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By Donald W. Gentry

This section deals with one of the most fascinating aspects of mining the evaluation of mine investment opportunities. Be-fore proceeding further, it is important to clarify the meaning of some fundamental terms used frequently in the text. 6.0.1.1 Mine Valuation vs. Evaluation The words "valuation" and "evaluation" in a mining context are often used interchangeably. However, for the purposes of this section, a distinction is made between the two terms in accordance with commonly accepted practice. The word valuation in a mining project context has the rather narrow meaning of placing a dollar or other currency value on the worth of the project as a whole. In other words, the value of a mining project refers to a measure of the desirability of ownership of that property. As such, the major item of interest is, "what is the mine worth?," or `what is the value of the mine?" The value of a mining project may actually be determined in the marketplace at any specific point in time, or it may be estimated by one of several methods. The topic of mine valuation is discussed in more detail in Chapter 6.1. The word evaluation in a mining project context connotes the broader meaning of determining the numerical values of all

Jan 1, 2008

State ownership of mineral in the ground is not newthe Regalian Right is an ancient concept. And the compulsory purchase of land and the minerals beneath it by the State or a body approved by the State (Fitzgerald, 1952) was a principle well established and enforced in practice over a hundred years ago, when such powers became a practical necessity during the period of railway building in Britain and elsewhere:The acquisition of mineral properties which stand in the way of public construction projects still goes on. But in recent years nationalization is being increasingly undertaken as part of the planned use of national resources, for the closer regulation of economic activities, or merely, so it would seem, as a matter of political expediency or national pride. For instance, the unsevered coal in Britain came under State ownership in 1938 in an attempt to simplify a complex pattern of freehold titles which were impedingplanned mining operations. Later, unsevered minerals became a factor in negotiations arising under various town and country planning acts. The acquisition of the Rio Tinto mines by the Spanish Government implies political aspirations. Or State purchase may even be accidental: it was the easiest course for the Sierra Leone Government consequential upon its failure to prevent widespread trespass over legally-held diamond privileges in 1955.This paper has been prompted by problems that have arisen when properties containing unsevered mineral have been expropriated by the Crown in New Zealand: expropriations, it is true, that have been on a small scale in rela...

Jan 1, 1957

By M S. Powell

In this paper it is argued that we are entering a new mining era, based on considerably more challenging orebodies as we rapidly expand minerals production by exploiting previously uneconomic deposits. Rapidly increasing production costs cannot be sustained by continually increasing commodity prices, as illustrated by the recent downturn in the industry.Driven by reduction in grade, requiring the processing of 50 to 100 per cent more ore to recover the same amount of metal, often accompanied by finer grain structure - necessitating a finer product size and more challenging recovery - the productivity of the mining industry is dropping in real terms. The author suggests that tweaking current technologies and relying on economies of scale will not turn the industry around, but rather a switch to considerably more efficient processing is required.It is imperative to utilise the properties of the orebody, especially in terms of variability, in revolutionising our processing techniques. Our new mantra may be æselective mass mining with flexible processingÆ. This paper explores how this may be implemented using current technology and equipment in order to change the cost profile of the new mining industry. Orebody knowledge, based on the underlying process drivers, rather than proxies, is required. These properties and their variability will need to be propagated into the orebody through utilising the geological data rather than smoothing block averages, which destroys information on variability.Novel flexible circuit designs are presented that can respond to a wide variability in ore properties and throughput requirements in order to slash processing costs and energy utilisation, while enhancing overall recovery. The success of these circuits will be based on an ability to predict at both design stage and in everyday processing the variable ore properties, which is dependent upon reliable orebody knowledge that caries variability and underlying processing properties.CITATION:Powell, M S, 2013. Utilising orebody knowledge to improve comminution circuit design and energy utilisation, in Proceedings The Second AusIMM International Geometallurgy Conference (GeoMet) 2013 , pp 27-36 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 29, 2013

By J. A. Finch, Zhenghe Xu, Z. A. Zhou

A particle-bubble collision model was used to investigate the minimum recovery zone height, H(r,min) required for flotation columns. The criterion used to define H(r,min) is that height which gives unit collision probability. It is shown that H(r,min) is determined by particle and bubble size, gas hold-up and bubble-bubble interaction. Under typical operating conditions, for flotation of particles less that 10 micrometres in size H(r,min) is greater than 10 m, but it reduces to less than 1 m for particles greater than 100 micrometres

