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By C. Q. Payne

(New York Meeting, February, 1912.) THE art of crushing ores and other materials by means of rolls is a comparatively recent one. While the first record of rolls using iron crushing-surfaces dates back to the year 1806, when they were employed in Cornwall, their principal development has taken place during the last 30 years. To Stephen R. Krom belongs the credit of the pioneer in introducing the belted high-speed roll, which has had its origin and a marked development in this country. His notable contribution to the art was in the use of a single bed-plate or frame supporting the roll-shafts, and to which levers holding the movable roll-bearings were pivoted. He also made use of steel tension-rods to support the crushing-strains, and of hammered-steel tires for the crushing-surfaces. These changes brought the design of crushing-rolls to a high level. Following closely thereon, about 1885, W. R. Eckart conceived the idea of the swivel or ball-and-socket support for the roll-shaft bearings. This is an excellent mechanical conception, especially for bearings held against a spring pressure, and while it may not be necessary for all types of rolls, yet it has been quite generally adopted by other roll-designers, and illustrates the refinement which roll-construction has now reached. Other engineers, as for example, Argall, Vezin, Roger, and Sturtevant, to mention only a few among many, have also given the closest attention to the various details of rolls, such as the frame, springs, bearings, and shafts, and have developed many novel and original designs. It has remained, however, for the boldness and originality of Mr. Edison to extend the field of crushing-rolls in two new directions, and to cause them to exercise new functions. In developing crushing-machinery for his Portland cement works, Mr. Edison constructed ? giant " rolls, having a diameter of 6 ft. and a length of. face of 7 ft.

Jun 1, 1912

By FREDERICK LAISY

A NUMBER of new plants for the treatment of copper ores were completed or under construction during the year. Among these may be mentioned the plants of the International Nickel Co., those of the Hudson Bay Mining and Smelting Co. and of the Roan Antelope Copper Co. Three copper re- fineries have been constructed, one at El Paso, Tex., and the other two in Canada. Two more are projected, one in France and one in England. The International Nickel Co.'s plant consists of an 8000-ton concentrator and a smelting plant containing thirty 10-hearth Herreshoff roasting furnaces, five reverberatory furnaces, and eight Smith-Pierce converter5 . The smelting plant is estimated to have a capacity of 5000 tons of ore or concentrate per day. The roasters are superimposed on the reverbratory furnace plant. As a consequence of this arrangement, the furnace building is unusually high. being 183 ft. from yard level to highest roof elevation.

Jan 1, 1931

By C. T. Bischoff

Introduction Air conditioning is a term which has come into common use only during our generation. By definition, it means the positive and accurate control of temperature, humidity, movement, purity, and component constituents of the atmosphere within an enclosure. Claiming such results for Noranda's ventilation system, or for that of any other large mine, at present would be an idle boast. However, we are working toward that end with considerable success. Modern underground ventilation at Noranda dates back about six years. The later development of air conditioning is in its fourth season, but still in the experimental stage. Various ingenious methods have been devised to cool mines which, because of climatic or geological conditions or depth, are excessively warm. A few installations have been made to warm intake air during the winter months where this is necessary. However, the method currently in use at Noranda is unique in that it accomplishes both ends by one process. This method utilizes the freezing and melting of ice to equalize year-round temperatures. Mining Methods While a discussion of mining methods at Noranda is not proposed in this paper, a brief summary may be in order. The Horne mine of Noranda Mines, Limited, has been developed by six shafts, four of which are now active. The most recent, an internal shaft, extends to 6,000 feet below surface, but all of the ore mined to date has come from above the 3,000-foot level. Figure 1 shows a model of principal ore bodies. The area mined is relatively small in plan, considering its vertical extent and the tonnage per vertical foot. Most of the ore lies within an ellipse about 600 by 1,000 feet. While this has certain advantages, the mining of such massive orebodies has presented many problems.

