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By Robert W. Wheeler, Richard G. Ames, Robert B. Reger

Introduction The use of diesel engines as an alternate power source in US underground coal mines has been a controversial step towards more efficent mining practices. Three areas of potential benefit are foreseen. First, diesel-powered mining equipment is believed to be more efficient, resulting in less occupational risk for any given amount of production. Second, diesels are believed to pose fewer intrinsic hazards, especially those related to fires and ignition of combustibles. Finally, several other health and safety advantages are foreseen for diesel units. Each of these issues will be discussed separately. Diesel Efficiency Proponents of the use of underground diesel-powered mining equipment point to increased production efficiency due to greater maneuverability, speed, power, and payload (Bradbury, 1973; Jorgensen, 1982; Ogden, 1978; Wenberg, 1979; Olsen, 1980). Units most suitable for diesel power include LHD vehicles, shuttle cars, personnel carriers, and maintenance vehicles. Estimates of increased efficiency vary from 60%-300% and more (Wenberg, 1979). Increased diesel mining efficiency is usually viewed as making it practical to mine lower grade seams. Diesel units can also operate over a wider range of floor pitches and distances than electrically-powered units, thus allowing mining of seams with special mining problems (Olsen, 1980). Diesel application is not a universal substitute for electrical power. For example, continuous miners are unlikely diesel candidates. Reduced Intrinsic Hazards Proponents of diesel use have pointed to the increased safety potential due to a reduction in electrocutions, arcs, burns, underground cable fires, and methane ignition (Ogden, 1978). Diesel units are frequently employed in maintenance activities for lifting and moving, and for coal cleanup. Thus the case is made that diesel use, by making powered operations more conveniently available, reduces the incidence of lower back injuries and related causes for days lost due to disability (Olsen, 1980). Several other issues relating to diesel safety have also been suggested. Diesel units can continue operation even during power outages allowing, for example, personnel evacuation. The maneuverability of diesel units make them particularly attractive in difficult physical conditions, such as long haulage from the face to the belt and in areas where water is deep. The case for diesel use focuses heavily on the potential for a "per worker" reduction in accidents, or a reduction in the severity of accidents. Since accidents are a major part of the health impact of mining, a reduction in accidents and resulting injuries would make a major contribution to the health of coal miners. Opposition to Diesel Use Opposition to the use of underground diesel mining equipment in the US seems to have started with the United Mine Workers of America. Some opposition to US diesel use has been based on a widely publicized 1976 letter from NIOSH to Mine Enforcement and Safety Administration administrator Robert Barrett (NIOSH, 1982). In essence, this letter warned that while insufficient evidence existed as to diesel effects on underground coal miners, NIOSH had concerns based on prior knowledge of separate diesel exhaust constituents and the potential for interaction between these constituents and coal mine dust. Current opposition to underground diesel use has focused on respiratory health effects related to diesel emissions, particularly nitrogen dioxide (NO,), carbon monoxide (CO), and particulate content (Barrett, 1982). Through

Jan 4, 1983

By Calvert D. Iles

Open-pit mines in the US and throughout the world are typically characterized by increasing operating costs and decreasing ore grades. Thus, companies must continue to improve their use of human and technological resources to remain competitive in the marketplace. Duval Corp. has historically been very sensitive to mining costs, in part because of relatively low grade copper-molybdenum ore bodies. These concerns have resulted in three haulage system generations at the 218 kt/d (240,000 stpd) Sierrita-Esperanza open-pit mine south of Tucson, AZ. Each generation has exceeded the performance of the one replaced. The latest system of portable crushers and conveyors reduces hauling costs by combining both hardware and technique. Savings are achieved not only bysubstituting conveyors for haul trucks, but also by permitting the crusher-convey or system to closely follow mining as the pit deepens and/or mining areas change location. The Duval system is capable of easy and inexpensive relocation in varying site configurations in relatively short time periods. Its implementation in active mining areas results in minimum disruption to both the mine operation and mine design. This haulage concept allows the mining engineer maximum freedom to design an open pit for profit rather than for equipment. Maximum savings with a portable system are achieved by minimizing truck haulage costs. At Sierrita, for example, the yearly estimated operating cost savings for each thousand feet of +10% truck ramp replaced by conveyors is about $1 million per portable crusher. A savings of $30 million could be achieved fora three-portable system overa 10 year period simply by reducing the average truck Iiftto the crusher by 30 m (100 ft), There is also the added capital expense of buying trucks to cover the additional 30 m (100 ft) of lift. Relocation costs are an important consideration in a portable system. Direct costs can become a significant operating expense if frequent relocations are necessary to take full advantage of potential haulage cost savings. A site preparation cost of $375,000, for example, would add an additional operating cost of 2.8¢/t(2.5¢/st) for a system handling 13.6 Mt/a (15 million stpy), assuming one move a year, In addition to the direct cost of site preparation, such as installation of retaining walls, apron feeder slots, and equipment pads, there is the cost of site renovation after abandonment. Indirect relocation costs, while less tangible and more dependent on specific mine design and scheduling, can be of significance. A slowdown in the mining rate or a less efficient mining plan can result from a site not being immediately available for mining after abandonment. Conversely, mining in narrow areas can be adversely affected if two or three month lead times are required for site preparation.

