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By Anna H. Connard

SUMMARY The discussion focusses on developments in the debt/equity swap market since the Marte project was negotiated in early 1988. It emphasises carrying forward the recent market trends to anticipate the breadth and scope of debt/equity conversions for mine development in the 1990s. Secondary market prices of LDC paper, conversion values and political influences in the host countries and the use of near debt and commodity-based instruments as components of mine financing in debt/equity deals will be placed in the perspective of recent trends and expectations for the future. THE MARTE PROJECT The Marte mine is a gold porphyry deposit in Chile's high Atacama, for which financing was put together at the beginning of 1988. The Marte project was financed by a combination of common equity and loans. It was unusual that the equity infusions were made under different programs. Some of the international equity was infused with fresh funds via DL 600. Other common foreign equity was provided through the conversion of Chilean bank debt under Chapter XIX. On the loan side,. export credits for the import component of machinery and equipment were sought. Local bank financing was negotiated for the remainder of ' the project's anticipated cost. The debt conversion market in Chile was at its apex in terms of interest, activity and government support when the mine financing was arranged. The price of Chilean paper in the secondary market hovered about 62 to 66 cents per U.S. dollar of face value. Meanwhile, the Chilean government was negotiating conversion redemptions significantly closer to full face value. The government differentiated between debt paper exchanged for corporate investors who had sourced that paper in the secondary market, and debt paper held by bank investors who would incur a transaction loss in the conversion. The use of a combined DL 600lChapter XIX equity financing created different yield calculation bases for the various investors. Chapter XIX prevents remittance of profits before year 5 and capital repatriation before year 11. Investors choosing this vehicle have either for a corporate policy in the target project not to declare dividends until repatriation is allowed, or they have to seek uses for the peso liquidity that would be generated through dividend declarations in the early years. However, DL 600 investors face no such waiting period on dividends, nor do they have restrictions imposed on cashing out of the investment before the 11th year. Therefore, any equity structure with components of both investment mechanisms will have inherent differences in cost basis and future income flows for the various participants. This equity imbalance is defensible if the investment motivations of the parties are analyzed: a mining investor using fresh funds looks for a hurdle return on equity calculated at conservative commodity prices, with as much flexibility to reap upside benefits as possible; a mining investor choosing to invest through a debt conversion mechanism will realize a modest short term gain on the conversion, reducing his effective cost basis, but sacrificing some return because of the waiting period on repatriation of dividends. INVESTMENT OBJECTIVES A bank investor exchanging his own paper for an equity participation in a mining project realizes a conversion loss on the transaction. He seeks a risk adjusted acceptable hurdle rate of return to recoup that loss over time. Motivation for the bank investor to take that loss may be derived partly from a strategy to diversify its existing portfolio by internal policy and externally regulated guidelines. The bank will compare yields on its loan portfolio to that country with anticipated dividend flows discounted back at a risk adjusted rate. It will analyze the project with return objectives of yield enhancement over time and with

Jan 1, 1990

By B. Thomas Mansbach

INTRODUCTION The Overseas Private Investment Corporation ("OPIC") is a U.S. Government agency mandated to promote the economic development of the less developed countries ("LDCs") by assisting U.S. private investment in the Third World. Generally, investment decisions turn on the optimism or pessimism of the private sector's financial analysis of a project, with market price of product a major unknown in a very chancy set of projections. Discussions with American mineral companies, however, show that, more often than not, in developing country projects it is the political risks of investing in mineral exploration and extraction that pose the most serious deterrent to investment. In several of the projects described here, investments would not have been made if OPIC had not been involved providing support to the project sponsors and their funding sources. Clearly it is not OPIC's business to promote U.S. investment in a project which is not commercially viable, but OPIC's programs can neutralize the political uncertainties which act as disincentives to investment in otherwise commercially viable projects. That is to say, OPIC's programs are designed to reinforce market decisions and not distort them. Although OPIC is an independent agency of the U.S. Government, it is managed by a Board of Directors, the majority of whom come from the private sector. This, coupled with the statutory requirement that it be self-sustaining and operate with due regard for the principles of prudent risk management, requires that it operate on a business-like basis. Although established as a development agency, to the business public OPIC is both an insurance company and a lending institution, with two major programs which are available to U.S. investors in the minerals sector: its political risk insurance program and its finance program. Each has been specially tailored to the meet needs of the mining industry. The insurance program provides coverage against four basic types of political risk: Currency Inconvertibility, Expropriation, loss caused by War, Revolution and Insurrection and Interference with Operations as a result of an act of War, Revolution or Insurrection. Coverage against the risks of Civil Strife can be added to both War, Revolution and Insurrection coverage and Interference with Operations. Inconvertibility coverage provides protection against a deterioration in an investor's ability to convert local currency into U.S. dollars. This deterioration can be the result of either active or passive delays. Active delays consist of a change in exchange laws or regulations that leads to inconvertibility delays of 30 days or more. For example, if the exchange regulations at the time of contract execution allow an investor to transfer earnings equal to 18% of its registered capital per annum and the government of the host country later changes the law to allow conversion of only 12%, the insured would convert the 12% transferable under the new exchange regulations with the government foreign exchange authorities, delivering the remaining 6% to OPIC for conversion at 99% of the then prevailing rate of exchange. (OPIC does not cover devaluation risks.) Upon delivery of the local currency to OPIC, normally at the U.S. Embassy in the project country, the insured's account in the U.S. would be credited with dollars. Delays can also result from what is termed passive blockage, which includes administrative delays of more than 60 days (sometimes longer) caused by the bureaucratic tie-ups or pigeonholding of transfer requests, as well as delays suffered simply because the government of the host country does not have sufficient foreign exchange. The transfer procedure is the same as with active blockage - the local currency is delivered to OPIC in the project country and OPIC provides dollars in the United States at the then prevailing rate of exchange. The second coverage -- Expropriation -protects not only against the loss of the investment due to the well-known risks of expropriation, nationalization or confiscation by the host government, but also against

