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By Francois E. Heuze

The Crestmore Mine of the American Cement Company lies at the eastern end of the Jurupa Mountains, 50 miles east of Los Angeles. Originally, a quarry was opened in 1908 for "limestone" used in the manufacture of cement. The mining operations eventually went underground employing first a modified system of block caving and later the "room and pillar" scheme. The limestones are relatively small roof pendants preserved in an enveloping and intrusive quartz diorite. They occur as two irregular lenticular bodies roughly parallel at the top and tending towards convergence at depth. Their dip varies between 25 and 30 degrees E. The presently mined lower bed, Chino limestone, is typically composed of alternating bands a few inches to a few feet thick of medium to coarsely granular white crystalline limestone and somewhat yellowish limestone (brucite marble). A "room and pillar" scheme of mining is currently employed in the lower body of the Crestmore Mine. The levels are horizontal and access is provided by a spiraling road starting in the old quarry. The present depth of operations is an average 750 ft below the surface. Fig. 1 gives a three-dimensional general sketch of the mine. The long axis of the rooms is in an E-W direction, normal to the strike of the beds. Fig. 2 is a horizontal map of the 130 level, the deepest level mined presently. It is in this level that most of the in-situ investigations have been conducted. The present investigation was made possible by a non-restrictive grant of the American Cement Company to the University of California. The program included a series of in-situ tests using flat-jacks, plate bearing,

Jan 1, 1968

By P. P. Scott, George C. Howard

During the drilling of wells, fractures which are created or widened by drilling fluid pressure are suspected of being a frequent cause of lost circulation. A study of the variables which are believed by the authors to he related to fracturing led to the premise that the presence of an effective lost circulation material in a drilling mud stream would serve to plug small fractures at the moment they are encountered or created and thereby a a possible cause of lost Circula. tion by preventing fluid pressure from widening and extending the fractures. A large number of lost circulation materials were classified and tested in simulated fractures and in shallow wells. Granular type materials with a gradation of particle sizes were found to be the most effective for plugging. Within the limits of pumpahility, the concentration in mud of each lost circulation material tested was found to be a controlling factor in determining the maximum size fracture which could be sealed. A new type centrifugal sorter was given preliminary tests and found to be capable of concentrating cuttings for rejection and reclaiming lost circulation materials. INTRODUCTION The control and prevention of lost circulation of drilling fluids is a problem frequently encountered during the drilling of oil and gas wells. Lost circulation or lost returns may be defined as the loss to formation voids of the drilling fluids or cement slurries used in the process of rotary drilling and well completion. The loss may vary from n gradual lowering of mud level in the pits to a complete loss of returns. Not to be confused with lost circulation is the continuous reduction in mud volume caused by the loss of the fluid phase of muds as filtrate and the solid phase as filter cake during the continuous filt~ation process which occurs on permeable formation surfaces. The loss of drilling fluids and their costly constituents is only one of the detrimental effects experienced when circulation is lost. The loss of drilling time, plugging of potentially productive formations, stuck drill pipe, blow-outs, excessive inflow of water, and excessive caving of formatioils are other effects which contribute to make the control and prevention

Jan 1, 1951

By Sylvia Whitehead, G. M. Schwartz, J. N. Gundersen

Sylvia Whitehead (Petrologist, The Broken Hill Propriety Co. Ltd., Melbourne, Australia) — Examination of thin sections of jaspilites from numerous banded iron formations in Australia has revealed no evidence to suggest that silicate minerals have formed by reaction between magnetite and silica. Textural relations indicate that part of the magnetite crystallized very early in the history of the rocks, probably during diagenesis, and remained stable under conditions of metamorphism altering only to hematite or limonite under conditions of oxidation and weathering. Many jaspilites also contain later magnetite which is almost certainly of metamorphic origin. Wherever magnetite is present in quartz rich bands containing little or no silicate or carbonate, it is very fine grained and occurs generally as isolated, well formed octahedral crystals or as small crystalline aggregates. These show no evidence of corrosion or reaction with the quartz even in rocks where adjacent bands contain silicate minerals of moderate to high metamorphic grade. Concerning the silicate minerals, it is reasonably certain that bands of very fine grained stilpnomelane