Jan 4, 1983

By David M. Parkes, Mike Fisher

In 1947, coal production in Western Canada was 10 Mt (11 million st) which predominantly came from 120 underground mines. By 1968 production was down to 1 Mt (1.1 million st). Production in 1981 was back up to 29 Mt (32 million st), but only 1.5 Mt (1.7 million st) of the total was from underground mines. In fact, because of competition from open-pit mines, only two underground mines were operating in 1981-the McIntyre and B.C. Coal mines. While several other underground mines are being planned, this article will deal with only the two in production. Geology The geology in Western Canada is frequently complicated; hence only more regular deposits are mined. Coal is generally thick, often steeply pitched and usually soft or well cleated. The 5000-km (3,100-mile) coal belt that runs from the Yukon to Mexico is well developed in Western Canada. It is divided into two distinct regions-the Rocky Mountain Lower Cretaceous coals and the mostly uniform level Upper Cretaceous coals of the plains area to the east. Isolated pockets of coal occur at Vancouver Island and Hat Creek. Hat Creek's massive 300-m (984-ft) thick geologically recent lignite deposit is 250 km (155 miles) inland. Geography The infrastructure of Western Canada is shown in Fig. 1 along with the locations of the two mines. Both rely on exports of premium low volatile metallurgical coal mostly to the Pacific Rim. The rail distance from both mines to port is 1100 km (684 miles)-accounting for a significant portion of the sales cost of the coal. Mining Methods Two main mining methods are used-room and pillar and hydraulic. Longwall has been attempted and is being considered again. In the past, a simple hand method used gravity to help mine most of the coal on steep pitches. Levels were driven in the seam, rising slightly to assist in draining. On the advance, mining would start at the upper level, usually from adits driven in the side of the mountain. Rooms or angles were driven up 100 m (328 ft) at a suitable angle for the coal to flow down. On retreating out of the level, the pillars would be taken, starting from the highest point, using batteries to stop coal or rock flushing down the room. Batteries consisted of three to six stout wooden posts set at an angle to resist material flow. Coal loading was directly from chutes at the bottom of raises into 1- to 2-t mine cars hauled by diesel or battery locomotives. Often output was restricted by the supply of empty cars. Mechanization began in the 1960s but was difficult in these conditions. Mines such as Canmore and Coleman continued operation into the 1970s but closed because steep seams, high methane emissions, and faulting made mining difficult. McIntyre Mines The McIntyre mines are located 360 km (224 miles) west of Edmonton, Alberta, in the foothills of the

Jan 4, 1983

By Earl M. Frizzell, Ronald W. Utley

Introduction For the past several years the Bureau of Mines has undertaken research to develop alternative mine material haulage systems that will improve mine productivity, reduce haulage costs, increase mineral availability, and conserve energy. One basic concept being pursued is a means for crushing primary blasted rock to a size that can be reliably and economically moved on conveyors. During 1980, mine requirements for this equipment and the capability of existing technology to satisfy these requirements were assessed. The study continued into 1981 on the basis that satisfactory equipment for this purpose needed to be developed. The objective of the 1981 program was to perform an engineering design of such a system. A mine survey and equipment development study was conducted in cooperation with the open-pit mining industry by GATX through its subsidiaries, Fuller Co. (a crusher manufacturer) and GARD Inc. (GATX's research and development center), under contract to the USBM. Results of a mine survey in the copper, iron, and molybdenum industries indicated that a universal crusher system could be developed even though details might vary from mine to mine. The crushing characteristics, including tonnages desired, were similar in all surveyed mines. Most mines had similar views about the desirability and frequency of crusher movement. The perceived need for in-nit crushing varied between copper and iron mining. The copper mines felt a greater sense of urgency for introduction of such a system, probably because typically greater vertical haulage is found in copper mines than in the iron mines. All mine personnel surveyed were interested in portable crushers and almost universally preferred gyratory-type primary crushers. They preferred large crushers, citing inherent reliability and durability, and the machine's relative freedom from clogging. Large size minimizes the number of crushers and conveyors needed. Analysis of desired crusher system characteristics (Table 1) fixed the crusher size at 1.5 x 2.3 m (60 x 89 in.). The 1.5-m (60-in.) feed-opening dimension could accept the largest material normally fed to the crusher, and the 2.3-m (894n.) head diameter could fulfill the 3.63 kt/h (4,000 stph) capacity requirement. Selected System Description The comments and analyses discussed in the contract report led to the design and refinement of a movable crusher system. This system represents the consensus of more than 100 mine workers and almost 50 construction and engineering company personnel. It is supported by more than 50 years of experience in crusher manufacturing. Although many alternatives are available for any given system, and selections are likely to be dictated by varying site conditions, the selected system is believed to be appropriate for most projected requirements. Final design would be dictated by mine operators during evaluation for approved projects. Detail design of the feed and discharge systems were not included in the study because they are mine specific. The basic system (Fig. 1) consists of a 1.5 x 2.3-m (60 x 89-in.) gyratory crusher on a structural steel frame. The frame is used as an operating platform for the crusher and as a carriage to move the crusher. The control tower includes a crusher lubrication room, a hydraulic equipment room, a switch gear room, a room for the motor control center, and a control room for operating the crusher and maintaining the equipment. The auxiliary system consists of a hydraulic rock hammer and pedestal crane with 74-t (80-st) and 14-t (15-st) hooks. Figure 1 also shows stairs, railings, and a work platform. Feed and discharge arrangements are shown on Fig. 2. The system shown is for mildclimate applications. Additional enclosure and heating would be needed for extremely cold weather conditions. Crusher A 1.5 x 2.3-m (60 x 89-in.) gyra¬tory crusher was selected for this application. This size can handle the typical throughput of 3-3.63 kt/h (3,500-4,000 stph) desired by the mines and the 1.3-m (50-in.) material to be crushed without difficulty. The crusher is the heaviest