Jan 1, 1985

By Jan H. Hommen

TRENDS IN MINE FINANCE Reviewing historical trends may help in dealing with future funding strategies. The first trend is the increase in the use of debt to fund corporate America. Surprisingly, when comparing that with other corporates in the global marketplace, the U.S. does not look too poorly. Japanese, in particular, but also German companies, are much more leveraged than their U.S. counterparts. Note that in Japan and Germany the government and the consumer have shown substantial restraints when it comes to credit. Not so in the U.S. where the savings rate (4%) is much lower than that in Japan (20%) and in Germany (14%). As a result, the cost of leverage is substantially lower in Japan and in Germany than in the U.S. Lower debt costs in these countries allows one to obtain more of it for the same price. The close relationships between financial institutions, corporations and governments in Japan and Germany also make the risk of leverage more bearable and understandable. Also note that interest rate volatility in these countries is more subdued. The investor base in common stock is also changing. Private pension funds have been net sellers of equities during the last few years while public pension funds have been net buyers. Individuals are basically out of the market. It is estimated that over $330 billion of equity was retired in the U.S. through 1986-1988. The reasons are well known: restructurings, buy-backs, takeovers, mergers, and buy-outs. This de-equitization is likely to continue as the cost of equity capital is higher than the cost of debt capital, even on a before-tax basis. Because there has been no market for equity since October 19, 1987, junk bonds have replaced equity capital in the corporate finance structure. The non-investor-grade borrower has access to the public markets through high-yielding debt securities that often look like senior equity. Deregulation has also provided 24-hour markets; securitization can now liquify assets that before were rusting on balance sheets; information processing and communication tools give facts that are instantaneously available, creating the need for products to cover risk and exposures unknown before the start of the information and technology explosion. Thus we now have swaps, options, futures, options on futures, caps, as well as program trading, portfolio insurance, index funds, etc. Globalization will be unstoppable. Today's environment demands it. Corporations are now global competitors, even though they may have never shipped a product off-shore. Boundaries are disappearing and impediments have been removed. Stocks can be issued in a global offering with distribution in all major financial centers of the world. The high leverage of Japanese companies has made common stocks very scarce, which with the high savings rate, makes equity capital inexpensive in Japan. If markets were perfect everyone would issue stock in Tokyo and buy it back in New York. This would certainly stop the bleeding on the balance of payments. With the deficit balance of payments in America, it is no surprise that the cost of money is expensive here. The risk-return relationship on U.S. equity is not favorable enough to appeal to Japanese equity investors. The Tokyo-market, helped by a stronger yen, surpassed New York as the most important equity market in the world. The question is, will the Tokyo market hold up when Japanese domestic consumption increases at the expense of savings? In the U.S. debt markets, the plain vanilla debenture is making a comeback after a period of absence. Commercial paper has replaced short term bank borrowings for working capital funding by larger corporations. The banks have made an interesting comeback with loan sale programs that will continue to attract borrowers. There will be a continuing

Jan 1, 1990

By Sue Sawyer

In October, November and December, teachers at the National Science Teachers' Association (NSTA) area conventions were lured to visit the Minerals Education Coalition (MEC) booth by the promise of free rocks, video tapes, and literature on earth science topics. Teachers were content to stand in lines that at times took as much as an hour and a half to progress through the exhibit. Adding to their interest was the opportunity to converse with people from the minerals industry who were staffing the booth. The MEC was formed by a group of associations and companies in the minerals industry. They felt the need to educate the public about the current-day minerals industry and how it affects everyone's life. The American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. (AIME) underwrote the major expenses of exhibit space and exhibitor services at all three conventions in 1997. SME members have been active in staffing and chairing the NSTA exhibit booth. But they represented only about one-third of the volunteers for the booth. Additional volunteers were drawn from local minerals companies, associations, interested teachers and other support groups. (See donors list on page 64.) In 1997, the conventions were held in Pittsburgh, PA, Denver, CO and Nashville, TN. The local SME GEM Committees chaired Pittsburgh and Denver and The Rogers Group Inc. supplied the chairperson in Nashville. Each exhibit relies on a local committee to plan and run the booth. Support is available from the GEM Projects Coordinator at SME headquarters. Usually the chair of the committee is drawn from the local SME membership. It is easy to see why the MEC booth is so popular. Free literature, videos, posters, workshop packets and rock specimens were handed out to about 5,500 science teachers at the three sites. Feedback from the attending teachers was overwhelmingly positive: "Who do we thank for these great materials?" Some of those great materials included Caterpillar's outstanding donation of Common Ground videos and teacher packets for Pittsburgh, Denver and Nashville for every teacher expected to attend. Placer Dome sent enough What's a Mine coloring books and It Comes from a Mine activity books for teachers at all three sites. Newmont supplied all teachers with an excellent poster describing gold processing. Women in Mining Education Foundation had plenty of its classroom activity handouts. The American Coal Foundation provided a list of its educational materials that are given out free to teachers who request them on school letterhead. The National Mining Association had its Facts About Minerals and Facts About Coal available. US Borax provided the funding to reproduce the NMA black and white posters that were published as inserts in Mining Voice magazine. In addition, each site had other materials chosen by the local committees to round out their selections. At each exhibit site, committees raise between $8,000 and $12,000 in cash donations from industry to support the high overhead of producing this exhibit. Usually, there are between 12 and 18 different rock specimens representing a range of mineral ores from aggregates to the metal ores. The committee arranged to have these donated (along with the freight charges to ship them to the site). Literature is also donated by the industry. It covers a diverse spectrum from basic information on rocks and minerals to posters, flow charts, videos and coloring books. Other donations include storage space before the event, haulage of items to the hall and door prizes. These exhibits could not have been staged without the network of SME Local Sections and the able chairs and committees at each site. At this time, credit should be given to their extensive donation of time and effort.

