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By Raymond F. Mikesell

This paper evaluates the contributions of "third parties" to surplus capacity in the world metals industries in the 1980s. Special attention is given to the role of international development agencies, such as the World Bank, that have made project loans to state mining enterprises. The paper also reviews the contributions to surplus capacity of the International Monetary Fund and evaluates the large volume of credits from commercial banks to developing countries. Although the credits to Third World countries during the 1970s facilitated the expansion of mining capacity in those countries, no one source of financing can be held responsible for a significant portion of the expansion.

Jan 1, 1989

By Tomek Ulatowski

This presentation discusses the necessary ingredients for the creation of an acceptable credit structure, i.e., the structure that enables the borrower to attract the funding from different groups of lenders. As the amount of debt in the capitalization of new projects increases, it becomes quite critical that the mining venture sponsors obtain funding in a manner which maximizes the project economics. Attention normally is focused on the inherent operating cost characteristics of a venture such as the cost of mining, milling, transportation, smelting, and refining. The projected costs are derived from lengthy feasibility studies often taking millions of dollars and years to prepare. For a variety of reasons as the amount of equity directly provided by the sponsors declines, the balance must be made up from external credit sources. As a result, once the project becomes operational, debt service requirements assume crucial importance. For most new ventures, in the early years of production, the total amount of periodic debt amortization charges together with the projected interest expenses equals or exceeds the total operating cost. Utmost care must be taken, therefore, to reducing these costs which will then increase the chances for the implementation of the project. Project sponsors must carefully evaluate different funding sources in terms of their potential economic impact and, concurrently, evaluate alternative credit structures in order to be able to attract the selected funding vehicles. In this presentation I will discuss credit sources in the order of their relative appeal; i.e., from the standpoint of maximizing rates of return to the project owners. The tenor of the credit, that is the period from signing a loan agreement to the time of last repayment under the loan agreement, is undoubtedly the most important variable in evaluating the attractiveness of debt sources. Therefore, I will begin by discussing debt sources with the longest maturities and will end with a description of credits with relatively shorter tenors. The availability of different funding possibilities will naturally depend on the geographic location of the proposed venture, the creditworthiness of the borrower and the sponsors, the project economics, and finally the actual liquidity conditions in the capital markets at the time that the funds are committed. U.S. LONG-TERM DEBT MARKET - PUBLIC OFFERINGS AND PRIVATE PLACEMENTS The long-lived nature of most mining projects dictates that the majority of the mine financing be raised from long-term sources. In today's world capital markets U.S. debt issues probably carry the longest maturities available. The maturities can range from 5 to 40 years. Various types of long-term corporate debt instruments can be differentiated from one another by their terms, seniority as to claims against the assets of the issuer, legal form, and whether issued privately or through a public offering. The terms of these debt issues vary widely. For example, the interest rate which is typically fixed at the time of issuance, is determined by the credit quality of the issuer, the maturity, the average life, the seniority of the debt, the quality of control covenants or type of assets pledged as security, and other exogenous factors such as: economic policy, general level of interest rates and cur-rent level of financing activity. The entire principal amount of the debt may be due and payable at maturity (known as a "bullet" maturity) or, more typically, through periodic repayments in equal or staggered amounts. Almost all such debt issues allow for prepayment at the option of the issuer, but require varying amounts of repayment penalties. Disbursements are made over a relatively short period after signing of the debt documentation which may not coincide with the actual funding needs of the project. Financial covenants can be quite stringent, covering areas such as the issuer's financial leverage, working capital, payment of dividends and other distributions, merger and acquisition activities, and limitations on the disposition of property. Long-term debt issues may also be distinguished by the seniority of their claims against

