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By Don Hendricks, Alan Dahlstrand

Introduction The subjects discussed in this chapter deal with production planning, or more specifically, how the results of production planning may relate back to long-range planning and final pit design. The items discussed here are operating slopes, geometry, bench height, ore and waste faces, relationship to equipment selection, and computer methods. Many different ideas can be presented on these subjects, but this material is a recap of mining experience in the Butte ore body.

Jan 1, 1979

By C. E. Wethered

THE Morning mine is operated through one main working adit, known as No. 6 or 800 tunnel level. At a distance of 10,000 ft. underground from the portal is the vertical four-compartment, main working shaft, which extends to the 3050 level, a distance of 2250 ft. below the collar, or 800 level. Shaft-stations are cut and levels opened every 200 ft. of depth and the ore is stoped to the next level above. The vein is nearly vertical and the ore is usually fairly massive and brittle. Both walls are soft and slabby and much difficulty is therefore experienced in holding them. Stopes are usually carried up in short sections, approximately 200 ft. in length, that are mined as rapidly as possible in order to avoid a too great replacement or repair of stope timbers. The four-compartment vertical shaft, 110 ft. in the footwall of the vein, is the sole medium of outlet for all ore mined below the adit level. Two compartments of this shaft are used exclusively for hoisting ore, except at the time of changing shifts, when one compartment is used to handle some of the men and timber. The third compartment is equipped for handling men, tim-ber and all general supplies and is operated by a Nord-berg 300-hp. electric hoist. This hoist has a lifting ca-pacity of 14,000 lb. with an average rope speed of 800 ft. per minute. The fourth compartment is used solely as a manway and pipeway.

Jan 7, 1927

By Finlay, J. S.

THE North Lily Mine started its career in an unusual way it was discovered by a geologist. The remarkable circumstance of driving a 2400-ft. drift into an unexplored country and "hitting her on the nose," indicates that geologists are sometimes numbered among those whom the Lord loves. Diamond- drilling from surface had previously shown the presence and position of the Ophir beds, and surface showings of pebble-dykes, faults, and bleached rhyolite indicated conditions similar to those at the Tintic Standard "Pot-hole." The discovery drift from the Tintic Stand- ard 700-level reached the North Lily orebody in January, 1926, and development and stoping were continued by Tintic Standard men and equipment until the North Lily shaft was sunk and put into service in May, 1928. The discovery drift was run on a cooperative basis by the Tintic Standard and North Lily mining com- panies. Finding the North Lily mine cost the North Lily company $26,000. The Tintic Standard Mining Co. furnished men and equipment to drive this discovery drift at a fraction of what it would have cost to find the orebody from surface. This was the beginning of the friendly cooperation that still exists. Through Tintic Standard ground the Tintic Standard paid two- thirds of the cost and the North Lily one-third; the cost of the drift through Eureka Lily, into North Lily ground, was paid by North Lily. Later, another drift from the Tintic Standard 900-level was run on the same plan, excepting that Eureka Lily paid its share of the cost; that is, the Eureka Lily paid one-third of the expense in Tintic Standard ground, and the Eureka Lily two-thirds and North Lily one-third in Eureka Lily ground. This 900-drift was driven by North Lily from the Eureka Lily line to near the North Lily west side-line. From this point the Chief Consolidated continued the drift well into Tintic Bullion ground.