Jan 1, 1998

By Gregory M. Rumbaugh, Christopher Mark

"The proliferation of unconventional gas well development in the Northern Appalachian coalfields has raised a number of mine safety concerns. Unconventional wells, which extract gas from deep shale formations, are characterized by gas volumes and pressures that are significantly higher than those observed at many conventional wells. The gas is composed largely of methane as well as other hydrocarbons. Hundreds of planned and actively producing wells penetrate protective coal pillars or barriers within active mine boundaries, including chain pillars located between longwall panels. Gas released from a well damaged by mining-induced ground movements could pose a risk to miners by flowing into the mine atmosphere. The mining-induced ground movements that may cause well damage include conventional subsidence, non-conventional subsidence (e.g., bedding plane slip), pillar failure, and floor instability. This paper describes the known risk factors for each of the four failure mechanisms. It includes a framework that can guide the risk assessment process when mining takes place near gas or oil wells.INTRODUCTIONSouthwestern Pennsylvania has served for centuries as a producer of coal, oil, and natural gas. Coal mines were first developed in the Pittsburgh Coal Seam in the 1760s, with the first recorded mine in 1761 being the Fort Pitt Mine (Edmunds, 2002). Natural gas was introduced to the region when the Haymaker Well in Murrysville, Pennsylvania experienced a blowout on November 3, 1878. Although it was originally drilled prospecting for oil, it produced an estimated 30 million cubic feet per day of natural gas. Without well controls or pipeline infrastructure in place, it burst into flames and lit the night sky for over a year. Soon after, the Penn Fuel Company continued development of the Murrysville gas field and is credited with making Pittsburgh, Pennsylvania the first major city in the U.S. to have natural gas supplied for home and industrial uses. “Natural gas is king in Pittsburgh,” proclaimed an October 18, 1885, article in the New York Times headlined “Value of Natural Gas, Its Use Clarifies the Atmosphere at Pittsburgh” (AOGHS, 2018). By the early 1900s, coal, oil, and natural gas production had reached the southern extents of Pennsylvania in Greene County. The county had first produced oil in 1886, and shortly after began producing natural gas in 1890. By 1906, over 1,300 wells had been drilled (Stone and Clapp, 1906)."

Jan 1, 2019

By Robert E. Palmer

The Hawkesworth detachable drill steel shank and bit were invented by A. L. Hawkesworth, while he was a mechanical foreman for the Anaconda Copper Mining Co., at Butte, Mont. Mr. Hawkesworth died on June 16, 1925, at the time that his invention was practically a proved success. The first application for patents was made by him in November, 1918, and the bit is now being manufactured under patents issued in 1922 and 1923. The credit for its development in the early stages belongs to A. L. Hawkesworth, Roy S. Alley, Harry A. Gallwey, E. J. Bowman and various officials of the Anaconda Copper Mining Co. Later improvements, manufacturing problems and the direct usage in the mines were originated and perfected by the mechanical department under C. D. Woodward, E. R. Borcherdt, head of the Rock Drill Equipment Department, Robert E. Kelly of the Mechanical Department, and various operating department heads of the Anaconda Copper Mining Co. The author wishes to acknowledge the assistance of these officials in the preparation of this paper. Comparison of Costs Using Regular Drill Steel and Detachable Drill Steel In 1922 production was satisfactory and sufficient enough to warrant a complete installation in an operating mine. The study and tests were made at the Badger State mine, the production of which averaged 1200 tons of ore per day. E. R. Borcherdt, head of the rock drill equipment department, was in direct charge of the trials, installation, operating problems and records during the entire .period, arid still continues in that position. This mine is a typical Butte mine, operated through a standard four-compartment shaft, served by a double drum hoist and an auxiliary hoist. The texture of the ground and ore has all the variations from soft to very hard granite and sulfide ore with production from levels between the

Jan 1, 1930

By A. B. Cummins

THE past year has been of unusual interest for industrial minerals. It is increasingly evident that requirements for these raw materials move with general economic trends. Thus, with a peak year in the construction, chemical and petroleum industries, the nonmetallic mineral industries have been brought into the complex maze of an economy in which military spending is in the billions and in which the national income and wholesale commodity prices reached new levels. Many industrial minerals are of first rank essentiality in the defense effort and its supporting industries, and since some of these are of limited supply and others dependent on imports, the problems of procurement, distribution and conservation of available supplies make a complicated pattern. Despite some drawbacks and weak spots, the industrial mineral industries have, in general, met the national situation with great credit and many new production records have been set. The general accomplishment in 1951 should be one of satisfaction with confidence for the future. Difficulties, unsolved problems and uncertainties should not obscure the general trend which many consider optimistic. Prices in the main have been upward, in line with the inflation spiral, but nonmetallics appear with some exceptions to be behind the general increases. Labor difficulties have not been serious throughout the year. Retarding influences in expansions and planning have been the uncertainty of the Korean and international situations and a lack of confidence by many in the government economic program and its ultimate impact on the economic structure. It must also be kept in mind that stockpiling, unless all-out war develops, reaches a level and then ceases to be a major sustaining factor in the mineral markets. In accordance with the Defense Production Act of 1950 various control agencies have been set up to establish the desired rate of stockpile acquisitions. The objectives are subject to change depending on availabilities and needs-military, industrial, and civilian. In some minerals there has been disagreement on actual stockpile requirements, and there is some feeling that the needs of defense might be better met if more funds went into the development of new sources of supply of scarce raw materials and more materials were released to industry at this time. Nonmetallic minerals on the strategic and critical list of the Munitions Board as of July 1951 were: Group I; asbestos, some types; bauxite, refractory grade; beryl; celestite; chromite, chemical and refractory grades; columbite; corundum; diamonds, industrial; fluorspar, acid grade; graphite, some types; kyanite; manganese ore, battery and chemical grades; mica, some types; quartz crystals; rare earths; sapphire and ruby; talc, steatite, block; and Group II; bauxite, abrasive; cryolite, natural; diamond dies; graphite, crystalline fines; iodine; mica, muscovite block, stained and lower; rutile; selenium; talc, steatite, ground; zirconium ore, zircon. Details on the current status of stockpiling inventories are not available. The Defense Minerals Exploration Administration has, since April, executed 39 contracts for the exploration of nonmetallic minerals, including twenty for mica, seven for beryl-mica, six for asbestos, three for sulphur and one each for monazite, steatite talc and fluorspar. Total value of these contracts came to $892,059, of which the Government's participation amounts to $689,247. There were on hand at year's end another 97 applications for exploration aid on nonmetallic minerals in twenty different

