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By H. Boyd

Fluid energy grinding, or jet pulverization, refers to the process of entraining solid particles in high velocity gaseous or vaporous streams and reducing their size by impact and attrition against other particles or some sort of target. Since all desired size reduction is not achieved in one pass through the zone where energy is applied, some form of classification is necessary to return oversize particles to the grinding zone for further size reduction. Applications Fluid energy mills have normally been used to produce products where the particle size is basically finer than 325 mesh. Products having particle size distributions with a maximum size of 4 or 5 µm, and with a high percentage finer than I µm, can be produced using fluid energy mills. More recently, some fluid energy grinding units have been applied economically to produce ground products with 1 or 2% coarser than 200 mesh. It is also possible to consider usage of a jet-pulverizing zone, without the usual integrated air classi¬fier, operated either in open circuit or in conjunction with a screen. Feed sizes to be delivered to the fluid energy mill depend on the material involved, the type of jet pulverizer used, the finished product size requirement, and the upstream process. In some units feed sizes up to l in. or larger can be accepted, but practical economics usually require the starting material to be -4 mesh or smaller and some pulverizers are typically fed at 20 mesh top size. It is not unusual to find feed materials at essentially -325 mesh when extremely fine products are needed, since capacities are improved with finer feeds. Conventionally the fluid energy grinding process has been used for relatively soft and nonabrasive materials. This includes very low¬melting-point and temperature-sensitive materials or coatings, since there is no measurable temperature rise during fluid energy milling. More recently, however, jet pulverizers are being used on highly abra¬sive materials such as silica, feldspar, glass, zircon, calcined alumina, coke, boron carbide, and similar materials. Since the primary energy application is by impact of particles against themselves, there is a low rate of wear resulting in a small amount of product contamination and in low maintenance costs. Usually the fluid energy pulverizer produces a more narrow particle size distribution than other mills provide, and this is useful where such a requirement exists. It is possible, within limits, to adjust classifi¬cation and other functions of the overall fluid energy system to vary the particle size distribution curve and thereby approach the broader distribution obtained from other grinding methods. By controlling the temperature, composition, and humidity of the fluid used, it is possible to incorporate other functions with the size-reduction process. These include drying or adding moisture, coating, mixing and blend¬ing, and even oxidation or reduction and other chemical reactions or their inhibition. The finished product is discharged in the fluid stream and is conveyed pneumatically to the desired point, where a suitable dust collector must be provided. Operation and Mechanical Features One of the earliest fluid energy mills is the Micronizer now manu¬factured by the Sturtevant Mill Co. Similar units are also manufac¬tured by Jet Pulverizer Co. and others. As shown in Fig. 81, the micronizer consists of a shallow circular grinding chamber with noz¬zles arranged at the outer periphery to discharge tangentially inward. Fluid (usually compressed air or superheated steam) is provided to the nozzles from a manifold at pressures normally in the range of 100-150 psig and at temperatures up to 800°F or higher, depending on the raw material, required results, and economic factors. The com¬pressible fluid expands to high velocity through the nozzles and gener¬ates a spiral flow pattern in the grinding chamber, and discharges

Jan 1, 1985

By Andrew Cecala

The Bureau of Mines performed tests to compare the effectiveness of steam and of water sprays to reduce respirable dust levels at mineral processing plants. By applying 0.22 wt pct water vapor as steam to product material, a 64-pct respirable dust reduction was recorded. By applying the same amount of moisture with water sprays, only a 25-pct dust reduction was recorded. By increasing the moisture content up to0.5 pct using water sprays, the dust reduction was increased to 55 pet, which was still less than the dust reduction achieved by adding less than half that amount of water in the form of steam.

Jan 1, 1985

By J. A. Herbst, H. R. Cooper, R. J. Brison, R. W. Harper, K. P. Ananthapadmanabhan, W. C. Hellyer, B. H. Bergstorm, D. M. Hopstock, H. Rush Spedden, W. C. Hellyner