Jan 1, 1985

By M. Onifade, O. S. Otuogbai, A. F. Mulaba-Bafubiandi, O. D. Eniowo, H. Grobler

Artisanal and small-scale miners in Nigeria struggle to attract formal financing to upgrade their operations to a more sustainable form of small-scale mining operation. Literature shows that for an investment to attract formal sources of financing; the business must be considered creditworthy by potential lenders. This means that the credit risks associated with the investment must be bearable for the potential lender. This study looks at how artisanal and small-scale miners can attract formal funding, which will help them take the leap from artisanal state to a form of sustainable small-scale mining operation. This study evaluates the creditworthiness of artisanal and small-scale mining operators using key credit risk parameters identified in the literature and through primary investigation. A quantitative study is conducted on a sample of 100 artisanal and small-scale miner establishments in Nigeria to evaluate the effect of these identified credit risk parameters on creditworthiness. It is shown in this study that being a member of a mining cooperative society, which is a form of social collateral, best improves the chances of access to formal financing for miners within the sample group. This underpins the role of social collateral, in both the formal and informal economy, and its influence in improving the creditworthiness of a typical artisanal and small-scale miner.

Jul 23, 2025

By H. Immink

Keywords: Kyoto Protocol, carbon credits, global warming, energy, auditing Climate change is nowadays being taken increasingly seriously, and the link between global warming and the carbon dioxide released in the generation of energy is coming under increasing scrutiny. The Kyoto Protocol was signed in 1997, after five years of negotiation. So far, about 84 countries have ratified this agreement, under which terms developed countries have strict targets linked to their 1990 level of emissions. However, ?greenhouse gas? (such as carbon dioxide) emissions continue to rise alarmingly. According to the World Resources Institute, greenhouse gas emissions in the USA increased 13% from 1990-2002, while Australia recorded a 22% increase. In contrast, the European Union, a Kyoto signatory, has seen a small decline in its emissions during the same period. This is led by the UK and Germany, who reduced their emissions by 15% and 19% respectively. The concept of ?carbon credits? provides a funding mechanism for companies in the developed world to compensate for some of their CO2 emissions by paying companies (trading credits) elsewhere in the world to undertake projects to bring about reductions in emissions. In the southern African mining industry, it will be possible to get refunded for undertaking voluntary emission-reduction projects. Concern about the environment is creating business opportunities. A preliminary calculation has shown that various projects in South Africa (those in the pipeline, with quite a high likelihood of coming off) could earn a combined total of about R2.5-billion, under the initial phase of the Kyoto Protocol's carbon-credit scheme, which allows developed-country companies to trade credits with developing countries. A number of local companies are planning projects that could comply with the Clean Development Mechanism (CDM), in which they will implement techniques to achieve certified emission reductions (CERs) of greenhouse gases. In order to prevent abuse of such a system involving vast sums of money, vigorous audits need to be carried out. A company has to prove it has made real changes and is not simply conducting business as usual under a cloak of claimed environmental improvements. PricewaterhouseCoopers has applied to become one of only a few international agencies that will be accredited to conduct validation and verification of the credits, by auditing what is called the ?designated operational entity?. An independent validator needs to confirm that the project meets the strict requirements of the Kyoto Protocol. The company has to demonstrate that it?s not business as usual. So, if you refurbished every five years, the next refurbishment is not a good CDM project, unless you can demonstrate that you will do something beyond the maintenance - that is what can be registered. So, Kyoto intends to get additional projects going, and the money for that is actually quite good - prices of 14 euros per ton of carbon dioxide not emitted have been seen. The price depends on who takes the risk for non-delivery if a project doesn?t deliver the emission reductions on time. The highly energy-intensive South African mining industry is heavily dependent on coal. There should be many opportunities for the pyrometallurgical industry to come up with creative ideas to reduce emissions, and there is now an additional financial incentive to encourage this. Companies can actually get money in return for doing these types of projects, in addition to the contribution to corporate social responsibility.

Jan 1, 2006

The accurate estimation of ore reserves is the most crucial element in a financier's assessment of the risks associated with funding a mining project. It is crucial because any deficiencies in the estimation of a company's ore reserves will be later reflected in the cash flows derived from the production and sale of the commodity. Bankers must rely on the advice of members of your institute in assessing the quality and quantity of reserves. This information helps determine the cash flows which bankers use in their credit making decisions. It is against this background that this exposition has been prepared on "what bankers require in ore reserve statements" or put another way, "what does a bank require in ore reserve statements in order for it to provide the necessary credit Approvals".

