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By Bell I. F

In 1985, ZC Mines (now Pasminco South) had been unprofitable for some years due to a combination of high operating costs, low metal prices, low head grade and an aging and inadequate mining infrastructure. However, the resource of metal in the ground was still of world class, even after some 80 years of mining. A major study, which was to be of two years duration, was therefore commenced to establish a practical and profitable long term mining strategy and to cost the infrastructure options needed for its support and thus form the justification for a capital expenditure program to take the mine profitably into the 21st century and its second century of operation. This paper discusses the rationale behind the methodology adopted and the nature of the results achieved in one aspect of the study - the determination of the mineable resource and the relationship between the head grade/quantity of the economically mineable resource and the variables of cut-off grade, cost structure, annual production rate and metal prices/exchange rates. The basis of the study was the designing of some 5000 scopes to mine out the entire resource for a range of cut- off grades and the assembly of the detailed physical data thus obtained in a stope-by-stope data base for financial and other analysis. Those scopes which were shown to be economically mineable were then scheduled for two optimum annual production/cut-off grade/metal price combinations to provide life-of-mine cost and value of production cash flows.

Jan 1, 1992

Shallow ore deposits are mined by surface methods but a depth is reached in the case of most deposits after which underground methods are applied for the extraction of the remaining ore. The determination of this depth and its analysis is the subject of this paper. In order to determine transition depth from open-pit to underground mining on the basis of the allowable and economically feasible overall stripping ratios, an economic-mathematical equation is first introduced. Using the achieved equation and an analytical procedure on a particular two-dimensional hypothetical tabulate deposit, an effective formula is then established. The formula introduced here, together with the procedure adopted, could be used in all similar mining situations by the mining design engineer.

Jan 1, 2010

By Lyon F. Terry

INCREASING domestic demand for products, a sharp reduction in exports to Europe, and a rise in imports from South America were the chief features of the economic side of the industry in 1940. As the war progressed it became evident that exports to former European customers were being cut off or drastically reduced, leaving heavy inventories of products in the hands of many American refiners who had anticipated larger demands from the belligerents. Stocks of motor fuel reached burden-some proportions early in the year for the added reason that refining operations were stimulated by heavy demand for heating oils. Excessive tanker rates for Gulf to Eastern Seaboard movements during the first part of 1940 contributed to the accumulation of products on the Gulf Coast, where refinery gasoline prices were forced to extremely low levels by midyear. Tanker rates receded to normal during the summer but have since risen again to the approximate equivalent of pipe-line tariffs from the Mid-Continent.

Jan 1, 1941

The expense of mine environmental and planning process approvals is a fundamental and proper part of mine planning and feasibility costs. It is not a cost that should be the subject of challenge nor is it a cost that should be avoided. However the additional process approval costs incurred by bureaucratic delay, process duplication and administrative incompetence is a scandal and a deterrent to investment.

Jan 1, 1992

By L. C. Snider

During the past few years a number of large and highly productive oil fields have been discovered in the United States. The immediate oversupply which has resulted, together with the circumstances under which the new fields have been operated, has created exaggerated impressions of the importance and magnitude of these fields. Statements as to the many years during which individual fields could supply the entire demand of certain areas, as to the overwhelming effect of these fields on the industry, and as to their greater size compared with any of the older fields have become so common as to attract little attention. For example, East Texas is commonly considered as the "greatest oil field" and a review of the development of the field for 1931 is so headed in one of the leading trade journals.' East Texas is unquestionably a very great oil field. However, some students of the field have estimated its ultimate recovery at about one billion barrels, and the Bradford field discovered in 1875 is also estimated, by competent engineers, to have about a billion barrels still recoverable by water drive, in addition to more than 300,000,-000 bbl. it has already produced. If East Texas should produce the two or three billion barrels assigned to it by more optimistic estimators, it will, though considerably greater than Bradford, still fall far short of it in importance to the industry. A reasonable doubt also exists as to whether East Texas will exceed the Midway-Sunset field which has produced about 720,000,000 bbl. and still has important reserves. Again, in importance to the industry, Midway-Sunset has been greater than East Texas can ever be. Relative Importance of Oil Fields The principal purpose of this study is to compare, on the basis of their importance to the industry, a considerable number of the major fields which have been developed in the United States. Some remarks are also made as to the estimates of reserves in certain fields now in course of development, since the writer believes that the conditions under which these fields are operated lead to estimates of recoverable reserves which