Scope of Section The physical characterization of an ore or mineral mixture in such detail that mineral processing may be effectively applied to create more useful products is one part of the technology of sampling and testing. In addition, the evaluation of the multitude of separation processes, both physical and chemical, combined with ancillary opera¬tions and performed on samples at a laboratory scale, is another part of the testing procedure. Although analytical techniques provid¬ing quantitative determinations of elemental compositions are an im¬portant and necessary supplement to any testing program, that field of endeavor is a well-developed, separate entity beyond the scope of this Section. Sampling procedures cover the practice of selecting representative quantities of test materials in the field to evaluate mineral deposits, and extend to techniques of obtaining process samples in slurry and bulk ore as part of process evaluation. The same techniques are appli¬cable, of course, to standardized methods of metallurgical accounting. Sampling is also an important facet of successful on-line measurement of slurry properties such as assays and particle size in the practice of automation. However, the sampling methods in this case can be different from those needed for precise testing and accounting pur¬poses. Sampling was well defined in Taggart's Handbook as "the opera¬tion of removing a part convenient in size for testing, from a whole which is of much greater bulk, in such a way that the proportion and distribution of the quality to be tested (e.g., specific gravity, metal content, recoverability) are the same in both the whole and the part removed (SAMPLE). The conditions of the more stringent definition, that the sample shall be completely representative of the whole as regards all aspects save bulk, are practically never fulfilled when heterogenous mineral mixtures are sampled." Taggart's Handbook of Mineral Dressing, Section 19, "Sampling and Testing," continues to be a very useful compendium of principles and techniques, particularly as applied to manual methods for han¬dling samples. In the intervening years since its last revision, substan¬tial progress has been made in both the theory and the techniques; thus, this current contribution is designed to be an extension of the earlier work, yet complete enough to provide procedural guidelines to methods of continuing validity. Although basic principles of testing remain unchanged, the meth¬ods of applying those principles have undergone great change. New testing equipment has become available, yielding a greater precision of results. Testing methods have been refined which, in many cases, allows for a valid scale up of flowsheet designs without the necessity of costly pilot or prototype plant development. Justification for a Sampling and Testing Program* The proper evaluation of a mineral property is a complicated process. It often is done on a team basis with the exploration geologist, mining engineer, mineral process engineer (extractive metallurgist), economist, and product utilizer (ceramist, chemical engineer, chemist, metallurgist, etc.) all represented. The mineral processing engineer is a key member because he can provide a go no-go answer to the question, "Can this ore be processed economically?" In addition, his judgment on the response of even the initial sample to processing can be an invaluable guide to the proposed process and its mutations. Since the capital investment and operating costs are so sensitive to the type of process used, the judgment of the mineral processing engineer forms an important part of the early evaluation of the profitability of a new mining venture. This early estimation of the processing approach is all the more important since, for some metalliferous ores, the capital investment for mill, smelter, water supply, and tailings disposal exceeds the cost of the mine. At present, for commodities such as coal, the reverse is true. There is a smaller capital investment for the coal preparation plant than for the mine. In general, both the capital and operating costs escalate very rapidly in the following order: gravity concentration of alluvial deposits (e.g., dredging), gravity concentration of lode ores, flotation, simple hydrometallurgical processes, and complicated hydrometallurgical and pyrometallurgical processes. The latter two processes may cost 100 to 1,000 times more per ton treated than processing of a simple alluvial deposit. This dictates that the valuable mineral be concentrated as much as possible to minimize the total tonnage treated in the more expensive operations. Within each of these ore-processing categories there is a wide range of process sophistication and hence of capital and operating costs. Perhaps the greatest variations are in the chemical processing of ores. These range from the simple leaching of a copper waste dump to very sophisticated hydrometallurgical processing of ores in increasing order of cost. Because the overall cost of a mining venture is so sensitive to the process selected, it is essential that the mineral¬ processing engineer evaluate the ore in the initial stages of the development of an ore body. As better samples become available, he must continually revise his estimate of the process to be employed. The sampling and testing process must be a necessary and continuing activity throughout the life of a project. One fundamental aspect of nearly all mineral deposits is the inherent variability of the mineral assemblage and composition. A utopian goal of any processing plant is to have the process so flexible and so well-defined that an automatic process control system can optimize the economic recovery at all times. Since this is rarely possible, a continuing or at least a periodic testing program is desirable. Variables to be considered are: 1) Ore body inconsistencies. 2) Zonal variations. 3) Feed variations from mining plan or methods. 4) Variable performance of processing units due to wear. 5) Seasonal or other changes affecting processing conditions such as water quality, temperature, etc. 6) Changing market conditions for product quality or byproducts. 7) Technological advances in processing methods or equipment. 8) Increasing demands for environmental control. 9) Changing economics of competitive processes, of supplies, of capital investment vs. labor costs, etc. Sampling Procedures Preliminary Guidelines for Sampling Ore Deposit Studies. t At a very early stage, it is essential that the mineral processing engineer receive a sample of the ore. This may be a portion of the diamond drill core or a split from the trench, pit, churn drill, channel, or sheet sample. Even a grab sample may have some value, but it should be selected by the mining engineer or exploration geologist to be as representative of the ore body as possible within his best judgment. The sample delivered to the process engineer should have been subjected to as little prior crushing as is practical since fine sizes are difficult to concentrate. In addition, finely ground ores are readily oxidized and thus may give misleading test results. Furthermore, ground samples may make it impossible to eval¬uate either the comminution or the coarse-gravity concentration pro¬cesses. For an initial evaluation, a good deal may often be learned from a sample of only a few pounds if that is all that is available. To obtain the maximum information from a sample, its selection should be carefully discussed with the mineral processing engineer. In addi¬tion to being as representative as possible, the mineralogically distinct samples should be carefully segregated rather than composited. Since drastically different processes are often needed to process samples of differing mineralogy, considerable care and time must be exercised during this sample collection step. The segregation of samples showing gross mineralogical differences, such as the oxide caping on a sulfide deposit or a laterized zone, is easy. It is the more subtle changes in mineralogy that can often elude the field man. Yet these differences are often sufficient to dictate that an entirely different type of process be used. Obviously, the selection of these initial samples for ore testing and mineralogical studies requires that it be done by a man of consider¬able experience and judgment. While the mining engineer or field geologist is collecting these samples, he should also note and convey to the processing engineer such details as water quality and availabil¬ity, terrain, potential mill location, tailings-disposal areas, case of transportation, etc. As the property is developed with additional drill holes, adits, etc., larger and more representative samples will be required to develop the ore-processing flowsheet more adequately. If pilot-plant studies are required, a very large sample may be necessary. Though the type and amount of sample collected for flowsheet development investigations vary widely, gathering a representative sample of the ore body is a prime requisite for any process development effort. The process developed for any given ore body is only as reliable as the sample on which the flowsheet was based¬