Jan 1, 1987

By G. R. Erdman

The industrial mineral filler plant of the Gouverneur Tale Company is equipped with a good dust collection system installed long before the recent popularization of environmental pollution. Credit for this fact is due to the foresight of Mr. R. S. McClellan, Project Manager and subsequent Vice President and General Manager of Gouverneur Talc, who recently retired as Vice President Engineering of the parent organization, the R. T. Vanderbilt Company. Also instrumental in the early stages of plant operation and the solution of start-up problems was J. A. Gustin who is now an engineering consultant located in Martinsville, Va. Credit is most certainly due to the late R. T. Vanderbilt, the company's founder, who favored and approved the investment in the necessary facilities that were far ahead of all competitors in the industry at that time.

Jan 1, 1972

By F Radke, P A. Tilyard

Determination of the mineralogical location (deportment) of minor and trace elements (including credit and penalty elements) in base metal concentrates can indicate whether further processing is likely to (a) reduce the levels of the penalty elements, and/or (b) direct selected elements into other plant products, thereby increasing current concentrate grade or increasing payment for credit elements. To determine the deportment of elements requires knowledge of the proportions of the minerals present and their individual element contents. In addition, knowledge of the liberation and locking is important, as this can affect any possible further processing. Mineral proportions can be determined by a variety of methods including chemical analysis, point-counting, area-counting, QEM*SEM, image analysis and mineral separation. In the case of a Broken Hill zinc concentrate, several of these methods were used and gave consistent results.

Jan 1, 1998

By AIME AIME

A PERIOD of business depression and falling prices always raises questions as to the possible responsibility of the monetary or banking system. This is natural enough, for it is agreed that the supply of money or credit is a very important factor in modern business and in prices. However, it is far from being the only important factor. One of the chief merits of the gold standard is that under its workings the supply of currency and credit is regulated automatically to the masimun extent, in- stead of by the control of any arbitrary authority. The supply of new gold comes from the mines, and mining is free. It is distributed among the countries by the currents of trade and the play of economic forces, with the general result that the distribution tends to be in accordance with the economic development of the countries and their ability to use it or command it. Inasmuch as the accumulated stock of monetary gold is very large in comparison with the annual additions, the total avail- able supply changes but little from year to year, and it may be assumed that price-changes that are properly chargeable to gold will take place gradually rather than suddenly.

Jan 1, 1930

By L. Rodd, C. Walker, T. Koehler

"The energy content of slag represents approximately 80% of the total energy inputs to a laterite nickel electric smelting furnace. Conventional slag handling methods produce only low grade heat and the entire thermal content of the slag is wasted. A heat recovery system proven on BOF slag in the mid 1980's can be adapted to a laterite nickel rotary kiln electric furnace (RKEF) plant. Slag is granulated using a high velocity air jet inside a waste heat boiler to produce slag granules. Granules are cooled during flight via radiation to water-cooled boiler walls and by convection to the granulation air. This system has the potential to recover 80% of the total slag energy in the form of hot air and steam.Integration of the recovered slag energy into the RKEF smelter can be achieved by a number of methods, including the use of preheated air at the ore dryers, kiln or existing power plant. Energy from the slag boiler may be used to reheat boiler feed water from the power plant or to produce superheated steam and generate electricity. The heat recovery system can provide up to 25 - 30% of the total electrical requirement of each RKEF line and a reduction in CO2 emissions of 234,000 tonnes per year.The total cost of slag heat recovery, including CAPEX and OPEX, is $2.5/GJ, which is competitive with using coal when CO2 credits are $18 per tonne. With Clean Development Mechanism (CDM) carbon credits currently selling at €13 ($20 USD) per tonne CO2, there is considerable opportunity for slag producers in regions including South America, Korea, Indonesia and Africa. Increasing fuel costs and more wide-spread legislation for GHG emissions will likely create conditions in which slag heat recovery could generate a favourable return on investment."

