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Laboratory flotation tests on sized fractions of a certain number of selected minerals with homologous fatty acid derivatives (i.e. sodium salts and amine acetates) confirm that the higher homologues are more efficient collectors than the lower. Tests were carried out on sized material and finer size fractions floated at lower collector concentrations.It is suggested that selective flotation is best achieved with the reagent which most readily floats the most friable mineral in the ore, and that grade of product will be improved with the lowest usable homologue.INTRODUCTIONFlotation of non-sulphide minerals with fatty acids as collectors is usually less selective than the flotation of sulphide minerals with xanthate collectors. It is common to use the gradation in collecting power of homologous series of xanthates, as well as the more specific effects of activators and depressants, to achieve the separation of sulphides.The original aim of the work was to ascertain whether sodium salts of fatty acids (anionic) and fatty amine aceta:tes (cationic) could be selected from a homologous series to achieve better selectivity in separation of nonsulphide minerals by flotation. Subsequently the importance of friability of minerals in selective flotation was observed and the aim was expanded to develop a more practical approach to the testing of ore.MATERIALS USEDMineralsA series of massive mineral specimens, as pure as could be obtained, was procured. The specimens were cleaned by removing extraneous material, and then crushed and dry...

Jan 1, 1965

During recent years there has been a marked increase in the use of explosives in Queensland coal mines. Delay detonators have been introduced and their use has extended with the wider application of mechanised methods of mining.The need for careful study of the characteristics of delay detonators is stressed so that the advantages of simultaneous firing, from the points of view of safety and efficiency, may be obtained. With their use new potential hazards are introduced. These hazardsare considered and means whereby the overall safety may be improved are discussed.The increase in the number of misfires since the introduction of delay detonators is shown and the examination of misfired detonators is described. Lessons to be learned! from these misfires are noted and details are given of the essential requirements for safe and efficient blasting using delay detonators.INTRonUCTIONOne of the aims of mechanization in coal mines is to reduce the physical effort applied to the winning of coal. Explosives play an important part in achieving this and, following the introduction of power borers for the drilling of shot-holes in Queensland coal mines, much of the arduous work associated with coal getting has been eased. During recent years there has been a marked increase in the consumption of explosives, as shown in Table 1, and it must be the aim of all to use these explosives safely and efficiently. That there are dangers associated with the use Of explosives cannot be denied. The shotfiring operation is fully covered by legislation and, being under the control of one man, shQuld be capable of being carried out with a high degree of safety. The main source of accident appears to be the failure to take proper cover and this has resulted in...

Jan 1, 1958

The works of Metal Manufactures Ltd are situated at Port Kemblam NSW, within a few hundred yards of a deep-water harbour. At present they occupy about 26 acres, and ample provision has been made for future extensions. Rail connection exists between various parts of the Works and the main South Coast Railway, the harbour jetties and the adjacent copper refinery of The Electrolytic Refining and Smelting Co Ltd. A plan of the works is shown in Fig 1.The company was incorporated in March 1916, and commenced production of copper wire in June 1918. Early in 1920, tube manufacture was undertaken, followed by telephone cable mnufacture in 1923. Today the Works consist of five principal sections: Founrdy, Tube Factory, Wire Factory, Cable Factory and Case and Drum Factory. Whilst the last four are engaged in producing the finished materials for despatch from the Works, the first-mentioned is engaged in producing copper, brass, and other non-ferrous billets for use in the Tube and Wire factories. In addition, there are Engineering and Metallurgical Departments supporting the manufacturing sections, and in these, as well as in all other sections of the Works, extensions have been carried out from time to time to provide for increased output and new types of products.