Jan 1, 1952

By C. M. Shigley

Tan record of the largest magnesium plant in the country utilizing sea water as a primary raw material stands as another victory in the struggle for large-scale production of pure chemical elements from the oceans. Bromine was the first element to be economically and commercially recovered when, in 1933, a six million pound per year unit was built on the Atlantic Coast near Wilmington, North Carolina, by the Ethyl-Dow Chemical Co.1 The bromine was reacted with ethylene to produce ethylene dibromide, a necessary associate of tetraethyl lead in ethyl antiknock fluid. Within eight years that plant was doubled and redoubled, and another large unit was put into operation at Freeport, Texas, taking bromine from the Gulf of Mexico. In 1940, in fortunate anticipation of the impending demand for magnesium and the limitations of the production from natural brines, the Dow Chemical Co. turned again to the sea, and designed and erected a plant at Freeport to produce 18,000,000 lb. of magnesium per year from sea water.2 In March 1941, two months after the new plant had been put into successful operation, construction of an 18,000,000-lb. Government-financed addition was started. Late in 1941, as a part of the $400,000,000 defense program intended to produce 600,000,000 t0 700,000,000 lb. of magnesium per year, Dow was asked to build and operate for the Government a 72,000000-lb. plant near its original plant at Freeport. Within a few days after the Japanese made their attack at Pearl Harbor, preparation of a site was started at Velasco, Texas, for the construction of the Texas plant of the Dow Magnesium Corporation-the largest known magnesium plant utilizing sea water as its raw material. Less than six months after the first piling was driven, urgently needed magnesium was in steady production. Five months later, the plant had exceeded its rated capacity. It remained above rated production until the general magnesium curtailment was applied to Government-owned plants in September 1944. Credit for the construction and operation record of the Dow magnesium plant must be divided among the efforts of a very determined group of men, an extremely favorable location, and a simple process. It is with the two latter aspects of the plant that this article will deal. The site for the new enterprise was chosen near Velasco, Texas, on property bordering the Brazos River at a point approximately 6 miles inland from the original magnesium plant and y miles inland from the Freeport Harbor on the Gulf of Mexico. This location was far enough away from the operating units to reduce both interference from construction and the vulnerability of closely bunched manufacturing operations to the then feared air attack. Yet the distance inland was not too great for the economical construction of a barge canal from the harbor to serve both the transportation of raw

Jan 1, 1945

By Roshan B. Bhappu, Ronald J. Roman, Dexter H. Reynolds

The reaction between manganese dioxide and molybdenite in a water- sulfuric acid medium was studied at atmospheric pressure and from 25° to 103°C. Both solids are dissolved to give, as final products in solution, Mo(VI), S(VI), and Mn(II). Stoichiornetric relationshifis are most simply represented by the equation MoSz + YMnO2 + 15H+ - HMoO-4 + 2HSO-4 + 9Mn++ + 6H20 The rate of this reaction was found to be dependent on temperature, manganese sulfate concentration, acid concentration, and, in a complex way, the surface areas of both manganese dioxide and molybdenite. Both the total amount of manganese dioxide and tnolybdenite and the ratio of manganese dioxide to molybdenite played a part in determining the over-all rate of the reaction. The effect of acid concentration on the rate was also dependent on the ratio of manganese dioxide to molybdenite. SEVERAL reports in the literature describe reactions using manganese dioxide in water-sulfuric acid media as an oxidizing agent. Nearly all previous work describes interactions between an ion and manganese dioxide, such as the oxidation of ferrous to ferric iron,' or the interaction between a molecule in solution and manganese dioxide, such as the oxidation of toluene to benzaldehyde.2 Only a few references describe the use of solid manganese dioxide to oxidize another solid in sulfuric acid. One report3 states, "Manganese dioxide in dilute sulfuric acid solutions had no beneficial effect (in leaching copper from chalcopyrite), but in more concentrated acid solutions the rate of solution was about the same as that for permanganate." In 1902 a German patent4 described a process which used manganese dioxide in strong (50°Be') sulfuric acid for oxidizing chromite ores to soluble iron and chromium salts. The process consisted of mixing the sulfuric acid with the finely ground ore and manganese dioxide. The pulp was then heated to about 120°C and an electric current passed through it. The manganese dioxide apparently dissolved in the strong, hot acid solution, oxidized the iron and chromium and itself was reduced to manganese 11! then was oxidized at the anode back to manganese dioxide, and the cycle repeated. An extensive study5 of the kinetics of the oxidation of pyrite with manganese dioxide indicated that in dilute sulfuric acid solutions (about 0.1 N) and at elevated pressures the dissolution of the pyrite was brought about by air oxidation of the iron to ferrous sulfate, followed by manganese dioxide oxidation of the ferrous sulfate to ferric sulfate. The mechanism proposed by the authors involved the oxidation of the iron at the surface of the manganese dioxide. Also! the oxidation of sulfide sulfur to sulfate was credited to the oxygen in the air, not to the manganese dioxide. Since the metallurgical literature is lacking in information concerning the use of one solid to oxidize another solid. the current investigation was under-

