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By Richards RG, Cross MS

The development of alluvial mining, processing systems and associated gravity separation technology over the last 30 years is largely linked to the mineral sands industry. Attention has been focussed on Australia in these areas of mineral resource development and technological Advancement.

Jan 1, 1986

By D. R. Wilburn

The Bureau of Mines investigated the potential availability of magnesium from 45 properties in market economy countries (MEC's). The 38 significant deposits evaluated have demonstrated resources of approximately 29 billion short tons (st) magnesium-bearing material containing 416 million short tons (MMst) magnesium oxide (MgO). Using data it gathered, the Bureau determined the magnesium production potential for each property including a 15-pct rate of return on invested capital. Total and annual availability assessments for the next 30 yr were completed for magnesium (Mg) metal, deadburned MgO, and caustic calcined MgO. At a January 1984 market price of $1.34/Ib Mg metal, the properties evaluated could economically produce an estimated 13 MMst Mg metal. At a market price of $400/st nonmetal magnesium product, these properties could economically produce 109 MMst deadburned MgO and 43 MMst caustic MgO. These properties could produce approximately 301,000 st Mg metal, 3.0 MMst deadburned MgO, and 430,000 st caustic MgO annually at current full production levels and 1984 market prices until at least the year 2000. Total 1984 MEC production assessed in this study was 153,000 st Mg metal and 4.3 MMst nonmetallic MgO products.

Jan 1, 1986

At the Waikato North Head Ironsand operation, NZ Steel Mining Ltd is using a Bucket Wheel Excavator û shiftable conveyor mining system to excavate Titanomagnetite bearing sand and clay. The system utilises two Bucket Wheel Excavators with a two level shiftable bench conveyor and common trunk conveyor to deliver the material to a processing plant. The system was commissioned in November 1984 and has proved itself to be a high capacity, low cost method of excavating. Techniques of handling high sand faces have been developed and the conveyor layouts are going through a process of change to cope with the variable geo technical conditions and remain within: the characteristics of the excavators. The safety requirements for operating the system have been of a high standard and the experience has increased the confidence of the Company and the Mines Department Inspector's, for the first Bucket Wheel Excavator Mining system in New Zealand.

Jan 1, 1986

By Ted Schwinden

It's my pleasure to welcome the Rocky Mountain Coal Institute to Montana. Now that you've ended a 74 year history of meeting outside our borders, I hope you'll be back more often. Even if I can't convince you to come back before 2060, when another 74 years will be up, I'm confident the Kalispell and Flathead Lake area will do the persuading for me. In recent weeks, I've made a number of speeches around the state pointing out just how wrong the revenue projections in Montana's state government made in April of '85 were when we came to April of '86. Since the middle of this month, Montana's legislators have been in Helena struggling to balance a state budget that, by the end of fiscal year '87, threatened to be some $88 million in the red. Other western states reliant on natural resource and agricultural economies have found themselves caught in the same deflationary spiral. The "window of opportunity" I proposed and the 1985 Montana Legislature passed, couldn't have been opened at a more difficult time. What was envisioned as an incentive to expand Montana's coal production, and our tax base, ran aground on low oil prices and excess hydroelectric power. De- spite the one-third severance tax rebate offered on new coal production, year-to-date figures published in the June 2nd Coal Week show that production in Montana is down almost 10 per- cent from last year. Again, we're not alone. Production in Wyoming is down 8 percent and in North Dakota, it has dropped 13 percent. An over- all 3 percent production decline in western states looks even worse when contrasted against a 12 percent increase for your eastern competitors. Montana's "window of opportunity" had the potential to be a significant signal to your industry. That potential was quickly tempered by the inability of Arab nations to stabilize world energy prices. If any of us had forgotten, the last twelve months have reminded western states that the well-being of our natural resource economies has a tremendous impact on the ability of all levels of government to provide services. The past year has also driven home that in the world of business and in the business of the world, risk-taking is still the name of the game. The Western Governors recognize the problems facing this industry - and our states - and we're prepared to fight for the future of western coal. In the past two decades, legitimate environmental concerns have created a vast body of new legislation affecting coal producers. The industry has been required to meet new reclamation standards - tough regulations relating to ground water, air quality and wildlife habitat. To the industry's credit, coal companies have hired professionals with the technical know-how to do it right. Rather than considering reclamation laws to be an unreasonable burden, today's coal company is more likely to view its reclamation efforts as a source of corporate pride. In a sense, the industry and the agencies which regulate it have matured together . . . although at times OSM is reluctant to admit that either of us capable of or willing to play by the rules. Certainly some abuses exist and OSM's oversight has been helpful in ensuring parity between those states willing to comply and those that would rather defy federal law. Nonetheless, penalizing the more modem and responsible western coal industry for abuses that occur elsewhere is both unfair and counterproductive. Federal penalties range from "cruel and unusual" reporting requirements to the proposed electricity tax that would effectively force utilities and ratepayers who have already met the sulphur emission standards to subsidize those who have dodged their cleanup responsibilities. As a member of the Alliance for Acid Rain Control, I have joined corporate leaders, academicians, environmental representa-