Jan 1, 1947

By Takeshi Nagano

Copper pyrometallurgy in Japan has experienced quite fundamental changes in last fifteen years. The severe environmental restriction coupled with increase of energy costs accelerated the development work of the new continuous process in Mitsubishi Metal Corporation. After several years of pilot plant test work the commercial plant was put into operation at Naoshima Smelter in 1974, the design capacity of which was 4,000 tonnes of copper per month. Many modifications and improvements have been incorporated into the process and 7,200 tonnes per month of copper production was achieved in 1983, proving that continuous process was much more economical than conventional process. It is now possible to design and operate the continuous process in wide range of capacity. This paper will review the process and describe the progress of the process in these 10 years. 311

Jan 1, 1985

By J. F. Myers

AT the Regional meeting in Columbus, Ohio, in September 1949, the authors presented a progress report of the first year's operation with a Hardinge tricone mill in closed circuit with a Dorr hydroscillator. The present report covers our findings on this grinding circuit to January, 1950. In order to clarify our position, the authors wish to state that no invention or discovery is claimed. The Tennessee grinding circuit is simply an engineered arrangement of known equipment arranged to incorporate all of the recognized efficiency factors of comminution as they are known today. As we concluded our first report, it was not clear how effective the Tennessee mode of operation would be on harder ores. The only information we had at that time was that the Bond grindability test at 48-mesh gave 6.04 g of undersize per revolution. A later test on the same sample at 100-mesh reduced this to 2.04 g, which is definitely in the harder ore class, and which makes the reported 8.80 kw-hr per ton of -200-mesh produced a very creditable figure.

Jan 1, 1950

By Donald A. Ranta

Every mineral project or mine is based on a geologic entity-an ore (mineral) deposit. A well-defined mineral deposit and its associated geologic characteristics are the only aspects of a project that cannot be altered. Mine plans can be modified to exploit the deposit using alternative approaches and yielding similar results. A variety of processing methods also are often available producing generally comparable results. Major modifications can be made to other aspects of the project without substantially changing project economics. However, all engineering and metallurgical aspects of a mine must be accommodated to the spe¬cific location and geologic characteristics of the deposit. Geologic data and interpretations form the foundation for both mine evaluation and mine production by providing esti¬mates of reserves and essential information for mine planning and process design or control. Proper geologic work requires a keen awareness of and an ability to anticipate the technical requirements of geotechnical engineers, hydrologists, mining engineers, metallurgists, and other specialists. Geologists are inte-

Jan 1, 2008

By Kyle Wightman

INTRODUCTION CRA Limited is the largest mining group in Australia by value of sales and the second largest company in Australia in terms of share market capitalisation. In the past 25 years, CRA, its predecessors and affiliates have been involved in a number of mining and further processing developments in Australia and elsewhere. Many of these have been financed using project financing techniques. These include Comalco's development of the Weipa bauxite deposits in Northern Queensland in the late 1950's, the Hamersley iron ore developments in the Pilbara region of Western Australia in the mid 1960's, the Queensland Alumina Limited alumina refinery in Gladstone, Queensland, at about the same time, and the Bougainville copper project in 1969/70. In the past three years CRA has again utilised project financing techniques to fund its Tarong steaming coal project in Queensland, the Blair Athol steaming coal project also in that State and CRA's interest in the Argyle diamond project in the Kimberley region of Western Austrlia. PROJECT FINANCE DEFINED Nevitt Definition Nevitt's is the most frequently quoted definition - "A financing of a particular economic unit in which a lender is satisfied to look initially to the cash flows and earnings of the economic unit as the source of funds from which a loan will be repaid and to the assets of the economic unit as collateral for the loan." Risk and Balance Sheet Treatment It is important to focus in more detail on two aspects of project financing, risk and balance sheet treatment. The assessment of the various elements of risk in a project and the sharing of that risk between sponsors and lenders is the most critical feature. At one end of the spectrum is full absorption of risk by the sponsor(s). This can be described as "on risk" or "on credit" or "full recourse" to the sponsor(s) and is effectively a corporate financing. At the other end of the spectrum the lenders absorb the whole risk in a non-recourse financing which is "off risk" or "off credit" for the sponsor. The other aspect is the sponsor's balance sheet treatment. If the balance sheet of the economic unit undertaking the project and the financing need not be consolidated into the balance sheet of the sponsor (because ownership does not exceed 50%) then the financing may be described as off-¬balance sheet. If consolidation is required then the financing is described as on-balance sheet. Most project financings involve some recourse to the sponsor, i.e. they are limited recourse. Very few are non-recourse or off credit to the sponsor. Limited recourse financings may be on-balance sheet although many may also be off-balance sheet insofar as consolidation is concerned. However, sponsor support may very well be a contingent liability to the sponsor and require disclosure by way of note to the balance sheet should consolidation not be required. CORPORATE FINANCE CONTRASTED A financing which is on credit or full recourse to the sponsor, whether it is directly borrowed or guaranteed by that sponsor, is a corporate financing. Lenders will tend to base their credit assessment on a historical assessment of the sponsor's activities and its financial results rather than an assessment of the project or a detailed assessment of the future activities and prospects of the sponsor. PROJECT FINANCE - A BORROWER'S PERCEPTION Although CRA could choose to arrange all finance on a corporate basis (except perhaps for the very largest projects or acquisitions), project financing techniques provide a number of specific advantages which CRA has noted and which should be carefully considered by a project sponsor. Advantages

