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By N. S. Dalal, X. Shi, V. Vallyathan

"Correlated spectroscopic and cytotoxicity measurements were made on newly crushed silica to find whether the fracture-induced, silicon related (Si-0· or Si· type) free radicals play a direct role in the mechanism of hemolysis by silica particles. The free radical content of the silica particles was controlled through the radical decay, thermal annealing, and boiling processes, and was followed with electron spin resonance spectroscopy. Portions of the same sample were evaluated for their hemolytic potential, employing sheep erthyrocyte and optical absorption techniques. The results indicate little, if any, correlation between the amount of the silicon-based radicals and the hemolytic potential of the fresh dusts, but these or related radical sites might be contributors to silica cytoxicity and fibrogenicity via peroxidative pathways .INTRODUCTIONIn an earlier convnunication (1.) from our laboratory it was reported that mechanical crushing of coal and quartz under normal air atmosphere generates free rad;cals on the particle surfaces, and that these radicals decay with time, hence pointing to a higher toxicity of fresh dusts in relationship to pneumoconiosis and silicosis. More recently Fubin; et al.(2) have also reported the detection by electron spin resonance (ESR) of the formation of SiO· and Si·-type of radicals from quartz particles crushed under atmospheric conditions. In agreement with earlier ESR studies on single crystals of quartz crushed under high vacuum (10-10 torr) (3) and subsequent exposure to air (3), and to other gases (4), these radicals were identified (2) as being formed by the hemolytic cleavage of the Si-0-Si bonds and the reactions of the Si· and SiO· ,radical with atmosphere. Fubin; et al. (2) also suggested that these radicals might be involved in the mechanism of the fibrotic action by silica, either by transforming the particle surface into a selective oxidating agent or as an initiator of a sequence of reactions leading to fibrosis. Earlier Gabor and Anea (5) had reported that lipid peroxidation caused by free radicals on the silica surface might be involved in the red blood cell membrane damage. Thus far, however, no parallel cytotoxicity, fibrogenicity, and free radical studies on a given Quartz dust sample have been reported, except for some earlier work from our laboratory (1,6,7). We now present more recent results obtained from parallel cytotoxicity, fibrogenicity, and free radical measurements on a freshly made quartz dust. The dust’s free radical content was measured using ESR spectroscopy while its cytotoxicity poteni1al was estimated via hemolysis. Hemolysis was employed as the tox1c1ty test because it 1s a widely used method for estimating the potential of a dust for disrupting the cell membrane (8). The f1brotic potential was followed.by measuring the dust-induced lipid perox1dat1on. us1ng linole1c ac1d as a model lipid. As discussed below, the results obtained suggest new clues.to the mechanism of the Quartz-related cytotoxicity and fibrogenicity."