Jan 1, 1986

By Brian W. Mackenzie

The paper addresses five questions concerning the economic of gold exploration in the western Canadian shield. Can historical footprints be used to project future gold prices for exploration planning? Experience suggests that gold price forecast are too clo ely tied to current market events to provide meaningful guidelines. What range of breakeven gold price will typically be required to ju tify gold exploration in Canada? Minimum price requirements. initially asses ed at $540 to $1080 per ounce, probably lie in the range of $480 to $760 per ounce (expressed in 1985 Canadian dollar). Within Canada, what role do regional conditions and taxation policies play in determining the viability of prospective gold exploration targets? Striking interprovincial differences are found to exist, given the same geological circum tance -Nova Scotia, ew Brunswick, and Quebec rank towards the top in term of motivating exploration, Briti h Columbia provides the least investment incentive, while Saskatchewan and Manitoba place around the middle of the Canadian league. How can minimum acceptable tonnage-grade conditions for gold targets in the western shield be established and, then, constructively applied to provide exploration planning guidelines? Minimum target conditions, realis tically defined in terms of a broad band of doubt, can be used judiciously to help balance the direct costs of uneconomic exploration with the opportunity costs associated with rejecting economic deposits. How does the average cost per ounce of gold discovered in the western shield compare with the overall Canadian experience? Average discovery costs for the we tern shield, apprai ed at $100 per ounce, are shown to compare favourably with the Canada-wide record.

Jan 1, 1986

By John R. Marks

Introduction An engineer is a builder and a problem solver. He uses knowledge of the properties of matter and energy to furnish the needs of society. Engineers form the bridge between scientific researchers and the general public, most of whom are technologically illiterate. Mining, metallurgical, and petroleum engineers extract minerals from the ground and process them into usable forms. Then, other engineers further process them into society's needs. Minerals engineers deal with more uncertainty than other engineers. Each ore deposit has its own personality and each ore is metallurgically unique. Minerals engineers, therefore, must be flexible, often applying larger safety factors and contingencies than other engineers, and frequently functioning as a jack of all trades. A minerals engineer can work in coal, oil, oil shale, base metals, ferrous metals, precious metals, industrial minerals, strategic minerals, or in exploration. Other mining jobs include banking and financing, education and research, marketing and sales, and government. As a minerals engineer, you may be among the first to work on the ocean floor or the moon. College Preparation A difference between college and industry is the type of problems to be solved. A typical college problem has an exact answer derived from given information. An industry problem is more apt to have a solution chosen from a number of alternatives. Information required for the solution is not given. It must be measured, calculated, looked-up, estimated, or otherwise derived. Solutions involve trade-offs, economics, and human factors, as well as application of physical laws and theory. When a college problem is answered, you move on to the next one. In industry, however, the headaches may just be starting with the implementation of the solution. Students often complain that they see little use for the theory they are learning. This is valid. A good professor will link theory and practice. Another difference between college and industry is the price of failure. In college, you can make a half-hearted effort in an assignment and take your C or D. On the job, however, poor engineering results in potentially effective projects being rejected and unsound projects being undertaken. Poor performance results in cost overruns, schedule holdups, oversights, disgruntled employees, irate bosses, unsafe structures, and unreliable systems. The costs are time, money, and possibly lives. The student pays the university for his work - not the other way around. So the rewards for good schoolwork often seem nebulous. But education must be viewed as an investment. Working for good grades will help you think better, learn more, receive better job offers, and perform more effectively on the job. There is no substitute for hard work. Avoid taking the easiest electives. If you desire a more liberal education or dislike rigorous physical sciences, mathematics, or engineering courses, change majors. Remember, you are training to be an engineer, not a computer programmer or market analyst. At least one summer of industry employment is necessary for minerals engineering students. The sooner you gain actual experience, the sooner you will know whether to change majors. Most large companies hire students during summer. It is best to send out applications around Christmas break. First and second year students usually work as laborers. Upper-classmen may work as engineering technicians. Students must sometimes choose between returning to a company at a higher position or trying a different company at a lower position, for more varied experience. Both alternatives have advantages. Do your best on these summer jobs. The company is watching. If you do well, the chances are good you will get a job offer when you graduate. Good references are important when you begin job hunting. Interviewing occurs near the end of your school career. The standard procedure is to send your resume with a cover letter to each company you are interested in. The resume for a graduating engineer with little experience need not exceed one page. The cover letter must be written for the individual company.