Jan 1, 1929

By J. J. Jakosky

ALL electrical geophysical methods depend for their operation upon the effects produced by the flow of an electric current. By studying these effects it is possible to predict the general axis of current flow. The greater flow of current is in the path of greatest, effective conductivity; and since the effective conductivity of a mineralized zone is different from that of its surrounding envelope (usually much greater), it is possible to locate such a mineralized zone by the distribution of current. Due consideration must be given, of course, to geological structure, to type of mineralization, and to other factors. A number of methods are used to cause this flow of current, and various methods are available for detecting the presence of such current flow and for studying its effects. In a rather detailed way, this paper will discuss the theoretical and practical phases of the inductive methods of geophysical prospecting. ELECTROMAGNETIC GENERATION OF AN ELECTROMOTIVE FORCE The inductive method is so named because the current flowing in the conductor is obtained by electromagnetic induction, instead of by the use of ground electrodes through which a current is passed as in the applied potential systems, or by direct contact with the orebody. An alternating current flowing in a coil will create an electromagnetic field around the coil. This field will have the same frequency as the current and will radiate or travel outward from the coil in closed magnetic or flux circuits: These flux circuits (in air or a homogeneous medium) will be perpendicular to the plane of the coil and will extend or travel outward with uniform velocity in every direction. Maximum field exists in the plane of the coil. Such a coil used for transmitting or as the "energizer" will exhibit similar figure-eight characteristics to those exhibited by the direction-finding coil which will be described in detail later.

Jan 1, 1928

By C. Allen Born

INTRODUCTION As the title of this paper suggests, the author does not believe that risk can be managed. Rather, the objective is to identify the risk which will be present in a given venture and assess the level of that risk which is acceptable. More often than not, the risk which is present is subject to little or no modification. After identifying and measuring the risk a corporation will decide to accept it and proceed in such a way that it will be less exposed, or it will decide not to proceed at all. The exercise for a corporation is different only in degree from everyday judgements made by average people in average situations. However, that word "degree" means that it is considerably more complex on the corporate level. There is good reason for the additional complexity of corporate risk evaluation. The variables influencing a company's decision can be more numerous and the penalties for miscalculation much greater than those normally encountered by an individual. It should be understood that no analysis of risk, certainly not one as brief as the following, can do more than touch on some of the high points. Before examining the sorts of risk which affect the development and operation of specific mines, let us consider the broader aspect of the term with which mining companies, and all other business corporations, must deal. Companies must determine their long-term objectives and strategies within the context of a constantly changing world. To plot their direction they must attempt to read the future by seeking answers to questions such as: How will society evolve? Which businesses will thrive? In which of these should we place our emphasis? If a company hopes to be around five or ten years from now it must make the attempt to answer such questions in order to judge the impact of changing patterns in the evolving business environment. Information is available to allow the lessons of the past to be projected on the future. We have data on birth rates, economic booms and busts, patterns of conflict within and between nations, drought and other forces of nature as well as individual events which cannot be predicted, but which over time, do seem to occur in regular cycles. Ultimately the question "where will we be and what will we be doing a decade from now?" must be answered by one or more senior people with responsibility for the company's future. The compilation and interpretation of hard data by competent support staff, can only be used up to a certain point in determining future corporate strategy since there will be alternative possible futures and a high degree of risk will always remain. At this point those elusive qualities of experience, instinct, and - "gut feeling" - become important factors in choosing a long-term corporate direction. The goals of a company have a significant bearing on its attitude towards risk. This in turn dictates the "hurdle rate of return on investment" which a project decision-maker will require. The hurdle rate is the minimum-discount-percentage-rate applied to forecast cash flows to give a present value of zero to the All-Equity-Funded Investor. The feasibility study for a project is a fundamental tool in the management of risk. An experienced team has an established and well-understood set of ground rules for the preparation and assembly of a feasibility study. The necessary degree of conservation is built in at all levels of study data and, if the project is technically feasible, the hurdle rate becomes a catch-all measure of risk in a base-case project cash flow.

Jan 1, 1985

By J. G. Bradley

On February 1, 1971, United States Steel Corporation, Lorain Works began operation of its first BOP facility equipped with a partial combustion gas cleaning system.- This shop consists of two 220 ton vessels. Figure I schematically describes this partial combustion gas cleaning system and highlights the necessary features for it-s safe and efficient operation. Waste gases are drawn into the membrane hood by a 2250 H.P. induced draft fan and are first quenched by the six inch bull nozzle at the top of the hood. Larger solid particles are separated from the gas in the quencher venturi and final scrubbing takes place in the P-A high energy venturi scrubber before the cleaned waste gas is burned in the flare stack. Scrubbing water is routed through a cyclone separator and then cycled into one of two 100' diameter thickeners. Underflow sludge which averages 20% solids is dewatered by 100 H.P. centrifuges. The clear overflow from the thickeners is recycled first to the P-A venturi and then to the quencher before returning to the thickeners.