Jan 1, 1985

By J F. Penrose

To obtain cost-efficient financing by way of securing an optimal credit rating, the operating and market risks of a single-asset mining project should be accommodated in the financial structure. Weak financing structures can cause projects to fail, as evidenced by the Murrin Murrin and Bulong examples; these can be compared to the investment-grade structure of Straits (Nifty), which managed operational, market, and financing risks well. Most mining projects are capital-intensive, and have heavy dependency on debt financing. A weak financial structure may result in the early failure of an otherwise sound and economically viable project. Appropriate management of technology, construction, and management risks generally will get a project built; of the project failures that occur, most are caused by a liquidity crisis as the project goes through ramp-up (the transition period between completion of construction and full operation). A projectÆs viability can be enhanced through sound hedging practices, while poor hedging can increase the likelihood of financial default.

Jan 1, 2003

By C. Richard Tinsley

INTRODUCTION Project financing has been defined by various authors in this book. It is founded on reliance upon the project's own future cash flows and secondarily on the collateral value of the asset base developed. It is chiefly provided by the banking community who, after an assessment of the risks involved (See Chapter 9) analyse the company's presentation (See Chapter 10) in order to structure a financing package often at a leverage of up to 80% debt. This paper describes the various support and structuring techniques used to delimit and abate the risk components perceived from the banks' experience on project development especially for the period before cash flow is generated (pre completion). ADVANTAGES The advantages of project financing extend beyond the offloading of risks to banks. Among the advantages are the following: 1. Longer loan maturity than conventional, unsecured financing; 2. Loan disbursement and repayment tailored to specific mine; 3. Ability of a joint venture without a "track record" to raise financing; 4. Obtain financing where further direct borrowing (corporate credit) limited by existing indentures; 5. Possibility of arranging finance off-balance sheets; 6. Leverage return on equity; 7. Obtain tax savings with certain project financing structures; and 8. Obtain flexible loan repayment conditions. It can also be said that from the point of view of the company, project financing has certain disadvantages which can be summarised as follows: 1. Perceived higher cost (risk premium) compared with straight corporate credit; 2. More documentation; and 3. Need to negotiate risk-sharing aspects. The main attraction of project financing is the ability to pass certain risks on to the lenders within a flexibly funded transaction. (For a more detailed description of the specific risks see the author's paper at the beginning of Chapter 9. The same risk system is followed here.) The typical project financing has corporate support prior to completion and will usually carefully control the resultant cashflow after completion to ensure the bank does not unnecessarily assume further risks of an equity nature. WITHIN THE COMPANY'S CONTROL Operating Risk This is broken into three interrelated segments for ease of description. Technical Component: This must be specifically addressed if new technology or unproven adaptations are to be used. The banks will have scrutinized the sampling and bulk testing work, perhaps grilling the geological, mineral processing, metallurgical, and mining engineering staff or consultants directly. A number of supports are available such as: TECHNOLOGY GUARANTEE: Either the company itself or the process developer will guarantee that the technology will work for a period of, say, six months to two years after startup. If not, then financial penalties will apply although these are rarely sufficient to repay the loan. Many process developers are weak financially and may have little substance to back such a guarantee.