Jan 4, 1983

By Kerry M. Masson

Perhaps the hottest item on the agendas of most state legislators this year is the state budget. The main question: Where will all the dollars come from to finance health care programs, state jobs, unemployment compensation programs, and on and on? This is especially so since people are out of work, business bankruptcies are up, sales are down, and incoming revenues from some sources have decreased or dried up. A sure bet is that state taxes will be increased in some form or another. The mining industry could face increased income taxes, property taxes, severance taxes, or even a host of new taxes (if the state does not already have them) like a gross receipts tax, investment tax, or tax on revenues made outside state borders. That's bad news for an already depressed industry, even though increased taxes may be the least of the industry's worries in the current economic climate. While reopening existing mines and developing most new mineral projects depends primarily on higher commodity prices, new taxes still could pose long term concerns for mine project development. Just how mineral tax law impacts a project is not easy to figure. It involves a complex set of calculations based on interpretations of numerous federal, state, and local tax laws that change almost annually. At best, projections of tax effects for the life of a mine are educated guesses. At the same time, projections are necessary to evaluate the economic feasibility of a mineral project. At a recent Technology Transfer Seminar, the US Bureau of Mines introduced a computer software program designed to evaluate the feasibility of a mineral project and to determine the tax effects on the project's discounted cash flow rate of return (DCFROR). The program, called MINSIM, began in 1967 as a 200-statement FORTRAN II program for evaluating a hypothetical large-scale open-pit gold mine. This single-commodity oriented program employed discrete simulation techniques and a continuous DCFROR was used to measure the effect of changes in revenues and costs. Over the past 15 years, MINSIM has developed into a program 70 to 100 times larger than the original. Basically, it will analyze costs and parameters specific to an identified deposit, then determine the DCFROR. Or by using a specified DCFROR, it will determine the primary commodity price required to attain that specified rate of return. MINSIM, which is explained in detail in this article, is available from the Division of Minerals Availability, USBM free of charge. Written in FORTRAN IV, it comes on punch cards or magnetic tape and is compatible with most major computer systems. The MINSIM Program The main objective of any freeenterprise mining venture is to make a profit. To determine profitability of a given project, alternate methods of operating and financing must be evaluated. That is the purpose of MINSIM. While there are a number of methods of evaluating the economic profitability of a mining project, MINSIM uses the Discounted Cash Flow Rate of Return (DCFROR) method as its major criterion because DCFROR considers the time value of money and gives the truest measure of profitability. One disadvantage is that the calculations are deposit oriented. In other words, MINSIM analyzes only those costs and parameters specific to the deposit. It cannot be used to evaluate the overall corporate picture. The program is designed to simultaneously handle five different commodities and a leach operation for any type of mining project. For example, analysis of a coal project would include only one commodity-coal at the mine mouth. Analysis of a copper operation might include numerous commodities-from the raw material to the refined product. Input MINSIM considers capital investment-recoverable exploration, acquisition, and development costs; depreciable capital investments such as mine plant and equipment, mill plant and equipment, and infrastructure costs; all general and commodity specific operating costs; and the cost of alternate financing methods. The program has the capacity to incorporate different types of depletion allowances, numerous commodity-dependent severance taxes, variations of property taxes, and many methods for calculating state or provincial taxes. There are even many different ways to calculate federal and national taxes. The capacity to handle tax variations is generated from an internal subroutine in the program called the "open file." The user can reconstruct, customize, or evaluate any kind of tax desired. Outputs Given this kind of capacity for numerous input parameters, MINSIM is capable of the follow¬ing major outputs:

Jan 3, 1983

By Maurice Grieves

GC. Waterman Mr. Grieves' paper on "Shaft Sinking Today--A Boring Business Tomorrow" in the Dec. 1981 issue of MINING ENGINEERING is an excellent description of recent improvements in speed and costs of shaft sinking. However, shaft boring techniques are not a recent development. In 1935-36, the Idaho Maryland Co. (gold), Grass Valley, CA, bored the vertical 1.5-m-diam Idaho No. 2 ventilation and supply shaft to a depth of 346 m. The equipment was designed and perfected by Branner Newsome and was, I believe, described in "Transactions." Pickands Mather later bored a 1.8-m-diam shaft to a depth of about 305 m using Newsome's design. The Idaho No. 2 shaft cut through hard gabbro, diabase dikes, soft serpentine, very incompetent ankeritized serpentine and a strong fault zone. The completed shaft did not require timber support; the fault zone was cemented. Equipment consisted of a rotating 1.5-m or 3-m core barrel with a slotted bottom which cut a 76-mm kerf. The cutting agent was chilled steel shot introduced into the slot as needed. The driving mechanism and core barrel were lowered into the shaft, the former secured to the wall and the inshaft "engineer" operated the motors which controlled core barrel rpm and advance. After an advance of 1.5-3 m the equipment was lifted out of the shaft, a half(?) stick of powder cut off the drilled core, and it was hoisted to the surface with a cable attached to an eye bolt at the tope of the core. A "shift" consisted of three men: hoistman, equipment operator (down the shaft), and a surface laborer. Advance was variable as equipment and techniques were perfected. Near the end of the job advance was, as I remember, 1.5-3 m per shift. Costs were, as I recall, about $115/m. Up to 4 m cores were lifted out in one piece and swung to the dump by a stiff leg derrick. The Newsome equipment was relatively inexpensive to build and operate and his method should be (more than?) competetive with the methods described by Grieves. W.E. Hawes The author, in mentioning the South African developments of the cactus grab, ignores the parallel development of the Cryderman mucker in this hemisphere. Perhaps a slightly longer history of blind hold drilling would have been in order. Blind shaft boring got a major boost at the Nevada Test Site, as part of the nuclear weapons development, when it was essential to be able to quickly assess depth for weapons testing. One of the early civilian attempts to utilize this technology occurred when Kerr McGee drilled the shaft at the Section 19 Mine at Ambrosia Lake, NM. This twin masted drill rig belonged to a subsidiary of Kerr McGee, not Shaft Drillers. This was a difficult hole, due to bentonitic shales that decomposed. Later advances in drilling fluids eliminated this problem. The Conoco project referred to is not entirely correct, and needs minor amplification: The depth of the development (not pilot) shaft drilled was 684 m, at a diameter of 3.05 m, with a 2.16 m ID hydratatic casing being installed to a depth of 669 m. Conoco Inc., not Challenger, executed the drilling, however Conoco did use Challenger Drilling Company's Rig 14-S. Rig 14-S is unique in that it is specifically designed for shaft drilling, rather than being an oil field rig used for this service. All work was planned and directed by Conoco personnel. Deviation of the aforementioned shaft from vertical was 31 cm. Two smaller shafts (pilot shafts) were drilled with the same rig. These smaller ones were drilled 1.8 m in diameter, to depth of 665 m and cased with .91-m-diam casing, to depth of 650 m to be used as pilot holes for 5.5 m diameter shafts. The total elapsed time for all drilling, casing, cementing, and rig moves was 50 weeks. The constraints mentioned of vertical accuracy, torque, wall collapse, rig set up time, lining time etc., pumping out, etc., may not be as serious as the author implies. First, vertical accuracy: The record achieved by Conoco indicates that with reasonable care, good accuracy can be obtained, primarily by having a fair amount of weight in tension, rather than on the drill bit. Second, the amount of torque that can be applied to the drill stem has been greatly increased by the introduction of larger diameter drill stems, such as the new Hughes rig uses. Third, risk of collapse of shaft walls is minimal with the proper mud program. Basically, the walls are supported by the weight of the mud and it is not removed until some type of casing is installed and grouted in. Here in the real challenge of blind drilling shafts to devise a more economical method of lining bored shafts than using steel casing. The remaining issues were minor at Conoco, provided adequate planning and scheduling takes place. An excellent paper, "Shaft Drilling--Crownpoint Project" by Hassell H. Hunter, presented at the Fifth Uranium Symposium in Albuquerque in Sept. 1981 contains details of this project. A combination of blind boring, with enlargement by either mechanical means (boring machine, or tunneling type shield) or slabbing down, with muck removal through a larger bored shaft would seem to be the future trend in shaft development. The economics, especially for wet conditions, favor this concept over conventional sinking, as has been demonstrated at Kerr McGee --Churchrock, UNC--Churchrock and Conoco at Crownpoint.