Jan 1, 1985

By D. G. Collins

As part of its effort to develop ways to maximize resource recovery, the Bureau of Mines investigated the extraction of vanadium from Western phosphate beneficiation tailings with H2S04 and/or H3P04. Dissolution of the vanadium was accomplished by digesting a mixture of acid and a 50-pet-solids, tailings-water slurry. In the most effective method investigated, vanadium and phosphorus were leached by digesting the slurry at a constant boiling temperature (1000-1100 C) in a stirred reactor. In batch tests, maximum vanadium dissolution was 95 pet. In continuous-circuit tests designed to further evaluate vanadium dissolution at con-stant boiling temperature in a continuously stirred reactor, vanadium dissolution ranged from 70 to 85 pet. An economic evaluation of the process demonstrated that H2S04 consumption is the major cost factor. Based on the value of the vanadium product with no allowance for a phos-phate product, the cost of producing the V205 is more than twice its value. The potential for profit would depend upon the value of the phosphate fertilizer produced from the impure H3P04 remaining after vanadium extraction.

Jan 1, 1985

By C. Richard Tinsley

INTRODUCTION The economic analysis (Chapter 3), the engineering studies (Chapter 10), the credit structure (and the consequential funding sources) - Chapter 11, and the overall feasibility structure for any venture are all directed to determining one major decision element: How much and how certain is the reward for taking these risks? Risk assessment is a surprisingly weak area of analysis and is usually addressed in a checklist fashion. It is much preferable to deal within a risk system so that the inevitable tradeoffs among risks are correctly made. DEFINITION The first step toward risk definition must be to ascertain all of the risks to which a project or a company is exposed; otherwise one will remain ignorant of the possibility of a financially crippling loss until it occurs. (Carter and Crockford, 1974). However, simply stating what "risk" is can lead to debate. For example, risk could be (adapted from Vaughan, 1982): -the chance of a loss - uncertainty of loss -possibility of loss - uncertainty -dispersion of actual from expected results - probability of an outcome different from the one expected - possibility of an occurrence of an undesirable contingency -a condition in which a possibility of a loss exists. For the minerals industry financier, the last definition is probably the most appropriate. However, from a mineral company's point of view the definition might well include the possibility of not achieving the expected financial return. RISK CLASSIFICATION Risk identification will be readily agreed as the all-important first step. There are five major "branches" of risk classification. These are: -Statistical -Modellers -Checklist -Project Financing -Insurance The Statistical set discovered probability theory and any risk discussion soon deteriorates into a mathematical jungle (Megill, 1977; Hartman, 1976; Reutlinger, 1970; and Pouliquen, 1970).Their use of terminology tells its own story: coin toss (binomial distribution), gamblers' ruin, delphi (oracle) techniques, monte-carlo simulations, random walks, etcetera. These techniques inadequately represent the judgements necessary in an increasingly complicated and interrelated world. The risk Modellers have turned to the computer to handle these inter-relationships but soon find barriers because of "simultaneity". Certainly the computer has its uses to conduct various analyses (marketed as "sensitivity" analyses) but very often one finds that this involves changing one or two variables at a time, all other things being equal. Unfortunately, in a modern and complex world all other things do not remain equal. The statisticians will, no doubt, jump to their own defence by citing this

Jan 1, 1985

By B. Strohmeier

The role of large, ultra-high-powered arc furnaces in a fully integrated steelworks for the production of flat products is outlined, and an account is given of the technological improvements that have been implemented over the past few years to enable the arc furnace to remain competitive against the conventional route using blast furnaces and top-blown-oxygen steelmaking (LD). Modern secondary refining facilities have been installed, enabling the arc furnace to operate at high production rates in the manufacture of high-quality flat products.

Jan 1, 1985

By J. A. Meech, R. J. Tucker

"A dynamic computer model has been developed to simulate the operation of ore crushing plants. The model was created in a general form to allow imitation of a wide variety of secondary crushing circuits with only minor program modifications. The system can be run on either a microcomputer or a large time-sharing main frame computer as required.The size reduction and separation characteristics of crushers and screens are based on standard manufacturers' design and performance data. These calculations are isolated within various subroutines to facilitate tailoring of the model to emulate any particular plant of interest. Input and output data are presented in a variety of formats. Crusher, screen and conveyor amperages and surge bin levels can be presented in a tabular form along with appropriate alarms arising from improper circuit operation or process interruptions. Graphical representation of the circuit together with strip chart data output are features of the system when operated in a microcomputer environment.The program is currently being used at Queen's University as a teaching aid to demonstrate plant operating characteristics, control strategies and design concepts. The acceptance of, and reaction to the program at this level indicates a good potential for it to provide a valuable tool for operator training."

