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By Madgwick J. C, Ralph B. J

A method for the determination of microgram quantities of uranium in leachates from low grade uranium ores is described. Solubilized manium is purified by transfer to an organic solvent by a selective solvent extractionprocedure using tributyl phosphate, iso-octane, and aluminium nitrate. The organic phase is mixed with scintillation fiuors in toluene and the radioactive decay determined in a liquid scintillation counter. The method is sensitive and reproducible in the range 3-30 µg uranium.

Jan 1, 1978

By Bradford NL

The Isa Mine of Mount Isa Mines Limited produces 2.6 million tonnes of silver-lead-zinc ore annually from sub level open stopes of which approximately 40% comes from the narrow Racecourse orebodies below 15 level.Geologically the stoping environment is complicated by highly fissile shale hangingwalls and below 17 level by a high stress regime.The realization that major hangingwall failures and generally poor ground conditions could lead to serious dilution problems, and ultimately production shortfalls, prompted investigations into the use of low strength explosives.

Jan 1, 1985

Ore from the Hill 50 Gold Mine, consists essentially of pyrrhotite, with minor amounts of pyrite, chalcopyrite, galena and gold, replacing "jaspilite." The gold is associated with the sulphides as shotty particles. About 8 per cent. of the particles are less than '0.010'mm.The Hill 50 Gold Mine, at Boogardie in the Murchison goldfield, about 300 miles north-west of Kalgoorlie, was first operated in 1898. From 1898 to 1917 it yielded 20,000 short tons of ore for a recovery of 6,225' fine oz. gold, equivalent to a recovery grade of 6.22 dwt. gold per ton.The present company since the beginning of its operations in September 1936 to June 30, 1954, produced 811,081 short tons of ore for a recovery of 242,554 fine oz. of gold, equivalent to a recovery grade of 5.98 dwt. gold per ton.The grade of ore (recovery grade) has shown a remarkable variation with depth. From the 120 ft. Ievel to the 300 ft. level, it averaged about 7.5 dwt. Au per ton. Below the 300 ft. level it declined, and from 300 ft. to 400 ft. averaged 4.9 dwt. per ton, falling further with increasing depth to about 4.5 dwt. per ton at the '600 ft. level.On the 820 ft. level the grade improved sharply to about 14 dwt: per ton, and this grade has persisted down to and on the 1060 ft. level.The orebody has been described by Finucane (1953) as a series of lenses of finely banded jaspilite conformably enclosed by greenstones. The jaspilite is tightly folded and faulted and intruded by dykes of felspar porpnyry.Mineralization is practically restricted to the jaspilite.

Jan 1, 1955

Precision surface mining is increasingly occupying a significant role in open pit mining. Improvements in technology now allow continuous surface mining of material well above 140 MPa (20 300 psi) efficiently and cost effectively when compared to drilling and blasting/primary crushing methods. These include the elimination of the use explosives and primary crushing, the ability to precisely extract the ore from the waste, or separate ores of varying chemistry and mine thin seams and non-homogenous orebodies cost effectively. In addition, precision surface mining extends the useful life of a mine by extending the mine boundaries. It can expand production capacity in existing mines and is particularly cost effective in greenfield start-up mines. Precision mining techniques result in higher percentage recoveries. This paper reviews several of these techniques for the Terrain Leveler« surface excavation machine (SEM), and shows their impact. Vermeer's current approach to precision surface mining is utilisation of the T1255 Terrain Leveler SEM. Several units have been proven in round-the-clock, seven day operations throughout the world. Among other innovations are design simplicity, stability, maneuverability, rear-mounted tilting drum and top-down cutting. The impact of these items are discussed in more detail in the paper. After a detailed analysis of the importance of machine availability on overall mine performance, Vermeer has extended its equipment line to include a direct-drive option for its T1255 Terrain Leveler SEM. In addition, improvements in dust suppression are presented. While the T1255 Terrain Leveler SEM is of optimum size and cost in small and medium sized mines, Vermeer has recognised that larger mines require larger machines with increased capacities. Vermeer will prototype the T1655 Terrain Leveler SEM later this year. Specifications of this machine and up-to-date preliminary results are presented. A discussion of the role of each machine size and driving mechanisms are included. Finally, the next stage in Vermeer's providing solutions to the surface mining community will be described - a continuous loader. The impact on current mine planning is presented using a detailed computer program developed for studying the impact of loading techniques and higher production rates on mine plan optimisation.