Jan 1, 2010

By Robert D. Brown

"On April 22, 1980, the Ontario government introduced a totally new incentive program for mineral exploration in the province to be effective September I, 1980. Replacing the former Mineral Exploration Assistance Program (MEAP) and also the assistance formerly provided to the mining sector under the Small Business Development Corporations Act, the new Ontario Mineral Exploration Program (OMEP) promises to offer a valuable benefit to certain eligible applicants.Unfortunately, the program is not without its shortcomings: the eligibility for grants or tax credits under the program is comparatively restrictive, and an October 1980 federal budget provision to amend income tax legislation would blunt some of the originally intended attractiveness of the grants and credits.IntroductionIn his budget of April 22, 1980, Ontario Treasurer Frank Miller introduced a new incentive program to encourage mineral exploration in the province.The Ontario Mineral Exploration Program (OMEP) replaces the Mineral Exploration Assistance Program (MEAP), which will be phased out by March 31, 1981. Exploration programs approved under MEAP will continue to qualify for incentives under that program, but will not qualify for OMEP."

Jan 1, 1981

By Robert B. Parsons

"With several hoots of the whistle, Canada's fiscal engineers are once again cranking up the income tax locomotive, in an effort to inject new stimulus into a stubborn economy. And once again, additional gears, wheels, levers, and other mysterious part s are being added to the already complex machinery in order to accommodate the new push.This time, a significant new mechanism involves a major overhaul and expansion of the investment tax credit system.Although the shiny new devices have considerable appeal to a certain group of potential passengers, one wonders if all of the renewed chugging and huffing is on the right track.IntroductionAs indicated in Tax Notes in the July 1983 issue of CIM Bulletin , the April 19, 1983 federal bud get introduced a number of new measures which would permit investment tax credits and research and development deductions to "" flow through "" from a corporation to another taxpayer."

Jan 1, 1984

By Robert T. DeGavre

I have been asked by the Society of Mining Engineers to present a paper on Inco Limited's Indonesian nickel project as a case study in the financing of large overseas mining projects. I welcome this opportunity It is a story worth telling not only because the project itself represents a significant human achievement but also because there are certain important lessons that can be derived from our experience in financing the project. The paper will be divided into four sections: (i) a brief history of the project, (ii) a critical appraisal of the project's financing plan in terms of the goals that we sought to achieve, (iii) some comments on certain factors underlying the relative success of the financing plan, and (iv) the contributions that the engineering staffs must make to a successful financing plan. The paper will not present a technical assessment of the project since Inco Limited has been asked to submit a series of papers on this subject at the International Laterite Symposium as part of the 108th Annual Meeting of the AIME in February 1979.