Jan 1, 1988

By Nar S. Dalal, Xianglin Shi, Val Vallyathan

"INTRODOCTIONIn an earlier communication 1 from our laboratory it was reported that mechanical crushing of coal and quartz under normal air atmosphere generates of free radicals on the particle surfaces, and that these radicals decay with time, hence pointing to a higher toxicity of fresh dusts in relationship to pneumoconiosis and silicosis. More recently Fubini et al.2 have also reported the detection by electron spin resonance (ESR) of the formation of SiO. and Si-type of radicals from quartz particles crushed under atmospheric conditions. In agreement with earlier ESR studies on single crystals of quartz crushed under high vacuum ( -10-10 torr>3 and subsequent exposure to air,3 and to other gases,4 these radicals were identified2 as being formed by the homolytic cleavage of the Si-0-Si bonds and the reactions of the Si• and SiO- radical with atmosphere. Fubini et al.2 also suggested that these radicals might be involved in the mechanism of the fibrotic action by silica, either by transforming the particle surface into a selective oxidating agent or as an initiator of a sequence of reactions leading to fibrosis. Earlier Gabor and Anca5 bad reported that lipid ·peroxidation caused by free radicals on the silica surface might be involved in the red blood cell membrane damage. Thus far, however, no parallel cytotoxicity, fibrogenicity, and free radica1 studies on a given quartz dust sample have been reported, except for some earlier work from our laboratory.1·6·7 We now present more recent results obtained from parallel cytotoxicity, fibrogenicity, and free radica1 measurements on a freshly made quartz dust. The dust's free radica1 content was measured using ESR spectroscopy while its cytotoxicity potential was estimated via hemolysis. Hemolysis was employed as the toxicity test because it is a widely used method for estimating the potential of a dust for disrupting the cell membrane. 8 The fibrotic potential was followed by measuring the dust-induced lipid peroxidation, using linoleic acid as a model lipid. As discussed below, the results obtained suggest new clues to the mechanism of the quartzrelated cytotoxicity and fibrogenicity. MATERIALS AND METHODSReagentsCrystalline quartz particles with a size range of 0.2-2.5 mm were obtained from the Generic Respirable Dust Technology Center, Pennsylvania State University, University Park, Pennsylvania. These particles were crushed in air to obtain quartz dust samples with particle sizes smaller than 20 microns. We chose to work with a dust with mixed particle sizes, rather than a specific range, as an effort to simulate the mining atmosphere. An agate mortar-pestle arrangement was used for the crushing and grinding because of the close similarity of the structure of agate to that of quartz. Diethylenetriaminepentaacetic acid (DETAPAC) were purchased from Sigma. All other chemica1s were purchased from Fisher or Aldrich.Hemolysls ExperimentsHemolytic activity of silica was measured, following an established procedure,9 as the amount of hemoglobin released from a 2 % suspension of sheep erythrocytes after incubation with 10 mg of silica dust for one hour at 37 °C. The hemoglobin release was estimated via the absorbance at 540 nm using a Gioford spectrophotometer. The procedure was calibrated by substituting the silica dust by a phosphate buffer solution as a negative control (background) and O.S % Triton-X-100 as a positive control (100% hemolysis). The percentage of hemolysis was calculated as follows:"

Jan 1, 1990

By S O’Connell, M Scholz, A Robertson, M L. Bloss

The value created in any mining operation is a function of the mine plan. The quality of this plan is dependent on the strategies employed during definition drilling, resource estimation and mine planning. This paper presents opportunities to improve the value of an operation through better strategic management of these core activities. Case studies undertaken recently at Olympic Dam are presented to support the conclusions presented in the paper.CITATION:Bloss, M L, O’Connell, S, Robertson, A and Scholz, M, 2016. Do we maximise the value of our operations through our definition drilling, resource estimation and mine planning strategies? In Proceedings International Mine Management Conference, pp 9-20 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jun 22, 2016

By A Giblett, K Afewu

This paper uses a case study to demonstrate best practices techniques for predicting the contribution of gravity concentration in a gold recovery process flowsheet. The case study was selected as an example of an ore with a marginal gravity gold content, which makes the value of a gravity circuit difficult to quantify. In this instance the value of leveraging a significant knowledgebase of operating gravity circuit performance to support the decision making process was demonstrated. This case study analysis serves as a useful demonstration of best practice methodologies supporting decisions to include or exclude gravity recovery in a gold recovery process flowsheet.CITATION:Giblett, A and Afewu, K, 2015. Do we need a gravity circuit or not? A case study in applying best practice, in Proceedings MetPlant 2015, pp 288–295 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 7, 2015

By Eugene Guccione

The domestic iron and steel industry is a vital and major segment of the US economy. Including its employees in coal mining, iron ore mining, limestone quarrying, and related transportation, the industry directly provides jobs for approximately 750,000 people, has a $10 billion annual payroll, and indirectly supports a substantial volume of employment for the entire country. Because of its size and visibility, if nothing else, the US iron and steel industry has always been an easy target of attack and has often been subjected to a great deal of political sound and fury. Today, the industry has different troubles and is fighting for survival: it is faced with spiralling costs, inadequate earnings, labor unrest, foreign competition, government over-regulation, an acute shortage of investment capital, and an all-time high debt burden.