Jan 1, 1963

By Oberlin Smith

The experiments described in this paper are very incomplete and only preliminary to those I hope to make in the future. Having had a good deal of experience in cutting, forming and drawing sheet-metals, and feeling a great interest in the commercially new and wonderful metal, aluminum, I applied to my friend, Mr. A. E. Hunt, for some specimens in sheet-form, that I might, from time to time, test its working-properties in presses with which we happened to be experimenting at the works of the Ferracute Machine Company. The chances for such trials being accidental only, and the time having been limited to the last few weeks, no crucial experiments have been tried, and no exact data have been obtained for a rigid comparison with other metals. The results of what little we have done, however, are shown in the articles exhibited in connection with the reading of this paper, which comprise various cups, plates, boxes, bells and cartridge-cup and shells. For the latter I am indebted to my friend, Mr. Hobbs, of the Union Metallic Cartridge Co., who, at my request, ran several pieces of sheet-aluminum through the dies with which he was making brass cartridges. The specimens are rougher than they would be had the metal not been a little too thin for the particular dies which he happened to be running.

Jan 1, 1890

By H. Hooykaas

A few years ago Marsal published a method of predicting oil recovery as a function of time for an edge-water-drive reservoir with several rows of wells.' The method is based solely on oil- and water-production data obtained during a short period for the first row of wells and the gross productions (past and future) of all wells. This paper presents a streamlined version of the original publication and experimental evidence showing the reliability of this version. For this purpose scaled experirnents were performed in a large model (750 X 500 X 23 cm, 24.4 ft X 16.2 ft X 8.9 in.) in which edge-water-drive reservoirs with three rows of production wells were simulated. From the results of the experiments it is concluded that the method gives a fairly accurate prediction of the future production behavior of the reservoir and enables us to select the most profitable production plan. Results obtained with the method were always slightly conservative. INTRODUCTION The calculation method developed by Marsal aims at forecasting future reservoir behavior.' It can be applied to floods in which a number of down-dip wells are rapidly going to water. Essentially it is a method for predicting the future behavior of the up-structure wells on the basis of the observed behavior of the down-structure wells. As such, the method is especially useful for predicting behavior of edge-water drives toward several rows of wells. The requirement to be met for justifying the approach is identity of production mechanism in all regions of the reservoir. The attraction of the method then lies in the fact that it applies even when we have no complete description of the prevailing production mechanism. The original publication was in the German language and for this reason, perhaps, did not attract widespread attention. In our opinion it deserves to do so because it does offer in a simple way results which are in fair agreement with observed data. The aim of the present paper is to bring the method to the attention of a wider audience. The method in its most simplified form is reviewed and experimental data in support of it are presented. PRINCIPLES To show Marsal's principle. we will first write the continuity equation for very simple conditions, linear flow (in the positive x-direction) in an incompressible porous body [cross-section A(x), porosity +(x)], saturated with incompressible fluids (oil saturation S). When the oil in this formation is displaced by water, injected at x = 0 (inlet face), we get where q(t) is the total gross displacement rate and f the fractional oil flow. The equation can be solved if we make the assumptions: (1 ) that the fractional oil flow (f) is a univalent function of saturation (S); and (2) that the function is the same throughout the porous medium. Then: f = f(S) Solving this equation with the method of characteristics, we obtain

Jan 1, 1966

The Institute conducts jointly with the American Society of Civil Engineers, American Society of Mechanical Engineers and American Institute of Electrical Engineers, certain activities as listed below, and is joint owner with them of certain properties. United Engineering Trustees, lnc. When Mr. Carnegie made his gift which made possible a home for the engineering societies, a separate corporation was organized to act as a holding company and to manage the common property. This was long known as the United Engineering Society, but the name has now been changed to one which more nearly reflects the real function of the corporation. It holds title to the Engineering Societies Building and to various funds placed in its charge and is managed by a Board of Trustees, of which three are chosen by each of the four societies, American Institute of Mining and Metallurgical Engineers, American Society of Mechanical Engineers, American Institute of Electrical Engineers and American Society of Civil Engineers, which have equal and undivided interests in. the property. The land and building cost two million dollars. During the year 1934, the Constitution and Bylaws