Jan 1, 1978

By Robert T. DeGavre

INTRODUCTION The $645 million financing for Inco Ltd's Soroako nickel project in Indonesia not only represents a significant human achievement but also there are certain important lessons that can be derived from Inco's experience in financing the project. The paper will not present a technical assessment of the project since Inco Ltd. submitted a series of papers on this subject at the international Laterite Symposium as part of the 108th Annual Meeting of the AIME in February 1979. BRIEF HISTORY OF THE SOROAKO PROJECT Table 1 summarizes the milestones achieved in the Soroako project and its financing. Exploration Phase A contract of Work was signed on July 27, 1968 by the Republic of Indonesia and F.T. International Nickel Indonesia (P.T. Inco) covering an extensive area of over 25,000 square miles on the two southeastern arms of the island of Sulawesi. The Contract provides that P.T. Inco has the sole responsibility for financing the project and determining the terms on which the financing should be obtained, that P.T. Inco has the right to receive and hold outside of Indonesia foreign exchange revenues and to freely dispose of such revenues, and that Indonesians have the right to purchase up to 20% of the equity of P.T. Inco over a period following start of production. P.T. Inco began field investigations in the Contract Area in August 1968. Preliminary reconnaissance sampling with portable drills broadly outlined areas of favorable laterite terrain which were then systematically sampled on surveyed grids. By early 1971 sufficient exploration work had been completed to indicate that the laterite deposits near Soroako could sustain a major nickel-producing plant (figure 1). Pilot plant studies in 1970 and 1971 at Inco's research station in Port Colborne, Ontario, using two bulk samples of Soroako ore material, also confirmed that the ore could be upgraded and treated for the recovery of its metal values. Feasibility Phase Encouraged by the results of its exploration program and pilot-plant work, Inco Ltd. commissioned Toyo Engineering Company of Japan in August 1971 to prepare a capital cost estimate for a relatively small nickel project called "Stage I". Stage I was to be a single-line pyrometallurqical process plant with an annual capacity of approximately 15,000 metric tons of nickel contained in 75% nickel sulphide matte (see Figure 2). Electric power was to be supplied by a thermal power station. It is important to recognize that Inco's strategy was to develop the Soroako ore deposits in several stages: first, construct a small project to gain experience and to reduce the initial capital outlay and then later expand in one or more steps to a much larger project to achieve maximum economies. The strategy reflected both Inco's financial position in 1971 as its sales and earning dropped sharply and the difficulties previously experienced by Inco in trying to launch in the late 1960's very large "greenfield" nickel projects in New Caledonia and Guatemala. Toyo's Project Development Study was completed. in January 1972. Based upon Toyo's cost estimate for physical facilities, Inco estimated the total capital cost of Stage I to be $115 million. For the next several months, Inco ran numerous in-house financial feasibility studies, using as inputs Toyo's cost estimate and the results of its exploration and pilot plant programs. In September 1972, Inco completed a project feasibility study which was based upon a capital cost estimate of $135 million. The feasibility study was immediately made available to potential partners and lenders. Partner Negotiations The Japanese nickel market had from the outset been central to Inco's planning for the Soroako project. That market had been growing dramatically at rates in excess of 20% per annum during the 1950's and 1960's. Japan had established, for rational security and other reasons, a domestic

Jan 1, 1985

By Nate Ober, Heath Rushing

"Mining companies want to be in a position to move quickly and seize a favorable market or to keep their key staff productively busy. One of the problems for these companies is the time required to compensate for unavoidable impacts that the mine will have on the natural environment and to gain environmental permits. All too often, circumstances that were favorable when the project was proposed have become less favorable by the time all the hurdles have been cleared.Accordingly, many mining companies are interested in ways they can inject more predictability into their timelines for gaining environmental permits, shorten those timelines, and be more certain of getting the permits they need to carry out their next project.One increasingly popular way to do this is through a relatively new kind of service — the mitigation bank.Mitigation banks purchase property or easements through property that has been impacted by agricultural, industrial or resource activity. They then turn it around from an environmental point of view. This might include restoring streams and wetlands so that fish and aquatic organisms can survive, and animals have habitat and food to flourish.Appropriate native species of plants including trees and shrubs are planted, and steps may be taken to introduce wildlife to the new habitat. In some cases, a special focus is placed on creating habitat for rare and endangered species of plants or animals.The property is inspected by regulatory authorities, coordinated through an interagency review team (IRT). If the property is determined to be effective as natural habitat, the mitigation bank is then issued credits that it can then sell to development projects that are creating an unavoidable permitted environmental impact elsewhere. A mining company, for example, would buy credits to offset the aquatic impacts due to construction of a mine, access roads and other infrastructure — as required by the Section 404 Clean Water Act permit that governs those unavoidable aquatic impacts. The mitigation bank used for offset must have an IRT-approved service area that includes the location of the impacts."

Jan 11, 2017

By R. D. Brown

In his March 31, 1977 budget, Finance Minister Macdonald has attempted the delicate balancing act of stimulating the economy without reinforcing the inflationary pressures which Canada is continuing to experience. Several tax changes of benefit to the mining industry, as well as measures designed to encourage oil exploration in frontier areas, are among the budget proposals. Additional earned depletion of 66- 2 /3 %, which may be offset against income from any source, will be available on drilling costs in excess of $5 million incurred between March 31, 1977 and April 1, 1980 in connection with an exploratory well in Canada, including the continental shelf . Other changes include more favourable treatment of resource property dispositions, less restrictive rules r elating to "successor corporations" , increased capital-cost allowance on railway spur lines, the inclusion of certain production royalties in Canadian development expenses and the application of the lower "manufacturing and processing" tax rate to sulphur production. To encourage business capital spending, the 5% federal investment tax credit it to be extended an additional three years to mid 1980 and broadened to include spending on scientific research and development. The rate of credit will also be selectively increased on a regional basis, to 7.5 % in certain designated areas in Saskatchewan, Manitoba. Northern. Ontario and Quebec, and to 10% in the Atlantic provinces and the Gaspe.