Jan 3, 1983

By J. W. Carson

Introduction Many bulk solids such as coal, limestone, and fine moist ores often flow unpredictably out of bins, hoppers, and boreholes. Vast amounts of time and money are spent-with or without success-on flow promoting devices. In addition, many solids segregate in storage, feed erratically, flood, arch, rathole, and stick to bin walls reducing the live capacity. This article discusses bulk solids flow properties and provides guidelines for designing storage bins, hoppers, and feeders to provide reliable flow. Bulk Solids A bulk solid is a granular material consisting of discrete solid particles-submicron to several inches in size-that is handled in bulk form (for example, in a bin or silo). The gas filling the voids is generally insufficient to fluidize the material and the liquid (usually water) content is assumed to be less than saturation. Types of Flow Problems To design an efficient storage system, an engineer must be aware of problems that can arise during storage and flow of bulk solids: • No flow. A stable arch or pipe (rathole) develops within the solid, stopping flow. • Erratic flow. Momentary arches form within the solid, (ratholes), partly or completely empty out, and then collapse. • Flushing. Powders become fluidized, aerate, and flush uncontrollably through the bin outlet. • Lack of design capacity. A large part of the stored material remains stable around a rathole. Manual prodding, severe vibration, and even explosives may be used to restore flow. • Segregation. Smaller particles tend to sift through the voids between larger particles causing accumulations of fines and coarse in various areas of the bin. • Product degradation. Some materials spoil, cake, or oxidize if they remain in a bin too long. This is usually caused by a first-in-last-out flow sequence. • Level control. Measuring the volume of material left in a bin is difficult if a rathole develops. In one portion of the bin the level control device may indicate the bin is full; in another portion it may indicate it is empty. Eliminating Flow Problems All flow problems can be minimized or prevented by suitable design of the bin/feeder unit. This involves knowing the flow properties of the solid, then choosing the appropriate type of bin and feeder to establish the desired flow pattern. There are three types of flow patterns that may occur in a bin: funnel flow, mass flow, and expanded flow. Funnel flow occurs when some of the material in the bin is stationary while the rest is in motion. Funnel flow bins, shown in Fig. 1, are characterized by: • Low head room. A flat bottom or shallow hopper bin has large storage capacity with minimum height. Unfortunately, all this storage capacity may not be usable ("live"). • First-in-last-out flow sequence. The first material put into a funnel flow bin is the last material withdrawn because the flowing material is concentrated in the region directly above the outlet. • Ratholes. Because of the flow channel that forms, a stable rathole develops if the material has sufficient cohesive strength. • Erratic flow. Once a rathole becomes partially or completely empty, it may collapse creating a stable arch and erratic flow. • Flushing. Collapsing ratholes cause flushing and flooding of fine material. • Segregation. If a bulk solid has a tendency to segregate, this tendency will be accentuated as the material is discharged from a funnel flow bin. Funnel flow bins are suitable for coarse, free flowing, nondegrading solids, when segregation is not important. Mass flow occurs when all the material in a bin is in motion whenever any is withdrawn. Char-

Jan 3, 1983

By Wang Ding-heng, Wang Zhi-yuan, Nolan B. Aughenbaugh

The People's Republic of China has abundant coal resources with proven reserves amounting to 582 Gt (641 billion st). Recognizing coal as a major energy source on which to build the country's industrial and economic base, there has been a rapid increase in production since the founding of the People's Republic. In 1949, only 29.4 Mt (32.4 million st) of coal was mined. Production has increased to 576.5 Mt (635.5 million st), exclusive of Taiwan, at present, making China the third largest coal producing country in the world. Plans call for a 4-5% increase in annual production for the next 20 years. Coal constitutes 70% of the primary energy consumption in China. The remaining 30% is divided between petroleum and natural gas with 26% and hydropower with 4%. Coal use and consumption is divided as follows. General industrial use comprised 48.9%, power generation uses 20.1%, and coking accounts for 10.5% (6.3% for metallurgy and 4.2% for chemical industry). Domestic use such as home heating and cooking makes up 17.8% and coal-fired steam engines for railways uses 4.7%. Coal Districts Coal underlies about 1/18 of China's land area. It occurs in 30 provinces, autonomous regions, and municipalities. In addition, the western interior region, which has not been explored, may contain sizable reserves. Based on geology, geography, and administration, the coal fields can be grouped into five districts as shown in Fig. 1. The north China district, the heart of the industrial base for the country, has the most extensive and largest deposits of the five districts. This amounts to almost 40% of the country's total reserves. The largest coal basin with proven reserves of 181.4 Gt (200 billion st) and the most exploitable seams is located some 300 km (186 miles) southwest of Beijing (Peking) in Shanxi Province. Centered around Taiyuan, the compound field extends from Datong in the north to Xian in the south. Its western extension is not known fully. The Northwest and Northeast districts contain the second and third largest deposits. The biggest coal field in South China is located in the Sichuan and Guizhou Provinces near Chongqing. At present, it is not known if sizable coal measures exist in the Tibetan district. Coal Types China's coal varies widely both in age and rank. Geologically, coal measures were deposited from the lower Carboniferous (Pennsylvanian of the US) and Permian of late Paleozoic, mainly during the Jurassic of the Mesozoic and peri¬odically throughout the Cenozoic. Collectively, coal from the lower Carboniferous, Permian, and Ju-

