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By Robert C. White, Kurt W. Keskimaki

The Henderson Mine is a large underground panel cave molybdenum mine located near Empire, Colorado. Diesel equipment is employed for all development work, as well as production ore handling. Due to fluctuating demand for molybdenum, production rates have varied from 16,000 to 32,000 metric tons per day (18,000 to 36,000 short tons per day) over the last four years. In order to obtain the maximum air flow for minimum power cost the Henderson mine has completed the following modifications to the ventilation system: removal of large intake fans, elimination of underground booster fans, shutdown of tunnel exhaust fans, completion of the number 5 exhaust ventilation shaft, and use of partially debladed main exhaust fans. These changes have reduced the annual cost of mine ventilation at the Henderson Mine by over 80 per cent, a very critical cost savings in today's competitive molybdenum marketplace.

Jan 1, 1989

By Robert S. Hedin, David M. Hyman

Acid mine drainage (AMD) is a common water pollution problem on active and abandoned coal mine sites in the eastern United States. AMD forms when surface mining brings unweathered pyrite-containing rocks to the surface or when deep mining allows oxygen to contact buried pyritic strata. In the absence of neutralizing compounds, the drainage that results can be extremely acidic and contaminated with dissolved iron, manganese, and sulfate. Drainages with pH < 3.0 and concentrations of sulfate greater than 1,000 mg/L, iron greater than 50 mg/L, and manganese greater than 10 mg/L are common. Where water flows through alkaline materials (such as limestone) before surfacing, the drainage is less acidic and occasionally circumneutral, but it can still contain high concentrations of sulfate and metals. Current water quality standards in the United States require that mine discharges have a pH between 6 and 9, total iron concentration less than 3.0 mg/L, and manganese less than 2.0 mg/L. At thousands of active and inactive mine sites, drainage does not meet these standards and is being treated before discharge by the mining company. At thousands of other sites, which were abandoned prior to the enactment of water pollution laws or were operated by companies that have gone bankrupt, untreated AMD is polluting receiving water systems. The standard mine drainage treatment system involves the addition of a1 kal ine chemicals to the water, which raises the pH and cause metals to precipitate in a settling pond. These systems are expensive, often costing tens or hundreds of thousands of dollars per year for chemicals, operation, maintenance, and disposal of the metal- laden sludge. Because the drainage on many sites will likely be contaminated for decades, there is financial incentive to find alternative water treatment systems. In the last five years, many mining companies and engineering firms have experimented with the construction of wetland treatment systems. Very few of the several hundred wetland systems that have been built are performing well enough to justify total abandonment of chemical treatment. Nonetheless, systems continue to be built because the mining companies have found that wetlands can reduce their AMD treatment costs. It is also their hope that further research and development will eventually result in systems that will completely rep1 ace chemical treatment and offer long term performance at minimal cost. The Bureau of Mines has been actively involved, from a research perspective, with this approach to AMD treatment since its inception. In this paper, the status of constructed wetland technology is discussed with respect to the construction and performance of systems, chemical and biological processes that affect AMD chemistry within constructed wetlands, and the future of this technology as perceived by the Bureau of Mines. ORIGINAL OBSERVATIONS The constructed wetland concept has its roots in observations of natural Sphaqnum peat wetlands that received acid mine drainage and, instead of being adversely affected, appeared to cause an amelioration of the polluted water (Huntsman et al. 1978; Wieder and Lang 1982). These observations instigated the idea that wet1 and systems might be used for the intentional treatment of mine drainage. Because the discharge of AMD into a natural wetland is prohibited in the U.S. by several laws, it has been necessary to construct wetlands which act solely as water treatment systems. Initially, most wetland research and construction efforts mimicked the original observations by utilizing Sphaqnum moss and peat. Despite promising laboratory results (Kleinmann et al. 1983; Tarleton et al. 1984; Burris et al. 1984; Gerber et al. 1985), virtually all field tests of Sphasnum-dominated constructed wetlands failed to provide sufficient water treatment for more than several months. Sphasnum proved quite sensitive to the stresses associated with transplanting, abrupt changes in water chemistry, excessive or insufficient water depth, and