Jan 2, 1985

By J. R. Walls

The United States potash industry had its beginning in the early Colonial days. Potash was initially manufactured by leaching of hardwood ashes in large iron pots. Production of potash was recorded as early as 1631 in New Hampshire, and in Maine a few years later. According to the census of 1850, the production of potash was America's most thriving chemical industry and, at that time, 569 plants were reported producing potash from wood ashes. Interest in potash was so great prior to the 1800's that the very first United States patent, signed by George Washing- ton, was granted for the production of potash on July 31, 1790. A new era for the production of potash began when potash was discovered by the analysis from a brine well in 1839 near Stassfurt, Germany while exploring for salt. The predominant use of potash at that time was in the chemical industry rather than agriculture. The discovery, by Justice von Liebig in about 1858, that potash salt contributed greatly to the essential plant food in soil opened up an enormous potential market for a suitable potash material.

Jan 1, 1985

By L. M. Pero

The paper summarizes aspects of the recent literature on mineral development in the Third World. The emphasis is on publications covering agreements between host governments and mining companies.

Jan 1, 1985

By C. P. Mishra

The Bureau of Mines performed a study of the availability of cobalt from market economy countries. The study entailed the detailed analysis of 97 deposits which contain 3.9 billion lb of cobalt at the demonstrated level; in 94 of the deposits cobalt is recovered as a byproduct, and in 3 it is considered the primary product. Since 97 pet of all recoverable cobalt is derived as a byproduct from copper and nickel deposits, the report focused on these two sources. At an assumed market price of $0.89flb for copper, $3.45/lb for nickel, $475/tr 021 for platinum, and $7/lb for cobalt, 1,330 million lb of cobalt at the demonstrated level are potentially available. This total includes 1,105 million lb of cobalt from copper properties, 190 million lb from nickel, 29 million lb from platinum, and 6 million lb from primary cobalt. This analysis indicates that the production cost for 589 million lb of cobalt can be totally covered by the revenues obtained from the other metals produced. The impacts of increases in capital investment and energy costs are also discussed.

Jan 1, 1985

By H. E. Hilliard

The Bureau of Mines investigated hydrometallurgical procedures for concentrating precious metals from a mechanically processed metal fraction of obsolete military electronic scrap. Feed material for the leaching procedures described in this report was the high-tension-separated metal concentrate obtained as a fraction from mechanically processing partially stripped electronic units. Initial pretreatment with a 20-wt-pct-NaOH solution solubilized most of the aluminum. After washing, the resulting residue was incinerated to destroy any organics attached to metal particles. The incinerated residue was leached with 20-vol-pct H2S04 solution using two methods, countercurrent pressure and ultrasonic-aided leaching to solubilize the base metals, predominantly copper. Silver was recovered from the base metal leach residue using 50-vol-pct HN03, and gold contaminated with several percent palladium was recovered from the silver leach residue using aqua regia. The impure silver and gold plus palladium products represent about 1.5 wt pct of the high-tension-separated metal concentrate. Included is a three-step process evaluation study of mechanical processing of general electronic scrap and two hydrometallurgical procedures for leaching high-tension-separated metallic concentrates obtained from the mechanical processing step. Process evaluation concluded that only mechanical processing is economically viable.