Jan 3, 1983

By Simon D. Strauss

The recession that began in late 1980 has proved to be not only prolonged and severe, but in certain ways unique in its effect on the mineral industries among the periods of economic slowdown experienced in the Western world since the end of World War II. This time almost all minerals have been affected. In previous business turndowns, by contrast, some mineral sectors have with-stood economic adversity well. They experienced little or no adverse effect-thanks either to a strong secular expansion in the markets for their particular product or to specific factors that caused demand to be well maintained. For example, aluminum, molybdenum, and nickel are three metals that enjoyed extraordinary growth in applications during the years 1946-1973. These metals were little affected during the recessions that occurred in that era. Similarly, coal did not suffer a pronounced drop in sales in the 1974-75 turndown because, with the price of oil rising sharply, a switch away from oil and back to coal was clearly indicated for some energy-intensive applications. Oil itself was largely impervious to the ups and downs of the business cycle until very recently. And the precious metals, gold and silver, have often been regarded as benefiting from reduced economic activity because labor becomes more available, productivity rises, and operating costs diminish. In the current recession, however, no major mineral has escaped the broad trend. The secular growth factors that were previously so evident for aluminum, molybdenum, and nickel have disappeared, at least temporarily. The stable pricing behavior that previously characterized all three of these commodities has been replaced by extreme price weakness and apparent inability of the major producers to continue their roles as market leaders. Coal and oil both have suffered from a sharp drop in energy requirements. There are those who now anticipate a collapse of the market control over oil prices so clearly exercised by OPEC since 1973. If oil prices are no longer effectively controlled by the governments of the exporting countries, then coal prices are also certain to be affected. And the combination of high interest rates, tight money, and a change in public perceptions of precious metals put the skid under gold and silver quotations in 1981 and early 1982. Although inflation has been viewed as the scourge of most Western countries ever since the oil crises of 1973-74, prices-in constant dollars-of most minerals have not risen. On the contrary, with the exception of the precious metals and oil, for most minerals the prices that prevailed at the end of 1982 were close to the levels of the Great Depression of the 1930s in constant dollar terms. Table 1 compares prices for copper, lead, zinc, and aluminum at the end of 1982 with the average prices in 1934, stated in constant 1967 dollars. This emphasis on prices for mineral commodities reflects the fact that profits of mining enterprises vary directly with the level of prices. Manufacturing and retailing enterprises march to a different tune. They establish sales prices based on costs. Their profits tend to vary with volume. Commodities are for all practical purposes fungible, that is the advantages of known brands in marketing manufactured goods have little application in a commodity market. Thus the individual seller of minerals is unable to establish his sales prices. Except where a monopoly is present, he must sell at the going market. His option is to abstain from selling if he finds the price unremunerative. In past recessions, some mineral producers chose to do precisely that-either accumulating a substantial share of their output in inventory or, in prolonged downturns, abstaining from production. During the current recession, however, private-sector mining companies did not have the option of accumulating inventories to any great extent. Capital costs for new mineral projects or for expansion of existing facilities have escalated at an alarming rate since the early 1970s. Added to this has been the heavy cost of installing pollution control or safety equipment to comply with the regulations adopted in most industrialized countries (and particularly the United States) since 1968. The consequence has been that the financial position of most major mineral enterprises in mid-1980 was already strained. To finance increased inventories meant incurring additional funded debt at high interest costs, thus impairing the concern's credit rating. Management Choices Private-sector managements have had to face up to the alternative of either continuing to produce at an unchanged rate and marketing output at unremunerative prices or reducing output. The latter has meant either operating at a curtailed rate, with con-

Jan 3, 1983

By Kenton E. McElhattan

Financial analysts have often called National Mine Service Co. the only "pure play" company to the mining industry, meaning that an investment in NMS is an investment in the mining industry. As a leading manufacturer and supplier to the industry, National Mine Service does enjoy a close and direct relationship with mining. It is the only independent company that offers products and services that include mining machinery, health, safety, instrumentation, mine supplies, and reconditioning services for hydraulics, electronics, and machinery. But what is a positive relationship in periods of economic upturn can be eauallv as negative during the downturns. In fact, National Mine Service has felt the resounding blows of the current recession in the mining industry. Two-Fold Strategy Rising unemployment, corporate losses, bankruptcies, and mine closings in particular have directly affected NMS. But the company embarked on a strategy several years ago that included a two-fold approach to becoming less dependent upon the vagaries of the US coal industry. One strategy was to develop additional products and services for other mineral industries such as potash, trona, and salt and, where possible, apply the technology developed for the mining industry to industrial markets. The other strategy was to become a more international company. The objective was to make export sales a minimum of 10% of total corporate sales. Even today, NMS believes this is a good strategy as opposed to diversifying because its expertise is in mining, not in other areas. A review of NMS's fiscal 1982 annual report indicates that the company's strategy did begin to pay off. 1982 was a turnaround