Dec 6, 2010

The author summarizes and extends the relevant results of papers previously published by various authors and presents these results in chart form. The charts are used to demonstrate the theory on a hypothetical mine.INTRODUCTIONRecently a series of articles have dealt with leakage in a mine ventilation system and the problem of its reduction.Theories were developed by Peascod and Keane (1955) for the combined effect of flow in the airways and leakage through the porous barrier between the intake and return of an ideal mine. Later Keane and Peascoa. (1956) extended these ideas to the use of an underground booster fan in increasing the face ventilation and showed how to determine the water gauge and location of the most efficient underground fan.These articles were based on the assumption that Atkin:son's formula:P = R Q2 (1)gave the relation between the pressure drop P lb'/sq. ft., the quantity, Q kilocusecs, flowing in the mine airways and the total resistance, R Atkinsons, to air flow offered by the mine roadway. An Atkinson is defined as a resistance such that 1 kilocusec of air flows due to a pressure drop of 1Ib.jsq. ft. However for conditions prevailing in most mines a more :appropriate relation is that postulated by Reynolds and others (Lamb, 1953) :P=R Qn (2)where n has some value slightly less than 2. It should be noted that Atkinsons may not be used as units when n is not equal to 2.

Jan 1, 1958

By Bratt G. C

When zinc is electrowon from concentrates or residues of high manganese content, the zinc sulphate electrolyte may contain high levels of manganese. The manganese level is usually controlled by removal of manganese at the anode as the dioxide during the zinc electrodeposition stage.By increasing the temperature of an electrolyte containing 8 gll manganese from 35°C to 90°C, decreasing the acidity from 100 gll to 30 gll, reducing the current density from 432.A.m-2 t6 286 A.m-2 and using new lead anodes containing over 0·75 per cent silver, the current efficiency for manganese dioxide removal was .increased from less than 1 per cent to over 20 per cent.At the same time the current efficiency for zinc deposition was maintained above 90 per cent by additions of high molecular weight cationic polyacrylamides to the cell. By utilization of these conditions in a small number of cells, the manganese level in the circuit could be economically concrolled to any desired level.With these conditions the formation of the dioxide changes from an indirect route, via Mn04-, to a direct oxidation of Mn2+ to Mn02.The incorporation of impurities such as Pb, K, NH4, Cu, Ni, or Fe makes the deposit unsatisfactory for direct use in Zn - Mn02 dry cells. The deposit structure changes from cryptomelane at low temperature to y3-Mn02 at high temperature.

Jan 1, 1975

By D N. B Skinner

Changes in the configuration of late Cenozoic volcanic arcs related to Pacific-Australian plate convergence in northern New Zealand may have localised large-scale epithermal gold-silver mineralisation to a particular part of the volcanic arc system, the Coromandel Volcanic Zone (CVZ). The history of arc-type volcanism in northern New Zealand began with the development of the continental margin Northland Volcanic Arc from early-mid Miocene (26-15 Ma). From 18-15 Ma the Northland Volcanic Arc extended south into the northern and western part of the CVZ where it is dominantly composed of andesite with lesser dacite and very minor rhyodacite. In the south, centre and east of the CVZ, younger andesite-dacite volcanism overlapped in space and time (14-5 Ma) with voluminous rhyolitic volcanism associated with rift-hosted calderas and minor basaltic eruptions. This change to bimodal rhyolitic-basaltic volcanism and extensional tectonics was a result of southwest (SW)-directed propagation of the Colville-Lau oceanic island+ arc into the north-northwest (NNW) trending Northland Volcanic Arc and its underlying continental crust. The extensional tectonic regime created in the collision zone between the two arcs is also the site of the 14-6 Ma Coromandel epithermal gold-silver province, which contains some 50 separate deposits and has a production (1862-1996) of about 300 t Au and 1150 t Ag. Extensional tectonics facilitated the emplacement of silicic magma at shallow crustal level and led to reactivation of deep basement faults. The resulting enhanced heat flow and fault-focused fluid flow localised large hydrothermal systems and associated extensive low-sulphidation epithermal gold-silver deposits in the southern part of the province, as at Waihi, Golden Cross and Karangahake.

Jan 1, 1997

Mining is a fundamental activity on which modern society and the world's economy are entirely dependent. Mining investors, large and small, invest on an international scale, frequently being active in several countries.   Prior to committing investment to new countries, the prudent investor will consider the risk involved by analysing a number of physical, financial, administrative and political parameters that impact on the potential financial returns it is seeking. This paper considers these risk factors in relationship to New Zealand and six competitor countries. The conclusion is that for reasons largely within the control of our politicians, New Zealand is a high risk country for mining investors.