Jan 1, 1965

By Bob Snashall

"We could blow that damned fort out of existence if we could run a mine shaft under it!," claimed one Union soldier eyeing Bobby Lee's Petersburg defense line protecting Richmond and Jeff Davis. Puncture the line, take the hill behind, and the Confederate capital would celebrate Yankee jubilee, 1864. That was June. At 4:15 am, July 30, mine boss Henry Reese, sergeant, 48th Regiment, Pennsylvania Volunteers, gingerly entered the mine, dark and muddy. Something had gone wrong. The mine, set to go off at 3:30, hadn't exploded. It had to be checked. The main mine gallery, 1.5 m high x 1.4 m wide (5 x 4 ft) narrowing at the top to 0.6 m (2 ft), forced Reese into a tuck run. Some¬where up there in that 155 m (511 ft) stretch running 6 m (20 ft) under the rebel works, moisture may have doused the charge. Or maybe a fuse splice went awry. Or maybe there was live fire steaming like a locomo¬tive towards 3.6 t (4 st) of black powder. Perhaps now Reese wished this sprint was shorter. For the mine boasted a record break¬ing distance in military annals. Lieut. Col. Henry Pleasants Credit goes to Lieut. Col. Henry Pleas¬ants, commander of the 48th, who overheard the soldier's claim for what a mine could do. In peacetime, Pleasants had been a railroad engineer working on the Sand Patch Tunnel. He later switched to mining, working for the Philadelphia & Reading Coal & Iron Co. He even married the daughter of the editor of The Miners Journal. Grieving over his wife's early death, Pleasants plunged into the ven¬ture of war. This Union officer took the mine idea to the brass. Headquarters was less than enthu¬siastic. "The chief engineer of the Army and the rest of the regular Army wiseacres said it was not feasible," Pleasants wrote to his uncle. The pros scoffed, ticking off a list of horribles: No mine has ever gone that far, men will suffocate and be crushed, the rebs will countermine, the men will be trapped. Still, Pleasants eked out a signal to proceed. In the meantime, the miners of the 48th had commenced to dig anyway. It was like the 48th to proceed against the odds. The 48th Pennsylvania Volunteers The 48th had been recruited from Penn¬sylvania's Schuylkill County, anthracite coal mining country. The mines had been torn with strife over wages. Strikes and rioting were prevalent. Murder was not unknown. This "Buckshot" resistance centered in Pottsville, PA. It forced the governor to call in troops. Coal was in high demand to run the war machine. Pennsylvania operators worried that a military draft would stir up violence, closing the mines altogether and further shift¬ing business to emerging Illinois mines. Men lit out for the western gold fields in the tens of thousands. Secret societies bred in the mining camps invited draft agents to dance at the end of a rope. Jobs threatened by cheap, victorious South¬ern labor were one warning intended to get immigrant miners interested in the war. Operators gave miners time off to help de¬fend Philadelphia during Lee's thrust to Gettysburg. Even so, the draft spawned new violence and troop intercession. Soldiers were not welcome. The dust had barely settled when into this Pennsylvania "minefield" marched the 48th on a recruitment drive. The 48th had been in Lexington, KY on guard duty. When it came time for the regiment to pull out, the townspeople had prevailed upon authorities to extend the regiment's stay. Finally ordered to move out, the 48th was feted by a hanky-waving, tear-dropping send-off to the lyrical lament Auld Lang Syne. And Kentucky fancied itself to be rebel. Striding smartly into the Pennsylvania coalfields, the 48th attracted 400 recruits and marched off under regimental colors specially made by the proud citizens of none other than Pottsville, PA.

Jan 1, 1989

By Rudolf Gahl

THE history of flotation in America is very short, at least as far as the large-scale application of the process is concerned. It is remarkable how many important developments have taken place inn the last few years and are already being extensively utilized. What was new a year ago, seems almost commonplace now. For this reason it is with hesitation that I follow the suggestion: of Dr. Ricketts, President of the Institute, to describe the experiences of the Inspiration Consolidated Copper Co. with the flotation process. TESTS CONDUCTED IN SMALL TEST-MILL When the Inspiration company first decided to build a concentrating plant, nothing was known about flotation, and the process was to be gravity concentration pure and simple. Demonstration Tests Conducted by Minerals Separation Co. While plans were being prepared by H. Kenyon Burch (who had been intrusted with the design and construction of the concentrator) the Minerals Separation Co., a concern at that time little known in America, asked and obtained permission to demonstrate the value of its flotation process for Inspiration ore. As. a consequence, a small 50-ton flotation machine of standard design was added to the company's test plant and started to operate in the beginning of 1913. This marks the beginning of flotation at Inspiration. The results obtained with this machine, which was operated by members of the Minerals Separation staff, so far surpassed what this company anticipated that it was decided to continue flotation tests for this purpose, and two of the flotation experts of the Minerals Separation Co., I. L. Greninger and G. A. Chapman, were retained. L. R. Wallace, now superintendent of the Miami works of the International Smelting Co., was at that time metallurgist of the Inspiration company and in that capacity took an active part' in these tests. Great credit is due to him for his quick recognition of the possibilities of flotation.