Jan 2, 1983

By H. C. Juvkam-Weld

R. Michael Craig Mr. Juvkam-Wold's article is a timely and much needed presentation of the method of depressurization to reduce ground-water inflow into mine shafts. The article is very informative and discusses the effects of depressurization upon shaft inflows adequately. However, the article omits a discussion of another important benefit of depressurization: the reduction of potential for artesian burst or, as it is also called, floor heave. Confined aquifer systems (artesian aquifers) can contain water under several hunder pounds per square inch (psi) of pressure. For example, water levels at elevations of 455 m (1500 ft) or more above the top of the Westwater Canyon member of Reply by H.C. Juvkam-Wold In general, Mr. Craig's comments are useful and accurate regarding the potential benefits of aquifer depressurization. However, two of his points require further explanation since they may lead to a misunderstanding of my paper and its predictions. These refer to his comments regarding failure to account for storativity and to non-artesian conditions. Equation 5 is indeed Darcy's steady state equation. However, as a careful review of the appendix in this paper will reveal, I have used this equation to represent semi-steady state conditions. In other words, steady state conditions are assumed at any instant of time, but conditions may change gradually from

Jan 2, 1983

By Franklin J. Stermole

The current financial state of the mineral industry, in general, is bad. Economic prospects for improvements in the near future are uncertain. What will improve mineral investment economics so the mining industry can return to a more normal (in terms of past experience) production level? Basically, mineral commodity prices must rise. They must rise to economically justify reopening closed mines and for management to seriously consider expansion or development of existing and new mines. With the worldwide economy depressed for more than a year now (longer for most segments of the mineral industry), supply/demand relationships for mineral commodities are such that prices are depressed-except for precious metals. In investment analysis of the economic potential of existing or new investments in any industry, product price generally is one of the key parameters having great impact on the economic viability of projects. Petroleum and synfuels industry development contracted last year for the same product price reasons that have brought mineral industry development to a standstill. Much of the new mine development activity now underway or in the serious planning stages around the world involves precious metals ore body development simply because precious metal prices are high enough now or are projected to be high enough in future production years to give overall satisfactory project economics. It will take significant improvement in nonprecious metal mineral commodity prices in 1983 to develop significant new mine investment interest except in very high grade ore body special situations. Mineral Investment Decision Making Before progressing further with the discussion of mineral investment considerations for the coming year, it should be emphasized that mineral investment decision making-like all industry or individual investment decision making does not relate just to economic considerations. Investment decision making should and generally does involve three analyses: • Economic analysis • Financial analysis • Intangible analysis Economic analysis evaluates the relative economic merits of investment situations from a profitability viewpoint based on discounted cash flow analysis of projected investment revenues and costs. Financial analysis, on the other hand, refers to where and how the funds for proposed investments will be obtained. Regardless of the project's economic potential, if you can't finance it, the project will not be done. Intangible analysis considers factors affecting investments but which cannot be quantified easily in economic terms. Typical intangible factors are legal considerations, public opinion, goodwill, environmental and ecological impacts, and regulatory or political considerations, to name a few. New mine development investment decision making in the US has been impacted heavily by intangible considerations in the past decade and will probably continue to be impacted by them in 1983. There is a common tendency in literature and management practice to interchange the terms economic analysis and financial analysis. This often leads to confusion about the rationale for investment decisions. For example, in the past year a majority of companies in all types of industries cut back budgets for new projects. Often this was done not because new project economics were unsatisfactory, but because cash flow from existing operations was reduced compared to previous years due to the recession, and debt service requirements were high from existing loans so new borrowing was undesirable. For financial reasons, in other words, many projects were shelved last year. That included some precious metal mining projects and many petroleum projects. Many other projects were shelved for economic reasons (sometimes combined with financial reasons in the case of marginal economic projects). New mine development for copper, lead, zinc, molybdenum, iron ore, and synthetic fuels are a few examples. Economic Uncertainty and Financial Considerations Mineral project analysis has always involved a lot of uncertainty with respect to determining ore grades, tonnage of producible reserves, operating and capital cost projects, and mineral commodity prices estimates. The wide swings in mineral commodity prices in recent years and the almost impossible task of projecting future prices with any degree of confidence or accuracy concerns mineral project investment decision makers. In developing a new copper or silver mine, it is not today's price of copper or silver that is relevant to economic analysis of the mine, but what the price will be during the producing years. There is no way to avoid projecting the escalation (or de-escalation) effects on revenues and costs. To analyze a project in terms of today's dollar revenues and costs implicitly assumes that escalation will not change today's project costs and revenues; or that, if they do change, the project economics will be unaffected by the changes. This often is not the best or even a realistic assumption. The inherent uncertainty associated with historical mineral price swings is exacerbated in 1983 by the uncertainty of when