Jan 1, 1938

By W. H. Young, P. D. Torrey

The Eastern fields comprise a distinct geological and geographical unit, located in the northern part of the Appalachian geosynclinal prov-ince. In this area are the fields of New York, producing from rocks of Devonian, Silurian and Ordovician age; the fields of western Pennsylvania, where oil and gas occur chiefly in rocks of Mississippian and Devonian age; the fields of eastern Ohio, where oil and gas are obtained from rocks of Pennsylvanian, Mississippian and Silurian age; and the fields of West Virginia, where oil and gas are produced from rocks of Pennsylvanian, Mississippian and Devonian age. Many of these fields are of great antiquity in comparison to the age of the producing areas in a greater part of this country, and consequently in most instances it is impossible to obtain accurate historical statistics. In addition, the records of many of the more recently discovered fields are either unobtainable or are not sufficiently reliable to justify their incorporation in a review of this character. Rather than overemphasize certain fields and areas, where complete records are available, when there are many other fields of equal importance for which statistical data are not available, the authors have made a tabulation of development that does not take into consideration past operations and production. The records utilized in preparing this paper were derived largely from the scout reports of several of the larger companies, which generously made them available to the authors. These were independently tabulated by counties and townships, in order to eliminate as far as possible duplications and, excepting the Clinton fields of Ohio, where many of the smaller wells have not been individually reported, they represent the most accurate information available. Market conditions in both the oil and gas industry were far from favorable during 1932 and in consequence there was a total decline in drilling in the Eastern States, which is 22 per cent less than the number of completions in the preceding year. This decline was not constant over the entire area, as is shown in Table 1. The oil fields of both New York and western Pennsylvania were the scene of renewed drilling activity, which was largely restricted to the water-flooding operations in the Bradford and Allegany fields. Practically no new operations were started, but a certain number of new wells

Jan 1, 1933

By C. D. Demond

In reverberatory smelting, fuel is the chief item of expense, as it commonly is in processes using large percentages of it. Hence the most suitable supply is eagerly sought; that is, the supply which, in the end, yields the greatest net profit. The better grades are not infrequently bought, even at an advanced price, because they are apt to be decidedly more economical. High price, of itself, however, is no merit, for freight is generally the largest part of the cost of fuel, and the nearby supply may yield as high efficiency as that from a greater distance. If a poorer grade is reasonably good, and if its cost is low enough to more than offset the decreased technical efficiency, it is of course the more suitable. Any smelting operation depends for both efficiency and economy on raising the furnace atmosphere considerably above the "critical" temperature; that is, above the temperature at which smelting is completed. If this temperature is not exceeded, smelting stops, no matter how much coal is burned; and the real value of a fuel depends on the number of degrees that the temperature is continuously kept above this point. For example, if one fuel maintains 2,500" F. and another only 2,100 F., while the "critical" temperature is 2,000" F., the first is worth at least five times as much as the second, although the increase above atmospheric temperature is only one-fifth more in one case than in the other. This "margin of temperature" above the smelting point is much more significant than the total number of heat units developed from the fuel. The case is parallel to that of water flowing from a pipe. The reservoir may contain a billion gallons of water; but, even though the fluid has come to the nozzle, not a drop will run out, where it can be of practical use, unless the level in the reservoir is higher than the nozzle; and the speed and volume of flow depend on how much higher the level is in the reservoir than at this point. If the temperature in a furnace is not above the critical level there will be no slag to flow over the skimming plate, even though there are enough heat units to bring an unlimited quantity of charge up to the point of slag formation; and just as the value of a water supply for the purpose of putting out a fire depends largely on the effective head, so the difficulties of furnace management