Jan 1, 1972

By Richard R. Bains

"When l hear - I normally remember 10 percent When I hear and see - I can remember 15 to 25 percent When I hear, see, and do - I usually remember up to 50 percent" While this is not a truism in relation to each and every individual; on the average, this is the case. If we use this as a premise in training operator and maintenance personnel, then it must be obvious that we can't rely on a mere presentation, even one which includes the needed classroom participation and/or hands on work, to do a thorough job and to make this personnel totally proficient - 100 percent proficient. We have to have some other device some other means to make this a continuing process, a process wherein the people can grow in knowledge while performing their normal duties. We have to feel that the words "normal duties" are the key to the whole program. If you would ask a crusher operator what his duty is, he might say "To run this crusher so that we produce 250 tons per hour of a minus 13mm (minus 1/2 ") product." A maintenance man could say "To fix the unit when there is a problem." Both of these answers are legitimate but, they are only a part of the total picture. In order for each of these individuals to do the best job, he must know not just the specifics about the machine he works with or on - he must know the interrelation of all the machinery in the crushing circuit - how the efficiency of each machine affects the others - why a minor problem on one piece of equipment can generate a major problem for another unit which follows it or precedes it. In short, you cannot separate machine operation and maintenance from the application of the equipment in the crushing circuit - and obtaining this knowledge must be a part of the normal duty of crushing plant personnel. As an example a crusher - any crusher - is designed to crush oversize material. It is not designed to accept feed which is already at or less than the required product size. If sized material goes to the crusher, increase wear results by using the crusher as a chute or the crushing chamber can be clogged up with the fines. This latter point is particularly true with cone crushers, especially in the third (Short Head) stage of crushing. When a Gyradisc is used (fourth stage crushing) it is even more critical that the product be removed before the material goes to the crusher. The crusher cannot control this - the screen ahead of the crusher does. The screen must be of adequate size and be functioning properly to allow the crusher to work at optimum. Screening is both an art and a science. Since there are so many variables which affect the output of the screen, it is always best to have a screen which is larger than the sizing calculations dictate. The screens are the most important elements in the circuit. Without screens, specification materials cannot be made and the size of the screen will ultimately aid or hinder your ability to get the most production possible out of the plant. There is a formula available from all screen manufacturers which is designed to calculate the proper screen size. It takes into consideration the

Jan 1, 1982

By W. R. Phibbs

THE blast furnace of the Columbia Steel Corpn., at Ironton; Utah, was put in blast April 30, 1924, and its operation has presented some interesting problems. The coke for the furnace is furnished by 33 Koppers Becker type ovens of 15 tons capacity each. The coal is shipped from the company's mine at Columbia, Utah, which is approximately 123 miles from Ironton, and is probably the highest volatile coal that is being coked for blast furnace use in this country. The analysis of the coal is: PER CENT. Moisture 3.90 Volatile 39.00 Fixed carbon 51.10 Ash.... 6.00 Sulfur : 1.07 The analysis of the coke is: PER CENT. Volatile 0.55 Fixed carbon :...:.::: :..:.:: 89.70 Ash 9.75 Sulfur 1.05