Jan 1, 1985

By William J. Potter, Roger N. Pyle

Introduction The primary ingredient for survival of mining companies during a recessionary period is to be innovative and resourceful in the structuring and financing of operations. Over the past decade, many mining companies have had to retrench and restructure their operations and to redeploy their assets just to survive. During the same period, traditional sources of financing for mining companies -- commercial banks, subsidized export credit loans and long term straight debt financing in the public markets -- became less available and more expensive. Meanwhile, new markets and new financing instruments provided new alternatives for mining companies. Those companies which exploited these alternatives greatly enhanced their capacity for survival and even for profitability. This article considers the strategies adopted by some companies to adapt to changes in this recessionary environment; the inadequacy of traditional sources of financing; certain of the new financing instruments, structures and markets which have become available; and how several mining companies have utilized these new instruments, structures and financial markets to improve their competitive positions. THE IMPACT OF RECESSION ON MINING COMPANIES AND TRADITIONAL FINANCING SOURCES In its 1983 year-end article "The New Economic Order" Mining Journal characterized many of the large private sector mining companies with operations in the industrialized countries as being "gripped between the jaws of high working costs and stagnating metal commodity prices." The article went on to characterize the Canadian mining industry in particular as being "in the difficult position of having to seek to sell the bulk of its output in a world market characterized by over-capacity, where production costs were determined by internal political and economic factors while prices were set by external competitive forces of supply and demand." Miners of a wide range of commodities in the industrialized countries have come to realize that their domestic mineral resources are in many cases no longer competitive with global sources of supply. To compete and survive they would have to rely on their technical and financial expertise in mineral exploration and development and in mining and processing. Strategies For Survival Global competition has compelled management in the extractive industries to improve their worldwide cost position. This is the only means whereby a mining company can differentiate its product and attain a substantial competitive advantage. During the past decade, for example, ASARCO Inc. and Inco Ltd. chopped their payrolls, postponed expansion plans and otherwise retrenched. ASARCO reduced its capital expenditures and cash requirements for operations in 1984 to a level almost equal to its internally generated cash. The company's finances were also strengthened by increasing total lines of credit from outside sources, by selling common stock, and by reducing annual pension funding through a change in actuarial assumptions. Other companies returned to their traditional organizational structure where they had a demonstrated competitive strength. Consolidated Gold Fields, for instance, resumed its operation as a mining finance house. Its capital investment programs are now devoted solely to resource development. In mid-1984, at a time of firming zinc prices, Union Miniere S.A. used the opportunity to integrate its smelting capacity and to direct investment to certain subsidiaries at the expense of less viable operations. Smaller corporations realized that it was not enough just to be the low-cost producer. For example, Drummond Coal Company in Alabama, which dominates its regional market due to its low-costs, has also developed a world-wide trading capability and has placed incremental tonnage from its own mines as well as brokered coal produced by others, thereby minimizing capital risk. In Canada, Campbell Resources has exploited difficult times by acquiring assets cheaply. In the process it improved its capacity to withstand cyclical economic swings by diversifying from solely a copper and gold producer to a company based upon asbestos, coal, copper, gold and natural gas.

Jan 1, 1985

By Wesley W. Eckles

Microcomputer technology has begun to revolutionize petroleum engineering. Petroleum engineers' use of relatively inexpensive personal computers (PC's) is likely to continue expanding rapidly. Since 1982 SPE's Microcomputer Applications Committee has developed a Society-wide users group, a bi-monthly newsletter (MICROCOMP NEWS), an SPE Short Course, a hardware and software distribution program, and a world wide electronic network (SPE NET). The purpose of this paper is to share SPE's experience in creating a dynamic program for meeting the individual member's need in the application of microcomputers to petroleum engineering. My hope is that this will encourage other engineering and scientific organizations to provide similar programs for their members.

Jan 1, 1985

By W. S. Cavender

The Round Mountain mining district, Nye County, Ne- vada, was discovered in 1906 on claims owned by Lewis D. Gordon. Initial mining operations uncovered gold veins of spectacular richness, and within a few days of discovery, Gordon sold his controlling interest for some $87,000. From this sale emerged the Round Mountain Mining Co., predecessor of Nevada Porphyry Gold Mines, Inc., the latter destined to become the major property owner in the area. Vein mining in the district continued sporadically into the early 1930s, yielding 9.3 Mg (330,000 oz) of gold plus substantial silver credits from approximately 626 kt (690,000 st) of ore. In addition to the lode deposits, the early miners recognized the placer potential in the alluvial fan material accumulated around the west and north sides of Round Mountain itself. Intermittent placer operations were carried out for a number of years, and in the 1940s and 1950s, Round Mountain Gold Dredging Co. worked the placers under a lease from Nevada Porphyry Gold Mines. The last placer operation terminated in 1959 when it, like some of its predecessors, proved uneconomic. Total placer production for the district is estimated at 3657 km (4 million yd) of gravel containing 59 Mg (210,000 oz) of gold and possibly 2.0 to 2.3 Mg (70,000 to 80,000 oz) of silver. Round Mountain is a small hill situated on the east flank of the Toquima Range in central Nevada. The hill is com- posed of relatively flat-lying Tertiary rhyolitic ash flow tuffs, which overlie Paleozoic metasediments and Cretaceous granites. Throughout the surrounding Round Mountain mining district, most of the known gold ores occur in the tuffs, although the metasediments and granites are also mineralized. Mineralization is structurally controlled, principally by a series of northwest-trending shears and shattered zones. Vein, stockwork, and disseminated ores occur, usually containing simple quartz-pyrite-gold mineral assemblages. The gold itself is electrum, having a silver content of 30% to 40%. In September, 1967, Elwood Dietrich, a prospector and mine promoter, obtained a purchase option on the 4452 ha (1 1,000 acres) of mineral rights held at Round Mountain by Nevada Porphyry Gold Mines. The original option had a buy-out price of $1 million and was established through Dietrich's friendship with officers of Nevada Porphyry. In April, 1968, Dietrich conveyed his option to Ordrich Gold Reserves Co., a partnership created by a group of west coast investors, mostly employees of the airline industry. There- after, Ordrich invested considerable funds in trying to test and develop the property, but soon recognized the need to seek financial and technical support from the mining industry. In December, 1968, Dietrich contacted Wayne Cavender, then Regional Geologist, Southwest, for Copper Range Exploration Company (CRX) in Tucson, Arizona, and made a data presentation. Shortly thereafter, Cavender was appointed Manager of Exploration and Chief Geologist for Copper Range Co. (parent company of CRX), New York City, and he asked C. Phillips Purdy, CRX Regional Geologist, Northwest, to make an initial property examination. Purdy's one-week field study took place in March, 1969, and resulted in a recommendation that CRX pursue its investigation of the property. The presence of low-grade gold mineralization in both the alluvial gravels and in the bedrock was verifiable, but the placer was deemed to have the greater immediate economic mining potential. At that time, gold was in the $1.41/g ($40 per oz) price range. Working from Purdy's information, Cavender decided to attempt acquisition of the property, and the first in a long series of negotiations was initiated with Ordrich. Basically, CRX felt that the placer had a promising potential for several reasons, including (I) past operators had recovered free gold but not the gold contained in the pebble fraction of the gravels; (2) past operations appeared to have been ineffectively designed or managed and not costefficient; and (3) the price of gold appeared to be poised for an upward move. Negotiations with Ordrich were prolonged and difficult, with CRX competing against several ma* mining companies, but finally an agreement was reached, effective June I, 1970. Gold was then back to $35. It is believed that, in