Jan 1, 1915

IN THE early period of steelmaking, ingot structure and segregation presented no difficult problems. Crucible melting required very small ingots which, if properly deoxidized, gave little segregation, and a small inserted hot top prevented pipe. As larger ingots were poured [ ] from Bessemer and open-hearth furnaces, segregation, piping, and gas evolution became increasingly important. The first studies of solidification were made by Gathmann (l) and the Brearley's (2) who used stearine to show the effects of shrinkage and mold shape. Figure 78 shows a series of stearine ingots at various stages of solidification. These studies indicated that the liquid solidifies at a nearly uniform rate, starting at the walls and bottom of the mold and progressing inward, and demonstrated the formation of secondary pipe in big-end-down molds. Stearine illustrates the mechanics of solidification, and exaggerates pipe because of its great

Jan 1, 1944

By A. E. Nehrenberg

IN an earlier publication' it was shown that the.. shape assumed by a volume of growing austenite is inherited from the prior structure. The matrix grains of pearlitic microstructures are equiaxed, and austenite grows in an equiaxed manner in these prior structures. Martensite and bainite, on the other hand, have an acicular grain structure, and the austenite produced in such structures grows in an acicular manner. In the discussion of this paper' it was pointed out that in cold-rolled tempered martensite, austenite grows in an equiaxed, rather than an acicular manner. The results of an experiment carried out to arrive at an understanding of this behavior are illustrated by the micrographs. Fig. 1 shows the acicular microstructure produced by heating tempered martensite to a temperature within the Ac1-Ac3 range, 1350°F. When tempered martensite is cold rolled, then heated to the same temperature, the equiaxed structure shown in Fig. 2 is produced. A sample of cold-rolled tempered martensite heated at 1350°F just long enough for the formation of a small amount of austenite is shown by Fig. 3 to have an equiaxed (recrystallized) ferrite grain structure. The small particles of. austenite which formed at 1350°F in the equiaxed ferrite matrix are likewise equiaxed. Thus, the equiaxed growth of austenite in cold-worked tempered martensite is not a contradiction of the principles described in the previous paper, for the growth pattern reflects the matrix grain structure existing at the time of austenite formation. References A. E. Nehrenberg: The Growth of Austenite as Related to Prior structure. Trans. AIME (1950) 188, pp. 162-174; Journal of Metals (January 1950). 2 J. R. Vilella and R. A. Grange: Discussion of ref. 1. Trans. AIME (1950) 188, pp. 1378-1381; Journal of Metals (November 1950).

Jan 1, 1953

By S. S. Nosseir

INTRODUCTION General Quebec Cartier Mining Co. (QCM) , Canadian subsidiary of U . S. Steel Corporation, operates two iron ore concentrators at the North Shore of Quebec, Canada. In its own operation at Mount-Wright, over 45 million tons per year of crude ore are ground, fully autogenous in six 32' x 11-1/2 Dominion Engineering mills. At Fire Lake/Lac Jeannine operation, property of Sidbec Normines Incorporated (SNI), over 11 million tons per year of crude ore are now ground, fully autogenous, in twelve 18' x 5' Hardinge mills. The Lac Jeannine concentrator was originally constructed by Q.C.M. in 1960 and. was since operated, in beneficiating the Lac Jeannine ore deposit until fully depleted in 1977, at an annual capacity of 18 million tons of crude per year. In 1976, the new company, Sidbec Normines, was incorporated by Sidbec Corporation, British Steel Corporation and Quebec Cartier Mining Co., in proportional holding of approximately 51 to 41 to 8 percent respectively. Since the acquisition of the Fire Lake ore deposit and Jeannine concentrator by the new company, QCM has continued managing the mine and concentrator operaions for S idbec Normines Inc . Flow-Sheet Design Jeannine concentrator comprises twelve identical mill lines grinding the ROM from 8" top size to 14 mesh nominal size range. Driven by 600 H.P. motor at 13.4 RPM corresponding to 73% critical speed, each mill is operated in a closed circuit with two 5' x 12' vibrating screens dressed with 2.5 x 25 mm slot opening cloth. The ground product or screen undersize at an average grade of 33.4% Fe is beneficiated by gravity separation to produce 66.5% Fe concentrate grade at 42.7% weight recovery. At the rougher stage, each mill line con-tains 128 Humphrey 13- 1/2" pitch spirals which produce a final tailing, middling and concentrate products. The rougher concentrate - so produced - is classified by 64 Humphrey pocket sizers into an underflow, which is a final concentrate product and an overflow which is further upgraded by 64 cleaner spirals. The cleaner concentrate together with the pocket sizer 's underflow are dewatered on a 13'[6] horizontal filter. The rougher middling together with the cleaner tailing are recycled in a closed circuit with the spirals. The rougher tailing after dewatering by hydrocyclones is disposed of by a