Jan 1, 1993

By Delahant A. B, Dworski M

From the Saranac Laboratory for the Study of Tuberculosis of the Edward L., Trudeau Foundation, Saranac Lake, New York:We are assembled to honor the memory of our friend and colleague, Donald Cummings, one of the founders and a past president of the American Industrial Hygiene Association. I deem it an Unusual privilege to have been asked to give this first memorial lecture and hope that what shall have to say may be worthy of the occasion. It is fitting that we should discuss here the subject of Silicosis to which he devoted such a large part of his life and it is doubly fitting, I think, that I should report to you an extended series of investigations carried on by his associates at the Saranac Laboratory.The subject of silicosis may seem hackneyed to this audience which is so familiar with the tried and accepted methods of prevention and control.But in spite of our efforts, the condition is still with us and unfortunately is still being produced in many places. In industries that now maintain good control of dust, fresh cases are appearing on annual re-examination, whose major exposure date back to the days before the hazard was recognized.A few new employees, with apparently ineffective upper respiratory protection against inhaled dust, develop silicosis precociously in environments that are comparatively harmless to their fellows. In plants that have relaxed their vigilance under the urgency of war production schedules, conditions again prevail that will produce, disease in the future.Silicosis acquired new interest with the announcement by Denny, Robson and Irwin(1) in 1937 that it could be prevented by the inhalation of powdered metallic aluminium. It so happened that without knowledge of their work, we at the Saranac Laboratory had for some months been conducting similar experiments with one of the hydroxides of aluminium.Quite independently we discovered that hydrated alumina would also protect animals against quartz. Our approach to the problem had been empirical; we were trying to neutralize quartz particles by coating their surfaces with an insoluble material following the lead of Kettle who in 1932 had shown that this could be accomplished with iron. He neglected to describe his method and the chemist who prepared his coated...

Jan 1, 1945

Copper, zinc, lead, and silver in the discordant magmatic-hydrothermal orebody of the Conrad Mine, N.S.W., all have a relatively high mean abundance. Any single concordant sulphide orebody containing the same metals has a similar order of mean abundance of only one or two of these, particularly copper, copper and zinc, or zinc and lead.The relative abundances of the metals in the Conrad orebody vary more widely than in concordant orebodies, and the lead-zinc-silver and copper-zinc-lead relationships are significantly different.INTRODUCTIONIn previous investigations of metal abundances in sulphide ores, the basis of selection of the orebodies was their form, and to some extent their geological setting, rather than hypotheses concerning their origin. In all cases they were generally concordant with the bedding of the sedimentary or meta-sedimentary rocks enclosing them, and most occurred in volcanic-sedimentary sequences. Their mineralogies were simple, and they were copper, copper-zinc, zinc or lead-zinc rich in composition. Most were of the type ascribed by several authors to exhalative-sedimentary processes.In one of these investigations (Stanton, 1958), it was pointed out that since the metals in ores of this type showed similar abundance patterns and behaviour, it would clearly be of interest to examine, and to compare with them, orthomagmatic and vein types, unquestionably derived from their igneous rock associates.The present investigation is concerned with a single orebody, of clearly discordant type, and of indisputable hydrothermal origin. The abundance and behaviour of copper, zinc, lead, and silver have been determined and compared to similar data fOl!' the concordant type. Such a comparison tests the possibility that metal abundance patterns of base metal ores may be indicative of the mode of ore deposition.

Jan 1, 1963

By Osetzky D, Hesp W. R

The treatment of a hydrobiotite containing 0·64 per cent copper with various soluHons showed that a high percentage (up to 90 per cent) of the copper can be extracted under mild conditions (1 M BCI, 85°C) or withsaline solutions (20 per cent by weight NaCI or NH4F, 400°C). The latter results suggest that the copper is incorporated in the interstratified vermiculite of a vermicuHte-biotite mica and the solutions (NaCl and NH4F) which reacted with the vermiculite without attacking the biotite gave the highest extraction yields.In general, extraction yields with saline solutions increased with the temperature (between 100 and 400°C) and duration (3 or 6 days) of the treatment but were not appreciably affected by the initial pH of solutions.The results of RCI treatment especially may have a bearing on the hydrometallurgical treatment of refractory copper ores where copper is tied to gangue silicates.