Jan 11, 1975

Most new engineers in the mining industry do not realise the importance of legal obligations. During investigations the first question you are asked is: Do you have any proof or evidence? The smallest detail in an underground notebook or a diary entry is able to be used as your proof and/or evidence. The importance of a paper trail is often undervalued and overlooked when you first enter the industry. As a new engineer, all too often your legal obligations, including your duty of care are not given enough consideration. Whose job is it to inform you of what your legal obligations are and when do they end? Everyone has legal obligations at every level of the industry, from graduate to mine manager. The level of these responsibilities varies depending on the position that you hold. When you first start in the industry you need to understand what your responsibilities are and how you are expected to discharge them, whether they are memos, databases or senior sign-offs, etc. In order to fulfil your obligations you must first discharge your own obligation, which in turn discharges those of your department and ultimately those of the mine. As a graduate engineer in the mining industry what I have learnt about my own legal obligations has come directly from my own experience, which will form the basis of this paper.

Jan 1, 2007

By Vince Poxleitner, John Delaney

Introduction In the mining industry, comminution typically begins in the mine with a blast of explosive to break rock so that it can be handled by the avail- able equipment. Though the breaking of the rock is essential for material handling in the mine and plant, this is not the only reason for ore reduction in the mineral industry. Comminution is primarily required to liberate minerals from ore so that they can be concentrated into valuable products or to prepare minerals, such as talc, for market as mined. The size of the equipment used for comminution ranges from small to massive. Regardless of equipment size, the power required to reduce the rock is a major expense. Years ago, mineral deposits could be mined more selectively and required less grinding to produce saleable products. However, as richer deposits were depleted, it has become necessary to mine low-grade deposits, with the valuables dispersed throughout the rock. Comminution equipment evolved in physical size and capacities to meet the new mine and process requirements. A modern, modestly sized mining operation, with a capacity of 25.000 TPD may use crushers two stories high weighing over a million pounds, SAG mills 36 feet in diameter driven by dual motors putting out 10.000 horse- power, and ball mills over 16 feet in diameter . Because of the increasing size and weight of modern equipment, the builder is faced with the problems of erecting massive foundations and field assembling equipment on these foundations. As equipment costs and plant construction costs increase, builders are finding that owners are asking for more detailed progress and cost data. Comminution construction projects are generally classified as grass roots plants or expansions or modifications to existing plants. It is estimated that 60-702 of the jobs involve existing plants. Today ' s costs for construction of small, new comminution plants can reach tens of millions of dollars; larger plants can cost hundreds of millions of dollars. Modifications, on the other hand, usually run from a few thousand to several million dollars. Though many problems are common to the construction of both new plants

Jan 1, 1982

By Allan D. Taylor

INTRODUCTION From the designer's view, the installation starts with the first definition of the orebody, and progresses through a long and complex development. The design is affected not only by the characteristics of the ore, but by all of the personalities and events of the project during its development. The following discussion attempts to touch on the most important aspects which define the context in which the designer must work in apply the do's and don'ts. That context is the basis of the viewpoint. WHAT CAN GO WRONG The Project Is Going Over Budget This is a common and serious concern to the plant designer. The Project Falls Behind Schedule Another common and disturbing condition with which the plant designer must cope. Some Equipment Fails to Perform This can be due to either faulty equipment or operating deficiencies. It can be the result of a wide variety of causes, but the designer will be an interested party in the search for the cause and the cure. The Plant Isn't Flexible Enough Sometimes a plant will handle some or even most of the ore satisfactorily but is unable to treat another type properly. This can be a significant problem. An example might be a case where low capacity of a cyclone feed pump makes it impossible to accompany an increase in grinding mill throughput with a corresponding increase in dilution water. This could lead to an increase in cyclone feed density, and a loss in product grade or a limit on the plant capacity. Spillage And Cleanup Are Excessive This is one of the most common and annoying defects in metallurgical plants, and one for which the designer can rarely delegate blame. Maintenance Is Excessive Another common complaint in new plants, and also one for which the dedesigner must accept most of the responsibility.