Jan 1, 1933

By Richard T. Newcomb

This paper considers the many problems involved in estimating rates of technical change via productivity indexes. In mining, declining ore grades complicate the measurement of progress considerably. The estimates discussed in this article were made for the United States iron mining industry by means of two techniques: a simple model of production with two inputs, and multiple regression. The results can be used to explain the relation existing on U.S. iron ranges between rates of exhaustion, technical change, output per man and the increase in capital proportions observed since World War I. Similar ob-servations can be made on the mining sector trends in the United States, Canada, and Japan. Formidable problems confront the economist attempting to estimate the influence of technological changes on the progress of mineral industries. Peculiar to these industries is the problem of how to adjust any measure of technological progress for the offsetting influence of exhaustion. Exhaustion has long been recognized in the mining industry as a critical dimension. Empirically, it is usually treated as a problem of declining grades of ore either in production or in reserves. There are studies of the trends in mining industries attempting to relate changes in input requirements to changes in grade and technology over time. Most frequently, the measure used to indicate technological progress is average labor productivity, e.g., output per man-hour. However, although such an approach has the merit of being simple and direct, it ignores the influence of other important factors of production such as capital. Without defining both the nature of technological change and of production, it can be very misleading to identify increases in labor productivity with tech-

Jan 1, 1969

By Walter H. Voskuil

Illinois supplies coal to seven states in the Upper Mississippi Valley —Illinois, Missouri, Iowa, Minnesota, Wisconsin, and portions of the Dakotas, Nebraska and Kansas. In this same area are marketed large quantities of coal from West Virginia, Kentucky, Pennsylvania, and elsewhere; fuel oil from the crude petroleum supplies of the Mid-Continent fields, and natural gas from Louisiana, Kansas and the Texas Panhandle. The boundaries of this "Illinois coal-market area" are determined by competition from other coal fields and from other forms of fuel. Within the area so described 90 per cent of Illinois coal is marketed. Thus in the Southwest, an abundance of fuel-oil supplies and natural gas dominates the market almost to the exclusion of coal. The westward movement of Illinois coal in Kansas, Nebraska and the Dakotas is met by an eastward flow of high-grade coals from Colorado, Wyoming and Montana. In the lake-shore counties of Minnesota and Wisconsin, the market is dominated by Appalachian coals, cheaply carried over the Great Lakes and reaching the ports of Lake Michigan and at the head of Lake Superior. Illinois coals find their largest market in the southern and western sections of these two lake states. Only small quantities of Illinois coals are shipped east of the state line. This market area is occupied entirely by the neighboring coal fields of Indiana and the Appalachian coal fields in Ohio, West Virginia, Kentucky and Pennsylvania. Illinois Coal-makket Area , With these factors in mind, the map of the Illinois coal-market area may be drawn. Within this boundary is the area that is logically and economically served by Illinois coal. However, this area is by no means exclusively dependent upon coal from Illinois mines. The preponderance. of Appalachian coal in Wisconsin and Minnesota has been mentioned. Appalachian coal, also, moves in large tonnages into Illinois itself, particularly the Chicago district. The Iowa and Missouri local coals share the market with imported coal from Illinois; throughout the market area, fuel oil and natural gas are important factors in the total energy supply.