Jan 1, 1989

By Richard R. Klimpel

INTRODUCTION Froth flotation is the most widely used and economic means of concentrating metal sulfide ores such as those containing copper, lead, zinc, nickel, molybdenum, and pyrite. Also recoverable are other metal species that are often associated with sulfide ores, such as cobalt, platinum, gold, silver, etc. Flotation of metal sulfide ores has been successfully practiced at the industrial scale for more than 50 years. It is the relative technical/economic ease of floating metal sulfide minerals that has been a major driving force behind the rapid expansion in the supply/demand of metals over this 50 year period. It is estimated that 1.6 billion tons of feed sulfide ores are processed each year in the free world based on the froth flotation process, Klimpel (1987) and the manufacture/use of associated chemical reagents is a major portion of the 1.5 billion dollars (U.S.) free world mining chemicals business, Klimpel (1988b). The use of froth flotation appears to be increasing partially due to the ever decreasing feed grades and liberation sizes of the feed minerals. Froth flotation has shown itself to be a flexible process that lends itself well to many solid/solid separations. Thus, with surprisingly little equipment modification, separations can involve very different particle sizes and densities, and relative weight ratios of materials to be separated. In addition, the flotation process is economic, especially when compared to size reduction, its associated precursor process. Flotation also lends itself to continuous operations with a variety of equipment configurations. Such operations exhibit an ability to vary feed rate of solid to the process by as much as 50% without a total collapse of separating efficiency. In addition, the widely used mechanical flotation cell is scalable from 2.8 to 57 or 85 m3 (100 to 2000 or 3000 cu ft) with surprising ease relative to other unit engineering operations over the same relative size increase. The separating medium used is water. Most of the chemicals required -- pH regulators, frothers, collectors, activators, and depressants -- are all relatively inexpensive and common. They are not usually used in large quantities. While there has been a tendency for the quality of metal sulfide ores in any one geographic location to deteriorate over time due to mining intensity, the overall global supply of sulfide minerals is still very ample. Thus, the physical supply side of sulfide ore concentrates has not been under strong technology improvement pressure with increasing metal demands. Part of this is due to the ability of capital to consistently move to new geographic sources having suitable-grade sulfide ores. In these moves, the actual froth flotation technology used (including collector chemicals) has had to change little. As an illustration of this trend, of the approximately 80,000 metric tons of thio collectors used commercially (1980) in the free world, almost 987 were known and manufactured in some form 25 years ago. This is clearly not typical of reagent development in other process-related industries. In addition, the industrial-scale practice of froth flotation applied to sulfide ores has proceeded since the 1920&apos;s with often little direct (predictive) scientific explanation due to the extreme complexity of the flotation process. Empirical testing has been a mainstay of industrial flotation reagent development and use. Even today there is often strong disagreement between researchers as to the mechanisms of chemical flotation practices that have been performed successfully on an industrial scale for many years. Thus the industrial process of froth flotation, especially as applied to the recovery of sulfide minerals, poses a dilemma: such a process is widely used, economic, versatile, forgiving, etc. and yet is still not very well understood in a mechanistic sense leading to prediction of results from fundamentals even after 50 years of usage. Lack of such predictive ability has not limited the general over-all industrial use of froth flotation in sulfide mineral recovery. Rather the lack of

Jan 1, 1989

By John J. Reed

The 1945 fire at the Braden (El Teniente) Copper Mine in Chile took 354 lives, and ranks as the most lethal metal mine fire in history. The mine was developed in the wall of a canyon over 900 m (3,000 ft) deep. Principal entrance was through a main haulage adit at the canyon bottom, and up through two internal shafts. Mining was by block caving from the top of the orebody with most of about 900 men on shift working in three production areas. Ore was transferred by gravity to the haulage level through a complex system of ore passes with associated ladderways. Normal mine ventilation was incast through numerous level portals and up- cast through the shafts and raises. The fire was confined to a maintenance shop just inside the portal of the lower production level. Smoke, gases and flammable vapors were drawn into the mine, and a subsequent explosion of the gases destroyed an air door and injected carbon monoxide into the workings. Falling water in a drainage raise near the fire made it downcast, which carried gases down to all the lower levels where they were drawn into the levels and then up connecting raises. Miners attempting to escape by climbing down the ladderways from the production levels were met and killed by the rising gases.