Jan 1, 1928

By Fred W. Stiefel

THIS paper covers the operation and maintenance of Diesel locomotives underground on a portion of the Delaware River Aqueduct.[t] This part of the tunnel is r5 miles long, with shafts 14 ft. in diameter spaced about 5 miles apart. These shafts (2, 2a and 3) are 825 ft., 1551 and 840 ft. deep, respectively. The grade of the tunnel is almost level, except for the 12,100 ft. north of shaft 2, which has a grade of 2.31 per cent. The tunnel is circular, 19 to 19 ft. in diameter, It lies at a depth of 400 ft. below sea level, with a maximum overburden of 2400 feet. The tunnel driving was carried on in six headings, using 15 storage-battery locomotive each of 13 gross tons and having a [inum] speed of 8 miles per hour. The longest haul was 3 miles, which proved to be the maximum distance for which storage-battery locomotives could be employed economically for the amount of material to be moved. One locomotive was used for switching cars at each heading, one for switching cars at the bottom of each shaft and one on the main-line haul from the heading to the shaft. The maximum amount of material hoisted in one shaft from two headings when 104 ft. of tunnel was driven in 24 hr. was 1000 cu. yd., or about 2000 tons of rock in place. The total quantity excavated was 950,000 cu. yd. (1,500,000 tons of rock). The tunnel-lining operations using con¬crete presented a problem of hauling a maximum distance of 5 miles in the tunnel. The concrete-placing equipment had a capacity of about 2000 cu. yd., or 4000 tons in 24 hours. Experience had shown that storage-battery equipment could not handle this quantity of material within the time required at the distance of 5 miles, Trolley-locomotive haulage was considered dangerous and expensive, and would cause interference because transmission equipment would be required. Therefore the performance of Diesel locomotives of 160 hp., with a speed of 18 miles per hour, in comparison with that of other types of locomotives, was studied. CHOICE OF LOCOMOTIVES In deciding upon the type of locomotive to be used for the 5-mile haul, four alternatives were considered, as follows: I. To purchase additional storage-battery locomotives with the necessary batteries over the 6 locomotives and 12 batteries available. 2. To convert the existing battery locomotives to the trolley type. 3. To purchase new trolley locomotives. 4. To purchase Diesel locomotives. PROPOSITION No. I The go-hp. storage-battery locomotives available (each weighing about 12 tons), when hauling a load of 64 tons, with a drawbar pull of about 1900 lb. on a level track, developed a speed of 8 miles per hour and could make five round trips in 8 hr. with a

Jan 1, 1942

By Fred W. Stiefel

THIS paper covers the operation and maintenance of Diesel locomotives underground on a portion of the Delaware River Aqueduct.[t] This part of the tunnel is 15 miles long, with shafts 14 ft. in diameter spaced about 5 miles apart. These shafts (2, 2a and 3) are 825 ft., 1551 and 840 ft. deep, respectively. The grade of the tunnel is almost level, except for the 12,100 ft. north of shaft 2, which has a grade of 2.31 per cent. The tunnel is circular, 17 to 19 ft. in diameter. It lies at a depth of 400 ft. below sea level, with a maximum over-burden of 2400 feet. The tunnel driving was carried on in six headings, using 15 storage-battery locomotives, each of 13 gross tons and having a maximum speed of 8 miles per hour. The longest haul was 3 miles, which proved to be the maximum distance for which storage-battery locomotives could be employed economically for the amount of material to be moved. One locomotive was used for switching cars at each heading, one for switching cars at the bottom of each shaft and one on the main-line haul from the heading to the shaft. The maximum amount of material hoisted in one shaft from two headings when 104 ft. of tunnel was driven in 24 hr. was 1000 cu. yd., or about 2000 tons of rock in place. The total quantity excavated was 750,000 cu. yd. (1,500,000 tons of rock). The tunnel-lining operations using concrete presented a problem of hauling a maximum distance of 5 miles in the tunnel. The concrete-placing equipment had a capacity of about 2000 cu. yd., or 4000 tons in 24 hours. Experience had shown that storage-battery equipment could not handle this quantity of material within the time required at the distance of 5 miles. Trolley-locomotive haulage was considered dangerous and expensive, and would cause interference because transmission equipment would be required. Therefore the performance of Diesel locomotives of 160 hp., with a speed of 18 miles per hour, in comparison with that of other types of locomotives, was studied. CHOICE OF LOCOMOTIVES In deciding upon the type of locomotive to be used for the 5-mile haul, four alternatives were considered, as follows: I. To purchase additional storage-battery locomotives with the necessary batteries over the 6 locomotives and 12 batteries available. 2. To convert the existing battery locomotives to the trolley type. 3. To purchase new trolley locomotives. 4. To purchase Diesel locomotives. PROPOSITION No. I The 90-hp. storage-battery locomotives available (each weighing about 12 tons), when hauling a load of 64 tons, with a drawbar pull of about 1900 lb. on a level track, developed a speed of 8 miles per hour and could make five round trips in 8 hr. with a