Jan 9, 1916

By Roy Lindgren

Since the year 1643, when the first blast furnace in America for treating iron ore was built at Saugus, Mass., out of mica schist quarried in the neighboring district, the procurement of a suitable refractory for furnace lining has been a problem of concern to the operators of furnaces. The stacks built of mica schist continued to smelt iron ore until about 1836, when, according to F. H. Norton, the first firebrick were produced1, at Queens Run, Pa. Other writers speak of brick having been molded and burned in Massachusetts about the year 1834. In 1841, Andrew Russell began to produce medium refractory plastic clay brick near East Liverpool, Ohio, that were used for lining blast furnaces1. The well-known Kentucky clay-producing district was not opened up until the year 1871, but since then it has produced a large percentage of the linings for iron blast furnaces. While some strides have been made by the refractories industry during the 100 years that have passed since the first firebrick were produced, it has been only during the last two decades that any real progress has been made towards bettering the product, even though the method of production had improved. Perhaps the fault lies with the user of the brick rather than with the producer, for not sooner demanding a supe¬rior product. During the past 15 years the tonnage produced per lining has increased from 500,000 gross tons to 1,000,000 gross tons, and now some furnaces are producing 1,600,000 gross tons and better on a single lining. It is true that enlarged capacity of furnaces and improved practice have accounted for some of this increase in tonnage, nevertheless better quality in firebrick must be given credit for its share. However, we are not yet ready to say that we have reached a maximum life of furnace lining. We believe that a better product can be produced and that the refractories industries of America will, through their extensive research depart-

Jan 1, 1936

By Richard W. Jolk

A pollution control equipment exemption which reduces the fair and equitable taxable value of a mine property is allowed under Nevada Revised Statute (NRS) 361.077 and must be filed in accordance with the filing requirements of NRS 361.155. USMX Nevada Operations annually saves a substantial amount of State property tax dollars by taking advantage of this tax exemption. The State documents received by USMX and the documents filed by USMX are reviewed in this paper. The application filed by USMX exhibits the format and detail used to obtain this tax exemption and the extent to which environmental control equipment may be claimed.

Jan 1, 1993

By Michael A. Gustafson, Fernando B. Sotelino

INTRODUCTION The degree of success of any new project will ultimately depend on two factors: (i) the underlying economic strength of the project; and (ii) how successfully the parties involved can coordinate their interests to establish a financing structure which indeed capitalizes on the project's inherent economic attractiveness. A project's underlying economic attractiveness is determined by its inherent comparative advantage in accessing the factors of production, combining these factors of production to create a product and marketing this product. Initially, the decision regarding whether to go ahead with the project - the go/no go decision - has to be based on its total ability to generate cash flow returns to project participants to compensate them for resources committed and risks undertaken. The extent to which project sponsors will actually benefit from the project's inherent economic attractiveness is fundamentally dependent on their ability to establish the long-term financing arrangement which best meets the objectives and constraints of each project participant and sources the most advantageous funding. The decision regarding the financing of the project, the "how-to-go" decision, is then an attempt to find the capital structure, consistent with market terms and conditions and sound financial management policies which will best: (i) match planned outflows with cash inflows; and (ii) maximize the return for project sponsors. This article makes use of a case study to illustrate the analytical process involved in dealing with the go/no go and the how-to-go decisions on a project. Though most commonly applied to project finance situations, the guideline described herein is equally applicable to other financing situations, such as leveraged buyouts and debt restructurings, where timely repayment of debt depends largely on the future cash flows to be generated by the entity being financed. Our case study is of a hypothetical expansion of an existing copper mining operation in Latin America. The company, Latin American Copper (LAC) currently has 147 million metric tons of proven sulphide ore reserves. The existing mine complex consists of an open pit mining operation and a conventional flotation plant with a processing capacity of 20,000 metric tons of ore per day. LAC sells copper concentrates primarily to Japanese custom smelters. The mine has been in operation for 5 years, fine copper production last year was 108,240 metric tons, and LAC currently has assets of $175 million and net worth of $135 million. Due to a recent increase in proven reserves, LAC is considering doubling the treatment capacity of its flotation plant to 40,000 tons per day, and expanding its mining capacity to meet the additional concentrator capacity (the "Project"). Project capital expenditures and incremental working capital have been estimated at approximately $210 million. The construction period is expected to cover one year, including a three-month start-up phase. The Project is to be funded by a combination of equity, senior debt, including both supplier credits and/or commercial bank term loans, and subordinated debt. LAC's shareholders are willing to commit a maximum of $50 million to the Project. A government development agency, which is also a minority shareholder, might be willing to lend approximately $40 million to LAC in the form of subordinated notes, depending on the ability of the Project to generate foreign exchange reserves. Commercial banks cannot be expected to offer loans with maturities longer than ten years. The Project is expected to increase the value of the firm because: (i) It will solidify the Company's position as a low-cost copper producer by taking advantage of economies of scale. As a result of the expansion, cash production costs are expected to decrease 7.0[c]/lb. and all-in costs 11.0[c]/lb; (ii) The potential earnings stream from the sulphide ore reserves will be realized