Jan 1, 1985

By F. J. Palumbo

Effective recycling or disposal of flue dusts is a continuing problem for copper, brass, and bronze smelters. Over 300,000 short tons (st) of dust is generated annually by U.S. secondary copper, brass, and bronze smelters. The Bureau of Mines has developed an alkaline leach method for recovering metal values from copper converter flue dust containing zinc, tin, lead, and copper. The dust was leached with a hot solution of ammonium chloride and ammonium hydroxide to solubilize ZnO. All of the tin (as Sn02) and the metallic copper, lead, and zinc, as well as possible insoluble compounds of each, report to the residue. Dissolved copper and lead salts are removed from the leachate by cementation with granular zinc. Zinc oxide is precipitated by diluting the leachate with water. The tin-rich (9.8 pct) residue has a ready market. The cement product is recyclable to the smelting operation. The ZnO is at least 97 pct pure and has potential marketability.

Jan 1, 1985

By Richard L. Gordon, William A. Vogely

ENERGY POI.ICY-PRINCIPLES AND THEIR PRACTICE Persistently, at least since the end of World War 11, governments have intervened broadly, deeply, and incoherently in major energy markets. If we take a broad definition of energy that encompasses gas distribution and electric power, we can observe regulations of even older vintage. This trend, of course, is not unique to energy. Expansion of government controls has occurred in many areas. The relevant basic question about energy regulation, therefore, is not why is energy special, but whether any general principles exist to explain the wisdom of existing regulations. This review takes place at a time, the middle 1980s, in which a massive onslaught is being undertaken against government regulation. However, the present chapter is influenced primarily by my observations of the failures of energy regulations and not by any inspiration from those ideologically opposed to government intervention. Several subquestions arise in policy appraisal. A primary need is to establish clear objectives and determine the consistency between these goals and the policies imposed. Thus, the first step is to set objectives. The next is to outline ways to attain these goals. However, it should be recognized that many apparently distinct options are economically equivalent. When the goal is to charge producers or consumers for something, it is possible to attain the same result through either government ownership or taxing private transactions. The tax can raise the price to the level the government would have charged if it were the owner. Creation of a Department of Energy is not necessarily any different from having separate energy agencies well coordinated by some small supervisory body. Thus, a distinction should be made between substance and form in policymaking. The critical substance concerns such matters as whether the government imposes financial penalties, incentives, or rules to attain a goal. Then, there can be many equivalent ways to implement the basic policy form. The second prior illustration suggests that one favorite question is how to attain proper integration of policy. At various times, voices on either (or even both) sides of the Atlantic have called for a coordinated energy policy. The U.S. Paley Commission made this a primary goal for future policy. The western European governments that were the founding members of the Coal and Steel, Economic, and Atomic Energy Communities spent much time in the middle fifties and much of the sixties trying futilely to agree on an energy policy. (See Gordon, 1970 for an annotated review). The energy price rises of the 1970s rekindled United States interest in coordination. However, astute observers of the problem such as O. C. Herfindahl of the United States and Maurice Allais (1 962) in France warned the discussions confused form with substance. The crucial issues were what were the goals and what were the best types of policies to attain such goals. Policy suffered, not from poor organization, but from discord about the goals and how to attain them. All this suggests that we need principles to guide policy appraisal. The branch of economic theory known as welfare economics concentrates on providing guidance about the problems of policymaking. The theory examines both what

Jan 1, 1985

By Richard L. Gordon, William A. Vogely

In this chapter, the principles that determine the procedures selected to transform minerals in the ground into usable commodities are re¬viewed.a I argue here that straightforward mod¬ification of the modern general economic theory of production suffices to meet the practical needs of a mineral economist. Therefore, the chapter is largely a review of the general economic theory of production to which is added discussion of the special prob¬lems of the exhaustibility of mineral resources and the economics of finding and developing economically recoverable minerals. In many cases, propositions applicable to all industries are reviewed because they are not treated ade¬quately in prior texts. In the discussion, use is frequently made of basic concepts of differential calculus widely used in economics. However, this is supple¬mented by simpler verbal and graphical treat¬ments, so that those either untrained in the calculus or, as is often the case, whose skills have grown rusty, can still follow the discus¬sion. Where the argument depends critically on the mathematics, this is noted and the justifi¬cation for including the material is provided. In addition, an appendix outlines the critical mathematics and reviews some of the numerous books published that provide the most readable available introduction to the subject. Further¬more, mineral industries examples are used to suggest the relevance of the theory. THE RELEVANCE OF THE ECONOMICS OF PRODUCTION Three basic steps are involved in establishing the relevance of economic analysis to mineral ¬industries decision making. First, the general theory of production must be defined, and its relationship to the simpler models of production stressed in economics textbooks must be noted. Second, the critical modification-considera¬tion of the problems of discovering and devel¬oping mineral deposits-must be developed. It turns out this too involves a special case of the general theory of production. Third, the concept of an economics of exhaustible resources must be explored sufficiently to suggest why its practical relevance is doubtful (or at least far smaller than the numerous writers on the subject seem to believe). The present approach is heavily influenced by post-1945 developments in economic anal¬ysis. Particularly since World War II, economic theory has drastically changed its scope. First, stress has increased greatly upon viewing the economy as a network of intertwined markets known technically as the general equilibrium system.b In this view, not only is the economy viewed as an integrated system, but critical con¬cepts are viewed somewhat differently than was previously fashionable. Specifically, in general equilibrium models, the concepts of supply and demand are rejected as central concepts in favor of a distinction be-