Aug 1, 1995

By W. G. Freeman

It is unlikely, as In the past, improvement in truck efficiency and capacity can fully offset the effects of inflation, fuel costs/shortages and ever increasing haul distances. There-fore, investigations of haulage systems less sensitive to these problems are warranted. Thus, this U.S.B.M. contract research study on alternative continuous haulage systems was prepared. This study identifies the physical, economic and technological parameters in the application of continuous haulage systems with special attention to under pit slope conveyors and skip hoisting systems. The evaluation data was gathered from extensive literature searches. European/North American mine visits, and industry comments. The study concludes that continuous underground haulage is a viable method within the proper geometric configuration.

Jan 1, 1978

During the last 20 years, more than 80 km (50 miles) of tunnels have been constructed in the Los Angeles, CA area. Recent projects include The East Central Interceptor Sewer (ECIS), completed in 2004. It spans more than 18 km (11 miles). The Northeast Interceptor Sewer (NEIS), completed in 2005, spans 11 km (7 miles). And the 2-km (1.3-mile) Metropolitan Transportation Authority?s Gold Line Eastside Extension (MCGLEE) was completed in 2006. All of the tunnel routes lay beneath heavily populated urban environments so minimizing ground surface settlement was critical to the success of the projects. Previous tunneling efforts in the Los Angeles area using open shield methods resulted in significant settlement that damaged roads, utilities, buildings and other structures. Earth pressure balance (EPB), or slurry machines, were specified for these projects to reduce subsidence risk. The contractors chose EPB tunnel boring machines (TBM) for the work. The closed and pressured face of the EPB TBM reduces loss of ground at the tunnel face and, when the machines are used in combination with gasketed pre-cast tunnel liners and backfill grout behind the installed segments, losses from over-cut of the excavated surface are also reduced.

Jan 1, 2008

By Henry P. Wheeler

H ELIUM (chemical symbol: He) is a member of a family of normally gaseous elements, which, because of their zero valence and corresponding lack of chemical activity, are called the "noble" or "inert" gases. It is a monatomic element with an atomic number of 2, and it exists naturally in two stable isotopic forms-He3, with an atomic mass of 3.0170, and He4, with an atomic mass of 4.0039. With the exception of a trace (10-6 percent) of He3, all of the naturally occurring helium is He4. Two unstable isotopes-He5, with atomic mass 5.0137, and He6, with atomic mass 6.0208-are listed by various scientists, but the existence of He5 is questioned by some of them. He6 is radioactive, with a half-life of 0.8 second. Helium was discovered in 1868 in the gaseous atmosphere surrounding the sun. Although several scientists studied the solar chromosphere that year, it is generally agreed that J. Norman Lockyer of England should be credited with the discovery of helium, which he named, deriving the word from "helios," the Greek name for the sun. It was not found on earth until March 1895, when William Ramsay of London produced a small amount from a sample of cleveite, a uranium-bearing mineral. In 1905, H. P. Cady and D. F. McFarland of Kansas found helium in natural gas produced from a well near Dexter, Kans., and for the first time a large source of helium became available.

Jan 1, 1952

By Huang Qiming

The CISDI-GreenEAF innovatively applies the top-side-chute for charging for improving the cold zone of electric-arc furnace (EAF) requiring preheating scrap. It can greatly reduce the operating power consumption during EAF melting by combined use of fume for preheating scrap. The enclosed charging mode and specially-designed structure contribute to less emission of dust and fume during charging while enhancing the metal yield. Thanks to the extraordinary fume temperature control at scrap preheating procedure and fume quenching technology as developed by CISDI, for restraining the regeneration of dioxin.