Jan 1, 1936

By Walter H. Voskuil

Illinois supplies coal to seven states in the Upper Mississippi Valley —Illinois, Missouri, Iowa, Minnesota, Wisconsin, and portions of the Dakotas, Nebraska and Kansas. In this same area are marketed large quantities of coal from West Virginia, Kentucky, Pennsylvania, and elsewhere; fuel oil from the crude petroleum supplies of the Mid-Continent fields, and natural gas from Louisiana, Kansas and the Texas Panhandle. The boundaries of this "Illinois coal-market area" are determined by competition from other coal fields and from other forms of fuel. Within the area so described 90 per cent of Illinois coal is marketed. Thus in the Southwest, an abundance of fuel-oil supplies and natural gas dominates the market almost to the exclusion of coal. The westward movement of Illinois coal in Kansas, Nebraska and the Dakotas is met by an eastward flow of high-grade coals from Colorado, Wyoming and Montana. In the lake-shore counties of Minnesota and Wisconsin, the market is dominated by Appalachian coals, cheaply carried over the Great Lakes and reaching the ports of Lake Michigan and at the head of Lake Superior. Illinois coals find their largest market in the southern and western sections of these two lake states. Only small quantities of Illinois coals are shipped east of the state line. This market area is occupied entirely by the neighboring coal fields of Indiana and the Appalachian coal fields in Ohio, West Virginia, Kentucky and Pennsylvania. Illinois Coal-makket Area , With these factors in mind, the map of the Illinois coal-market area may be drawn. Within this boundary is the area that is logically and economically served by Illinois coal. However, this area is by no means exclusively dependent upon coal from Illinois mines. The preponderance. of Appalachian coal in Wisconsin and Minnesota has been mentioned. Appalachian coal, also, moves in large tonnages into Illinois itself, particularly the Chicago district. The Iowa and Missouri local coals share the market with imported coal from Illinois; throughout the market area, fuel oil and natural gas are important factors in the total energy supply.

Jan 1, 1936

By H. J. Struth

Economic law was accorded considerably more recognition by the oil industry last year than perhaps ever before. While proration was undoubtedly given added impetus in 1931, and the list of proponents of unit operation was noticeably lengthened, predominant evidence plainly shows that the functioning of economic laws dominated collective efforts to reduce the excessive above-ground supply of petroleum. Crude oil production was reduced more than 48,000,000 bbl. last year; imports from other parts of the world were substantially lower; stocks of crude were drawn upon to the extent of nearly 48,000,000 bbl.; domestic gasoline demand increased 2 per cent—and yet, prices of petroleum and its products were at the lowest levels in many years. To say that the ills of the oil industry during 1931 were due to the general depression that was felt in all other lines is tantamount to attaching an air of uncertainty to a group of commodities that have been proved to be an ever increasing necessity, even in times of depression. TO say that the potential productivity of proven oil-producing areas has been responsible for the unsatisfactory state of affairs last year, and now, is to admit failure to carry out the principles designed to control production in accordance with the limits prescribed by demand. In fact, there is no reason why a large proven potential supply of oil should not be considered a valuable asset to the industry; an assurance against future needs; a stabilizing influence in building up confidence in the ability of the industry to supply this and future generations with fuel and lubricant requirements at reasonable prices. At any rate, an assured future supply of oil should be interpreted to the public to mean that the oil industry is a legitimate, progressive industry, and not a group of prospectors madly searching for "liquid gold." There has been a great deal of romance connected with the history of the oil business—so much that the public has come to associate the word "oil" with untold riches. However, the financial statements of 1931 will furnish conclusive proof to the contrary. Too much oil, too many refineries, too many filling stations, too much capital invested; these and other "too muches" and "too manys" have perhaps been given more publicity than necessary. We seldom hear these