Jan 2, 1983

By Hans W. Schreiber

Most geologic and mining engineering consulting firms* began to experience the recession with declining billing levels, number of inquiries, and proposal requests in late 1981 or early 1982. As of today, most of them have been functioning at reduced income levels for nearly a year. And while many consulting firms have apparently reached a stabilized income level, they can see little prospect for attaining normal (pre-late 1981) billing levels and income for the remainder of 1983. A few firms have escaped being affected by the recession. Such com panies almost without exception are small (fewer than 20 personnel), offer a limited range in technical capabilities, and tend to be highly specialized in a particular niche. They include those specializing in the heap leaching of precious metals ores, in ground water testing programs, and in the derivation of computer-aided programs to monitor particular mineral processing functions. Those firms affected by the economic downturn have instituted a variety of policies and undertaken actions to cope with significantly reduced incomes to bring fixed costs in line with the depressed demand for services. These changes fall into the following broad categories: • management and management practices; • markets and market definition; • marketing and the pursuit of assignments; and • administration and personnel relationships. Not all of the perceived changes have necessarily been instituted by every consulting firm, and any one appears sporadically instituted. Management and Management Practices In favorable times the managers, and often the owners of the equity, of consulting firms tend to concentrate their attention on the part of the business they find most satisfying and enjoyable. For some, this means acting as project or assignment leaders, even undertaking a specific technical aspect of the job. For others, it means constant marketing with the associated heavy travel and entertainment schedules. In unfavorable conditions, such as the current recession, managers tend to spread themselves far more thinly, expending time and effort on all facets of the business including marketing, proposal preparation and cost estimating, budgeting, general administration, accounting and cash flow monitoring, project/assignment overview, and actual client work. The manager who in favorable times concentrated on client work is now less billable. The manager who concentrated on marketing is somewhat more billable. The manager now needs to pay attention to and expend equal effort on each facet of the business just to keep all the facets in relative balance. Falling behind schedule on a client job or carrying an unduly large percentage of accounts receivable exact a cost to the firm. Clearly the absolute cost to the firm is the same whether demand for service is good or slack. But in periods of slack demand the firm is frequently less able or even unable to bear such costs. Marketing and Market Definition Markets appear to have undergone some significant changes: • Federal and state governments have assumed a greater importance as providers of work vis-a-vis both industry and private groups. • Projects with increase-in-capacity aspects have given way to projects with maintenance or reduced operating cost aspects. • Projects searching for new deposits of minerals in generally new locations have given way to projects reviewing known mineral districts or known deposits. • Industrial mineral and mining companies have exhibited a great propensity to cut back the use of consultants and to undertake as much work as possible in-house. Further-more, a number of industrial mineral and mining companies have entered the competitive arena with consulting firms, submitting proposals (usually to the federal government) in an effort to keep their staffs intact and occupied. In response, consulting firms have reevaluated their capabilities by reviewing old work and reassessing personnel. The purpose is to broaden the services offered and the potential client base, thus redefining the available market. For example, a firm specializing in assessment of technical and cost parameters of a deposit would normally assist a prospective lender in judging the deposit's suitability for project financing. That same company could easily expand into the field of analyzing production costs for an individual operation -something that is needed in periods when lower prices reduce profit margins. Similarly, a firm that has confined such economic assistance to commercial banks could expand to provide its expertise to other lending and even equity buying in-stitutions such as insurance companies. Marketing and the Pursuit of Assignments With few exceptions, consulting firms have significantly increased their

Jan 2, 1983

By John A. Kaufman, Terry D. Vandell

Recent mining regulations have increased the need for detailed engineering and environmental information pertaining to the hydrogeologic environment in mining areas. The cost of obtaining such hydrogeologic information has also increased. After mineralization of potentially economic grade ore and tonnage has been identified, and after completing preliminary mining feasibility studies (suggesting that development is merited), a second exploration phase can incorporate a simple, cost-effective baseline hydrogeologic data reconnaissance program that is limited but useful. Using exploration drill holes only, this program can provide a direct indication of where ground water is encountered. Also, reasonable estimates can be made on the relative production of water from various water-bearing strata, a composite potentiometric surface map can be prepared, and the general chemistry of the ground water can be characterized. This article outlines what typical baseline hydrogeologic data are needed and describes how it can be easily obtained during exploration drilling. Introduction Major engineering and environmental ground water parameters can be identified early in a project by using, drill hole data obtained from a mineral exploration program, designed by the mine geologist and hydrogeologist. Most importantly, data obtained in the exploration drilling program can be used to design a logical, defensible, and cost-effective baseline ground water data reconnaissance and monitor well program, which would be required for mine design and ultimately for mine permit approval. Drilling Where possible, exploration drill holes should be drilled with conventional rotary drilling equipment using air or, if necessary, water as the drilling fluid. Rotary air or water drilling generally allow good delineation of the first major saturated or water-bearing zone. If mud must be used during drilling, distinct hydrogeologic zones can still be defined, although the task may be considerably more difficult. Water Levels Static water levels can be obtained from selected exploration drill holes at specific depths while additional boreholes are drilled. Such measurements should not, however, be conducted until the hole has been developed with air (no water) and has stabilized at each of the depths to be measured. Such water-level information can be particularly useful when more than one aquifer exists. Where mine development is eminent, the hydrogeologist should install 50-100 mm (2-4 in.) diameter PVC casing in select drill holes. The PVC should be slotted, gravel packed, and properly sealed so additional hydrogeologic data can be collected for specific hydrogeologic zones at a later date. Such data could include water level information, permeability estimates based on injection and /or pumping tests, and water quality data. Where casing is not installed in drill holes, or when the drill holes are abandoned, the holes should be properly grouted and back-filled to the ground surface to prevent potential future ground water contamination. Monitoring Air Lift Water Production Estimates of the relative production from various water-bearing strata can be obtained from selected exploration drill holes. If ground water is encountered, its air lift (ground water flow) production can be measured at distinct intervals using a surface water flow measuring device, such as a portable Parshall