Jan 1, 1985

By S. S. M. Chan

The Bureau of Mines has investigated the structural aspects of shafts and support systems using the finite-element technique. In situ field measurements in deep, vein-type metal mines show that rock stresses are often higher in the horizontal direction than the vertical, and unequal in the horizontal plane. These data and laboratory and field-determined physical properties were used as input to analytical studies. Various design and construction parameters were investigated to deter-mine the effect on shaft stability. Rectangular shafts were studied in detail to determine the effects of applied stress ratio, shaft orientation and dimension, influence of interbedded quartzite and argillite, and rock fracturing. Various support systems were analyzed, including concrete lining, timber, and steel sets. Circular configurations were investigated to evaluate yield zones and liner thickness. Elliptical shafts and time effects were briefly evaluated to illustrate shape and time effects and demonstrate the methodology. It is shown that the magnitude, direction, and ratio of applied stress and rock mass anisotropy are keys to determining shaft stability. A realistic conceptual framework was developed with which to examine the rock and support interaction in deep mine shafts. Structural analysis techniques overcome some of the historical difficulties with shaft de-sign by defining the field data requirements and structural sensitivity of various design and construction parameters.

Jan 1, 1985

By Thomas P. Bispham

INTRODUCTION From the lender's point of view, the greatest period of risk in a project financing occurs during the construction phase. Therefore, most projects are supported during this phase by completion guarantees supplied by some credit-worthy entity; for example, the project sponsors in the case of a joint venture, such as that of W.R. Grace, Hanna Mining, and Liberty Capital; or by a strong contract with a utility or foreign importer/investor, such as the way North American Coal Corporation has structured many of its transactions. THE PROJECT LOAN REQUEST A project financing is a more complex form of term loan than one using an ongoing corporation's balance sheet as a credit base and, therefore, a potential lender will subject the loan request to a more rigorous analysis. To support this effort, the financial institution will require a more detailed information memorandum to evaluate the credit and technical risks of a project - especially since much of the necessary information is not otherwise available. (See also Gibbs and Sroka paper above in this Chapter) A well-prepared information memorandum will impress prospective lenders with the planning ability and general competence of management. Also, the process of preparing the memorandum will help management understand the true extent of the opportunities and limitations of its venture. Appendix A outlines the topics which comprise a complete information memorandum for a loan request. Of some interest to those seeking to sell a currently-operating mining venture, a similar information memorandum should be prepared i.e., covering the same topics discussed here, for the investment banker to use with potential purchasers. For that purpose, though, one might not want to prepare quite as much detail as for a lender. Appendix B outlines the elements of a reserve evaluation and feasibility study, often called the "Bankable Document." Usually, these studies are prepared by independent engineering consultants for use by potential borrowers and sellers. (Potential purchasers will often contract for a similar study for their use in evaluating an acquisition.) ELEMENTS OF A LOAN INFORMATION MEMORANDUM 1. Outline: The information memorandum should begin with a one-page outline covering such topics as: a. The borrower's name, address, and phone number. b. Principal contact at the borrower. c. Amount of the proposed financing. d. Desired pricing and structure of the proposed financing. This should include a description of the amount and source of equity in the proposed financing. e. Use of the proceeds and timing. 2. Summary: The most important information contained in the memorandum should be summarized in two pages. Note - If the borrower is a recently-formed single-purpose company, then elements 3, 4, and 5 will apply to the guarantors of completion and to the project sponsors. 3. The Borrower: This section is a brief biography of the borrower including such topics as date and state of incorporation, founder(s), lines of business, etc. 4. Capitalization: The borrower's current debt and equity position, including leases and trade debt, with amounts, terms, names, and addresses enumerated. Equity owners, and percentage ownership, should be identified. 5. Historical Financial Statements: If available, a minimum of five year's worth of complete historical financial statements