Jan 1, 1932

By H. J. Struth

Conditions in the gasoline market undoubtedly influence the oil industry's general economic situation to a greater degree than perhaps any other single factor. No matter how efficiently the oil industry manages to conduct its producing operations, a drop in the price of gasoline exerts definite pressure upon the posted price of crude oil in the field. Efforts of the recent past have shown that profits from the producing division of the industry are closely tied in with the course of the gasoline market. When refinery gasoline prices are depressed, as they have been during recent months, it is utterly impossible for purchasers to maintain a crude market that is commensurate with the cost of production, regardless of how well balanced the producing situation may be. In fact, the producer can no longer regard his operations in the light of an independent unit of the oil industry, since his financial well-being is directly dependent upon the well-being of the refiner. Because gasoline is the principal constituent of crude oil, it is obvious that profitable refining operations can only be maintained through profitable gasoline markets. Likewise, when the price of gasoline influences a profit for the refinery it also influences the prosperity of the producer, through the advent of higher and more profitable posted prices for crude oil in the field. Financial results for 1932 showed material improvement over the preceding year, primarily because the price of gasoline was maintained at levels somewhat above those of 1931. Consequently, the producer was able to record improvement in the crude market, through a somewhat higher level of posted prices. While effective methods of prora-t,ion of crude production are given credit for the advance recorded in the crude market last year, it is also a fact that the advent of higher prices for gasoline had a direct influence upon the posted prices of crude oil. For example, when gasoline was sold in Group 3 at 2 3/4 a gallon in June and July, 1931, the price of 36-gravity Mid-Continent crude was down to its lowest point of only 18c a barrel. As refinery prices advanced, however, there was a corresponding advance in posted prices of crude oil. Thus, when Group 3 gasoline commanded a price of 5c a gallon

Jan 1, 1933

By L. F. Terry, H. K. Ihrig, D. J. Sabin, Ralph E. Davis

This paper presents the results of a study of the comparative values of the several fuels commonly used by industrial plants. It shows that the energy actually recovered from any fuel and turned into useful work is dependent upon several factors: (1) the total energy available in the fuel, (2) energy losses resulting from combustion reactions and (3) energy losses dependent upon the mechanics of the firing operation. The chemistry of combustion and the losses resulting therefrom are discussed. The Advantages and disadvantages of the several mechanical methods of firing and the resulting heat losses in each are developed. Data obtained from several typical fuel operations, where careful records have been maintained, are presented to show that the practical results in the actual operation are in harmony with the theoretical results developed in the earlier part of this paper. Water power and solid, liquid or gaseous fuels are at present the only commercial sources of energy. The economic utilization of any one of them depends, in the final analysis, on the cost of energy per unit of finished product to which the energy is applied. The location of the plant utilizing the particular fuel chosen is a large factor in the original choice. The cost per unit at its original natural source, or even in its delivered form, is not always the final measure of its worth. The use of electricity as a source of energy illustrates this to the extreme. Electric current produced from water power is very cheap in certain localities. In Norway, current is sold as low as ½0# per kw-hr., while in dry cells it costs as much as $10 per kw-hr. Yet the sale of dry cells is a large business. The selling price of gas also varies widely. In some localities natural gas for the manufacture of carbon black sells for as low as $0.02 per million British thermal units, while artificial gas for domestic purposes sells for as high as $6 per million B.t.u. Obviously the cost per unit of energy is not the final determining factor in its purchase. Any discussion of the economic utilization of fuels must include costs in relation to the units of finished material manufactured. In large central power generating stations, this is the over-all cost per kilowatt-hour, and in ceramic firing the cost per unit of finished product of a certain quality is the criterion of economic utilization.