Jan 1, 1942

By Howard R. Keil

CARLTON mill in the Cripple Creek district, 45 miles southwest of Colorado Springs, Colo., has been in operation for approximately three years, treating the custom sulpho-telluride ores formerly handled by the Golden Cycle mill in Colorado Springs. At the new mill the pyrite-telluride flotation concentrates have been roasted, prior to cyanidation, in a Dorrco FluoSolids reactor, which has proved capable of yielding calcine readily amenable to cyanidation. Incoming ores are crushed at Carlton to 5/8 in. and sampled in 30 to 75-ton lots before the individual lots are mixed in the fine ore bin. The composite ore then goes to the grinding circuit. Classifier overflow from the grinding circuit is treated by flotation to produce a concentrate containing approximately 85 pct of the values in 5 pct of the weight. The flotation concentrate goes to the FluoSolids reactor prior to cyanidation. Cyanide solution values are recovered by zinc dust precipitation. Flotation tailings are thickened and cyanided, the values from this part of the circuit being recovered from solution by activated carbon.

Jan 12, 1954

By James T. Curry

FACED with processing an increasing volume of raw material through its existing plant, early in 1955 Calaveras Cement Co. of California considered incorporating liquid cyclones in its raw mill grinding circuits. One of many problems was the prospect of handling larger volumes of finished slurry through existing pipelines. Fixed capacities of the mechanical classifiers also placed limits on plant expansion.

Jan 10, 1957

By T. Nakao

Fujiwara quarry had been operated by the glory-hole benchcut mining system, but as it became difficult to meet expanding demand with this system, a central-shaft mobile crushing plant (MCP) system was introduced in 1979. This MCP is equipped with a hydraulic walking system manufactured for the first time in Japan. Central-shaft mining is now the common mining method of Japanese limestone quarries. With this method, crushing facilities are usually installed at the bottom of the shaft. But at the Fujiwara quarry, MCP was adopted and installed on the quarry surface. Many MCPs are operated in foreign countries, but few examples exist in Japan. Normally, Japanese limestone deposits lie in high mountain, obviously making it inconvenient for MCPs to walk in and around the quarry. This difficulty, however, was overcome, and the MCP has operated satisfactorily and efficiently for two years since its installation. To overcome difficulties in the central-shaft MCP mining system, two mining methods are employed: the slice-down method and the block-cut method.

Jan 1, 1985

By J. S. Marsh

JOSEPH PRIESTLEY prepared oxygen on Aug. 1, 1774, and noted with great surprise "that a candle burned in this air with a remarkable brilliant flame." On Aug. 2, 1774, some ironmaker possibly began to wonder if this substance could be used to increase his rate of production; at any rate, there is no disputing the fact that the notion of using oxygen for steelmaking in concentrations greater than that available in great abundance-as air-has been in existence for years. Action was delayed by the lack of enough oxygen at a cost within reach of the steelmaker. Within the last several years enough has been available to permit large-scale tests of its use for both combustion, with which this paper is concerned, and for decarburization. The literature is now enormous and easily available; it is sufficient here to cite three items of historic- importance in that all are about 25 years old and in that all are remarkably consistent as far as they go, with what is known today.1,2,3 SIGNIFICANCE OF HIGH-TEMPERATURE HEAT The principal 'function of the open-hearth furnace is to supply sufficient, high-temperature heat to melt the charge and then to increase its temperature to a range suitable for tapping, ordinarily in the neighborhood of 2900°F. That heat is required to make steel everybody; however, there seems to be some confusion now and then about the significance of high-temperature heat. Transfer of energy-and heat is energy is always from a point of higher potential to a point of lower potential and, other things being equal, the greater the potential difference, the greater is the rate of transfer of energy. In the open hearth the flame, of course, is the high-potential source. Perhaps the most satisfactory approach is through the notion of theoretical flame temperature; which is the ratio of heat input to the heat content of the combustion products,* the former is composed mainly of heat of combustion of the fuel plus sensible heat of the fuel plus sensible heat of the combustion air. Thus, flame temperature can be increased by increasing the value of the numerator, by decreasing the value of the denominator, or both. The first method is as old as the open-hearth process and, of course, makes use of preheated air; its possibilities have been by no means exhausted. The second method can be put into effect only by changing the composition of the combustion air, since the combustion of a given quantity of fuel produces a definite quantity of product, and since the denominator includes the non-reactive fraction of the air, principally nitrogen. In other words, the denominator consists of the volume of exit gas multiplied by its heat capacity and that volume consists of carbon l is understood by dioxide and water vapor as reaction