Jan 1, 1985

By M. K. McCarter

Jan 1, 1985

By C. A. Rowland

Introduction Rod mills are horizontal, cylindrical, rotating, tumbling mills in which steel rods, that are usually about 6 in. shorter than the length of the grinding chamber, are used for grinding media. Fig. 33 shows a cutaway view of a rod mill. Rod mills were first used around 1910 because of their ability to grind in open circuit, consistently produce a uniformly sized prod¬uct, give greater continuous availability, and give lower maintenance costs. They have basically replaced roll crushers and coarse grinding ball mills in comminution flowsheets. The present 20-ft limit on rod length, based on rod manufacturing methods, and the pulp flow char¬acteristics, that influence mill capacity, have established the maximum rod mill sizes' of 15 x 21 Vs ft using 20-ft rods and drawing from 2,200 to 2,300 hp. Rod Mill Uses. The principal uses for rod mills are: preparing feed for ball or pebble mills, grinding gravel or aggregates to the size analysis required for making concrete sand, preparing coarse agitator feed for leaching operations, and for primary grinding circuits, particularly in industrial mineral applications. Wet grinding is the most frequently used grinding process for rod milling. There are a few special cases where dry rod milling is used. Preparing feed for ball or pebble mills is the most common use for rod mills. In ferrous and nonferrous ore concentrators, wet open-circuit grinding is used to prepare ball-mill feed. Figs. 34 thru 37 show the four basic grinding circuits used in these concentrators. In rod mill-ball mill grinding circuits, where the rod-mill discharge contains 25% or more of the grinding circuit product-size material, the rod-mill discharge can be fed to the ball- or pebble-mill classifier as shown in Fig. 34. This is the most frequently used rod mill-ball mill circuit in the nonferrous ore concentrators. In a few concentrators such as Anaconda's Weed concentrator,55 the rod mill discharges to one classification stage which makes the same or a slightly coarser particle-size cut as the classifiers used to close the ball- or pebble¬mill circuits, as shown in Fig. 35. In concentrators where rod mill-ball mill circuits are used to grind low grade magnetic iron ores such as Reserve Mining Co., Silver Bay, Minn.; Erie Mining Co., Hoyt Lakes, Minn.; Eveleth Taconite Co., Forbes, Minn.; US Steel, Mt. Iron, Minn. and Atlantic City, Wyo.; Inland Steel-Jackson County Iron Co., Black River Falls, Wis.; and The Cleveland-Cliffs Iron Co., Adams mine, Kirkland Lake, Ont., the rod mills discharge to rougher magnetic separators (cobbers), the concentrates from which are fed to a ball milling stage as shown in Fig. 36. The same basic circuit is also used with gravity concentra¬tion methods such as spirals (Hanna Mining Co., Groveland, Mich.), tables (St. Joe Minerals, Bonne Terre, Mo.), and jigs. When the rod-mill discharge contains less than 25% of the grind¬ing circuit product size, this indicates an ore that does not readily produce the fines needed to help carry the coarse feed into the ball charge. When this occurs, the fines in the rod-mill discharge are needed in the ball mill or pebble mill so the rod-mill discharge flows direct to the second-stage mills as shown in Fig. 37. Rod mills are used to make feed for open-circuit ball mills such as those used in wet grinding cement raw material (American Cement, Brennan Ave¬nue plant, Detroit, Mich., and Port Huron, Mich., plant, and at the South Dakota State Cement plant, Rapid City, S. Dak.). Grinding gravel or aggregates to the size analysis required for making concrete sand is used in areas where natural sand of the proper particle size gradation required to make concrete is not availa¬ble. Three-quarter inch crushed aggregate is ground to 4 mesh using center peripheral-discharge rod mills (Fig. 38) operating in open circuit. US Corps of Engineers specifications state that the sand product be 93-100% passing 4 mesh and contain no more than 3-7% passing 200 mesh. It may be necessary to classify the rod-mill discharge to remove any excess -200 mesh sand produced in the rod mill. Particu¬larly when processing aggregate with high abrasion indices, center peripheral-discharge rod mills are used instead of hammer mills, fine bowl crushers, and crushing rolls for the production of specification sand. If the -4 mesh size fraction of the rod-mill feed is removed