Jan 1, 1931

By Sidney A. Swensrud

Much has been said and written about uneconomic and evil marketing practices in the oil industry, including such factors as loaning of equipment, price cutting and secret prices, commercial discounts, abuses of credit cards and coupon books, and so forth. It is not my purpose here to add to the discussion of those problems, but rather to attempt a discussion of some of the more basic factors in the general distribution economies of the industry. The economics of distribution in the oil industry cannot be regarded apart from the general economics of the industry as a whole. The attempt to regard them as separate has led many people into the fallacy of believing that the responsibility for the apparent evils in the marketing end of the business lay entirely at the door of the marketing end. Such a view fails to take cognizance of many underlying factors; we can only expect to understand the distribution economics of the industry if we understand its general economics. We must realize also that the oil industry today is essentially the gasoline industry. The oil industry may be said to have begun about 60 years ago. At the outset it was concerned chiefly with the manufacture and sale of kerosene, lubricating oils and greases. Gasoline was then a most obnoxious by-product. The early oil-marketing company was engaged almost exclusively in refining and marketing—it did not concern itself with production but bore the relation to it merely of a purchaser. It may be said that the urge of marketing development in those days, therefore, came from the refining and marketing end of the business. The raw material had not yet begun to exert its enormous pressure, nor had the producer of crude oil acquired a direct interest in the sale of the ultimate finished products. Since then great changes have taken place. With the development of the automobile came a vast new demand for the raw material from which gasoline could be made. No longer could the refining and marketing companies be indifferent to the source of that raw material, particularly in view of the pessimistic outlook then presented as to the probable quantity of oil in existence. And despite the complete overturning of those early estimates, made before the bounty of nature and the skill of

Jan 1, 1931

By Sidney A. Swensrud

About a year ago, I attempted in a general way to trace the origin and development of some of the marketing problems of the petroleum industry, and to describe certain trends which it then seemed possible to foresee. To summarize briefly, it was pointed out that the consumption of gasoline, after increasing for more than a decade at an almost unbelievable rate, was slowing down, but that the two factors which determine the supply of gasoline —-namely, the production of crude oil and the percentage of gasoline derived therefrom—were tending steadily to mount. It was suggested that, while the increase in gasoline outlets began with and probably was justified at the start by the rapidly increasing demand, long after all reasonable requirements as to number of outlets had been met the number continued to increase—if anything, at a still more rapid rate—because by that time the overproduction of crude had begun to exert an impelling urge upon the owners of that crude to seek assured outlets for it in the form of gasoline. As more and more companies became integrated all the way from crude oil to marketing, there took place an ever-increasing competition among them, not only for the existing outlets but for new ones. The wide margin between wholesale cost and retail price, which is characteristic of the early stages of most new industries, persisted in the oil industry longer than in most industries, for various reasons. The existence of that wide margin provided in large measure the means of attracting new outlets, for as the gallonage per outlet declined with the increasing number of outlets, competing companies simply offered the dealers a larger part of the total margin. The very nature of competition suggests that such a process would continue until practically all of the available margin was thus given away, and such was clearly the tendency. It was a system that in turn produced increasing marketing expense per gallon on account of the diluted gallonage per outlet; this increased expense might seem to have provided a justification for continuing wide margins. Economics, like its parent, nature, however, progresses by mutations and so began to throw out new types of marketers, in the form of tank-car service stations, cut-price jobbers, and the like—heretics or

Jan 1, 1932

By Joseph E. Pogue

Proration in the petroleum industry has come to mean a method for curtailing the production of crude petroleum by artificial effort, and it is in this sense that the term is employed throughout this paper. Although a contrived curb on supply has been invoked at various times in the past in particular fields and to meet specific situations, it is not until the past few years that this procedure has become general and assumed a dominant role in the oil business. In the sense that we now understand it, proration had its inception in the Seminole area of Oklahoma in 1927, from which time and place the practice spread to include practically all the flush oil fields of the country, especially those of California, Kansas, Oklahoma and Texas. At present there is perhaps no phase of the oil business that commands more attention than proration, nor one that engages more time and effort on the part of executives in the business. The practice of proration, indeed, has not only become an integral part of the policy of most companies and operators, but it has also taken on the aspects of a "movement" involving two schools of thought with considerable feeling, and at times some bitterness, on both sides. In this atmosphere it is difficult to find calm, dispassionate consideration of proration, for most discussions are either vigorous exhortations by its proponents, or else sharp condemnations by its opponents; although it appears that the majority of the industry is clearly "in favor of" proration. It is hoped that this analysis will be taken as an attempt to appraise the movement as an economic force, without bias and without regard to the incidence of the conclusions upon any preconceptions that the industry may entertain. Evolution of Proration To appreciate the causes that brought proration into being, it is necessary to view briefly the development of the petroleum industry over the past twenty years, approximately the span of the gasoline era., For the first ten years of the period, the industry was seeking capital

