised and significant advances have been made.

Sep 13, 2010

The Greymouth Coal field is situated on the West Coast of New Zealand's South Island and has been mined for coal for more than 120 years. The area covered in this paper is within the Rapahoe Sector of this field and contains >200 million tonnes of low ash, low sulphur, bituminous rank coal. Paper No 6, presented to the 19th Annual Conference of the New Zealand Branch of The Australasian Institute of Mining and Metallurgy in Christchurch in August 1985 by R G Bowman, explained 'A Geologist's View' of the 'Economic Potential of the Greymouth Coalfield', and describes previous geological assessments of the Rapahoe Sector.

Jan 1, 1989

Thermodynamic properties of the solutions of hydrogen in metals and carbon in austenite were investigated and it is possible to predict the interstitial solubility in these systems over relatively wide ranges of temperature and solute activity. Monte Carlo methods were used to compute the arrangements of interstitial atoms on the tetrahedral sites in body centred cubic metals and the octahedral sites in face centred cubic metals. It was shown that the non-configurational entropies of solution of hydrogen in metals can be interpreted as being principally vibrational and on this basis the potential value of the isotopic solubility ratio theory in indicating the compositional variation of these non-configurational entropies was discussed. The need for future work along these lines is pointed out.

Jan 1, 1970

The Khanong supergene-enriched copper resource, (~23 Mt at 3.0 per cent Cu), is one of several resources recently discovered in the intrusive-centred, sediment-hosted Au-Cu Sepon mineral field located in southern Lao PDR. The unusual style of hypogene mineralisation and unique set of conditions have resulted in the development and preservation of a supergene-enriched profile in this subtropical climate. Hypogene sulphide-rich mineralisation replaced calcareous cataclastite (fault rock) developed in the flat-lying, extensional, Khanong Fault. Spatially, the hypogene mineralisation was immediately out board of the skarn û hornfels Cu-Bi front and in board of sediment hosted Au-(As-Sb) mineralisation in a zoned intrusive-centred hydrothermal system. In situ supergene enrichment of the sulphide protore has resulted in a high-grade chalcocite-clay zone (~10.3 Mt at 4.6 per cent Cu) overlain by leached limonite-clay. A very high-grade in situ to exotic limonite-clay Cu-oxide-mineral zone is locally developed above impermeable dolomite at the base of chalcocite-clay zone. Exotic Cu-Mn-wad mineralisation developed for up to 1 km down the hydraulic gradient from the chalcocite-clay zone. Unique supergene enrichment conditions have resulted in the high-grade Khanong Cu resource in a subtropical weathering environment. The base of the currently active supergene profile coincides with the base of a flat-lying, pyrite-rich fault rock, dipping parallel to the hill slope, maximising Cu enrichment. Meteoric water has been channelled along subvertical faults and narrow horizontal subsurface zones. Low permeability of the fault host rock and footwall rocks has controlled the low volume and slow movement of groundwater required for supergene enrichment. Erosion has been slowed by the resistive ironstone and limonite-clay layer at surface, which assists in preserving the gentle slope over the chalcocite-clay zone.

Jan 1, 1999

New ZealandÆs share of global greenhouse gas emissions, at about one fifth of one per cent, is very small. But the profile of those emissions is unique among OECD countries; more than half come from methane and nitrous oxide associated with livestock agriculture. Consequently, fulfilling its obligations under the Kyoto Protocol is potentially quite onerous for New Zealand.In this paper we use a single region, static general equilibrium model to assess the implications for New Zealand of various climate change policy options. The energy and agriculture sectors are modeled in a detailed manner to enable realistic simulations to be carried out.Choosing an optimal set of policies is made more difficult by the fact that New Zealand relies heavily on emission intensive sectors for much of its export earnings. For example, one emission intensive sector alone, dairy, accounts for over 20 per cent of all merchandise exports. Avoiding carbon leakage is therefore an important consideration in selecting appropriate greenhouse policies.Our analysis shows the degree of sectoral adjustment required is substantial. In addition, the total costs depend on the uncertain level of variables such as the global carbon price and the level of afforestation activities in New Zealand, ie the rate of new forest planting.

Jan 1, 2002

Thickener Modelling - Incorporating Shear Effects

Sep 13, 2010