Jan 1, 1938

Situated in the Greymouth Coalfield, the Mt Davy Block contains a significant resource of high quality bituminous coal suitable for use in metallurgical coking coal blends. The coal, which is all low sulphur, is seen as a complementary deposit to export coking coal at Stockton Mine.   Previous drilling by State Coal Mines (1948 - 1953) and Japanese interests (1970's) have been supplemented by Coal New Zealand drilling (1992 - 1993) and surface mapping. A mining feasibility study was completed in late 1993 and approval gained for the driveage of an exploratory tunnel to the target seam.   Following construction of surface facilities, tunnel driveage on a 1:5 decline commenced from Rewanui in May 1995 and to date about half the required length has been driven. When the seam is intersected a comprehensive geotechnical testing programme will be undertaken to assess the in-situ mining conditions. It is expected that the results will confirm the assumptions made in the feasibility study.   The Mt Davy Mine, at depths of 500 - 700 metres, will be the deepest underground coal mine ever inNew Zealand and in-situ stresses (orientation and magnitude) will be important considerations for mining engineering. The coal has a high gas content and suitable techniques for gas control and prevention/mitigation of coal outbursts will be necessary.   Mine development is scheduled to commence in mid 1998 and an annual production level of 500 000 tonnes is forecast. The coal seams will be developed by continuous miner and coal extraction will be by hydraulic monitor. Coal will be pumped to the surface and from Rewanui transported five kilometres to Dunollie either by truck or slurry pipeline. At Dunollie a coal dewatering plant, coal stockpile and rail loadout will be constructed.

Jan 1, 1996

By J F. Seale

The design of the settling pond for the Malvern Hills opencast coal project was based on a primary requirement to control runoff and sediment generated from the immediate 6 ha mine catchment, which included two seepages from old underground workings. The pond has been particularly effective in controlling turbidity in the outflow water, with the consent limit of 50 NTU being met on all but one occasion and normal levels of discharge less than 10 NTU. Water quality testing carried out at the time of consenting indicated that there were no acid-generation issues with the proposed mine site in dominant mudstone strata of the Broken River Formation, and that water from the old mine workings was near-neutral in terms of pH and well-buffered. However, it became apparent over the very dry summer of 2003 - 2004 that slaking of the exposed mudrocks in the mine batters was resulting in significant acidity generation, and outflow pH levels were well below the consent limit of 6.5 during and following periods of rainfall. Although these acidity problems have been remediated in the short-term by the use of lime products, it is clear that a programme of lithotype characterisation for AMD should have been undertaken and this has now been implemented. Design of long-term acid drainage control measures is being carried out, and will probably be based around the use of hydrated lime for pH control with enhancement of natural wetlands.

Jan 1, 2004

llmenite from the west coast of the South Island, New Zealand, shows exceptional reactivity with dilute sulphuric acid. Based on this, a cyclic acid leaching process was developed for the production of material with more than 98% TiO2, suitable as a substitute for mineral rutile.Titanium hydrate is recovered from the leach liquor by hydrolysis, and is calcined to give the required product.Ferrous sulphate is crystallized from the hydrolysis filtrates, which after concentration are returned to the leaching stage. The need for further evaluation of the process on a larger scale is indicated.

Jan 1, 1973

By L O. Filippov, C H. Veloso de Melo, A Correa De Araujo

Froth flotation of iron ores is one of the most widely used methods to upgrade iron ore into high-grade concentrates. In recent years, reverse cationic flotation of iron ores has been specifically the subject of several studies. Since quartz is the most common gangue mineral in iron ores, understanding the behaviour of this mineral was the main target of the majority of such studies. However, with the depletion of mineral deposits considered rich and easy to process, it has become more common to find iron ores with complex gangue minerals, which are composed not only of quartz but by a variety of silicates. The mineralogical composition of the ore is an important factor for determining reagents and mineral processing parameters. The mineralogical suite of an ore also presents a paramount role for operational optimisation of any given flotation process. Some studies were performed with different types of amphiboles and other Fe-bearing silicates, for example, but the influence of the mineralogical nature of these silicates in reverse cationic flotation has not been fully explored and will be discussed here. Changes in the traditionally used reagent scheme for reverse cationic flotation, generally including alkaline pH values, polysaccharides as depressant (mainly starches) and primary ether amines and diamines, are expected when dealing with iron ores with complex silicate gangue composition.CITATION:Veloso de Melo, C H, Correa de Araujo, A and Filippov, L O, 2017. Reverse cationic flotation of iron ores with complex silicate gangue minerals, in Proceedings Iron Ore 2017, pp 241–244 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 24, 2017