Jan 1, 1932

By J. E. Pogue

It is the purpose of this paper to attempt to establish three theses which may be stated in advance as follows: 1. The crude oil potential is the accumulation of surplus initial production. 2. The crude oil potential is a semi-inventory and therefore is a causal factor in the price of crude petroleum. 3. The price of crude petroleum no longer correlates with above-ground inventories but does correlate with corrected inventories (i. e., above-ground storage plus the inventory equivalent of the crude oil potential). The factors and principles set forth in this study are thought to yield an approximate answer to a number of questions of active interest in the petroleum industry today, to wit: (a) How long would be required to eliminate the potential if all drilling ceased? (b) What would be the indicated crude oil production of the United States in 1931 if proration were abandoned? (c) What economic change would be necessary to warrant a higher price for crude oil? Definitions For the purposes of this study the following definitions may be stated: The crude oil potential in the United States is the quantity of oil that all the oil wells would make the first 24 hr. if permitted to flow unrestricted. The surplus potential is the above-mentioned quantity minus the volume currently produced. Initial production is the first day's unrestricted flow of an oil well. Aggregate initial production is the sum of the initials of all wells completed during a year. Surplus initial is the initial not needed to bring production into balance with demand. The surplus initial is equal to the crude oil potential minus the current rate of production. The annual production-equivalent of the crude oil potential is the volume of oil that would be produced in one year if all wells were permitted

Jan 1, 1931

By Norman F. Patton

The subject assigned is so broad that thorough discussion is well-nigh impossible within the space allotted, and further, few specific data are available upon which to predicate conclusions concerning the efficiency of present methods of distributing anthracite. This paper treats briefly the various agencies through which both primary and secondary distribution are effected, the methods of transportation and the general interrelation of production, demand, inventories and price. Avenues of Distribution Three distinct types of primary distribution are common in the marketing of anthracite. First, though not most important, is the sale by the producer, or operator, direct to the consumer. These sales, other than to employees and the local trade, are generally confined to steam sizes for industrial uses, and are consigned to the sidings or docks of the consumer. Sales of this type often are so closely priced to compete with oil and bituminous that the addition of even a small dealer's margin is sufficient to increase the cost to the point where the business might be lost. Second, the operator sells to a wholesaler or broker for subsequent resale, either to a retail dealer for clearance through his yard or direct to large consumers. Usually this method of distribution is employed by the smaller operators, who do not find it economically feasible to maintain extensive sales organizations. In most instances, the wholesaler retains some 5 per cent for his services, paid, of course, by the producing company whose anthracite he handles. He may, and frequently does, handle the output of several different companies, suited to the varying needs of the different communities he serves. His business includes all sizes of anthracite. The third, and by far the most general method, consists in selling to retail dealers, shipments being made direct from the breakers to the yards of the dealers. In large consuming areas, such as the metropolitan districts of New York or Philadelphia, one operator may sell to several