Jan 2, 1983

By S. D. Bechtel

Bechtel Civil and Minerals, Inc., one of the Bechtel group of companies, is a large engineering and construction firm that services the mining industry, among others. The firm's head, S. D. Bechtel Jr., comments on how his E&C company is dealing with the recessionary economy. First, he offered a historical perspective. About a half century ago-in the middle of the Great Depression-W. A. Bechtel and several business partners drew up a fixed price bid to build the Hoover Dam. At that moment in history, the W. A. Bechtel Co. was a modest success, but the times were troubled and uncertain. Money was scarce and a lot of contractors across the country were one project ahead of bankruptcy. The bid for Hoover was a make-or-break proposition for Bechtel, and it turned out successfully. The Hoover Dam was a no-frills operation in an isolated and harsh environment. There was plenty of hard work, long hours, and not many amenities. Controlling costs was critical. Everyone knew what had to be done, and why and what the consequences were. Today's Challenge Bechtel is now a bigger, more complex organization whose management views the current economic recession as a challenge to be met in much the same way W. A. Bechtel met the challenge of the Hoover Dam: by pulling together with a sense of purpose and direction. In many respects, Bechtel's situation today has a number of parallels to that which faced my grandfather. The company is eminently successful, but times are tough and there are plenty of signs that they could get tougher. My grandfather bet on the Hoover Dam to insure the future health of his company and I think we can work together again in that same tradition, make some tough decisions together, and the company's future can be just as promising. The first and most important requirement is to make certain that everyone understands the situation. The Bechtel group of companies are in an excellent financial position now. Its workload hit an alltime high in 1982 and it is well positioned in its principal markets. But the next two years may be critical for the company. Traditionally, Bechtel's work load lags behind general developments in the economy. Although many of its clients continue to suffer serious business difficulties, Bechtel is only beginning to feel the impact. The worldwide market for basic metals remains soft; relatively low prices and abundant supplies of oil and gas have flattened the petroleum market and made once promising synfuels projects economically unattractive; utility clients are still caught in the vise between overregulation and escalating costs. And persistently high, long-term interest rates have made capital investments expensive and difficult to justify. The company maintained a healthy workload through 1982. In some areas it has had little new work and consequently has been forced to lay off some staff as projects have been canceled or concluded. In other areas new work has tided the company over and more people have been hired. But new work bookings have fallen off, creating some uncertainty for the near future. 1983 requirements are clear, although seemingly contradictory. Belt tightening and cost reduction are necessary for Bechtel to remain healthy and competitive, enabling it to handle a possible further downturn with a minimum of turmoil and dislocation. At the same time, we need to allocate resources and funds in areas that will keep us positioned for the turn-around marketplace.

Jan 2, 1983

By Graham J. Morgan

The following material is excerpted from a presentation Mr. Morgan gave recently to representatives of the financial community. Introduction 1982 was a period of challenge for United States Gypsum Company because of reduced market opportunity. Housing starts for the first 10 months averaged a seasonally adjusted annual rate of 1 million units, 9% below the comparable 1981 period when housing starts were the lowest in 35 years. Industry gypsum board shipments declined 9% from the already low levels of the same period in 1981. US Gypsum met the challenge with stringent cost reduction programs and aggressive action in the marketplace. In late 1981, anticipating market deterioration, the company's management adopted strategies to focus on two shortterm objectives: • Adjust operations to perform profitably in view of limited opportunities through more efficient operations and asset management. • Continue to strengthen U.S.G.'s resources and ability to take advantage of important market opportunities as the economy improves through selective expansion of production capacity in key growth markets. Concentration on these two objectives resulted in a nine month performance in 1982 that, while certainly not satisfactory by company standards, compared very favorably with that of principal competitors in terms of net earnings, margin on sales, and return on average stockholders' equity. To counteract limited market opportunities, U.S.G. focused on productivity improvement, cost reduction, expense control, and maximization of market penetration. Energy Use Improving performance encompassed all segments of operations. For example, efficient use of energy was a significant factor despite lower operating rates at most plants. Overall, in the third quarter of 1982 versus 1972, the company used 27% less energy per unit of production, a savings of $15 million in that quarter alone. These continuing improvements helped to partially offset constantly rising energy costs. A number of operations achieved superior results in the first nine months of the year compared with the same period in 1981. For example, gypsum board plants in Jacksonville, FL, and Sweetwater, TX, recorded 8% and 7% reductions, respectively, in energy use per unit of production. Paper mills in Oakfield, NY, Galena Park, TX, and Kansas City, MO, each reduced energy use more than 12%, while the Greenville, MS, ceiling products facility achieved a 16%o reduction. Safety Safety is another important element that received increased attention. U.S.G.'s safety performance over the past five years has consistently improved. In 1981 it was five times better than that of the gypsum industry; nearly 10 times better than all industry as measured by the National Safety Council; and almost 20 times better than all US manufacturing as recorded by the Bureau of Labor Statistics. In addition to human concerns, this excellent record results in significant dollar savings that directly affect company results. In 1981, U.S.G.'s pre-tax savings in claims, premiums, and related expenses were about $20 million compared to the industries in which it competes. For the first half of 1982 performance improved further, with a cumulative lost workday incidence rate per 200,000 man-hours worked of only 0.27, an all-time record. Expense Control Careful control of inventories and receivables also received special attention. As of Sept. 30, 1982, inventories were 29%, or $44 million, below the level of Sept. 30,

Jan 2, 1983

By Frank Matter

Production of ultrafine powders of industrial minerals has been a problem in the past. In recent years new wet and dry grinding stirred ball mill systems have emerged which have been commercialized Two such systems are the TRZK mill with double step air classifier for dry grinding and the NRZK mill for wet grinding The primary features of these mills are feed entering from top and the product along with the grinding media leaving from the bottom, and a media separation and recycle system A detailed description of the NRZK mill for grinding coal is presented

Jan 1, 1983

By Jay P. Chapman

The basic control requirement for multi-pump, long distance slurry pipelines are discussed and a particular example of an operating slurry pipeline using programmable controllers is presented.

Jan 1, 1983

By Gill Montgomery

Although fluorspar is considered an industrial mineral by usage and value, its geological occurrence and the mining and milling methods employed make it more akin to the non-ferrous metal ores. Likewise methods of exploration for it are more like those used in the search for lead and zinc, with which fluorspar is often mixed. In fact, it often takes the mixture of fluorspar, lead, zinc, plus maybe barite to add up to enough recoverable values to make the mineral an ore by definition. This is so true where the fluorspar portion is low grade, perhaps less than 25 percent. Until the development of modern steel milling in World War I times, the invention of aluminum smelting, and development of the fluorine chemical industry and air conditioning, there were few uses for fluorspar aside from ceramic fluxes in the flint glass industry and for uses as glazes for pottery and china. Pure fluorite crystals have long been admired as semi-precious and ornamental minerals of many delicate colors.

Jan 1, 1983

By Harry Sutcliffe, Francis M. Keville

The paper describes the, impact of the geotechnical exploration program on the line and grade of the tunnels and the shaft configuration on the Red Line Extension N.W. in Cambridge and Somerville, Massachusetts, and comments on several aspects of the implementation of the project.

Jan 1, 1983