Oct 30, 2017

Despite limited discussion, Chemistry of Flotation is a good text and reference 1985 by M. C. Fuerstenau, J. D. Miller, and M. C. Kuhn Society of Mining Engineers Caller No. D Littleton, CO 80127 Softcover, $23.50 (member), $18.50 (student member), $28.50 (list) Review by Richard R. Klimpel Chemistry in Flotation, as stated by the authors, is intended as a textbook for students as well as a reference book for practicing flotation engineers. It covers subject matter related to surface phenomena; collectors and collector salts; natural floatability; the flotation of sulfide minerals, insoluble oxide and silicate minerals, semisoluble salts, and soluble salts; and slime coatings. There are no discussions in the book on practical plant implications of flotation chemistry, such as the influence of rate, particle size effects, dosage, flotation equipment, and methods of chemical addition. The book itself is small (only 177 pages), and, as published, is in an easy-to-handle soft cover. Once one accepts the intent of the authors, this book really does represent a very concise and convenient summary of the chemistry of flotation. It is, however, far from complete in its discussion of concepts and implications of data. Very often in the presentation, key prior knowledge (or at least subject matter awareness) not given in the book, is assumed. Thus, depending on one's familiarity with the specific subject matter, some sections can be easily followed while others could be tough going. Some of the discussion is so brief and terse on important subjects that unless the reader already realizes the meaning of the presentation, the conclusions to be drawn are not always clear. Therefore, if one is not expecting a self-contained primer on flotation chemistry, this book is very useful. To this end, the book is recommended to practitioners of flotation chemistry. The presentation of data in figures and tables is good. It helps considerably in the book achieving its conciseness. The authors certainly are qualified and knowledgeable in the subject matter - apparent in the style of presentation. In summary, this reviewer thoroughly enjoyed this book and will use it as a concise review of flotation chemistry. Richard R. Klimpel, member SME, is a scientist with Dow Chemical Co., Discovery Development, 1776 Building, M. E. Pruitt Research Center, Midland, MI 48640. International Symposium on Blast Furnace Ironmaking, 1985, The Indian Institute of Metals, The Tata Iron and Steel Co., Ltd., Jamshedpur 831007, India, 282 pp., papercover, no price given - Papers from this symposium held in Jamshedpur, India, include the following: determination of coal and coke quality; feed to blast furnaces; burden quality and blast furnace performance; operation of blast furnaces on charcoal; review of cast house slag granulation systems; developments in blast furnace engineering and control; process improvements in blast furnace ironmaking; coal injection into the blast furnace; and coke from stamp charged coal. Advances in Materials Technology for the Process Industries, 1985, edited by H.A. Huskins, National Association of Corrosion Engineers, P.O. Box 218340, Houston, TX 77218, 273 pp., softcover, $20-This book is the proceedings of a meeting held in Atlanta, GA in October 1984. It describes innovations in metallurgy, ceramics, glass, composites, and polymeric materials that impact the integrity and economics of operating systems. It covers biotechnical developments, improvements in membrane systems, or beneficiation processes, as well as developments in electrochemical controls, testing procedures, and surveillance techniques. A Reference Guide to Mining Legislation in Canada, 1985, by B. Barton, B. Roulston, and N. Strantz, The Canadian Institute of Resources Law, Room 430, Bio Sciences Building, The University of Calgary, Calgary, Alberta, Canada T2N 1N4, 120 pp., bound, $US28- This guide provides a ready means of finding how the different jurisdictions in Canada regulate mineral activity. It covers the rights required for exploration, development, and production of mineral metallics and industrial minerals. It does not cover placer mining, petroleum and natural gas, bituminuous sands, coal, or structural materials. Dictionary of Geological Terms, 1985, edited by Robert L. Bates and Julia A. Jackson, The American Geological Institute, 4220 King St., Alexandria, VA 22302, papercover, $7.95 plus $1 for postage - This third edition is for geoscience students, teachers, and rockhounds. It defines the core vocabulary of earth sciences, contains 8000 revised definitions, and includes 1000 new terms. It adds recent terms in plate tectonics, hydrology, and permafrost studies. Accurate definitions are given without technical jargon, cross-references are included, and commonly used abbreviations are provided. Processing and Utilization of High Sulfur Coals, 1985, edited by Yosry A. Attia, Elsevier Science Publishing Co. Inc., 52 Vanderbilt Ave., New York, NY 10017, 787 pp., bound, $142.50-These proceedings comprise the majority of the papers presented at the First International conference. Investigators there reported the latest discoveries, developments in commercial practice, and state-of-the-art reviews of scientific principles and applications of various technologies for handling, processing, and use of high sulfur coals. Sessions were held on: characterization of sulfur in coals; environmental problems and impact of high sulfur on coal use; selective mining and blending; coal desulfurization by physical and chemical cleaning techniques; handling of coal fines; sulfur capture during coal combustion; biological desulfurization of coal; and new applications for high sulfur coal. The Economics of Magnesium Metal, 1985, Roskill Information Services Ltd., 2 Clapham Road, London SW9 OJA England, 129 pp., 71 tables, appendices, bound, $750-Despite setbacks in some major magnesium markets in 1985, Roskill's latest forecast for the last half of this decade is for a 4% to 6% annual growth rate in demand. Growth for magnesium metal is expected in the motor industry for use as a possible substitute for aluminum. Some magnesium producers are altering their marketing strategies to cultivate this market. This study also includes a review of the worldwide magnesium industry, its end uses and consumption, and international trade and price trends.