Jan 1, 1985

By Robert L. Davidoff

INTRODUCTION The impact of taxation differs substantially from state to state in a complex fashion that depends on both the physical characteristics of a mineral deposit and on the price of the mineral commodity relative to its costs of production. A comparative analysis of the tax structures of eight states (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wisconsin) showed wide variations in rates of return for any given type of mineral property, with no state having either the most burdensome or least burdensome tax structure under all circumstances. Three hypothetical mineral operations were analyzed: a producing open-pit copper property, a non-producing underground platinum operation, and a non-producing underground gold operation. None of them corresponds exactly to an existing property. Each of these property types is further defined to have ore feed grades at three different levels, leading to three potential profitability levels, referred to in this paper as "economic", "marginal" and "subeconomic". Thus the differential impact of state tax structures is measured for mineral properties of different types, as well as for different profitability levels. Montana is used as the base case. This study does not address the topic of corporate structures or tax consolidation. There are no costs assumed external to the operation of the deposit (e.g. exploration to locate additional deposits). Two types of analyses were performed for this study. The first calculates the total cumulative tax payments in each state using all applicable taxes (including U.S. federal income taxes and examines the resultant differences in discounted cash-flows rate of returns DCFROR's amoung the eight states. The second is a sensitivity analysis that examines each type of state tax separately (i.e. state income, property, and severance taxes) in order to isolate and examine the differences in tax payments that are due to the difference in rates and methods of computing specific types of taxes in each state. The results of this study serve to illustrate the complex nature of interactions among various taxes. For example, property tax is a deduction in calculating severance tax in some state. Changes in property-tax and severance-tax payments both enter into the calculation of state and federal income-tax liability. This, in turn, could change the timing and usage of tax-loss carry forward amounts and investment tax credits. Additionally, the physical characteristics of a property, the method and costs at which the mineral will be extracted, and the profitability level at which each property operates will affect tax treatment. Each mineral operation was evaluated at three different predetermined profitability levels, referred to using the terms economic, marginal and sub-economic. These three profitability levels are defined by the ore feed grades of the primary commodity that yield in constant terms, approximately an "economic" 18% DCFROR, "a marginal." 10% DCFROR, and a "sub-economic" 5% DCFROR, respectively, under the Montana tax structure. In the analyses, the mining and processing parameters for each of the three types of properties were assumed to be identical for each of the eight states. It was assumed that each operation produces at full operating capacity throughout its life. This implies the level of mineral commodity demand will support the inferred commodity price, such that each operation will be able to sell all its output. The analyses performed for this study were done using a comprehensive economic evaluation simulator that is used in the Bureau of Mines, Division of Minerals Availability MAS program to perform DCFROR analyses. All economic evaluations performed upon these data (see appendix 2) were in constant January 1981 dollars. By-product prices used for the analyses were: [Gold $425.00/troy ounce Palladium$200.00/troy ounce Silver $ 10.00/troy ounce] Typical cash-flow calculation layout is given in Appendix 3. The initial step for each evaluation is to define an "economic" profitability level scenario. An 18% DCFROR rate in Montana was considered the

Jan 1, 1985

By Robert B. Parsons

"Although the April 19, 1983 federal budget appears to put greater emphasis on new or expanded government spending programs in an effort to get Canadians working again, the budget proposals contain a light sprinkling of tax changes which could be of some direct benefit to the mining industry.This month, Tax Notes examines some of the more important of these changes.IntroductionSome sectors of Canada's mining industry could benefit from the proposed income tax changes announced by Finance Minister Lalonde in delivering his budget address to the House of Commons on April 19, 1983. Improved depletion allowance rules, expanded investment tax credits, better use of business losses, and inflation proofing of personal capital gains on Canadian common shares are all part of the measures included in Mr. Lalonde's first budget to try to reinvigorate the battered Canadian economy.Improved DepletionUnder the Income Tax Regulations, a taxpayer who incurs Canadian exploration expense (and certain other eligible expenses) is permitted to deduct not only the full amount of the Canadian exploration expense (""CEE""), but also an additional allowance (the so-called earned depletion allowance) equal to one-third of the CEE. Thus, a taxpayer in certain circumstances can claim a deduction of $1.33 for each $1.00 of eligible expenditure, including CEE.Although CEE can be deducted from any source of the taxpayer's income (for example, from investment income, salary income, and so on), prior to budget date the earned depletion allowance was deductible only from the taxpayer's resource profits. This restriction on the deductibility of the earned depletion allowance substantially reduced the attraction of the allowance: few individual investors or investment companies, for example, have the required stream of resource profits, at least when the CEE or other eligible expenditure is made."

Jan 1, 1983

By J. J. Beeson

Fox the past fifty years or more, the structural features of the Cordilleran mountain system of western United States have presented some most interesting problems. Any geologist or engineer living in this region, or even making occasional examinations. of the mines, will lose much of interest and importance if he is not familiar with the literature. Some of the greatest works on geology have been the, result of studies carried on in sections of this region. Among the more important of the earlier works are those of Dutton,1. King,2 Gilbert,3 and Powell;4 of the more recent Lindgren,5 Ransome,6 Spurr,7 Butler,8 and others have contributed much. Many of the papers are largely of scientific interest but even these lay the foundation for the commercial application of the broader features of the geology. I have read many of these works with the keenest interest and pleasure; in fact, some have been read until some of the more important findings seem to be my own. In this paper, however, it is my aim to accept credit for little more than the labor of assembling some of the ideas of others. This is done with the hope that an interesting and valuable discussion will be the result. If some of the ideas presented should

Jan 9, 1925

By L. C. IlsLey

Coal mining is more widely distributed throughout the United States than is generally known, as 30 States are credited with having coal mines. In 1919 twenty-three of these States each produced at least a million tons of bituminous coal, and all the States produced about 560,000,000 tons. In addition, Pennsylvania produced about 85,000,000 tons of anthracite. Twenty-eight States have regulations prepared by commissions or have enacted laws governing the operation of coal mines. Pennsyl¬vania has separate codes for the anthracite and bituminous fields. The codes may be classified as follows: Twelve distinctly coal¬mining codes; eight codes that are essentially coal mining, but also apply to other mines; five codes that are subdivided, referring partly to coal mines and partly to other mines; and four codes that are essentially metal mining, but apply in part or in whole to coal mining. The first State to have a coal-mining law was Pennsylvania, which enacted a law, for Schuylkill County only, in 1869. The first State to enact a coal-mining law governing all the coal mines in the State was Illinois in 1872, followed by Ohio in 1873. Pennsylvania in 1879 enacted a law for anthracite mines only, but did not enact similar laws for bituminous mines until 1577. At least 10 other States enacted coal-mining laws between the years 1870 and 1890. Before 1890 electricity was little used in coal-ruining operations and therefore practically no provisions governing the installation, inspection, or maintenance of electrical equipment were made in any of the laws enacted up to 1890. In the law of Colorado, approved April 8, 1885, there is a reference to the use of telephones, probably the first reference to electrical equipment of any kind in a State-mining code. Most of the mining codes have been changed from their original form by amendment or by complete revision. In some of the early changes a casual reference is made to the use of electricity or to the handling of electrical equipment. In 1911 Pennsylvania added