Jan 1, 1977

By J Bresnahan, D Kepert, R Murray, R Neroni

Stratigraphy of the Hamersley Province in Western Australia, featuring alternating units of banded iron formations and shales with contrasting electrical properties in a mostly gently undulating shallow-dipping layered geometry, is particularly favourable to airborne time-domain electromagnetic mapping techniques. Manipulated vertical cross-sections of modelled conductivity obtained from laterally constrained one-dimensional inversion of SkyTEM304 data enable the exploration geologist to interpret weathering profiles, shallow-dipping stratigraphy and steep structures, all of which are crucial aspects of bedded iron ore deposits genesis models.The Cobra Project is located 14 km east of the NNW-trending Menindee Fault Zone, which defines the western margin of the Hamersley Province, Western Australia. The region comprises an extensive plateau of Brockman Iron Formation cut by a series of horst and grabens with a regional dextral strike-slip component. The 150° striking horst and grabens and associated 060° striking conjugate faults have approximate frequencies of 400 and 2000 m, respectively, and control the bulk of the iron mineralisation. Syn to late 150° trending dykes in part intrude the faults.In the Cobra region, elucidating the structurally dislocated stratigraphy without closely spaced drilling is very challenging. Geological mapping is hindered by the paucity of mappable stratigraphic markers within the banded iron formations and kinematic indicators. Airborne magnetic and remote sensing data sets highlight the dense lineament network, but provide limited assistance in quantifying relatively small apparent displacements, or distinguishing faults from dykes with reasonable confidence.Interpretation of modelled conductivity cross-sections generated from laterally constrained one-dimensional inversion of airborne electromagnetic method (AEM) data offers invaluable insight where the quality of mapping or drilling is wanting. Subsequent targeted field checking and infill drilling validated the geological model interpreted from the integration of these data sets.The AEM technique alone cannot decipher the complex geological environments often present in the Hamersley Province but can facilitate effective iron ore exploration by focusing precious field time and assisting structural and stratigraphic interpretations in areas with sporadic and shallow geological data.CITATION:Murray, R, Neroni, R, Kepert, D and Bresnahan, J, 2017. Using airborne electromagnetics to solve a structurally complex geological puzzle in the Hamersley Province, Western Australia, in Proceedings Iron Ore 2017, pp 269–276 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 24, 2017

In addressing the need for non-degree tertiary training, let us examine some recent reviews of engineering and geoscience education. The Finniston Report (1) criticised the formation of engineers in the UK and stated that this was largely due to the narrow British conception of engineering as a branch of applied science which militates against an effective marriage between theory and application. It also criticised the system for not giving students sufficient grounding in the synthesis of technical, human and financial considerations within their undergraduate courses. As we all know, this report has led to the restructuring of engineering education in the UK. More recently, a Review of the Discipline of Engineering was carried out in Australia by a committee chaired by Professor Sir Bruce Williams (2). The report stated that: Australia has a fairly good system of engineering education that should be made better. more should be done to develop the communication skills of both staff and students. more attention should be paid to changes in engineering practice and the human element in technology. there is a serious shortage of state of the art equipment in most engineering schools. female enrolments in engineering courses should be increased from the current level of about 7% to 20% by 1997. employers should develop a better understanding of the need for continuing education. staff in engineering schools should develop closer relations with employers of engineers. higher education institutions with engineering schools should give financial and other inducements to staff to increase the proportion of study leave or professional development leave spent working as engineers in the business sector. there is considerable room for improvements in the teaching process and in the development of evaluation schemes for assessing the teaching contributions of staff. In its recent report to the Council of the Institution of Engineers, Australia, the Task Force on Engineering Education(3) makes the following points: managerial, entrepreneurial, professional and interpersonal skills should be introduced and integrated into the undergraduate courses but studied in depth as part of continuing education. the continuing education policy of the Institution should be promoted and strengthened with all engineers required to pursue continuing education. the Institution should develop a comprehensive guide to continuing education available from universities, colleges and other public and private sector organisations.

Jan 1, 1989

Geological hazards such as faulting, basement ridges, and zones of "thin" (< 6 m) coal have a major impact on mining economics of underground operations in Huntly Coalfield. Experience has shown that drillhole-based investigations do not yield sufficiently detailed models of the coal seam to allow management of the planning risks associated with these hazards. Consequently, operational performance is affected by unplanned costs associated with lower productivity, loss of coal reserves, and expensive strata control remedies in problem ground conditions. Huntly Coalfield is a challenging environment for acquisition of good quality seismic reflection data due to the very thick (10-85m) weathering layer. Since 1994, successful acquisition of 2D and 3D data has been achieved through a combination of careful testing of technical parameters and experimental trials prior to committing to production recording. High resolution seismic reflection (HRSR) is proving to be an investigations technique which generates accurate and reliable models of the coal seam and associated structures, such as normal faults and topography of the surface on which the coal seam rests. The HRSR technique has been applied and developed in the Okowhao Sector where Huntly East Mine is developing and extracting coal reserves. Results of a recent 3D survey demonstrate that this technique is capable of revolutionising risk management in mine planning for underground mines in structurally complicated coal deposits.