Results obtained from small scale tests using Australian tin concentrates indicate that metallic tin containing less than 0·1 per cent iron can be recovered by a two-stage process using hydrogen and make-up chlorine. In the first stage the concentrate is ground,. pelletized, roasted, and reacted at 650°C with HCI and H2 to volatilize the tin as SnOI2. The volatilization reaction is conducted with cocurrent gas and solids flow because it was found that the use of cocurrent flow yielded a solids residue substantially free from FeCI2. The second stage uses a technique termed "reflux reduction" during which the SnOl2 produced by volatilization is reduced by hydrogen to form tin and a gas containing HCI and H2 of sufficiently high HCI tenor for recycle to the volatilization stage. The elimination of tin ranged from 98+ to 99·7+ per cent of the tin from concentrates containing 5 to 50 per cent tin, respectively. The process should be capable of continuous operation, and a tentative calculation has shown ,that a treatment rate of 12,000 tonnes of tin concentrate per year could be obtained in a volatilization reactor 1·1 m in diameter and 6·1 m high. The process may have particular application to finely divided concentrates containing less than 20 per cent tin.

Jan 1, 1974

By A L. Welsh, P S. Newling

Mill operators are entrusted to manage what are normally the largest capital assets on any mine site. Achieving maximum utilisation and lowest costs that drive operating margins are realised by applying well known fundamentals of good housekeeping and proactive (as opposed to reactive) maintenance programmes. Historically, maintenance and operations staff are bought in late during the construction stage and often do not have the time, know how or tools to put in place (let alone train the incumbent staff) a functioning maintenance system before commissioning starts. They then get drawn into a reactive maintenance paradigm as teething problems post commissioning are dealt with and day to day issues envelop the line tradesmen and supervisors. Additionally, even when some semblance of a planned maintenance system is established, it is often the case that over time personnel and cultural issues mask the development of problematic maintenance practices. As has been observed by the authors on many occasions, even when some basic programmed maintenance system is in place, the collection of maintenance data is often inaccurate, incomplete and not subject to analysis. The net result is of course a high incidence of machine failure leading to lower than expected availability, which ultimately translates to lower revenue and higher net maintenance costs. The time taken and the cost to repair a failed machine is always greater than the timely and planned repair of a worn machine.Upon review of a number of processing plants around the world, especially gold and small base metal operations, it is apparent that companies need to implement maintenance systems whereby the operators are not overwhelmed with data and can manage by exception. Inadequate or inaccurate data collection and analysis result in poor decisions being made and misguided actions taken. GR Engineering Services (GRES) has developed a system to enable the custodians of mining plant assets to make more effective and effective use of maintenance data by being able to focus on the indicators of plant deterioration and to programme concurrent maintenance activities to maximise plant availability and utilisation.This paper outlines the structures that can be employed to address the challenges of implementing a proactive asset management system. The best practice strategies described herein have been based on the fundamentals of a sound asset management framework:a phased approach to the development of Asset Management methodology and processeseffective implementation of programmed maintenance routinesmanaging asset condition data collected from various sourcesefficient analysis of asset data and management by exceptioninterfacing asset management data with Computerised Maintenance Management System (CMMS) and Electronic Management Systems (EMS) systemstips to assist with maximising asset performance.CITATION:Welsh, A L and Newling, P S, 2015. Operating strategies for custodians of company assets creating wealth, in Proceedings MetPlant 2015, pp 338–352 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 7, 2015