Jan 1, 1985

By T. K. McCranie, A. H. Tousley, A. H. Kackman, L. R. Gregory, A. Jr. McElrath, R. J. Krekel

In Roman and earlier civilizations the term cement was applied only to mixtures of lime, pozzolana, sand, water, etc., used as a mortar to bind larger stones. Today, portland cement, the subject of this section, can be briefly defined as follows: The product obtained by finely grinding clinker produced by calcining to incipient fusion (i.e., sintering) an intimate and properly proportioned mixture of argillaceous and calcareous materials. History The Egyptians were probably the first to join building stones with a mixture of sand and a cementitious material (i.e., having the property of or acting like cement). It is generally accepted that the cement used by the Egyptians on such structures as the Great Pyramid was calcined gypsum, Later the Greeks began to calcine limestone for use as a mortar with sand and water. Still later, broken brick and tile were added to the mortar to make the first concrete. The Greeks and Romans found that some sands produced mortars that were especially resistant to the action of water. Hydraulic (i.e., underwater-hardening) cements formed by combining slaked lime, water, and finely divided siliceous materials (e.g., pozzolana) possess superior strength and are capable of resisting the destructive action of water. They were used on the Pantheon, Colosseum, and other structures, some of which are still standing. In 1756 an English engineer, John Smeaton, found that an argillaceous limestone (i.e., containing an appreciable amount of clay as an impurity) produced a cement with greater resistance to the action of water. Despite Smeaton's findings, the use of the old mixture of lime and pozzolana long retained its popularity. Significant contributions in cement technology from England, Swe¬den, France, and Holland were made in the next 68 years. However, the invention of portland cement is generally credited to Joseph Aspdin, an Englishman, who in 1824 patented "portland cement." The name was selected because, on hardening, it resembled the natural building stone from the Isle of Portland, England. The patent features mixing ground limestone and argillaceous materials in appropriate proportions and calcining (i.e., expelling CO2 by roasting) the mixture. This superseded the existing practice of calcining naturally occurring argillaceous limestone. In about 1845 Isaac Johnson, also English, conducted experiments on proportioning the components and calcining them at higher tem¬peratures. His accomplishments are accepted as the beginning of the present-day portland cement industry. The U.S. cement industry originated with the demand for good hydraulic cement for building structures such as the Erie Canal, which was started in 1817. The first discovery of cement rock (i.e., naturally occurring argillaceous limestone with near-optimum ratios of calcium carbonate, alumina, and silica) near Fayetteville, N.Y., was made by C. White. In 1818, White secured a patent for the manufacture of natural cement from that deposit. Subsequently, several natural cement plants were built in 1830-1840 at Rosendale, N.Y., and in the Lehigh Valley of Pennsylvania. David Saylor, who participated in establishing a natural cement plant at Coplay, Pa., in 1850 discovered that a superior cement could be produced by calcining the rock at higher temperatures than hith¬erto. In 1871, Saylor obtained a patent and commenced the manufac¬ture of portland cement. By 1890, there were 17 portland cement plants in the United States with a combined annual output of 62,300 tons. At the end of 1970, the number of plants producing portland cement in the United States (including Puerto Rico) was 169, down from a maximum of 185 in 1967, with total annual shipments of 73.4 million tons valued at $1,298 million. (Fig. 1). In 1970, annual world production of hydraulic cement (which includes pozzolanic materials, hydraulic limes, natural cement, alumina cement, and portland cement, all of which are in current use in various parts of the world) reached 630 million tons (Table 1). Flowsheets of typical U.S. cement plants are shown in Chapter 13. Chemical Composition and Physical Properties It is generally accepted that portland cement clinker consists of a mixture of compounds or synthetic minerals. The four principal compounds are:

Jan 1, 1985

By H. W. Schreiber, G. R. Castle

INTRODUCTION The small mining company faces the dilemma of how to finance the development of its properties. Many of these small companies don't have the financial resources to pay for development costs from their own funds and frequently they do not even have the financial strength to permit them to borrow the money needed for development. A project financing can sometimes be arranged in such a way as to solve this dilemma. A typical project financing will not provide the answer to the "little guy's" problem because most project financings require that the sponsors of the project provide completion undertakings and sometimes other undertakings. These undertakings are often a prerequisite to obtaining financing, and if the sponsor is not financially strong enough to provide the comfort that the lenders require, then the sponsor will have difficulty obtaining financing no matter what undertakings are offered. However, with a little imagination and the right set of circumstances, a project financing can sometimes provide the solution to the small mining company's problem. The Strathcona Sound Project is unusually suited as a case study because the sponsor, Mineral Resources International Limited,(MRI) was able to arrange a project financing for the development of the project even though the lenders probably would not have been willing to loan a similar amount of money direct to MRI based on the full faith and credit of MRI's balance sheet. The way that MRI was able to arrange this financing makes for an interesting story. THE CASE In early 1974, MRI owned 100% of a small to medium sized zinc - lead - silver massive sulfide deposit (Property) located 475 miles north of the Arctic Circle less than two miles from deep water on Strathcona Sound which is a shipping zone in the Canadian Arctic. The Property was situated at a desolate location except for an Eskimo settlement (Arctic Bay) which was about 20 miles west of the Property. In other words, the project required that complete infrastructure would need to be installed in this far northern location. Independent reserve and feasibility studies (Study) had been completed on the Property which confirmed a total of 6,825,000 tons of reserves classified and summarized as shown below on Table I: [ ] These reserves were based on 229 diamond drill holes totalling 58,909 feet and were established on a cut-off grade of 7% zinc and a minimum mining height of seven feet. The overall mining recovery rate was estimated at not less than 85% and not more than 90%. The feasibility study indicated that it would cost an estimated $45,044,000 to develop an underground mine, a concentrator, a town-site, a power plant, storage facility, loading dock, a tailings disposal area and an airstrip on the Property with an annual capacity of 525,000 tons of ore per year. The construction period was expected to take two years and projected capital costs were broken down as set forth below on Table II:

Jan 1, 1985

By Rodney G. Ravenscroft

Leasing is not a new phenomenon. Experts have identified its origins as early as biblical times. It is a method of finance that has grown rapidly and is now used in most countries, including those of South East Asia, South America, the Middle East and even the People's Republic of China. Internationally, the leasing world divides fairly easily into two groups and this is determined, by and large, according to whether a country has Anglo-Saxon origins or not. Most of the Anglo-Saxon countries have seen tax-oriented leasing become a sophisticated means of financing the acquisition of large and costly items of equipment and large projects. Countries such as France, Spain and Japan have a highly developed leasing industry but it is not tax-oriented. This paper will not address leasing of this kind. LEASING - THE CONCEPT Wide acceptance of leasing as an alternative for financing capital equipment has grown with the recognition by the users of equipment that it is use and not ownership that generates profits. Whilst this seems obvious, memories of repossession of assets during the Depression and attitudes towards leasing as "last resort financing" have raised strong philosophical resistance that has only recently begun to be overturned. A financial lease is a commitment by way of contract between a user of equipment (lessee) and a financial owner (lessor) under which the lessee makes a series of payments in return for use of the equipment. The lessee is acquiring economic value associated with ownership but not ownership of the equipment itself - that remains with the lessor. A lease is a method of financing the use of an asset; other methods finance the assets themselves. It is the taxation aspects that then become important. The lessee is giving up some or all of the taxation benefits of ownership such as depreciation and investment tax credits. The lessor claims these benefits, as he is entitled to do as owner, and takes them into consideration when determining the level of lease payments that are necessary to generate his required rate of return. These lease payments are, of course, lower than they would have been without those taxation benefits. The lease payments themselves are fully tax deductible. This is tax shelter leasing. The lessor is acquiring taxation deductions that are applied fully and immediately against his other taxable income so as to reduce the amount of tax he is to pay to the revenue authorities. It is this concept that makes financial leasing work. Governments provide incentives by way of tax concessions to encourage capital investment. Governments presume that prudent capital investment will offer employment opportunities, generate sales and streamline economic activity. These, in turn, will lead to the collection of government revenue. It makes no difference at all whether these incentives are claimed by a commercial or industrial owner/user or by a financial owner who makes equipment available for use by industry. Rather, the issue is to ensure that if an incentive is available, it is used so as to achieve its desired results. No greater or lesser incentive is available for leasing and leasing does not misuse the taxation aspects of equipment ownership. The critical issue is whether the full value