Jan 1, 1982

By G. V. Raymor, James T. Waber, I. Rex Harris

The lattice parameters of a series of fcc alloys of cerium and thorium were measured at 93 " and 298OK. Lattice parameters were also estimated for 171OK. Substantial deviations, y, from Vegard's law were observed. Although y was negative at the two higher temperatures, it was positive and large at the lowest temperature. A variety of models, which have been proposed in the past, were considered, and the calculated values of y were compared with the observed values. The best agreement was achieved with values computed with Friedel's equation. THE purpose of this investigation was to determine the effect of temperature on the lattice parameter and on deviations from Vegard's law of Ce-Th alloys. A large negative deviation from Vegard's law was first observed independently by Weiner, Freeth, and Raynor' and Van vucht2 in the room-temperature lattice parameters of Ce-Th alloys that form a continuous series of solid solutions. This observation was confirmed by Evans and Raynor. The allotropy of unalloyed cerium was reviewed recently by Gschneidner, Elliott, and McDonald. In two subsequent papers,5" these authors reported the influence of various alloying additions on the y= transformation, which occurs below room temperature. Although other rare earths tend to stabilize the double-hexagonal phase, thorium, plutonium, and scandium as solutes tend to stabilize the normal fcc phase. With addition of sufficient thorium as a solute, there is evidence that the formation of is suppressed and it becomes possible to pass continuously with decreasing temperature from the room-temperature phase to the fcc a phase. Thus there is a closed loop which is similar in many ways to the y loop well-known in ferrous alloys. A closed field also occurs in the pressure-temperature "equilibrium" diagram of unalloyed cerium. Because of interest in the effect of thorium additions and their influence on the a and phases, lattice-parameter measurements were made at low temperatures on the fcc phase for a series of alloys ranging from 10 to 90 at. pct Th. The results obtained at three temperatures are shown in Fig. 1. Evans and Raynors analyzed the deviations from Vegard's law in Ce-Th alloys in terms of changes in the occupancy of the 4f electron level in cerium,

Jan 1, 1964

By H. H. Campbell

In the extending employment of open-hearth steel for structural purposes, it is a matter of prime importance that the test-piece shall represent with practical accuracy the characteristics of every portion of the heat from which it comes. In ordinary practice this homogeneity is assumed; but inasmuch as leading exponents of the revolving-hearth system have claimed that a reasonable uniformity could be obtained by their method alone, it may be pertinent to offer a few facts on the subject. The following heats made by the Pennsylvania Steel Company, for bridge-work, were tested by casting two four-inch ingots, one being taken during the first third and the other during the last third of the cast. Test-pieces obtained from these small ingots usually give results inferior to those obtained from larger sizes; but for purposes of cornparison they are equally conclusive. Many of the tests were made for experimental purposes within a few hours of the time of rolling, and before sufficient time had elapsed for the usual molecular redistribution necessary for the best results. All the tests were made on 3/4-inch rounds just as they left the rolls and without annealing; the results, therefore, are subject to the errors caused by variations in the diameter, and in the temperature at which the bar was finished. The tests from any one heat, however, were always nude as nearly as possible under the same conditions; and inasmuch as these data include the results of every heat so tested, and inasmuch as the errors could not by any chance always support any single theory, we may be certain that the unanimons testimony of the experiments indicates a valid conclusion.