Jan 1, 1989

By J. M. Cases

Diffuse - reflectance Fourier - transform infrared spectroscopy, Hallimond tube flotation and microelectrophoresis have been utilized to investigate the reactions involved in the adsorption-abstraction of K-amylxanthate on finely ground galena and pyrite. In order to work under well-controlled conditions both minerals were wet ground in a specially built laboratory stainless steel or iron mill. Four surface products were found to be formed on galena: monocoordinate lead xanthate, non-stoichiometric lead xanthate, dixanthogen, and amyl carbonate disulphide. Only dixanthogen was observed on pyrite after using stainless steel rods, while ferric iron xanthate was found when iron rods were utilized.

Jan 1, 1989

By William H. Schiffbauer

Research is being conducted toward making underground mining equipment autonomous. This will facilitate improvements in safety by relieving workers of dangerous tasks and will increase production by providing more accurate control with less down time.. A Bureau of Mines developed microcomputer network has enhanced this research by permitting a group of diverse computers to interact with a mining machine as well as with each other over a common data link. The network is composed of specially integrated off-the-shelf hardware and industry-standard operating system and programming languages. Using the network, researchers can conduct various experiments with the mining machine using a diverse group of intelligent sensors, computers, and microcontrollers. Descriptions of the mining machine, the mining machine control computer, control algorithms, -the microcomputer network architecture, and communication protocols are discussed.

Jan 1, 1989

By K. Kuhnhenn, G. Prommersberger

General aspects In Germany, swelling rock is mostly found in the keuper formation. Keuper is a sedimentary rock formation of varying composition. It mostly consists of fine or medium layers of clay/silt/marl/dolomite stone with intercalations of gypsum or anhydrite in strips or nodes. After disintegration of the top layers and tectonical incidents, the gypsum level, i.e. the upper [ ]

Jan 1, 1989

By Chen Chuanqing

The Mining design system is a CAE (Computer Aided Engineering) software and was developed as designer-oriented, interactive mode software to perform geological and mining design calculation and graphics. To perform geology and mining design, the deposit model files created by the software "Deposit Modelling System", are transferred to the environment of graphics support software, then a specially developed drafting submodule can be selected to proceed to interactive graphics design. If it is necessary to calculate the grade and quantity of a particular part of the ore-body, another submodule will be called and run. The resulting file is &apos;transferred back, and the recalculation program takes the data from the file and refers to the deposit model file to create a summary reserve report: The minimum hardware configuration of the system are IBM-AT Basic work station with high resolution graphic monitor and peripherals needed are digitizer, plotter, printer.