Jan 1, 1985

By E. Kendall Cork

The traditional financial objective for a single mine company has been to operate as frugally as possible and to pay out most of the earnings as dividends. If the business is cyclical (as it is for most metals) the dividends might fluctuate quite widely. When the mine is exhausted the company disappears. This is still quite a viable strategy for a single mine company. It is not however a viable strategy for the world as a whole. The mining industry is built by mine development companies who can mobilize the people and capital to bring new mines into production. Their skills must include marketing, engineering, finance and other politics. It is very rare for a property to be brought in without the support of a major company that can provide all these services. The exceptions will usually have some other form of big brother support, for example the U.S. government uranium contracts at guaranteed generous prices. The mine development company will seek as a minimum to perpetuate itself by developing new mines in order to replace those which are running out. The more common and more ambitious objective is to grow -- that is to add to its ore reserves and current production by developing more new mines. The financial objectives for that company are very different. Obviously if all the earnings were paid out in dividends there would be nothing left to work with. The first financial policy then is to spend an appropriate amount on exploration for new properties. The next is to retain enough of the earnings to provide the capital for new projects at least sufficient for the equity. There is no magic formula as to what proportion of earnings should properly be distributed as dividends by a growth-oriented mine development company. As a rough rule of thumb distributing half or more will probably leave too little to work on and 30% or so is probably a good balance. However the circumstances differ widely from company to company. It may be useful to set an objective for the rate of growth of a company's earnings. Some have picked rates such as 15% per annum compounded. Others have set a target in real terms which might appear as 10 or 11% plus inflation. Obviously the arithmetic of compound interest is very attractive; however in practice there is much variation. Indeed current returns from existing operations swing widely with the business cycle and there is no assurance that economic new properties will be found according to someone's arbitrary time schedule. For example, Western Mining Corporation Limited in Australia explored for 30 years with little to show for it, but then found the great Australian nickel deposits and more recently the huge Roxby Downs copper. That long dry spell could not have fitted anyone's arbitrary calendar of growth and yet they would not have found such orebodies without that long period of effort. Should they have abandoned the search? Once a new property has been found or acquired there has to be a threshold rate of return on the new capital to be invested against which to evaluate the property's economics. Conventionally this seems to be 15% after tax, a number common in other heavy industries as well. In some cases it is expressed as a lower number plus allowance for inflation. Discounted cash flow analysis is a very useful tool but it does not make the decision. In the end a "go" decision depends on judgment of many factors some of which are numbers used in the DCF calculation whose credibility must be examined. It is curious how frequently investment proposals come in with the rates of return very close to 15%. The project advocates know that a number much less than 15% will not fly and that a number much more is not necessary. With much higher nominal and real interest rates of recent years, even though before tax, logic suggests that the hurdle rate should also rise. The power of compound interest is so great that 20% is very hard to achieve in any cash flow projection but 18% may be a sensible yard - stick. Once again it is remarkable how many project proposals come in with an 18% return. On the record the mining industry as a whole has not been overly restrictive in choosing its hurdle rates of return. This is shown by the abundance of metals in recent years and the failure of metal prices to keep up with inflation. All of the foregoing is standard text book stuff.

Jan 1, 1985

By Brian J. Gorval, Robert L. Kemeny

INTRODUCTION Financing, or providing adequate capital at low cost for developing and bringing a natural resource property into production, is a fundamental requirement for profitable operation. Under the present economic environment the cost of financing any project is gaining more importance than ever. The fundamental keys for success in mining are "the Four M's": Mineral, Market, Management and Money. In recent years, with capital and operating costs skyrocketing, increased emphasis on obtaining adequate and low cost capital funds for bringing in a prospect is essential. For a small mining company there are limited sources for raising funds. In most cases these companies have neither a substantial asset base, nor any cash flow, and they are deemed as risky investments. The issue of shares of capital stock of such a company is probably the most common method of raising funds via the public purse. Alternatively, debt could be used and a source of such capital might be private investors or financial institutions. The company which intends to raise funds from the investing public by way of the sale of equity, subsequently lists those shares for trading on a stock exchange. Going and staying public commits a company to a multitude of complex laws, rules and reporting requirements. The governing bodies are the watch dogs for the public. The largest of such an organization of this kind in the world is the Securities and Exchange Commission (SEC) in the United States. In Canada, the Securities Laws come from within provincial jurisdiction. Most provinces have their own Securities Act, and Securities Commission. It is the Commission which administers the Act, and hence controls the distribution and trading of securities within the province. Extra provincial registration is required for trading and distribution in more than one province. In British Columbia, prior to a public offering, the approval of the Superintendent of Brokers (SOB) and of the VSE must be obtained. THE VANCOUVER AND TORONTO STOCK EXCHANGES There are five stock exchanges in Canada which supply a trading forum in which mining companies may operate. The stock exchanges are located in Montreal, Toronto, Winnipeg, Calgary, and Vancouver. Of the five stock exchanges, the Vancouver Stock Exchange (VSE) and the Toronto Stock Exchange (TSE) are the most heavily used for resource-based issues and are the focus of this paper. The objective of this section is to provide a brief background on the VSE and TSE. The Vancouver Stock Exchange The VSE is Canada's predominant stock exchange for financing resource-based, junior issues. Since 1907, the VSE has acted as a source of funds for mining, exploration and energy companies throughout Canada and the world. Currently, there are over 1400 companies listed on the VSE. During 1983, over 3.1 billion shares traded at a value exceeding CDN$3.96 million. The VSE has developed a reputation as one of the few exchanges where a speculative resource venture may obtain a listing and subsequent financing in a relatively short time, generally five to ten months. The SOB, the Investment Dealer's Association of Canada (IDA), and the VSE all regulate trading at the Exchange. Any irregularities in a company's stock dealings are investigated and trading may be halted by the VSE until a satisfactory explanation has been received from the suspended company. Companies can be suspended from trading or delisted for various reasons. One reason is misrepresentation of facts in documentation submitted to the SOB, VSE, or to the public, through news releases.