Jan 1, 1985

By Wi11iam I. Rau

In the recent past, there have been numerous projections of the capital requirements for additional mine and processing capacities required to meet projected non-Communist World demand for minerals during the next 15 years. A consensus judgment would place this currently at $14 billion per year, with the largest expenditures required for increases in aluminum and copper production. Until the early 1960's, internally-generated funds were used to finance nearly all of the large mining companies' capital requirements. Since that time, however, the enormous rise in capital costs per ton of capacity, accompanied by a relative stagnation in the financial condition of many of the major mining companies, have caused the industry to begin to rely on external sources for financing expansion, most notably, project financing from commercial banks and institutional lenders. Seven years ago, it was estimated that, in the five-year period 1972-1976,75% of the total capital requirements of $10 billion per year would come from internally-generated funds, with the balance to be provided by external sources. l There is little doubt that, in the coming decade, the percentage provided by external sources will increase. There should be little difficulty in attracting the necessary investment within the U.S., particularly in view of the expected continuation of companies in diverse industries seeking mineral investment opportunities. The more serious question lies in the availability of internal and external sources of funds for the expansion of mine and smelting capacity in the developing countries. Recently, R. F. Mikesell projected an average annual investment of $4.7 billion (in 1977 prices) over the 1977-1990 period would be required from foreign sources to expand metal producing capacity in developing countries. Mikesell concluded that external financing of mining projects in the developing world has averaged less than $1 billion per year over the past five years, thereby requiring more than a quadru1ling of this financing over the next decade.

Jan 1, 1978

Offshore petroleum development involves massive capital expenditure and financing demands, with the main participants being large international oil companies and State owned enterprises. Types of project oriented financing include take-or-pay contracts, throughput agreements, and production payment financing. The main project finance credit aspects are revenues, investment budgets and cost over- runs, reservoir, political and other risks and special problems such as weather and corrosion in the North Sea. A variety of documents is required and a mix of equity, export credit and Euro-market financing will typically be included in the financing.

Jan 1, 1983

By B. Morris

This presentation will describe the process by which the Quebrada Blanca (QB) copper project in northern Chile was financed. It will also show how a relatively junior mining company addressed the problems created by its inability to provide its share of the equity funding and the guarantees required by the project lenders. QB is located in the semi-arid Andean highlands of northern Chile, 170 kilometres southeast of the port of Iquique and 30 kilometres west of the border with Bolivia, at an altitude of about 4,300 metres (14,000 feet). Figure 1 depicts the project's location. The QB orebody is a secondarily enriched porphyry copper deposit containing reserves of 85 million metric tons grading 1.3 percent copper. Underlying the enriched zone is a significant primary ore zone containing several hundred million metric tons grading about 0.5 percent copper. In the late seventies and early eighties Falconbridge and its affiliates spent $20-30 million dollars exploring the deposit and conducting feasibility studies. For a variety of reasons they decided not to develop the property which was returned to its owners, Empresa Nacional de Mineria (ENAMI), which is a Chilean state mining corporation. In 1988 ENAMI announced its intention to privatize the property through a public bidding procedure.