Jan 1, 1886

By Ta M. Li

How will phosphate producers in southeastern Idaho fare with growing governmental regulations and environmentalism of the late 1970's? With a similarity that is reminiscent of the battles between the coal industry and environmental-conservation groups earlier in the decade, Idaho's future growth and a nation's need for phosphate fertilizer products remain uncertain. The catalyst that brought the issue to the forefront was the preparation of an Environmental Impact Statement (EIS) addressing the development of phosphate resources in southeastern Idaho. Although the final EIS was published in August 1977, resolution of rational and orderly growth in this potentially vital region remains stifled as Secretary of the Interior Cecil Andrus virtually "sits" on it.

Jan 1, 1978

The Library is a cooperative activity of the American Institute of Mining and Metallurgical Engineers, the American Society of Civil Engineers, the American Institute of Electrical Engineers and the American Society of Mechanical Engineers. It is administered as a public reference library of engineering and the allied sciences. It contains 133,000 volumes and pamphlets, 6700 maps and receives currently most of the important periodicals in its field. In order to place the resources of the Library at the disposal of those unable to visit it in person, the Library is prepared to furnish lists of references to engineering subjects, copies or translations of articles, and similar assistance. Charges sufficient to cover the cost of this work are made.

Jan 1, 1933

CENTRAL EMERGENCY COMMITTEE Chairman, MRS. H. N. SPICER As no further requisition will be Made for knitted garments, for the boys of the 27th Engineers, all completed garments and wool have been collected and returned to Mr. W. R. Ingalls, and the activities of the

Jan 12, 1918

By R. E. Hanneman, A. N. Mariano

In conjunction with the need for accurate volumetric data in the Fe-V system for subsequent use in calculating the high-pressure diagrams, room- and high-temperature X-ray diffraction measurements have been carried out. No previous measurements have been published on lattice parameters or volume changes associated with the a transformation for Fe-V alloys. The existing literature on lattice-parameter data for the a and s phases has been reviewed by pearson1 with considerable uncertainty indicated in the data. In order to obtain a good estimate of ?Va-? for thermodynamic calculations of the a D ?(bee D fee) phase stability, high-temperature vacuum X-ray diffraction measurements were made on an Fe-V alloy of 0.92 wt pet V. The term ?Va-? is the difference of molar volumes of the limiting solubilities of the a and y phases at any given temperature; these values can be calculated readily from the appropriate lattice-parameter data. The equipment used was a commercially available MRC (Materials Research Corp.) high-temperature X-ray camera which was fitted to a Norelco diffractometer

Jan 1, 1964

By Zay Jeffries

The object of the present paper is to enlarge somewhat on the general principles advanced in my discussion1 of Mathewson and Phillips' article on The Recrystallization of Cold-Worked Alpha Brass on Anneal-- ing.2 It will also serve as an acknowledgment of Prof. Howe's most important remarks on my contribution. In this paper the writer has adopted Prof. Howe's suggestion to substitute the term "germinative temperature'' for "critical temperature for grain growth." Instead of being an exact or certain temperature it should be considered that the germinative temperature phenomenon exists throughout a small temperature range. v Factors Influencing Fast Growth Phenomena The development of grains of macroscopic size at the germinative temperature should be considered the extreme condition of a general rule. When considered in this light it is not strange that the development of these large grains should be the exception and not the rule. The principal factors influencing the operation of the laws of fast growth temperature are as follows: . 1. Rate of heating. In the original paper,' the germinative temperature was defined as "the minimum temperature at which two adjacent grains can coalesce to form one larger grain, provided that this larger grain will have sufficiently increased its power of attack, to enable it to absorb adjacent grains which cannot coalesce with each other. Time is always to be understood as a factor governing the first stage of grain growth." If the time of heating is short, the germinative temperature is raised. The formation of large grains in metals may occur at relatively high temperatures when the rate of heating is rapid. It is to be understood that in such cases, grain growth