By C Maloloy-on, S Morgan, M Deiparine, H Mackie

There is a strong focus in the mining industry to limit its impact on water quality and usage. This is even more evident in developing countries, where mining companies operate within local communities and have to be diligent not to affect them negatively. In mineral processing operations, the vast majority of water reclamation occurs at the tailings thickener area and tailings storage dam. It is often more effective to maximise water recovery at the tailings thickener before material transport to the tailings dam. Tailing dams are relatively inefficient, and experience a high degree of water loss due to evaporation, seepage and water retention. In addition, tailings dams present the biggest environmental liability for mineral resource projects, so it is beneficial to limit their size and loading.In the past, it was common for tailings thickener areas to have a significant footprint with several large diameter conventional thickeners, producing underflows of between 45-55% solids (w/w). At times, these multiple thickeners were difficult to operate, leading to inefficiencies in water recovery and quality. The development of High-Rate Thickeners (HRT) has resulted in improved settling properties and HRTs usually operate at significantly higher solids loadings (= 1.2 t/m2.h) when compared to conventional thickeners (= 0.1 t/m2.h). Subsequently, thickener diameters have reduced in size and HRT technology has become the preferred option for thickener circuit design in both new and existing operations. HRTs also produce higher water recoveries with increased underflow densities = 55% solids (w/w).The Carmen Copper Corporation (“Carmen Copper”) circuit upgrade is a recent example of these HRT benefits, where one, 39 m diameter, Outotec HRT treats the solids flow rate of five 76 m diameter conventional thickeners. This has allowed operations to increase dry plant tonnage by 50%, maintain key performance targets and provide a framework for further plant expansion. This paper details the sustainable approach to the Carmen Copper tailings thickener upgrade, where metallurgical performance, cost-effectiveness and environmental impact were key considerations.CITATION:Morgan, S, Mackie, H, Maloloy-on, C and Deiparine, M, 2015. Carmen Copper – a sustainable approach to tailings thickener upgrades, in Proceedings MetPlant 2015, pp 416–430 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 7, 2015

Total mechanisation in the Western district of New South Wales is quite a recent addition to productive methods in that State, for it was only in 1940 that the first colliery was equipped for this method of winning coal. Now almost all mines either are totally mechanised or are planning to get their coal by these means.This marked change in recent years is explained by the salient features of the industry's history. Collieries in New South Wales had generally been subjected to low selling prices forced on them by over-production and severe competition. Little money was available out of profits to purchase machinery, and returns on capital were so poor that inducement to invest money in the industry was nonexistent.The second world war brought price fixing at the already low prices. It was not until the post-war period that there has been any inducement to mechanise.Much credit for mechanisation can be given to the Joint Coal Board, a government body formed in 1948. Pursuing a broad plan for the rejuvenation of the industry, this Board, purchased large quantities of machinery for use in, mines under hire-purchase agreement. These agreements encouraged machine mining, and this fact, together with the ensuing production economies, has improved the financial position of the industry.The Board has also been instrumental in the granting of increases in the fixed price of coal, so that the industry has been given an even greater boost in the direction of mechanisation.

Jan 1, 1954

The contiguous Kotre Basantpur and Pachmo (KBP) coal blocks in the Hazaribagh District of Jharkhand State in east India are being developed by Tata Steel Limited (Tata Steel) to supply coking coal to a new steel mill at Kalinganagar in Orissa.The planning challenges are many. The multiple coal seams range in thickness up to 6 m and extend to nearly 500 m depth, with dips up to 25¦ and highly variable quality. Several normal faults with throws up to 150 m intersect the deposit. There is little room for waste dumping on the lease, several large nalas (seasonal creeks) cross the blocks, and the KBP leases are not contiguous with Tata Steel's existing mining operations at West Bokaro. Geotechnical conditions, while not well defined at this stage, are largely unfavourable. There are several villages on the blocks, and extensive paddy fields. In 2009, Adelaide Mining Consultants Pty Ltd (AMC) completed a Detailed Project Report (DPR) for a production level of 8 Mt/a. A terrace mining system was proposed using 28 m3 hydraulic excavators and 185 t trucks working horizontal up-dip slices. Subsequently the viability of in-pit crushing and conveying was assessed, but the full results were not available for this paper.It is planned to extract a total of 147 Mt of raw coal at a strip ratio of 5.2 bank cubic metres per tonne (bcm/t). The planned maximum pit depth is over 300 m.The project includes a washery, a 2 + 25 MW fluidised bed power station to utilise all the coarse washery rejects, and a railway spur line to carry the washed coal to the railhead some 7 km distant.

Dec 6, 2010

According to the data provided by the most recent European Survey on Working Conditions, roughly 25 per cent of the European working population is exposed to mechanical vibrations for no less than one quarter of the work shift duration, while around ten per cent are exposed for the entire work shift. The occupational exposure to whole-body vibration (WBV), in particular, represents a major health risk in mining, quarrying and civil excavation activities. In accordance with European Directive 2002/44/EC, the latest version of the Italian law on physical risks has recently confirmed the possibility of using relevant literature data on vibration magnitude in order to evaluate personal occupational exposure (vibration database or data provided by the manufacturer). Still the alternative option, based on field measurements, represents the most appropriated method of risk assessment, as it accounts for the actual operating condition at the workplace; actual operator and vehicle under investigation and specific working cycle. The article discusses the vibration measurements taken on a number of heavy machinery (excavators, loaders, trucks, dumpers, etc) employed for talc extraction in a mine located in Sardinia and the resulting personal exposure for the drivers. The assessment was carried out in accordance with the specifications of ISO 2631-1 and EN 14253.