Jan 1, 1989

By G. Rainville, I. Servi, F. Katrak

Despite the severe drought conditions that reduced farm requirements for industrial mineral products, most industrial minerals markets in 1988 continued their growth or, at worst, remained flat. Earlier projections of output declines did not materialize in most segments. Preliminary estimates of demand in Europe and Asia show strong growth for most industrial minerals. Profitability in industrial minerals in North America was best in those minerals that had a significant export market or were not strongly regional. Growth and price trends in the more regional industrial minerals markets in the US such as sand and gravel, crushed stone, and cement, more closely followed the broadly disparate regional economic conditions. For example, sand and gravel and crushed stone grew strongly in the Pacific Coast and northeastern markets but not as much as in the Southeast. Total growth for sand and gravel in 1988 is projected at about 3% above 1987 levels. Combined production is up about 27 Mt (30 million st) to 2 Gt (2.2 billion st). Following the relentless trend of foreign acquisition of US cement companies (currently about two-thirds are owned by foreign interests), several aggregate operations have been purchased by foreign companies. Notable among these in 1988 was the acquisition of Rinker Materials Corp. by CSR of Australia. The acquisition of this Florida-based aggregate and concrete operation will expand the current holdings of CSR in the southeastern US, with operations consolidated under the Rinker logo. In addition, Pike Industries of New England and J.L. Shiely Co. of Minnesota were significant aggregate producers that were acquired by foreign firms. New England&apos;s only cement manufacturer, Dragon Products, was acquired by a subsidiary of Cementes del Norte of Spain. Dravo continued to expand its influence in the lime and limestone markets. It became the major supplier of construction aggregates on the inland river system with its purchase of Cyprus Minerals&apos; limestone aggregate operations in Kentucky, Louisiana, and Texas. Although lime production continued to grow from 14 to 15 Mt (15.7 to 16.7 million st) in 1988, lime imports decreased for the fifth consecutive year to 145 kt (160,000 st). In the more export-oriented industrial minerals markets, performance was generally very good for 1988. Soda ash enjoyed an excellent year, with its price up to $102.50/t ($93 per st). This reflected the tight market situation for soda ash, particularly in late 1988. Soda ash production in 1988 was 8.6 Mt (9.5 million st), reflecting the industry&apos;s improved efficiency. Particularly significant was the increase in caustic soda prices that led to increased substitution by soda ash. The export market remained at 2.1 Mt (2.3 million st). Phosphate production recovered to the 42 Mt (46 million st) level, a 12% increase despite a soft export market. The price, however, remained soft throughout the year. W.R. Grace sold its interest in its Florida phosphate mine and its phosphoric acid complex as part of its divestiture of the agrichemicals business. The strengthening of the major producers has continued as lower cost capacity has been idled. Future permitting of phosphoric acid facilities and development of reserves will be necessary to maintain current production levels beyond the mid- to late 1990s. Despite new developments worldwide in the titanium minerals market, strong demand has continued to apply pressure to price, with concentrate and slag prices going up. The demand for high quality slag as feedstock for pigment production has resulted in process improvements in South Africa (Richard&apos;s Bay) and in plans by Canada to import high quality ilmenite by 1991 to produce a 90% TiO2 slag. Although growth in industrial silica sand applications was small in 1988, concentration in the industry continued. Unimin continued to acquire silica operations. Unimin is now the nation&apos;s leading producer of granular silica. The end users of silica have consolidated further. Owens-Illinois purchased Brockway Inc., a leading container glass producer. Three companies now control 75% of the container glass industry. ECC continued to be an aggressive purchaser of industrial minerals operations throughout the world. It acquired Cyprus Minerals&apos; calcium carbonate business as well as two operations in Italy. In addition, ECC continued its aggressive acquisition of kaolin (Australia) and aggregate producers. 1988 was a good year for industrial minerals markets worldwide. More importantly, though, it was a year that showed continuing consolidations of reserve ownership in the industry around the world. Barite AN. Castelli, Baroid Drilling Fluids Inc. US mine production of barite decreased 9.4% during 1988. Consumption (sold or used by grinding plants) increased by 37.9%. Imports are estimated to have increased by 21.2%. World mine production decreased by 9.8%, according to the US Bureau of Mines. The value of domestically produced barite, fob mine, decreased 4.6%, according to the Bureau. The declared value cif US port of all imported ground barite during the first 10 months of 1988 increased from $37.16/t ($33.71 per st) in 1987 to $37.92/t ($34.40 per st), according to Bureau figures. Nevada continued to be the leading producer of barite with 72% of the total, followed by Georgia and Missouri. The Bureau of Mines estimates 69% of US mine production was used as a weighting agent in drilling fluids. The other 31% was used in barium chemicals, glass, or as a filler. Most of the production from Missouri, Georgia, and Tennessee was used in the non-oilfield sector. Of the total consumption used by grinding plants and chemical manufac-

Jan 1, 1989

By Wolfgang H. Roth, Stephen J. Navin, Samuel K. Louis, Anthony F. Stirbys

This paper presents a case history of the design and construction of the access shaft and cross adit utilized to gain access to the Los Angeles Metro Rail tunnel alignment, at the A146 Contract site. The access shaft, a 14 m (45 ft) inside diameter structure, was constructed using ring beams and lagging with concrete backfill to a depth of 18.59 m (61 ft). The cross adit was hand excavated in sequential benches using liner plate, arch ring beams, and posts for support. The sequence of excavation and support placement are discussed. Soil conditions encountered at the project site are discussed together with the development of the design criteria. Instrumentation data collected during the excavation are also presented.