Jan 1, 1993

By Grover R. Castle

INTRODUCTION "Project Financing" or "Project Loans" have become increasingly popular in recent years, and commercial banks are being asked to consider more and more of such financing. However, the analysis of this type of loan is quite different from the analysis of a loan to a financially sound corporation based on the company's balance sheet. For this reason Chemical Bank did a study of project loans in an attempt to be more sophisticated in our approach to them. As part of this study, we examined 29 project financings for which information was available. In this article I shall describe project loans and set forth the guidelines we developed, as an aid to credit officers who might have occasion to analyse this type of financing. DEFINITION OF "PROJECT FINANCING" OR "PROJECT LOAN" The terms "project financing" and "project loan" commonly describe the various methods that banks and institutional lenders use to finance the construction of new projects on a basis whereby payout is anticipated from the revenue stream generated by the project. A project financing often involves a loan to a new entity formed specifically to own the project. The analysis of a project loan proposal is quite different from the analysis of other term-loan proposals since it involves a credit decision based on the review of a projection or forecast rather than of historical earnings and/or it involves the reliance on contractual obligations of third parties. Lenders are asked to assume the added risks associated with project loans because: 1. Project financing may permit a company to obtain additional leverage. It is possible for companies to arrange financing on a project basis that could not be arranged as a direct borrowing. For example, a company may not be permitted to borrow more money directly, due to a limitation in a bond indenture. However, a project financing can sometimes be negotiated on a basis not prohibited by the indenture. 2. Often the sponsors of, or the stockholders in, the project are seeking an off-balance-sheet financing. For example, 11 of the 29 projects in our study were arranged on an off-balance-sheet basis and one showed on the balance sheet as a deferred income item. An off-balance-sheet financing, for the purpose of this article, is a financing which does not show as a direct liability on the balance sheet of the sponsors of or stockholders in a project. 3. Projects are often located in a foreign country. The financing is arranged so that the lenders assume the political risk on the loan because many companies rightly believe that this arrangement affords a degree of insulation from political risk not otherwise obtainable. 4. Many projects are jointly owned by several sponsors. This form of financing lends itself well to a situation where a new entity is formed to own a project and do the borrowing. Project loans can be used to finance a variety of activities including development of iron-ore deposits and associated pelletizing plants; development of coal reserves; construction of pipelines, alumina plants, fertilizer plants and refineries; etc. The specific areas of analysis can be quite different, depending upon the type of project being financed. It is important, therefore, to classify the proposal according to the type of project, and also by the nature of the financing - nonrecourse financing, financing covered by a guarantee of completion and financing supported by an undertaking lasting for the life of the financing. I will discuss each of these types in more detail later, but first, I should like to make some

Jan 1, 1985

By O C. Aitken

Mining project developers are committed to taking on all the challenges and obligations of financial risk management. It is interesting that our current models of project finance have not changed markedly in principle for some 700 years, yet the rules which prepare the way for effective project assessment and subsequent loan management still do not seem to be well understood by project or corporate developers. Probability and gravity fill the opposing trays of the golden balance of financial risk. Understanding the relationship between these opposing, but intimately related elements is critically important for successful risk management. It is important to move beyond the qualitative approach and use quantitative methodologies to measure the financial impact of the occurrence of each major risk. We live in a world where the only constant is change and thus it is not surprising that a bankerÆs life is still governed by assessing, measuring and pricing risk. Banks are attracted to funding well managed companies with strong cash flow projects. But we are more risk averse compared with the credit appetites of late last century. This attitudinal shift has resulted in tougher term sheets for the early 21st century, encompassing more conditions, warranties, undertakings and stronger cash sweep provisions. Banks require well balanced portfolios to achieve an acceptable spread of risk, thus there is a more restricted market for small company lending than that available to large multi-project corporate entities with less concentrated risk profiles. Because of this focus, junior company debt finance remains comparatively expensive and especially so for more challenging geographical and political environments.

Jan 1, 2004

By Corinne Boone

CO2e.com, LLC - launched in November 2000 - aims to be ?the global hub for carbon commerce.? CO2e.com is a subsidiary of the Cantor Fitzgerald Group, one of the world?s leading brokerage firms Recent Investor in CO2e ? Mitsui & Co. Alliance with Cantor Fitzgerald Environmental Brokerage Services Group (CFEBS) Offices in London, Toronto, Tokyo, New York, San Francisco, Los Angeles, Connecticut, Houston Primary Goals/Benefits of ET § Goals of Emissions Trading: ? Permit Industrial Growth/Expansion ? Promote Economic Efficiency and Flexibility in Meeting Air Pollution Standards § Benefits of Emissions Trading: ? Enhance Air Quality w/o Economic Stagnation ? Encourage Development of New Technology ? Foster Most Efficient Use of a Limited Resource -- Clean Air § Contributes to Sustainable Development and objectives of UNFCCC, Kyoto Protocol?.