Jan 1, 1920

By C. F. Clausen

"Cement" means binding agent or glue. It is derived from the Latin word "Caementum," the name of a limestone, chips of which were used in mortar more than 2,000 years ago in Italy. During the middle ages "cement" or "cement" generally denoted mortar. Today it means any binding material. The Thomas Register lists nearly 200 classifications for "cement" including automobile cement, household cement, rubber cement, etc. The material most commonly associated with this word, however, is portland cement which, when mixed with water and allowed to hydrate, is a ceramic binding material used to cement aggregates (crushed stone, gravel and sand) together in "concrete," the most universally used building material of today. It is estimated that more tons of concrete are used annually than all other building materials put together including steel, lumber, gypsum, bricks, tiles, aluminum and glass. Its use in foundations, building construction, sanitary work, dams, railroads, and highways, makes it difficult to conceive of modem civilization without concrete. A survey made in October 1955 showed the following uses of portland cement: [Percent Highways20 Nonresidential buildings20 Residential buildings15 Military construction10 Sewer and water works8 Public utilities10 Other (conservation, farm, and maintenance and repair)17 100] As of today, the percentage for highways is probably even higher. Ceramic binding materials have unquestionably been used in construction work for thousands of years. The mortar between the blocks of the great pyramids was calcined gypsum (plaster of paris). The use of calcined and slaked limestone goes back earlier than the Roman Empire. Gypsum, however, is relatively soft, and common lime mortar is not "hydraulic," i.e., it does not harden under water. The Greeks and Romans discovered later that an addition of a finely divided active siliceous material (Santorin earth or Pozzolana) would react with slaked lime to form a stronger, and hydraulic, cement. The Appian Way in Italy, Colosseum, and the great Aqueducts built by the Romans were made with this type cement, and some of these structures are still in existence today. However, not until 1756 did some serious research result in the development of better cements. In that year the English engineer, John Smeaton produced a stronger cement by burning a limestone containing considerable proportions of clayey impurities. Other investigations and improvements were made by Bryan Higgins, Bergmann, Joseph Parker, L. J. Vicat, J. F. John, James Frost, and I. C. Johnson.2 Traditionally, but perhaps unfairly to others, the invention of the prototype of today's portland cement is credited to the English mason Joseph Aspdin who in 1824 obtained a patent and gave the product its name, because in color the mortar produced from it resembled a natural building stone obtained from the British Isle of Portland. The contributions of Johnson and Aspdin were primarily the important step of preparing a synthetic mixture of lime and clay without depending on raw materials found in nature which might contain such elements in desirable proportions. However, even these early

Jan 1, 1960

CHAIRMAN LITTLEJOHN: We have with us this afternoon, Mr. D. W. Rockey, of the Industrial Educational Organization, who would like to occupy a few minutes of our time. There is still an hour left, and there is a lot more talking to be done, and when the time is up you can go. D. W. ROC'KEY (U. S. Vocational Training Bureau, N. M.) : Mr. Chairman and Gentlemen: I am sorry to say I am not more closely connected with the coal mining game. I am interested in it because I am interested in a great deal of educational work being done in New Mexico. Two years ago, this Institute appointed an Educational Committee to investigate the opportunity for education in coal mining, and you have the report of that committee; it was issued in May 1924. Mr. Littlejohn, Mr. Moorhead of the Phelps-Dodge Corporation, Mr. Dickinson, and Mr. Miller, I think, of the C. F. C I., and Mr. Pryde, were members of that committee. They investigated the work being done in Safety, Training, First- Aid, and other topics, and made a general survey of the educational problems that might be said to be of benefit to the coal operators and to the coal miners. I believe, if I understood Mr. Moorhead correctly, while this report was accepted the committee was not discharged; but everyone seemed to be a little in doubt as to whether this activity should continue. My plea here directly is, of course, to ask that they be made a permanent committee, and asked to report to you at the next meeting in February on what has been accomplished in carrying out the program that was advised by the various companies, and what success, from a standpoint of improved work and financial return to the company, has been had. I believe that the whole trend of your discussion here has shown the need or the opportunity for improved production through education. For instance your mechanical loader the need of men who are experienced along mechanical lines, rather than the old pick and shovel methods, and the need of better understanding of your problems, just as in your safety lamp discussion that came up in the report of your Safety Committee. We have also developed a new phase, a new may of getting at some of your problems at Dawson this year, that has not been covered previously. I want to ask Mr. Holman here to tell you what is being done as a starter. Remember, we have not worked this out. He will tell yon how we are making a preliminary start in training inexperienced miners with the idea of cutting the accident record and keeping the production of inexperienced men at a higher level. If you are interested in that, I would like to suggest that this committee be requested to investigate some of these things very carefully. The State of New Mexico was willing to put five hundred or a thousand dollars into this training program as an experiment. We are willing that the Institute should have the credit for it, but we want it carefully surveyed so at your next meeting or some subsequent meeting, they can say this has been a feasible project and worthy of consideration. Mr. Holman, will yon tell us a little about this? (Applause.) MR. HOLMAN: We had an idea that by putting a green man in the mine with an experienced miner, the green man would probably learn something, and not get into trouble, etc. We decided to take a certain portion of one of our best mines, cross entry room work, and establish an underground school. We picked one of the assistant foremen who was well trained in our particular mining methods, and any green man who was employed was put into this school. He was paid a salary and he trained each and every man. Each man or two men world be working in a room and we paid them the regular contract price; they were trained how to shovel coal, pick waste and various other things. Some would stay in there a month and be transferred to other portions of the mine or other

Jan 1, 1926