Jan 1, 1977

By L. Hartsell Cash

INTRODUCTION Created in 1944 to help rebuild those economies, principally in Europe, which were seriously damaged or destroyed during the Second World War, the World Bank--or to use its correct name, the International Bank for Reconstruction and Development-began its operational phase by making a loan to the Government of France to accomplish two tasks: (i) to import coal for space heating purposes; and (ii) to buy new machinery and equipment to help rehabilitate its coal mines. Once the thrust of reconstruction in postwar Europe was largely accomplished, the World Bank Group (for today the World Bank has three separate lending windows) turned to mobilizing funds to improve living standards in developing countries, which remains its primary goal today. Over this period of time, the World Bank Group has continued to assist the world mining industry in various ways and, since 1955 the World Bank Group has financed mining or mineral processing projects with loans/credits totalling $1.5 billion. The World Bank Group consists of two institutions--the World Bank itself and the International Finance Corporation (IFC), which was founded as a separate institution in 1956 and three separate lending windows--the World Bank, the International Development Association (IDA), and IFC. The World Bank loans are provided at commercially-related interest rates but have grace periods usually of up to 3 to 5 years and repayment periods ranging from around 15 to 20 years. Since the World Bank raises its operating funds on the international capital markets in varying currencies and in varying interest rates, it relends a basket of currencies at floating interest rates which are fixed every six months to reflect the Bank's own borrowing cost. At the present time, the interest rate is just below 10% per year and in addition, a one-time front-end fee of 1/4 of 1% is charged. Also, a commitment fee of 3/4% per year is charged on the undisbursed amount of the loan itself. For loans to industrial and mining projects, it is normal to charge an additional guarantee fee of 1 to 1.5% in addition to the annual interest rate. This guarantee fee is payable to the government of the country in which the project is carried out since, by its charter, the World Bank is required to have the guarantee of the host government for each loan made in a specific country. By far the greatest source of lending funds within the World Bank Group is that of the World Bank itself and for the fiscal year ending June 30, 1984, the World Bank approved loans totalling $12 billion. The second lending window within the World Bank Group is IDA which performs the same functions as the Bank itself and has the same staff. Nevertheless, its loans (called credits) are made on much softer terms and are made to the poorest nations only. IDA funds are subscribed by the wealthier countries, usually as grants, and these are relent as credits to those countries with the lowest per capita income. IDA credits are made for 50 year periods, including 10 years of grace, to the government itself. The credits are interest free, but there is a service charge of 3/4% per year on the amount withdrawn and outstanding to defray the administrative costs of IDA. Credits approved during fiscal 1984 totalled $3.5 billion. The third lending window is IFC. While IFC is a separate corporation and operates quite separately from the World Bank and has its own staff and regulations, it works very closely with the World Bank on its overall approach to the mining sector and to a particular country. IFC's mission is essentially to supply venture capital and to stimulate development of the local private sector in capital markets as well as to promote the international flow of private capital to developing countries. Unlike the World Bank and IDA, the IFC does not lend directly to governments