Jan 1, 1948

By Walter Weeks

CONSIDERABLE difference of opinion seems to exist as to whether the rate of air flow when a fan is placed on a given duct should be determined by the use of static pressure or total pressure characteristics. A little study will show that both methods are correct. Assume that a fan is connected to a duct by an expansion piece as shown in Fig. 1, and that steady flow is established. Considering the atmospheric pressure as zero pressure, let the static head at the outlet of the fan be h and the velocity at this point be v1. The total head at the outlet is then h + v1/2g? The total head at this point must be equal to the total head at the end of the duct plus the losses that have occurred between the two points. Let f be the friction loss in the straight duct, s the shock loss in the dif- fuser, and V2 the velocity at the end of the duct. Then h+ v12/2g=v22/2g + f + s FIG. 1.-FAN ON DUCT. A curve showing the value of the left-hand side of the equation for different rates of flow is the total pressure characteristic of the fan, while a curve showing the value of the right-hand side is the total pressure characteristic of the duct. If these two curves are plotted on the same chart, the intersection indicates the rate of flow when steady flow is established.

Jan 1, 1930

By C. Coles, J. A. I. Young, W. A. Wyeth, D. A. Fenton, G. W. Herzog

The reliability of large diameter, high horsepower ball mills is paramount when large production and minimum downtime is required. The 518 x 1706 mm (17 x 56 ft) double compartment ball mill at St. Lawrence Cement Co. has the fist gearless drive built in North America and has the world's largest hydrodynamic bearings currently built and running. The machine has seen three years operation and has met its specifications. The mill wm designed by Aerofall Mills Ltd. and the gearless drive built and designed by the Canadian General Electric Co. The paper discusses the operation of the machine from the mechanical, electrical and process aspects.

Jan 1, 1980

By Frank W. Cramer

THE operator's panel is the control center f or the operation of the electric-arc furnace. It contains the switches and meters that control and indicate the power supply and in a way gives a picture of what is going on during the meltdown and refining periods. Regardless of manufacture, these panels are very similar with respect to equipment and position of apparatus. A typical panel is shown in Fig I. The three lights at the top of the panel are connected from the electrodes to ground and give a visual measure of the voltage across each arc. The ammeters underneath the lights show the current passing through each electrode. Directly underneath are the voltmeter, the watt-hour meter and the wattmeter and under these the three current-adjusting rheostats. In the center of the panel is the master electrode-control switch, which controls the movement of all three electrodes, with the individual electrode-control switches directly underneath. Next from left to right is the six-position voltmeter switch, which can be positioned to show on the voltmeter above the voltage between phases and to ground, the tap-changer switch with its indicating lights, and the main circuit-breaker control switch.