Dec 6, 2010

By D Lautier, A A. Ndiaye, A Galli

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

Jan 1, 2009

By D Crequer

Land rehabilitation at Golden Cross is reviewed, 8 years after mine closure in 1997/98, from the perspectives of a Peer Reviewer (land rehabilitation) and a Regional Council Officer (Resource Consents compliance). Land rehabilitation items we discuss include: management of restored pastures, native plantings (on-site riparian and block plantings and off-site environmental riparian enhancement plantings), wetlands (on-site tailings lake and sediment ponds littoral zone plantings, and basement of the open pit; and off-site wetlands enhancement plantings), pine plantations on-site and on surrounding land, stabilization of the Tailings Lake Embankment (landslide) and Open Pit capping, capping of acid-mine-rock, stability of discharge channels, buildings and amenities, public access for recreation, educational uses, and future management of the site. Pest control has helped to conserve the rare and endangered HochstetterÆs (Leiopelma hochstetteri) and ArcheyÆs (L. archeyi) frogs, and a regionally significant stand of rare swamp maire (Syzygium maire) has been conserved and fenced.

Jan 1, 2006

By P Fullagar

Automated multi-sensor core loggers (MSCL) measure petrophysical properties of diamond drill cores, including gamma density, P-wave velocity, electrical conductivity and magnetic susceptibility. A Geotek MSCL system has been used to record petrophysical data on archival drill core from Cadia East Au-Cu porphyry deposit, New South Wales, Australia, for correlation with metallurgical parameters. P-wave modulus, calculated from density and P-wave velocity, exhibits a correlation with small-scale crushability (A*b) test results, and hence offers a means for æcontinuousÆ characterisation of ore crushability at Cadia East. Magnetic susceptibility has proved to be a good indicator of alteration styles, and is a possible indicator of crushability.

Jan 1, 2009

By A C. Chieregati, A Heberle, F L. S P Villanova

Since the publications of Gy’s initial work, many authors have discussed the approaches to estimate the variance of the fundamental sampling error (FSE). Experimental tests suggested by Pitard and François-Bongarçon determine the sampling parameters K and a to calibrate Gy’s formula. The heterogeneity test and the sample tree method are well known and broadly used for many commodities. However, prior to the analysis, the collection of a representative sample is an intriguingly difficult task. The composite for the heterogeneity tests often consists of run-?of-?mine material or processed ore on a conveyor belt. In most cases the final sample does not have enough mass, mixes different geological units, represents a rare blend and does not characterise the deposit. In order to obtain a reliable composite for trace elements and low-grade ores, sampling practitioners suggest at least half a ton of material.To prevent the common representative pitfalls in the FSE, this case study focuses on a single gold-?bearing geological unit collected in situ. With this unit being structured by the mine geologists, but with the interaction between engineers and chemists, it was possible to validate the reconciliation suggested by Pitard (2015). The heterogeneity test and the sample tree method were performed using 500 kg of a smoky quartz from a single geological domain and the results were compared to Gy’s formula. The logging practice by the geologists was modified, emphasising the definition of the size of the gold nugget or its cluster, number of grains and association. Finally, a mineralogical study was conducted on the geological unit to define the liberation factor. All the information is compiled in this paper, showing the need to fully understand the mineralisation to correctly define representative samples and proper analytical techniques.CITATION:Villanova, F L S P, Heberle, A and Chieregati, A C, 2017. Heterogeneity tests and core logging – a final reconciliation, in Proceedings Eighth World Conference on Sampling and Blending , pp 107–114 (The Australasian Institute of Mining and Metallurgy: Melbourne).