Jan 1, 1982

By J. George Gregr

INTRODUCTION This part contains field case studies of typical mishaps, accidents, equipment damage or post installation failures resulting from mistakes in design, manufacturing and construction, as well as improper storage, handling and installation procedures of the equipment covered in Part 1. GENERAL Certain mistakes are repeated and common rules violated on almost all industrial equipment installations, with the inevitable consequences of additional cost, construction delays and aggravation of all parties involved. The most common failures are in the following areas: Cleanliness of all components during installation and later in operation. Adherance to manufacturer' s recommendations and tolerances for equipment installation. Comprehensive, properly identified installation and maintenance records. Handling of the components. Adequate tooling and auxiliary equipment in working order. An inoperable hydraulic power unit for torque wrench or for jacking of the mill, or faulty crane can be a very costly proposition. A special area in comminution circuits are wear components. Apart from the mill liners, the wear components such as, feed chutes, rock boxes, mill trunnion liners, discharge sumps, etc. are designed to the best theoretical configuration, based on experiences in similar installations. However, each process is different to a various degree, mainly because of various types of ores and grinding requirements. Consequently the first generation of wear components is very seldom the ideal one. Based on operational experience, the shape and material of wear components should be modified, until the optimum, most economical design is achieved. SHIPPING AND STORAGE Considerable damage to the equipment can be done by careless packing, shipping or storage.

Jan 1, 1982

By D. Laguitton, D. Hodouin, V. K. Gupta, R. Spring

"The CANMET SPOC project aims at inducing progress in process evaluation and optimization by developing user oriented software based on state-of-the-art theory. The present work is the result of a joint effort by CANMET, Noranda Mines and Université Laval to develop two computer packages: one (RTD) to calculate the residence time distribution that best describes the material transport through the mill, the other (FINDBS) to estimate the rate of breakage and distribution function of the population balance model in a ball mill. The RTD package can handle data from various experimental methods (impulse or complex tracer feed, with or without recycling, etc...). The FINDBS package provides options for the functional description oj both model parameters Band S. The full detail of the methods and programs appears in a users guide. The program capabilities and several sample runs are presented.IntroductionSimulation of mineral dressing operations by computer has been largely contained within academic and research circles and has not yet gained a status of routine practice in the ore and coal industries. It is however a matter of time before process simulators are available on every process engineer's desk to assist process optimization tasks, flowsheet design and professional training. The CANMET SPOC project (Simulated Processing of Ore and Coal) was initiated in 1980 to assist the Canadian industry in integrating computer-based methodology for process evaluation and optimization(1). Software development, documentation and transfer is one of the main priorities of the project which will mature in 1985 by releasing a complete package of manuals and programs covering sampling, material balance computation, unit modelling, flowsheet simulation and optimization . This paper is a condensed description of a typical project element in its 1982-1983 state of development. The required methodology for ball-mill modelling and simulation was consolidated an d merged to other project elements during a joint study under contract financed by CANMET and Noranda Mines Ltd . The first part of the study dealt with documenting experimental methods and software for ball-mill computer simulation. Université Laval GRAAIM (Goupe de Recherche en Automatistion Appliquée à l'Industrie Minérale) acted as sub-contractor for this part of the study(16,17). A second part dealt with applying the model calibration techniques to a large industrial data base and is reported elsewhere(2,18,19)."

Jan 1, 1984

By Douglas R. Shaw

Normal dodecyl mercaptan was evaluated as a collector for flotation of sulfide minerals and precious metals. The reagent is from the class of normal mercaptoalkanes (n-alkyl thiols), and is commercially available in the form of a mixture of n-dodecyl mercaptan and a dispersant, under the trade name Pennfloat(TM)3. Reported are results of bench-scale flotation experiments on many commercially treated base metal and precious metal sulfide ores. Dosages, points of addition, and flotation pH were among the uariables studied. Most notable results were increased copper, molybdenum, and precious metals recoveries. Dosages of dodecyl mercaptan on some ores were considerably lower than required for conventional collectors.