Jan 1, 1985

By D. Symonds, A. J. Richins, M. G. Nelson

Mining activities at Kennecott and Park City are similar in that both districts began operation in the last half of the 18th century, and both operated on a large scale for many years. However, they are different for two important reasons. First, the mines in the Park City district were always underground. The city of Park City was above many of those mine workings. It remained in place after mining activity stopped, and as the town became an up-scale ski resort, property values increased and the tailings dumps became desirable building sites. In contrast, Kennecott eventually became an open pit mine, and the growing pit effectively consumed many of the small towns that had grown up around the underground workings. Even towns on the periphery of the open pit were razed to allow for the disposal of mine overburden. Second, almost all mining activity stopped in Park City in the early 1970s, just as the first rigorous environmental legislation in the United States was enacted. (The Ontario mine operated sporadically until 1982.) Many mine structures, waste dumps, tailings ponds and piles, and tunnels were simply abandoned as the mining companies ceased business or were bought out. Kennecott, on the other hand, has been in continuous operation for more than 120 years, so a closure plan hasn’t been finalized. Nonetheless, environmental and social problems have arisen, and the company has had to address them.

Mar 2, 2022

By Walter S. Weeks

CONFUSION appears to exist in the discussions of fan testing because engineers do not agree on what energy should be credited to the fan in certain cases, and because certain terms that are used in the discussions seem to have double meanings. The purpose of this paper, therefore, is to discuss the useful energy that should be credited to the fan and the methods of determining this energy, and to suggest changes in nomenclature for the sake of clearness. The instruments commonly used in the measurement of fan pressures are the manometer, the static tube, and the impact tube. The static tube is a tube with small pinholes in it. When connected to one leg of the manometer and placed in the air current with the holes facing at right angles to the direction of the current, this tube causes the manometer to register the static pressure, unaffected by the impact of the air. The impact tube is a tube with an opening that faces the air current. When connected to one leg of the manometer, this tube causes the manometer to register a pressure which is the static pressure modified by the impact of the flowing' air on the end of the tube. If the static tube is connected to one leg of the manometer and the impact tube to the other leg, and both instruments are inserted close together in the air current, the static pressure is eliminated and the manometer registers the impact pressure. The efficiency of a fan is the percentage of the expended power utilized in useful work. The items to be included as useful work are a matter of convention, and as the conventions are not universal I feel that the matter is open to discussion.

Jan 1, 1929

By Robert T. DeGavre

The $650 million financing for Into Ltd.'s Soroako nickel project is a story worth telling-not only because the project itself represents a significant achievement but also because there are certain important lessons that can be derived from our experience in financing the project. A critical appraisal of the methods and successes in the financing plan is presented in this article, in light of goals which Inco sought to achieve. A technical assessment of the project is not included, since Inco Ltd. has submitted a series of papers on this subject at the International Laterite Symposium as part of the 108th Annual Meeting of AIME in February 1979. Progress in developing and financing the project is encapsulated in the accompanying project factsheet.

Jan 3, 1979

By CLARENCE G. SMITH

Prior to the actual development of an oil property it is difficult to determine the quantity of oil under the property and the rate at which this oil can be brought to the surface-factors that determine the ultimate value of the property. Consequently, there has been much confusion in devising accounting systems that, during the entire life of a property, will show costs and profits from which the producer can determine whether his property is being worked at a profit or otherwise. The Bureau of Mines publishes this report in recognition of a distinct need for a simple treatise on accounting methods adapted to the peculiarities of the petroleum industry. Probably many companies operating oil wells are not fully acquainted with details important to the welfare of their business, because their account books fail to furnish them with exact and adequate data. With the accountant rests the responsibility of providing the management with reports setting forth the details of the business expressed in fitting terms as well as in dollars and cents. These reports are a means whereby efficiency may be maintained, waste prevented, oil obtained and sold, and money suitably reinvested. They also enable a concern to study the progress of its business in order to conserve to the utmost the possible benefits from an exhaustible deposit of mineral wealth. When managements realize the extent of the waste at their properties more attention will be given to the character of the accountancy records. Herein are presented descriptions and discussions of balance sheets, profit-and-loss statements, and bookkeeping methods peculiarly adapted to the oil business. As far as possible, technical phrases have been omitted in order that those not familiar with accounting terms may be able to follow the subject matter. The systems of keeping books outlined in Chapter X have all been found practical. For brevity as well as clearness the major part of the work refers to the company operating only one property.

Jan 1, 1917