Nov 1, 2002

Project-finance risk assessment is mature and approached systematically. Mining industry due diligence remains fragmented with specialists addressing different aspects of the project such as reserves/JORC, environmental impact, commodity market, even financial analysis/ modelling. Each professional has a natural tendency to believe that the risk factors they have examined are the key ones necessary to be reviewed, as if their review will stand in isolation from others in the way a project materialises. By first laying out the project risk categories and risk matrices, this paper examines the due diligence process with a keen eye to the risk assessment and overlap/interaction. Some cross fertilisation of due diligence techniques from other industry sectors is placed into the mining context. Six case studies are then presented with regards to due diligence features in each projectÆs feasibility review or financial information/ offering memorandum. A power case first shows the differences between the due diligence expectations of banks versus bond financings. Then some Australian and Indonesian mining development cases are analysed to see the due diligence learning points. Some of these were project/due diligence failures. The conclusion focuses on the value of a systematic risk assessment for project evaluation, all from the project-finance perspective.

Jan 1, 2007

By R. E. Stewart

"Using the concept of economic life and marginal analysis, it can be shown that proper equipment replacement timing can save a mining company many thousands of dollars. To assist management with determining the economic life of mining equipment, a new computer package has been developed. The package, called ERG (equipment replacement guide), incorporates all important economic factors related to equipment usage, such as operating costs, maintenance costs, salvage values, depreciation, volume of work, tax credits, inflation rates, ROJ, etc. The information is used in a series of equations which balance the costs of new equipment against the total cost of old equipment. The solution of the equations determines economic life and the point in time when the old equipment should be replaced. IntroductionIn an operating mine, equipment must eventually be replaced or downgraded for a variety of reasons. Fleets of haul trucks, dozers and other major pieces of equipment deteriorate over time until the mounting costs of maintenance and repair force either a major overhaul or the ir replacement by new and more efficient pieces of equipment.The question of determining the best time to replace old equipment has been approached in many different ways. Various methods, ranging from operating experience, intuition and physical necessity to sophisticated computer models have been devised to help cope with equipment replacement decisions . The best of the se will incorporate the most important economic factors related to equipment usage, such as operating and maintenance costs, salvage values, depreciation, work delivered, the cost of capital, tax credits and, of course, the effects of inflation.Economic TheoryThe fundamentals of equipment replacement theory grew out of the interaction between economics, engineering and finance. The use of annual cost comparisons and rate-of return calculations were helpful in handling situations in which assets with different finite lives were being compared. Later developments bringing together the concept of economic life and marginal analysis helped provide additional refinements to the theory. Taylorui showed that the displacement of an aging asset with a similar, but newer, asset can be justified economically when the marginal cost of keeping the asset one more year exceeds the minimum uniform annual cost equivalent of the proposed replacement."

Jan 1, 1980

By R. E. MacDougall

Very few mineral properties spend their entire lifespans from discovery to depletion in the hands of one owner. More likely, properties will have several owners, and partial interests may change quite often. Similarly, mineral companies are bought and sold with frequency, in recent years at what appears to be an accelerating rate. The reasons for selling a property can be manifold -need for additional capital in other parts of the business, need for development capital, realization of a large gain at a perceived high point in the market, pessimistic commodity outlook, retirement of principals, or resolution of estate problems. Regardless of the reasons for a sale, there are specific steps that logically follow. Spruce up the business, package the information, market the property, negotiate the terms, close the sale, and make sure it stays sold. Adherence to certain very basic ground rules in property sales can maximize the profits and minimize the effort.

Jan 1, 1990

By AIME AIME

IN accordance with the provisions of Art. XII, See. 3, of the By-laws of the American Institute of Mining and Metallurgical Engineers, the Board of Directors hereby give notice of their intention to amend the By-laws as follows : Art. V, Sec. 2. Amend by substituting the word "senior" for ('first" before the words "Vice-president" in line two of the third paragraph of said section which relates to the calling of special meetings of the Board in the absence or disability of the President.

Jan 1, 1930

By Williams J. A.

"Changes proposed in 1969 to modernize legislation governing the exploitation of mineral deposits in the United Kingdom serve as the basis for a discussion of what is considered to be a desirable framework for future legislative proposals.Proposals with regard to prospecting and exploration, evaluation, and acquisition and exploitation are considered, as are suggestions relating, inter alia, to aerial surveys and land restoration.It is concluded that without legislation along the lines proposed there can be no significant revival of metal mining in Britain."

Dec 30, 1971