Jan 1, 1985

By Peter Sonnenfeld

Bedded potash deposits are known only from Phanerozoic evaporite sequences. They are composed of either sylvite or carnallite, of which only the former produces commercial potash ores. Both Permian and Neogene potash deposits have experienced sulfatization by percolating oxygenated surface brines, causing enrichment in the potash content. Permian potash deposits are mined in various parts of Europe and North America, Miocene ones only along the outer rim of the Carpathian Mountains and in Sicily. New discoveries of large Miocene rock salt bodies make it possible to predict the occurrence of potash deposits along their flanks.

Jan 1, 1985

By Mark E. Emerson

INTRODUCTION A long time has passed since geologists encountered encouraging mineralization in their regional exploration program for base metals deposits. Detailed drilling during the following two field seasons served to delineate the configuration of the deposit. Various statistical techniques were employed to provide confidence levels regarding the extent of the reserves and to categorize them according to whether proved, indicated or inferred. At this juncture, it appears that the company has an orebody. Time elapsed? - three years; money spent? - $2.5 million. Much remains to be done before the orebody becomes a mine. The company urgently needs to develop new orebodies to replace its existing mines which are being depleted. It therefore has expended sizable amounts in exploration, the life blood of the company. A staff of specialists is maintained to evaluate new projects and to conduct feasibility studies. The scale of new mining projects today is beyond the resources of most mining companies. Bank financing, therefore, is often vital if the company is to survive. The following scenario describes how a company goes about evaluating mine projects and what is needed to meet lender's criteria in securing the needed financing. MINE PLANNING Now that the company engineers have taken over the project, their concern is no longer with finding ore but in developing it. An exploration shaft has been put down and a tunnel driven into the orebody to verify, on a large scale, what has been seen so far only in pencil- like drill cores. A large tonnage bulk sample is mined and shipped off to an independent metallurgical process laboratory for beneficiation testing. The budget is expended to cover engineering studies. Preliminary capical and operating costs are developed in- house and profitability studies are made based or1 assumptions concerning the markets for the main product and the indicated gold, silver, and other by-products. Time elapsed? - four years; cost to date? - $3.5-$4.5 million. The staff prepares its own pre-feasibility study. After review, the Executive Committee authorizes management to proceed with full-scale studies. The task is to make preliminary designs and to develop definitive capital and operating cost estimates. Specialized consultants will be engaged to study slope stability for the open pit and rock strength if underground recovery proves more feasible. If it is near the sea, an oceanographic report might be commissioned to see if the tailings can be disposed of off shore. Environmental impact studies are commissioned from a firm familiar with government requirements and regulations in this important area. The company subscribes for an expensive multi-client study of the supply- demand-price outlook for the product to support its own long-range price forecast. Now all the numbers are available to make a definitive appraisal of the value of the project. Cash flow analyses and sensitivity studies follow. Reams of computer printouts are generated. Time elapsed: five years. Amount spent? - up to $9 million, depending on the size, complexity and attractiveness of the project. Marginal projects always take longer. Finally, an engineering and construction (E&C) company is given the task of integrating and compiling all the data into a feasibility study. The results of dozens of reports, memoranda, computer printouts, and charts are boiled down to one final summary report of a few hundred pages together with conclusions and recommendations. After thoughtful review at a board meeting, the directors authorize management to proceed with detailed engineering work - provided that

Jan 1, 1985

By Edwin A. Rides

HISTORICAL ORIGIN OF THE EXPORT CREDIT AGENCIES Almost since the inception of international commerce sellers, having manufactured and/or sold and shipped goods to an overseas buyer, have been obliged to accept the risk that they will not be paid for one reason or another. There are many reasons why payment may not be forthcoming, for example, the goods may be lost at sea, or rejected by the buyer or the buyer nay simply not be creditworthy. These risks were brought into sharp relief as international trading became more sophisticated and the practice of giving credit to buyers gathered momentum. Inevitably enterprises sprang up which offered same mitigation of this exposure, accepting houses and later confirming houses and banks were prepared to assure acceptable credit risks an behalf of the seller, usually by discounting trade paper, and for many years the market ticked over reasonably satisfactorily. However, after the 1914-18 War international trade was at an extremely low ebb and its inherent risks were accentuated to a point where they were often commercially unacceptable. Yet a healthy and vigorous international market was indispensable to recovery of the world economy and a number of governments, led by the United Kingdom, perceived a need to offer their exporters a comprehensive form of insurance, particularly to facilitate the extension of credit to foreign buyers. In the United Kingdom the Export Credits Guarantee Department (ECGD) was set up to encourage trade through the provision of export credit insurance. Over the ensuing years others followed suit and now most of the developed trading nations and many developing nations have similar agencies. PRESENT DAY IDLE OF THE EXPORT CREDIT AGENCIES (ECAS ) Traditionally then the BA's role was to encourage trade through the provision to exporters of insurance against the risks of non-payment by overseas buyers of their goods and services. However, during the 1970's the manufacturing industries of most of the developed nations found themselves facing severe competition for business, particularly in the developing world. As a result the more aggressive ECA's began to introduce ancillary forms of cover designed to reduce exporters' risks outside of the credit field. For instance, most of the European agencies now have a form of cover against foreign exchange risks here contracts are denominated in currencies other than that of the exporter's country. Most of the agencies also provide cover to exporters against the risk of unfair calling of bid, advance payment, performance bonds etc and in certain countries, where high inflation rates were endemic, a form of cover against cost escalation. In certain circumstances it is also possible for an exporter to obtain cover against losses arising as a result of the involvency of a partner in a consortium or joint venture. These are all forms of insurance but, also during the 1970's, many of the national export credit programmes took a major step away from their original raison d'etre by facilitating the provision of preferential financing terns for the acquisition of capital equipment by an overseas buyer. This new line of business quickly became an important ingredient of major export financing packages and, as we shall see later, turned out to be extremely costly for the countries providing it.