Jan 1, 1989

By P. Worley

With Utah Power & Light Mining Division&apos;s commitment to operate the safest and most productive mines possible, a decision was made to purchase and install mine-wide monitoring systems for use in the mines. After review of several different systems the Conspec Senturion 200 system was chosen. Three separate systems were ordered to fulfill the monitoring requirements of the six mines in operation: one system for the Deer Creek Mine one for the Wilberg/Cottonwood complex, and one for the Deseret, Beehive and Little Dove complex.

Jan 1, 1989

The Xinglongzhuang Coal preparation plant project was a joint effort by American and Chinese engineers and for the most part designed to American standards. The plant owner and operator is the Yanzhou Coal Mine Administration, a division of the Shandong Coal Corporation. These are state owned companies which ultimately fall under the Ministry of Coal in Beijing. The new 3.0 million ton per year Xinglongzhuang mine is located in southern Shandong province in east-central China about mid-way between Beijing and Shanghai. This is an agriculture area, flat terrain, relatively dry climate with temperatures similar to Western Kentucky. During Confucius time (551-479 B.C.) this area was known as the state of Lu. Confucius home town of Qufu is about 20 kilometers to the north-east of the mine site.

Jan 1, 1989

By K. S. E. Forssberg, M. I. Hallin

In many cases, the reuse of process water in flotation plants is desirable both for plant operating reasons and for environmental protection. The main advantages are better housekeeping of fresh water and process chemicals together with the reduction of polluting species to the environment. There are however a number of problems involved in the use of recycled process water. The main problem is that recycling sometimes has a deterious effect on the process and can occur months after the start of water recycling. The Division of Mineral Processing of Luleå University of Technology has been conducting experiments on recycling of process water at various sulphide plants in Sweden for over ten years. The experiments have been carried out in pilot- and full industial scale, in collaboration with the mining companies operating the plants. Until 1988 investigations were carried out in four different sulphide plants. The objectives of the experiments were: first to document differences in the composition of the process water during recycling; secondly to investigate any changes in the pulp chemistry of the flotation circuits wich may be due to the influence of recycled water; and lastly to establish critical levels, if any. of the parameters measured. While conducting experiments of this kind several things have to be kept in mind. Normally, recycling is done by using tailings pond water as process water. This means that time effects are important, because of the time lag between water input in the tailings pond and the reclaim of that water back to the plant. As will be shown, the

Jan 1, 1989

By Richard E. Hucko

The U.S. Department of Energy (DOE) Coal Preparation Program focuses on providing the technical and process-development basis that can be utilized to produce environmentally acceptable clean-coal feedstocks for use as market conditions permit. A major objective of the Coal Preparation Program is the development of physical coal-cleaning technologies capable of significant removal of mineral matter and pyritic sulfur at high energy recovery levels.

Jan 1, 1989

By Dennis P. Martin, Michael M. Fitz, James E. Friant

Methods for reducing the cyclic nature of drill and blast tunneling operations have been long needed. A miniature blasting system using 10 mm (.375 in.) holes, 0.91 m (36 in.) deep, and blasting only one hole at a time makes it practical for men to work behind a shield, remaining at the face during the entire process. A prototype automated module was developed to drill, load the hole and initiate the detonation without moving from the hole. A unique cost effective gell explosive and a novel, low cost initiation method were developed.