Jan 7, 1986

By George Rice

Foreword Following the explosion in the Hillcrest mine, which occurred in the evening of Sunday, September 19th, 1926, and in which two men lost their lives, the writer was invited by the Hon. J.E. Brownlee, Premier of Alberta, to conduct an investigation into the causes of the disaster, and to make such recommendations as seemed advisable with a view to minimizing as far as possible the chance of future explosions in this and similar Alberta coal mines. Accordingly, the mine was visited, and extensive investigations were made underground on October 21st, 2.2.nd, and 25th, in company with Mr. John T. Stirling, Chief Inspector of Mines for Alberta, Mr. Moses Johnson, District Inspector for the Crowsnest Pass District, Mr. J as. A. Richards, Inspector of Mines, Edmonton, and also Mr. Thomas Davies, manager, and other officials of the Hillcrest mine. Hearings of the coroner's inquest were also attended on October 20th and 23rd, when testimony regarding the explosion was given by various witnesses. The following paper summarizes my general observations in tracing the place of origin of the explosion, and my efforts to determine the cause of ignition. Certain recommendations arc also made, and the writer invites discussion on these and the other matters dealt with in the paper.

Jan 1, 1928

By James A. Brown, Marius Botha, Christopher A. Fleming

"The technical and economic feasibility or re-processing hundreds of millions of tons of tailings in a number of historic gold tailings dams in the Witwatersrand area of South Africa is being investigated. The objective is to recover uranium and residual gold from the tailings, as well as to oxidize the sulphides to eliminate long term environmental liabilities associated with acid mine drainage. The tailings from the re-processing plant will be re-deposited in a new area far from urbanization, allowing for the rehabilitation of the real estate currently occupied by these historic tailings.The first step in the process involves a mild-regrind and mild acid leach of the tailings (pH 2.5 to 3.0) to dissolve up to 40% of the uranium. This uranium is recovered directly from the pulp by resin in pulp (RIP) with a strong base resin. The RIP tails are then treated by flotation to recover a rougher pyrite concentrate, and flotation tailings that are discarded. The rougher concentrate is cleaned to produce a final pyrite concentrate and cleaner scavenger tailings, and the pyrite concentrate is oxidized in an autoclave to leach uranium and generate acid. The autoclave discharge is combined with the cleaner scavenger tails, and the acid and ferric ions generated in the autoclave are used to leach more uranium and oxidize more sulphide in the cleaner tails. The product from the concentrate leach circuit is processed by resin in pulp for uranium recovery, followed by neutralization, cyanidation and carbon in pulp for gold recovery.The rougher float tails may be further treated to recover gold that was not recovered in flotation, but which had been liberated from the old dumps by natural oxidation of some of the pyrite over many decades. The float tails would be neutralized and treated by cyanidation and CIL to recover this liberated gold.All parts of the flowsheet have been extensively tested in the laboratory, and the critical elements of flotation, pressure oxidation and resin in pulp have been demonstrated in pilot plants. The results of the hydrometallurgical investigations are presented here."

Jan 1, 2010

By K. P. Wang

Mining and metallurgy have had a long history in China, and resources there have always been considered promising. Under the People's Republic of China (PRC), a remarkable industrial renaissance is underway that should further gain momentum in the years ahead. Rapid development of minerals have not only brought the PRC prominence in industrialization, but also in world affairs. Chinese mineral developments, especially petroleum, have been increasingly in the news. Oil and gas may have great potential, but a very large coal industry is already in existence. The steel industry ranks fifth or sixth in the world. The PRC is also prominent in fertilizer, cement, and salt production. The export metals are well known. Also, the country is buying heavily in nonferrous base metals. The need to know and the intense interest in the subject have prompted this study. The world significance of Chinese minerals is pointed out. The history of growth and PRC's mineral supply position are reviewed. Evaluations are made of policy considerations and regional and technical factors affecting mineral development. PRC's mineral trade and efforts to obtain equipment, supplies, and know-how are assessed. Specific reviews are made of major mineral sectors, including coal and power, oil and gas, iron and steel, nonferrous metals, industrial minerals, and fertilizers and chemicals. The overall outlook is summarized.