Jan 1, 1917

HAVING told you of the practices of the arts involving other metals, I wish to tell you also of the practice of that of tin.* Indeed, since this is an easily melted metal, in common use for the utensils which are made for human needs, it is an art known not only to skilled men but also almost to children, wherefore I could proceed with- out telling of it. However, besides the production of plates and bowls and many other dishes for eating from and keeping things in, this embraces two other arts, both of which you should know about because they are useful and beautifid. One of these is the art .of making the letters with which books are printed, and the other is that of making the sheets from which organ pipes are built. The vessels, as perhaps you have seen, are cast one by one in moulds made of white tuff. Several pieces fastened together are then put on the iron axle of a wheel rotated by hand, and [138v] they are turned with a slightly bent tool which has a cutting edge. In this way they are made thin and of a good shape. Then they are polished with a piece of linen cloth and a little powdered tripoli, and thus they are finished. The letters for printing books are made of a composition of three parts of fine tin, an eighth part of black lead, and another eighth part of fused marcasite of antimony.t The desired quantities of these metals are melted

Jan 1, 1942

By Anthony Tuke

Members of the Society of Mining Engineers may well regard it as rather unusual that a paper on this subject is being presented by someone whose first taste of mining came at the age of 60 or so - someone who last heard of cathodes and anodes in 1938. On the other hand, the title does refer to the financing of a mine and at least I can claim to have spent all my business life since the war until 1981 in the world of banking, though this inevitably means that I have been used to looking at these and other problems through what you might regard as the wrong end of the telescope. The lending of money, and more particularly the provision of finance for commerce and industry, is the central job of a banker and I have been involved in this in various ways over many years, but regrettably only very marginally in the world of mining. As you will see from what follows, the rather specialised form of finance which RTZ required was, to my regret, not provided by the British banking community since the great majority of the finance came from American banks and, to a lesser extent, from German banks. I am most indebted to Mr. Roy Wright for a great deal of the nuts and bolts in this paper. He was one of the three central figures in the growth and expansion of RTZ during the 1950's and 1960's and was right at the centre of the negotiations with bankers, with governments and with many others. The going, as you will see, was far from easy. The essential basis for the financing of each of the RTZ group's mining projects was a firm long-term sales contract for sufficient of the output of the particular mine to produce the cash flow necessary to service the loans. Wherever possible, loans were raised in the same currency as the sales contracts were made. Each sales contract was designed to give the customer the product he wanted with a long-term assurance of supply and at the same time to give the bankers the protection they required. Thus the marketing concept and the financing concept for a particular mine formed one overall plan, and talks with the customers and the bankers were conducted in parallel until a satisfactory marketing/financial package was agreed in principle. Preliminary talks were begun soon after the discovery of a potentially viable orebody. As confidence about a discovery increased, customers were persuaded to enter into contingent sales contracts before the very detailed and costly business of the economic and technical feasibility study of the mine was launched; such a study might cost 10% or more of the estimated total capital cost. At the same time provisional understandings were reached with the bankers. The contingent sales contracts usually gave a period of grace of eighteen months to two years, during which time the decision whether or not to continue with the mine had to be made. This decision rested mainly on the result of the feasibility study and also on coming to a firm agreement with the bankers. If all went well and the mine went ahead, then the contingent sales contracts became firm, but they fell away if the decision was negative. The Company was fortunate that during the whole period when its major mines were being developed, world trade was increasing rapidly and Japan was becoming a dominant industrial power. The Japanese supported many of the mines, including Hamersley Iron Ore, Lornex Copper, Bougainville Copper to name a few, with the basic long-term sales contracts that enabled their development. The Germans supported Palabora and to a lesser extent Bougainville. The mines were financed as individual projects generally with a loan/equity ratio of about 65/35, without legal recourse to RTZ for the loans. RTZ was, however, responsible for providing any capital overruns required to bring the mines into commercial operations. Nevertheless, the RTZ management regarded itself as morally responsible to the lenders because, Palabora aside, the sales contracts had either a fixed selling price (like Hamersley), an indexed price (like the Elliot Lake Uranium Mines and Mary Kathleen), or a floor price (as in Lornex, Bougainville and Rossing). Thus the Company believed that any financial failure would have been due to poor management or technical

Jan 1, 1985