Jan 1, 1985

By Phillip N. Yasnowsky

"In this Bureau of Mines report, the Federal income tax treatment of mineral exploration and development expenditures is summarized, and changes in the tax treatment of these expenditures since 1951 are detailed and analyzed. Although no attempt is made to establish causal relationships, major tax changes favorable to exploration and development activities did occur in 1951 and 1966 when the Nation was engaged in military actions and the economy was expanding. More recent changes have been unfavorable to exploration and development and were parts of major tax reform efforts. INTRODUCTIONThis Bureau of Mines report discusses the Federal tax law provisions relating to mineral exploration and development expenditures. These provisions, contained mainly in sections 616 and 617 of the Internal Revenue Code of 1954 (Title 26 of the U.S. Code), apply specifically to minerals (other than oil and gas), and thus are of interest to the Bureau of Mines.Bureau of Mines involvement in this subject stems from the legislative mandate in the 1913 amendments to the Organic Act of 1910 (the Act creating the Bureau) to conduct economic investigations of the mineral industries. Congressional concern with the financial conditions in the economic and mineral industries was expressed more recently in the Mining and Minerals Policy Act of 1970 and in the National Materials and Minerals Policy, Research, and Development Act of 1980. The General Accounting Office recommended in 1976 that the Department of the Interior ""identify and evaluate laws and agency programs that affect maintaining and developing a sound and stable domestic mining and minerals industry"" (17, p. iii). 2Taxes, a source of revenue to governments, are a cost to private firms. Thus, taxes directly affect private sector profits, and unique tax provisions are designed to encourage (or discourage) activities such as agriculture, construction, or mining. Even the international competitiveness of the domestic mineral industries may be affected by taxes because many minerals are traded in world markets."

Jan 1, 1985

By Michael Bradbury

INTRODUCTION A major change in financing exports in recent years has been the decreased importance of subsidized export credits, following the commitment of the OECD countries to eliminate the subsidy element. Subsidized export credit rates are now often more expensive than market rates as the financing for exporters has decreased in volume and importance. The forfait market, in recognition of this decreasing importance, provides a rapidly expanding source of nonrecource finance for exporters. The following is a step by step guide to what it is, how it works, its benefits and problems. WHAT IS FORFAITING? Forfaiting is not new. It has been used in Europe for about 25 years to provide export finance for both capital goods and commodities without recourse to the exporter. Although long the preserve of exporters in Germany, and more lately Italy, forfaiting is now used increasingly by exporters in Great Britain, the United States, Canada and Scandinavia. It is a fairly simple operation with easy straight-forward documentation. The transaction involves the purchase by the forfaiting bank of a bill of exchange or a series of bills without recourse to the exporter. These bills will have been drawn by the exporter, accepted by the importer, and will usually bear the unconditional guarantee of the importer's bank. They are normally drawn payable at intervals during the credit period agreed between importer and exporter and are purchased at a discount by the forfaiter. The exporter thus obtains his cash payment and the importer receives his credit period. The forfaiter collects the amount of the bills as they mature directly from the importer. Credit periods vary, depending upon the type of goods and the country and commercial risk of the importer. The period is generally between one and five years with six monthly maturities. The usual forfait currencies are US dollars. Deutschmarks and Swiss francs and others, such as sterling, French francs, and the Scandinavian currencies are being used more frequently. CHOOSING FORFAITING Most types of financing require the continued involvement of the exporter in the financial side of the transaction during the credit period. Forfaiting has certain comparative advantages. In particular, it is possible to forfait 100 percent of the risk without recourse to the exporter, unlike government sponsored export finance schemes, where some retention of the risk by the exporter is required. In addition, exports from country sources do not present problems and forfaiting can also cover trade within the EEC. Other benefits for the exporter are: (a) The exporter's balance sheet is improved; debts are turned into cash thus improving the liquidity of the company and enhancing its cash flow. And there are no contingent liabilities for bills of exchange. (b) If the sales contract is in a foreign currency forfaiting removes the risk to the exporter of adverse movements in foreign exchange during the credit period. (c) Fluctuations in interest rates during the credit period can be ignored since in forfaiting the transaction is usually done on fixed interest rate terms on a discount basis. (d) The political and transfer risks are taken by the forfaiter. (e) The commercial risk is taken by the forfaiter. (f) The costs of administration and collection etc. during the credit period are removed.

Jan 1, 1985