Jan 1, 1975

By Eugene A. Stephenson

THE year 1935 is noteworthy for the superior legislative measures passed by several states. Sincere efforts have been made to establish equity between the various producing tracts in oil and gas fields. Outstanding legislative measures include the New Mexico law, known as Senate Bill No. 79, approved on Feb. 23; the Oklahoma law on April 22; the Texas law on April 30; and the Kansas law, which became effective July 1. Primarily designed to prevent waste, but more or less the direct out- growth of the current excess of potential oil and gas production, these statutes fall in the class of "Proration Laws."

Jan 1, 1935

By Chand F

The silver deposits of Rockvale near Armidale, N.S.W., occur in fissure veins in epi-Permian granite. The ore is fine grained, mineralogically complex, and contains twenty-seven different minerals including eleven silver minerals. The ore is characterized by a unique multiple unmixing from a sphalerite solvent. The following minerals have exsolved from solid solution in sphalerite: pyrrhotite, chalcopyrite, cubanite I, cubanite II (chalcopyrrhotite), valleriite, "brown" stannite, "olive" stannite, argentian tetrahedrite, pyrargyrite, and an unknown grey-white mineral. Several of these minerals derive from a second-stage unmixing, the immediate solvents of which are the products of earlier exsolutions.INTRODUCTIONSmall silver-rich base metal deposits occur at several localities near Armidale in the New England district of New South Wales. Chief among these are the Tulloch Mine and the Rockvale Mine at Rockvale, 27 miles SE. of Armidale, and the Tait's Gulley deposits some 15 miles NE. of Armidale.At Rockvale (Kenny, 1928), irregular lenses of lode material, principally quartz and calcite, occur along a zone of shearing in biotite granite and altered sediments. The orebodies had a maximum width of 6 ft but averaged 2 ft 6 in. The largest lens was 150 ft long and 50 ft high. The Rockvale deposits were worked for both arsenic and silver; 2,897 tons of arsenic were produced but no figures are available forsilver.Little is known of the Tait's Gulley deposits which occur in folded arenites containing small but rich veins of pyrargyrite with base metal sulphides.The sediments in these localities are possibly Silurian.

Jan 1, 1962

By Richard Peaker, Jens Lichter, Alexander V. Potapov

"The recent combination of Computational Fluid Dynamics (CFD) and Discrete Element Modeling (DEM) can provide considerable insight into the performance of flotation cells. One area of interest from a fundamental equipment design perspective has been the influence of flotation cell size and the inflow rate on the metallurgical performance of the cell. One of the specific design objectives when increasing the size of flotation cells, or increasing the feed flow to the flotation cell, is to ensure that the feed stream flowing into the cell does not have an opportunity to bypass the mechanism.This paper describes the initial modeling efforts to quantify the inter-relationship of cell size, inflow rates, and feed and discharge box placement, on the retention time distribution of solids in the flotation cell, and the fraction of particles that bypass the mechanism on a size by size basis.INTRODUCTIONThe great majority of newly installed cells in mineral processing plants world-wide are of the cylindrical tank design and this tank shape offers a number of hydraulic advantages over the older style of square cells. Cylindrical cells give symmetrical flow patterns and by careful design of the mechanism and tank internals, the flow patterns generated can concentrate the more intense mixing in the lower portion of the cell to promote good solids suspension and particlebubble contact. Simultaneously, cylindrical tank design gives a more quiescent upper zone for particle-bubble transport into the froth zone. These symmetrical flow patterns are naturally disturbed in normal operation by the slurry inflow and outflow from the individual cells. The challenge for flotation cell designers is to determine the magnitude of these flow disturbances, and to assess whether or when the inflow and outflow rates have a sufficient impact on the hydraulic flow patterns so as to potentially affect the metallurgical performance of the flotation cell."

Jan 1, 2007

By Daniel G. DiCanio

This report describes a computer-based model for estimating the tangible costs of injuries and deaths from work-related accidents in underground coal mines. The study undertook to identify and quantify the elements of accident costs, including field visits to coal mines, insurance carriers, and public agencies. The mathematical models developed for each tangible element of accident cost are presented in Volume I of the report. A listing of the computer programs which comprise the model and instructions for using the programs are presented in Volume II. Statistical distributions of mining family characteristics, data on 95 miners killed in underground accidents, and other basic data used to develop the model are presented in Volume III. Application of the model to a data base of 9,286 accidents which occured in underground bituminous coal mines during 1974 yielded a total of $56,900,000 in tangible costs to industry, mining families, and public agencies. Loss of income to the families of miners injured or killed in these accidents accounted for 47 percent of the total.