Jan 1, 1989

By D. J. Collins

While the charcoal in pulp (CIP) process was introduced to the mining industry many years earlier, it did not gain widespread recognition until 1973 when Homes take Mining Company installed a CIP circuit at their Lead, South Dakota plant. Since then, a number of mills have been put into production which utilizes activated charcoal for the recovery of precious metals. One of these plants was the Jerritt Canyon mill which Freeport Gold Company commissioned in 1981. It was during the time that the author was employed by Freeport Gold Company that the ideas and concepts presented in this paper were formulated.

Jan 1, 1989

By R. O. Y. Breese

The term "diatomite" implies the nearly pure sedimentary accumulation of diatoms. Sedimentary and chemical purity, low density, inertness, intricate fine structure, high brightness and other properties give the diatom and diatomite unique industrial usefulness and commercial value in high value functional filler and specialty filter aid products. Although diatomite deposits occur commonly throughout the world in Miocene and younger marine and lacustrine sediments, deposits that contain significant reserves of crude suitable for these quality sensitive markets are uncommon. U.S. production is centered on exceptional deposits located in Arizona, Nevada, Oregon, Washington and California. Evaluation of deposits requires understanding of geology, mining, production and end use. As crude quality in deposits varies within and between strata, ore suitable for quality sensitive end uses must be identified through sampling and evaluation programs tailored to permit recognition of critical variations.

Jan 1, 1989

By H. L. Bourne

Not everyone understands the concept of mineral royalty. Mineral royalty is a fee paid to a landowner by someone who extracts a mineral commodity from the owners property. The royalty contract between the lessor and lessee contains clauses and conditions that are significant to both parties, e.g., annual m1n1mum, escalation factor, duration of the lease, reclamation and assignability. Comparison of royalty rates requires knowledge of many conditions that influence the value of a given deposit. People in several different professions benefit from shared royalty information.

Jan 1, 1989

By Bryan C. Smith, Duane R. Skidmore

Volumetric mass transfer coefficients and gas holdups were measured in a concentric tube airlift reactor designed for the microbial desulfurization of coal. The slurries were comprised of an acidified basal salts solution containing thirteen different weight percents of coal (74 µm Ohio #1) at three temperatures. An enhancement in the mass transfer coefficient, KLa, with respect to that measured in pure solution was found at weight percents of 5 (volume fraction solids, ES = 0.035) or less, the greatest enhancement being as great as 37% at approximately 2 weight percent (ES = J 0.014). At higher solids fractions, the mass transfer coefficient decreased with further solids additions, decreasing by as much as 91% at 40 weight percent coal (ES = 0.315). KLa increased with temperature at all solids concentrations, the greatest increase being 392% at 72°C vs that measured at 30°C. Gas holdup, EG decreased with all increases in solids loading by as much as 65% and increased by as much as 67% with temperature. KLa and EG were correlated with operating conditions separately, and the separate correlations combined to yield overall correlations for the mass transfer coefficient and for the gas holdup. The correlations are suitable for inclusion in system models devised earlier for microbial coal desulfurization processes, and may be used for design, operation and cost estimation for such systems.