May 9, 2017

The banded iron formations "jasper bars," jaspilites, banded hematite quartzites or banded ironstones, etc., as they have. variously been termed in Western Australia, constitute one of the most striking features of the Pre-Cambrian in this State. They occur in at least two distinct divisions of the Pre-Cambrian, viz., in horizons interbedded with quartzites, shales and thin bedded dolomite in the N~llagine (Proterozoic) Series; and amongst the Older Pre-Cambrian rocks, associated with the metamorphosed sediments of the Jimperding-Chittering Series, the Yilgarn Whitestone Series and the Mosquito Creek Series, and interbedded with metamorphosed basic lavas, tuffs and sediments of the Older prenstone or Kalgoorlie Series.In the Hamersley Ranges in the north-west of Western Australia banded ferroginous cherts are well developed amongst the horizontal sediments of Nullagine Age. These iron formations have recently sprung into prominence as they have been found to form the host rocks for important deposits of· blue asbestos. They are closely comparable with the unique crocidolite-bearing banded ironstones of the Cape Province, South Africa, and have been described elsewhere in some detail by the writer. (1) t .The banded iron formations with which it is intended to deal principally in the following pages, form most abundantly in the Central and Eastern Goldfields of Western Australia where they form portions of the Older Greenstone or Kalgoorlie Series of auriferous rocks. In these regions their chemical inertness and physical hardness provide considerable resistance to the agents of erosion and consequently they frequently stand out in strong topographic relief in otherwise monotonously flat or gently rolling country. These banded-iron formations have proved of considerable direct economic importance in the goldfields and in other portions of the State because of thei!! associations with 'gold, iron -and to' a lesser extent, manganese; whilst indirectly because of their peculiar nature, form and topographic prominence, etc, they have been of tremendous assistance to the field geologist both in the practical application of methods of geological mapping and in the' elucidation of geological structures. Finally, they have recently acquired a new importance in the specialised search for ore-bearing lodes or for structural information over areas of soil-covered country, as their form and composition make them ideal subjects for the use of either electrical or m!1-gnetic methods of geophysical prospecting.

Jan 1, 1941

Drill cores from Section 62, New Broken Hill Consolidated Ltd., were used to study the petrology of rocks associated with the zinc lode. The distribution of the rock types in relation to the lode structure was determined. The distribution of the gahnite-bearing rocks was shown to be only partly conformable with the structure.It was concluded that large scale metasomatism was not widespread, that the rocks associated with the lode (except, perhaps, the quartz-gahnite-garnet rocks) were formed by metamorphism of sediments, and that rocks and lode were contemporaneously metamorphosed.INTRODUCTIONThis investigation was undertaken in order to study the rock types associated with the zinc lode of the Broken Hill orebody, and their relationship to the structure of the ore horizons. The work was confined almost entirely to the laboratory, and is therefore limited in its scope. It is hoped, however, that the information gained may throw some new light on the genesis of the lode.Certain inferences which are drawn from this work are at variance with the ideas of a number of earlier workers.In particular, the idea of large scale metasomatism developing many of the rocks associated with the lode, especially those containing manganese, is questioned. On the contrary, the rocks associated with the lode are more simply explained as highly metamorphosed sediments, in some cases modified by water introduced from surrounding rocks into zones of strong folding and faulting. As a corollary, a metamorphicsedimentary origin for the lode material, either as a concentrated sulphide deposit, or somewhat disseminated...

Jan 1, 1961

By A A. Ndiaye, A Galli

In a companion paper on current hedging practices in the mining industry (Armstrong et al, 2009) we showed that contrary to popular belief, mining groups are still using financial derivatives to hedge against foreign exchange risk and interest rate risk, and more recently against adverse changes in energy prices, notably the oil price. This paper presents a case study on a hypothetical gold mine to illustrate the impact that hedging policies could have on its profitability by reducing the downside risk due to adverse changes in the exchange rate and increases in fuel prices. The characteristics of the hypothetical mine have been set to reproduce those of a real gold deposit, the Kisladag mine that is currently being exploited by open pit methods in Turkey. This mine was selected because its feasibility study was available to the public. Geostatistical simulations are used to reproduce the inherent uncertainty on the recoverable reserves û stochastic simulations are used to generate the variability of the other three key sources of uncertainty: the gold price, the cost of energy and the exchange rate. A simple strategy based on straightforward vanilla options (puts and calls) was developed for hedging the last two risks, on the assumption that the company sells its production at the prevailing spot price.

Jan 1, 2009