Jan 1, 1976

By Vincent A. Scovazzo

Many accepted and useful methods have been developed and used for pillar design. Each method has its own particular strengths and weaknesses. Three methods addressed in this paper are; empirical, analytical, and numerical. Each of these methods have their place in pillar design. Analytical methods result in close approximation of the ideal pillar (most economical, stable, or yielding) and are suitable for use in final mine design and in analyzing existing problems. BOYD uses the analytical method to develop site specific mine pillars design equations. An analytical method, one of many developed by BOYD, is presented here and is based on the procedure used by Wilson (1) and others in development of their empirical equations.

Jan 1, 1995

By Chris Fleming, John R. Goode, James Brown

"Data will be produced from two uranium feasibility studies that were conducted in 2008, both involving uranium recovery from leached slurry by resin-in-pulp (RIP) with strong base resins. Excellent metallurgical results were produced in RIP pilot plants in both studies, and the loaded resins were eluted with strong sulphuric acid and recycled to RIP in an integrated process. Resin losses by either abrasion or mechanical breakage were immeasurably low.Metallurgical results from these two campaigns will be presented, along with an economic analysis of RIP versus the alternative process of CCD or filtration and solvent extraction.INTRODUCTIONThe recovery of uranium directly from pulp with strong base resins in RIP contactors was practiced commercially in the USA in the 1960s, but the process never established itself as a viable alternative to solid/liquid separation and solvent extraction. This was due mainly to the necessity to do a sand-slime separation partially resulting from the unavailability of coarse resin beads, inadequacies in the design of the RIP contactors and screens to separate resin from pulp, as well as problems with the strength and durability of resins in agitated pulps.There have been significant advances in the last 30 years in each of these areas. All the commercial resin manufacturers are now producing very tough, durable, strong base resins, and are manufacturing them in a large bead size that is better suited to RIP applications. In addition, with the emergence and wide spread implementation of the carbon in pulp process in the gold industry in the 1980s, many innovative techniques for preparing leached slurries and separating carbon from pulp have become firmly established. These techniques have proven to be equally applicable to resin separation from pulps in RIP contactors."

Jan 1, 2010

By C. E. T. White

Although trace amounts of Indium are found in many ores, commercial production of the metal has come almost exclusively from residues, flue dusts and slags generated by Zinc recovery operations. Our paper attempts to summarize the various approaches used to recover Indium from these by-products. Some comments on production and price trends are included as well as our views on future availability.

Jan 1, 1982

By D Lautier, A A. Ndiaye, A Galli

Traditionally gold producers had built up hedge books to protect themselves against adverse changes in the commodity price, but diversified mining groups were staunchly opposed to hedging in any shape or form. The situation has evolved over the past few years. Gold miners have been reducing the size of their hedge books in line with the rising gold price. Commentators have talked about ædouble-digit dehedgingÆ and have suggested that this is the final countdown for gold hedge books. It sounded as if the era of hedging by mining companies was drawing to a close. But as appearances can sometimes be misleading, we decided to find out what mining companies were actually doing. Companies listed on stock exchanges are now obliged to give details of their derivatives holdings in their annual reports. Two or three years ago there was no such obligation. Our reality check was based on the latest annual report issued by three multinational mining groups; two with diametrically opposed views on hedging (Rio Tinto and Barrick) and the third (BHP Billiton) with an intermediate position. This snapshot of their derivative positions at a point in time revealed that Barrick and BHP Billiton have substantial derivatives positions (worth billions of dollars) to protect against adverse changes in foreign exchange rates and interest rates. Moreover Barrick has recently started hedging against increases in fuel prices. Despite its opposition to hedging, Rio Tinto has derivative positions worth several hundred million dollars, but these are primarily a legacy from various mergers and acquisitions over recent years or were entered into as a condition of project financing. Lastly we were surprised to discover that Barrick was holding asset-backed commercial paper (ABCP). So the idea that mining companies donÆt hedge their risks is just another urban myth.

Jan 1, 2009