Jan 1, 1989

By Simon D. Strauss

This article is part of a presentation Strauss made Dec. 3, 1988 at the sixth annual American Mining Hall of Fame (AMHofF) banquet in Tucson, AZ. At the banquet, the Mining Club of the Southwest honored Strauss by naming him the 1988 recipient to the AMHofF. (Industry newswatch, page 6). Introduction In the last two decades, there have been two previous periods of sharply rising copper prices. One was in 1973-74; the other in 1979-80. In both cases, a short period of high copper prices was followed by steep and prolonged periods of low prices. In the language of the market analyst, the high prices were called spikes. Is it likely, then, that three or four years from now the present price of copper will show up as a spike in the charts? There are substantial differences between the current position and the markets of 1973-74 and 1979-80. In 1973-74, US copper prices were subject to government-imposed price ceilings of $0.60 per lb through early December, 1973. These were increased to $0.68 per lb through May, 1974. Meanwhile, mines outside the United States were free of restraint. Rising demand in London pushed the price above $1 per lb in the third quarter of 1973. In early April 1974, it reached a peak of $1.50 a lb. In May of that year, the US ceilings were removed and the domestic price began to rise. What were the causes of this price strength? While ceilings held the domestic price below the world market, domestic consumers acquired all the tonnage offered by US mines. Meanwhile, in the world market, buyers feared prolonged shortages. The Club of Rome had warned that world economic growth would be limited by impending depletion of mineral resources. There was al so concern about a copper cartel that might increase copper prices even more. In early 1974, at a special United Nations session, developing-country spokesmen warned the industrialized world to expect high commodity prices. Also adding to the concerns of copper buyers was the fear that when US wage contracts expired in mid-1974, protracted strikes might ensue. The combined effect of this atmosphere was that consumers accumulated large amounts of copper, far above their normal carry. By midsummer, the position changed radically. While some strikes did occur in the United States, they proved short-lived. The most significant development was a massive economic recession. The energy crisis was causing enormous dislocations in the world economy. Construction activities were sharply reduced and automobile sales plummeted. Public confidence was shaken. Copper sales fell precipitately as consumers decided to draw down their swollen inventories. The price came down too. In April 1974, the London price- as noted-was $1.50 per lb. By the end of the year, it was down to $0.57 per lb. In 1973-74, the copper price rise was fed by fears of shortages, cartels, and strikes. In 1979-80, the market rose on the strength of good demand plus political and military instability. The price rise was also fed by inflationary trends, exemplified by speculation in precious metals. Prior to this second spike in copper prices, the market had been depressed despite economic recovery. Despite reduced US output, copper production in the rest of the world was increasing. Though consumption was rising, surplus stocks reached unprecedented levels. At the end of 1977, the aggregate of stocks at the refineries and in the exchange warehouses was 1.5 Mt (1.67 million st). That was more than three months&apos; shipments at then rates of consumption. In 1978, the statistical position improved. Shipments of refined copper that year were 8% greater than in 1977. The result was reduced visible stocks but -just as was to be the case in 1984-86 - the price remained depressed. In 1979, an even sharper drop in visible stocks occurred as shipments rose by another 4%. This time, though, the price responded. In December 1978, the price in current dollars had been less than $0.70 per lb. By the end of 1979, it was above $1 per lb. And in the first quarter of 1980, it averaged more than $1.20 per lb. Military and political developments were a factor. The hostage crisis in Iran was followed by the Soviet invasion of Afghanistan. To many, it appeared that war might result if the Soviets pushed on into Pakistan. At the same time, speculation drove gold and silver prices to incredible levels. As silver prices rose above $40 per oz), copper above $1 per lb did not seem unreasonable. Then, in March 1980, the precious metals price boom collapsed. Copper prices also retreated, though not as much. In February 1980, the copperprice averaged $1.32 per lb. By December, it had dropped to $0.85 per lb. In 1981 and 1982, the decline continued. The present copper situation Why is the current situation different from these two previous episodes of high prices? First of all, today&apos;s inventories are far lower than they were in either 1974 or 1980, when the price declines began. The stocks at refineries and in exchange warehouses are substantially less than they were then. More significantly, consumers today have very limited holdings compared with stocks they carried in 1974 and 1980. Even if faced with a downturn in their own business, copper consumers will not be able to stay out of the market. To the extent they have any business at all, they will have to buy copper. And on the supply side, there is also a significant difference. The year 1988 has been unusual. US production is up sharply, responding to higher prices. But production is little changed in the rest of the Free World. Indeed, several of the major producing countries have mined less copper this year than in 1987 despite the prices increases. Peru has had labor problems that have cut its output. Zambia and Zaire suffer from shortages of expatriate technicians, not to mention spare parts. They also suffer from the failure to maintain equipment or perform adequate development. In Chile, the two largest mines, Chuquicamata and El Teniente, have not met their production targets. Chuquicamata is struggling with high arsenic content in its ore. And, in late 1987, severe rockbursts hampered operations at El Teniente. In addition, depletion of some mines in Australia and South Africa has offset rising output at other properties. Indeed, when final mine output figures for 1988 become available, it may well be

Jan 1, 1989