Jan 1, 1947

By Olof Löfgren

PART 1 INTRODUCTION All modern pelletizing plants are equipped with either the drum or the disc circuits. Choice of one or the other circuit is not simple and it is desirable to establish a firm basis for such a task. For a meaningful and a fair comparison it is necessary to have the two systems working in parallel in the same plant with the same concentrate under the same supervision. Furthermore, the comparison has to be based on a defined green ball quality and size distribution. BALLING CIRCUITS The LKAB straight grate plant at Malmberget, Sweden, was started up in Septenber 1973. It was designed for a 2.5 Mton annual capacity and was equipped with five balling drum circuits. During the first year of operation it was found that the induration plant had the potential for a higher capacity which required increased balling capacity. For this purpose it was decided to install a balling disc circuit complete with a roll screen. The reasons for selecting a disc were space limitations and LKAB's desire to gather experience on balling disc circuits. The disc circuit was started up in 1975 and was run in parallel with the balling drums in the same plant and with the same raw material and under the same operating personnel. The necessary conditions for a comparison were thereby fulfilled. The data for the size distribution and quality of the green balls were obtained on random sampling during one year of operation, so that all the variations which appear in a commercial plant are covered.

Jan 1, 1977

By Peter J. Szabo

INTRODUCTION The time period from the detailed feasibility study to the post investment audity usually ranges from three to eight years depending upon the nature of the mining project considered. It is the only after the post investment audit that we know the adequacy of the assumptions made concerning operational risk assessment in the detailed feasibility or acquisition economics. The post investment audit results from numerous mining projects can best be described by a verse by John Greenleaf Whittier's Maaud Muller. It reads "For all sad words of tongue or pen the saddest are these 'It might have been!"' Dissecting the negative results of numerous mining projects we find faulty assumptions concerning markets, geology, capital investment and operational risk assessment. Although in hindsight many of these assumptions could have been considered impossible or impracticle to have forecast with any degree of certainty, we find that refined assumptions concerning operational risk assessment could have been made with only a modicum of additional "Due Diligence". Anyone who invests in a mining property should employ a much higher discount rate of future cash flow, (usually in the minimum range of 25%-30%), than he would expect from such safe investments as Treasury Bills or high grade Utility Bonds. The nature of this steep discount translates to a large uncertainty concerning the timing and actualization of assumptions contained in the detailed feasibility study. We must remember that when a project gets beyond 20 years, any contribution to the value of the project of cash flow is minimal due to the nature of the discounting process. Thus for each full or partial day lost in the development or early operation stage of a project, the financial impact will be greater than similar lost days later on in the project. Adequate operational risk assissment is particularly critical when bidding on competitive tenders for coal deposists in remote locations such as the Bowen Basin in Queensland, Australia. Because of the market attractiveness of these coal deposits for supplying end users in the Far East, Middle East and Europe, state governments require competitive tender biddings via the Authority to Prospect process. Front end bonuses and super royalty payments must be commited before the actual mining conditions are known. Time to submit firm offers from the actual request for proposal vary from 90 to 120 days. Thus any operational risk assessment must be detailed, realistic and reflective of the actual project. When one searches the literature, one finds limited qualitative data on operational risk assessment in valuation papers. Usually this facet of valuation takes a secondary role to such areas as reserves, markets, and environmental considerations. When one comes to the question of operational risk assessment more often than not one finds the use of "rules-of-thumb", such as tons per man shift, average production, average seam height, etc., are used to forecast results on which banks and other financial institutions are required to make investment decisions. Because of the extremely competitive environment of the 1970's and 1980's numerous financial institutions approved loans without adequate "Due Diligence", and are currently paying a steep price in terms of non performing loans and charge offs. One must always remember that each operation is unique with its own characteristic

Jan 1, 1985

By George B. Clark

COMMERCIAL strip mining of coal was first begun in the state of Illinois in 1911.1 The annual tonnage of coal produced from coal strip mines in the state was very small until 1924, when the strip mines shipped 1.68 pet of the total state shipping mine tonnage. Since then, strip mines have gradually come into their own by producing a sizable percentage of the coal produced in the state. Table 1 shows the coal tonnage shipped from both underground and strip coal mines in the state of Illinois for selected years. The table illustrates the major role that strip mines play in the state's coal industry. Today, strip mining is generally conducted in areas where the coal seams lie so close to the surface of earth that a stripping method of mining the coal seam is cheaper than an underground method. Strip mining not only recovers 100 pct of the coal deposit, but may also be used as a method of mining large acreages of coal abandoned by the closing of underground mines.

Jan 1, 1949