Jan 1, 1936

By Norman F. Patton

The subject assigned is so broad that thorough discussion is well-nigh impossible within the space allotted, and further, few specific data are available upon which to predicate conclusions concerning the efficiency of present methods of distributing anthracite. This paper treats briefly the various agencies through which both primary and secondary distribution are effected, the methods of transportation and the general interrelation of production, demand, inventories and price. Avenues of Distribution Three distinct types of primary distribution are common in the marketing of anthracite. First, though not most important, is the sale by the producer, or operator, direct to the consumer. These sales, other than to employees and the local trade, are generally confined to steam sizes for industrial uses, and are consigned to the sidings or docks of the consumer. Sales of this type often are so closely priced to compete with oil and bituminous that the addition of even a small dealer's margin is sufficient to increase the cost to the point where the business might be lost. Second, the operator sells to a wholesaler or broker for subsequent resale, either to a retail dealer for clearance through his yard or direct to large consumers. Usually this method of distribution is employed by the smaller operators, who do not find it economically feasible to maintain extensive sales organizations. In most instances, the wholesaler retains some 5 per cent for his services, paid, of course, by the producing company whose anthracite he handles. He may, and frequently does, handle the output of several different companies, suited to the varying needs of the different communities he serves. His business includes all sizes of anthracite. The third, and by far the most general method, consists in selling to retail dealers, shipments being made direct from the breakers to the yards of the dealers. In large consuming areas, such as the metropolitan districts of New York or Philadelphia, one operator may sell to several

Jan 1, 1936

By Sidney A. Swensrud

The writer has been interested for some time in trying to appraise our industry's prospects for gasoline consumption over the next half dozen years or so. Anyone who has even approached the problem knows the intimate relationship to it of the number of automobiles in use— by automobiles I mean both passenger cars and trucks. Probably at least 90 per cent of our gasoline is used in automotive vehicles. Some recent estimates secured from the Department of Commerce show the following breakdown: Per Cent Passenger cars............................................ 60.0 Trucks................................................... 27.4 Busses................................................... 2.9 Taxicabs................................................. 2.2 Subtotal............................................... 92.5 Aviation, motor boats and railroads......................... 0.5 Agricultural: farm tractors, etc.............................. 3.3 Balance (manufacturing, government use, construction, etc.)... 3.7 100.0 Up to the beginning of the depression there was, of course, a constant annual increase in the number of automobiles in use, for each year the industry added to the total inventory or ''population" more new units than were being scrapped, as may be seen in Fig. 1. Few of us in the oil industry needed to give much attention to the detailed figures, although the automobile industry seemed to interest itself in all sorts of calculations of replacement demand vs. new car demand, the average life of the car, the number scrapped, and the like. Probably many people in the oil industry, as well as outside it, were surprised at the way in which automobile registrations and gasoline consumption held up during the early years of the depression. Nor were they greatly perturbed when, as in the last two years, both registrations and consumption began to fall somewhat. That was natural enough; it

Jan 1, 1933

By H. J. Struth

In these trying times of proration and low oil prices, it is decidedly necessary for all branches of the petroleum industry to accord full recognition to the economic phenomena that contribute to its varying state of welfare. Perhaps no other single factor has a more important bearing upon the general oil situation than the supply and demand of gasoline. Year after year, the records have shown that the degree of prosperity or depression accompanying the industry's developments has been to a large extent influenced by the degree of balance maintamed between the supply and demand of gasoline. More and more it is being realized within the industry that equilibrium between the supply and demand of gasoline forms the basic structure of crude and product market values and, consequently, the deciding factor in the financial results of the industry as a whole. The influence of the gasoline situation upon the market and financial structure of the petroleum industry was effectively demonstrated during 1930, when excess accumulation of gasoline undermined not only the refined oil market but the crude market as well. In fact, it was a top-heavy gasoline situation that defeated the realization of benefits that might have accrued from an otherwise favorable statistical position in the producing branch of the industry. Indicative of this is the fact that crude oil production was curtailed to the extent of 98,323,000 bbl. last year, while refinery runs to stills were maintained at an excessive rate until late in the year, creating an excess gasoline production of 6,663,000 bbl. above actual requirements. Nevertheless, the movement to curtail refinery operations during the closing months of the year prevented a far worse situation, although it came too late to turn the ebbing momentum of the general oil market. Despite the severe depression of the market values that accompanied 1930 developments, it can be said that the results attained during the closing months of the year, in the direction of production control, marked a decisive turn in the industry's economic affairs. In fact, a review of the oil situation from every angle points definitely to a better general understanding and recognition of the workings of the economic law of supply and demand. As a result, the year closed with crude production in