Jan 1, 1997

By A G. Cuison, B V. Andam

Three well-known copper and gold deposits in northern Luzon, Philippines are located in the Mankayan Mineral District. These are the Lepanto Copper-Gold Deposit, the Far Southeast Porphyry Copper Deposit and the newly discovered Victoria Gold Deposit. The latter discovery led LCMC to shift from a predominantly copper mine to a gold mine. The pre-Eocene Lepanto basement andesite and the middle Miocene Balili volcaniclastic sequence underlie the Mankayan Mineral District. They are intruded by tonalitic to gabbroic Bagon Intrusive followed by diorite-quartz diorite intrusions. Diatreme emplacement of late Miocene-early Pliocene Imbanguila dacite pyroclastics and porphyries took place much later. Faults in the district mostly form a conjugate fracture pattern dominated by north and northwest trending shears, east-west trending extensional fractures and few north-south trending fissures. Victoria is an epithermal gold-base metal rich quartz vein deposit. The veins occur along tensional structures and it is common to observe crustiform and banded features among the sulphides and gangue minerals. It is an open space infilling type of mineralisation. The Victoria vein systems are divided into zones based on continuity. In each zone are major veins and associated spits. Dacite pyroclastics and porphyries predominantly host the major veins with a few narrow veins hosted by the Balili volcaniclastics and the Lepanto metavolcanics. The veins generally trend east-northeast with 75 - 80 dips towards the south. The longest vein can be traced fairly continuously for a horizontal distance of about 600 metres. The vertical persistence of major veins exposed on three level drives has a range of 150 metres and can reach as much as 400 metres based on drill hole intercepts. The vein widths vary from two to eight metres. Right lateral movements of either the NW or NE shear faults could have produced the east trending tensional fractures. The development of ore shoot patterns was recognised and has been helpful to the mining operations. Cymoid loops with defined pinch and swell features are noted both laterally and vertically. Complementing the structural pattern is the distribution of gold values along veins where lateral and vertical continuity is also observed. Gold is associated with quartz, sphalerite, galena and chalcopyrite. In relatively high gold zones, the abundant sulphides are sphalerite and galena. In relatively high copper zones, there is an abundance of chalcopyrite and tetrahedrite. Galena is always associated with sphalerite but less in abundance. Chalcopyrite occurs either as separate bands from or associated with sphalerite-galena. Chalcopyrite and tetrahedrite appears contemporaneous with sphalerite and galena but in some portions the former cuts the latter sulphides. The predominant gangue minerals are quartz, carbonates and gypsum. Rhodochrosite is the predominant carbonate gangue. Few sulphides are found in the carbonates. Gypsum (anhydrite) is found cross-cutting early mineralisation. It carries very few sulphides. The alteration halos around veins are relatively narrow. In an outward sequence, the silicic alteration occurs very near the veins, followed by sericitic-argillic alteration then to propylitic zones. It is also common to observe veins bounded by propylitic alteration. Preliminary paragenetic studies show apparent three stages of mineralisation, the early-quartz (-gold) stage followed by a carbonate stage and a late-gypsum stage. The abundance of base metals relatively decreases towards the gypsum stage. The Victoria gold deposit could have some genetic associations with the Lepanto Cu-Au deposit and probably indirectly with the FSE porphyry system. It is relatively apparent that the Victoria quartz-gold-base metal veins could have occurred similarly as the quartz-gold roots overprinting the Lepanto enargite mineralisation. This overprinting signifies the waning stages of the entire hydrothermal system.

Jan 1, 1999

The copper and zinc contents of herbarium specimens of 11 of the 12 Australian species of Polycarpaea were determined in order to establish background and anomalous values of potential use in biogeochemical prospecting.Cumulative frequency curves were used to establish appropriate threshold concentrations for six species including the "copper plant"' P spirostylis. Collection localities of Polycarpaea specimens with anomalous copper or copper-and-zinc values are under investigation.