Jan 1, 1985

By G. A. Smyres

The Bureau of Mines conducted laboratory studies to determine the feasibility of chlorine-oxygen leaching for treating low-grade zinc sul-fide flotation concentrates. Recovery of zinc sulfides by flotation from complex fine-grained sulfide ores is substantially higher in low-grade bulk sulfide concentrates than in the high-grade cleaned concen-trates required for smelter feed. However, there is no commercial process in the United States for the treatment of low-grade bulk zinc sul-fide concentrates. Leaching experiments using reactors of 500-mL and I-gal capacity were conducted on a bulk concentrate containing 19.3 pct Zn, 35.6 pct Fe, and 39.4 pct S. The effects of pressure, temperature, and percent solids on extraction were investigated. The chlorine-oxygen leaching procedure showed promise for treating the concentrates. Zinc extractions of 95 pct or more were obtained by leaching at 50 pct solids in the temperature range of 1000 to 1200 C. Zinc extractions by leaching with chlorine followed by oxygen at reactor pressures of 50 to 100 psig were independent of pressure.

Jan 1, 1985

By V. K. Gupta

"Effect of mill speed on grinding kinetics has been investigated with a view to using mill speed as a manipulated variable for control and optimization of the grinding circuit performance under variable ore hardness conditions. Dry and wet batch grinding tests were carried out for quartz, limestone and cement clinker in a 29 cm x 18 cm laboratory ball mill. Mill speed values selected were 55 and 70% critical. In the case of dry grinding operation, with an exception of quartz, for all materials studied the effect of mill speed on grinding rate was found to be insignificant for sizes finer than about 35 mesh. In the case of wet operation, grinding rates were found to be approximately proportional to the mill speed. The implications of these results are discussed.INTRODUCTIONIt is well known that mill speed has a considerable effect on the grinding rate of the ore particles l-3 For particles of a given size there is an optimum speed at which mill grinding efficiency is maximum (i.e. specific energy consumption is minimum) 3•4. Mill speed can, therefore, be effectively used as a manipulated variable to deal with the disturbances arising from changes in the size and hardness (grinding rate) of the ore being fed to the grinding circuit. Though, it has not been the case so far, with recent developments of ring motors2 and frequency inverters5 a continuous variation of mill speed has now become feasible, and it is expected that mill speed control will soon be a regular feature of plant operation2,6."

Jan 1, 1985

By Wynne Potter

"On the west coast of Cape Breton Island four coal basins have been identified, varying in age and extending from Port Hood northeasterly to Chimney Corner. Those of Chimney Corner - St. Rose in the north and Port Hood in the south belong to the Pennsylvanian Riversdale Group while lying between them are the coal basins of Mabou and Inverness belonging to the younger Pictou Group. Almost all of the coal basins are submarine and coal mining was carried out on all basins at various times. The seams in all basins dip steeply seaward at angles from 10 to 20 degrees but were found to flatten seaward. The coal is ranked as a high volatile C bituminous coal. Ash and sulphur contents are high compared with Sydney coal and the coal has a tendency to spontaneous combustion when stored in large quantities.Of the four basins, the most significant is that of Mabou. At Mabou recent seismic and drilling investigations have indicated that although a sizable reserve of coal may be found offshore the structural problems, particularly faults, and the poor quality of the coal encountered will make it a resource of the future, if at all. Inferred resources have been calculated at 150 million tonnes in four seams over a 10 km2 area and extending 3 km from shore. The quality of the Mabou coals varies with ash, ranging from 5 to 25 per cent and sulphur up to 6 per cent. Calorific value ranges from 25.3 Mj I kg to 31. 7 Mj I kg. The Port Hood and St. Rose -Chimney Corner fields (Fig. 1) contain 16 million and 3 million tonnes respectively, but the Inverness basin is considered to have been depleted. The active mine in this area is the Evans Mine at St. Rose that is currently producing between 30 -50,000 tonnes a year from proven reserves of approximately 3 million tonnes."

Jan 1, 1985