Jan 1, 1931

By A. B. Bowman

The 1963 Jackling Award lecturer describes the founding of Banner Mining Co. and its trials and tribulations before becoming an established firm. Such aspects as geological description of Banner mining areas, history of exploration and production, areas of present interest to the company and research work conducted by the company are included. Several years ago a wealthy Chinese business friend of mine purchased an interest in a proposed oil well to be drilled a great distance from his home. A few months later it came in as a producer and proved to be a huge success and materially added to his resources. I asked him why a man of his wealth should be so lucky in a venture outside his sphere of knowledge when most people of modest means never seemed to get ahead. His answer was, "Fat Hoy takes a chance." Even though this was his answer, I knew from my association with him that there were other tempering considerations which Mr. Hoy applied before making up his mind to enter any transaction. First, he was a cautious individual. He was also a great believer in details and insisted on knowing everything possible about a situation, and finally, he was what we call a very solid individual with good basic instincts and judgment. This philosophy of Mr. Hoy may be applied to most any business but especially to those engaged in a search for natural resources such as mining where great risks are involved. This article concerns events in the history and growth of Banner Mining Co., with which I have been associated for 27 years in capacities from mine surveyor to vice president. Mr. Hoy's philosophy has played a significant role in the exploration projects of this company over the years, but what is more important, the officers, directors, and controlling interests in Banner have been aggressive in their search for ore reserves. THE BIRTH OF BANNER Banner Mining Company was incorporated in September 1935 by a group of Oklahoma and Texas oil men for the purpose of exploring and developing the Bonney-Manilla mines at Lordsburg, N.M. These properties had a history of intermittent production since the first ore discoveries as far back as 1870. Most of the production from the district has come from four mines, namely, the Eighty-Five, the Atwood, the Bonney-Manilla, and the Misers Chest. The last two are now owned by Banner Mining. The Eighty-Five mine operated between 1885 and 1931, and production totalled 1,494,287 tons averaging 0.11 oz of gold per ton, 1.23 oz of silver per ton, and 2.80% copper. The vein extended for a distance of about 3000 ft northeast and was mined to a depth of 1650 ft. The Atwood mine, adjoining the Eighty-Five mine, to date has been of lesser importance as a producer, but it has been operating for several years producing high silica flux ores for a smelter. Production totalled 352,828 tons up to January 1, 1962 From the Bonney-Manilla and Misers Chest mines, owned by Banner, production through 1961 totalled 2,006,343 tons with an average grade as mined of 0.0192 oz of gold per ton, 0.760 oz of silver per ton and 2.63% copper. Banner built a 150-tpd flotation mill in 1936 after almost a year of development on the 600 level of the Bonney mine. After less than one year's operation, it became apparent that the 150-tpd rate was not sufficient to make a reasonable profit due to the marginal grade ores. The low tenor of the ore, mainly chalco-pyrite in a highly siliceous gangue, made mandatory the close control of costs in order to make ends meet. A 300-tpd unit was added to the mill in 1937, and it is still the operating unit today. The clean sulfides presented no problems in milling. A metallurgist doing research on it at the time stated that the copper minerals seemed to have a built-in desire to float. Mill recovery of copper throughout the 27 years of operation has averaged 96.23%. A PERIOD OF FORCED GROWTH World War II brought many hardships to Banner. Labor and supply shortages caused drastic curtailment in development work. Rapidly rising costs far outdistanced any relief from pegged prices which we received from Government agencies. Finally, a branch of the Government asked us to stop all devel-

Jan 1, 1963