Jan 1, 1978

By Wylie A. W, Mathew PJ

Bulk density and grade were determined on a variety of ore samples from the Mount Tom Price iron ore mine and the interrelationship between these properties and porosity deduced.Variable porosity is responsible for the wide scatter of data points and low accuracy of prediction in the grade of a single sample from grade/bulk density relationships.However, with a sufficient number of such data points, as from a nuclear geophysical borehole logging operation, the mean ore grade in an exploration-type drill hole (~63 per cent Fe) could be determined by regressionanal~sis with 95 per cent confidence intervals of approximately ± 1 per cent Fe. From the same logging operation, utilizing core data for calibration of the probe, the -mean fractional porosity for the drill hole (0·19 ± 0·016 at 95 per cent confidence interval) was deduced. This is less accurate than the corresponding result obtained on core material in the laboratory (0·20 ± 0·005).The range of porosity was from 0·08 for dense, high grade sectIOns of the ore, to 0·28 for friable ore of high grade or goethitic ore of lower grade. Shale band porosity ranged from 0·15 to anomalously high values of 0·48 believed to be caused by leaching of iron minerals from the shale. Porosity values for the iron ore component of the deposit are comparable to those found for the Cockatoo Island (W.A.) mine, and for sections of the Krivoy Rog (Ukraine) iron ore deposit of the Soviet Union.

Jan 1, 1978

Some important mineral fields are referred to in discussing the formation of placer deposits in Australia.Testing methods include boring by hand, with percussion rigs, with auger and pit digging drills, and by vibro drilling.Sampling errors are minimized by the use of correct techniques and equipment for boring, sampling and sample dressing. A hypothetical set of data is used to demonstrate the final process of evaluation, and somerelevant taxation provisions are discussed.

Jan 1, 1966

In general, the metallurgical industry has so far been slower than the chemical industry to adopt ion exchange materials for industrial processes. The atomic energy industry presents a marked exception to this general situation, and the literature shows a rapidly increasing use of ion exchange techniques for the recovery of atomic energy metals on scales ranging from the ultra micro up to that of the largest mining operations. In many cases, the processes used would be equally applicable to more common metals and it is hoped that this review will be of interest to metallurgists outside the specialised atomic energy field. The review is intended to describe developments of ion exchange processes made during the last three years. Earlier studies have been summarised by Kunin and Preuss (1956) and Roland (1957). In order to restrict the number of references discussed, purely analytical procedures have been omitted and only those processes which have been conducted on a reasonably large scale or which, from their nature, areclearly capable of being upscaled, have been considered. The paper is divided into five main sections concerning respectively:Water treatment and effluent disposal.Metal recovery and purification.New ion exchange materials.New ion exchange equipment.Membrane cells.WATER TREATMENT AND EFFLUENT DISPOSALA high proportion of atomic reactors, and particularly those of American design, are cooled by water which is...

Jan 1, 1961

By R Razanatsimba, A Galli

A mining company has entered into contractual commitments to supply certain quantities of its product to clients in each time period. Failure to fulfil its obligations would damage its reputation as a reliable supplier. The planned production would normally be sufficient unless major problems such as highwall failures, roof falls, natural disaster, or strikes that interrupt production or delays in obtaining environmental permits, occur. To overcome these difficulties, the company may be able to obtain more of the commodity: from its strategic stockpile (if there is sufficient there); by buying it on the spot market; or for some commodities such as gold and uranium, by leasing it. Two sources of uncertainty, the spot price of the commodity and the occurrence of serious incidents that interrupt production, are considered. For simplicity it is assumed that the commodity price follows a geometric Brownian motion, that productions incidents have a binomial distribution, that they are independent from one time period to another and that they do not affect prices. A branching tree structure is used to model the joint evolution of prices and production incidents. The aim of this research project was to evaluate the companyÆs options for fulfilling its contractual commitments. When evaluating these options, multi-stage stochastic programming with recourse was used to solve this problem because in addition to providing the dollar value of the project, it gives decision-makers the æroadmapÆ to reach the optimal value. That is, how much material should be bought/sold on the spot market, how much to add to/subtract from the stockpile, how much to lease and in the worst case what the shortfall would be, for each time period as a function of the current spot price and breakdown status. A case-study over a five-year period is used to illustrate the proposed procedure. In this study the production would be sufficient to cover the companyÆs contractual commitments unless production incidents occur. Focus is on evaluating the impact of the quantity initially in the stockpile on the value of the project when the commodity market is tight, that is, when only small quantities can be bought on the spot market or by leasing.

Sep 26, 2011