Jan 1, 1979

By A. W. Worcester

The plant is designed to produce 60,000+ tons of refined lead per year from a nominal feed consisting of 110,000 tons of SLI and industrial batteries, and 10,000 tons of lead contained in drosses and scrap. The plant will also produce as by-products polypropylene chips and detergent grade sodium sulfate, using the Engitec Impianti CX Technology. The battery separation circuit will consist of a battery breaking hammermill and a vibrating screen with water sprays to separate the battery paste from the grid metal and other battery components. The battery components, consisting of ebonite, and separator materials, will be separated' from the grid metal and classified with the use of hydrodynamic water separators. The battery paste will be treated with sodium carbonate to produce a lead carbonate paste for smelting in a reverberatory furnace. The slag from the reverberatory furnace will be campaigned through a traditional primary blast furnace to produce hard lead. The sodium sulfate liquor from the lead carbonate filtration step will be crystallized to produce anhydrous sodium sulfate. The metallic grid metal will be treated through a small rotary smelter of the Engitec design to produce a hard antimonial lead. The plant's scheduled to be commissioned 12 months after receipt of all of the Federal and state permits. The plant will be integrated into the Buick Primary Lead Smelter, located in the center of Missouri's New Lead Belt, at Boss, Missouri. This will allow The Doe Run company to fully utilize all of its existing assets.

Jan 1, 1990

By Jerry Pyatt

Lead has been used by mankind since before the Egyptian pyramids were built. Its durability provides for a continuum of innovation. As the largest integrated lead producer in the Western Hemisphere, The Doe Run Co. is committed to locating, mining, processing and sup-plying lead in ways that are responsible and sustainable. It takes ingenuity and resolve to successfully operate in the heavy industry field today. Doe Run is committed to applying responsibility through sustainability, lean manufacturing, safety, environmental stewardship, education and workforce development, and com-munity support.

Jan 1, 2008

By Roderick Eggert, Dipesh Dipu

We look at the empirical evidence of coal block auctions in India to understand how competitive intensity affects the bid amounts in common value auctions. The results suggest that competitive intensity measured through the number of bidders for a coal block is instrumental in determining the bidding outcomes. The presence of higher numbers of bidders in the auction leads to higher bids - every additional bidder causes the bid amount to rise by INR 142.67 per tonne of coal for auctions studied for 127 coal blocks from 2014 to 2023. The paper also examines the moderating and mediating effect of competition on bids and on excess of bids from the comparative market price of coal from alternative source of Coal India Limited. The results indicate that competitive intensity does not have statistically significant impact on the relationship between common value of coal blocks and bids, neither as a moderator nor as a mediator. The strategic behavior of the bidders has also been observed as bidders have been seen to bid in a higher than market price in order to outbid the competitors.

Feb 1, 2025

By L Bartsch, M Kelahan, E Wingate, J-S David

The use of column flotation cells for recovery of phosphate is becoming more common practice in certain parts of the world (Brazil, Russia) where igneous phosphate ores are processed. Igneous phosphates are generally finer grained (< 200µm) than some of the traditional sedimentary phosphates (<400µm). Australian phosphate from the Georgina basin is sedimentary, but has a much finer grain size (typically < 106µm) than similar deposits in North Africa and the USA.In 2013, Arianne Phosphate completed a bankable feasibility study for the development of their igneous phosphate deposit at the Lac a Paul site in Quebec. Initially, lab test work and bench scale piloting indicated that using traditional mechanical flotation would be able to produce adequate concentrate grade and an economic level of recovery, but would necessitate the installation of a complex and operationally challenging flotation circuit. Later pilot plant testing using column cells resulted in a significant reduction in process complexity and facilitated the processing of the -20µm ore fraction which resulted in a 10% increase in P2O5 recovery and a 5% increase in concentrate grade %P2O5.Flotation column testing achieved a concentrate grade of 38.6% P2O5 at a P2O5 recovery of 90%. Using a mechanical flotation cell circuit, the concentrate grade was 36.4% P2O5 with a P2O5 recovery of only 78.8%. A noticeable feature of the testing was the simplicity of the column flotation circuit configuration (Rougher + 2 stages of cleaning + Cleaner Scavenger) compared to the mechanical flotation cell circuit (Rougher + Scavenger + 3 stages of cleaning).The financial benefit for this case study was estimated using a sales price of US$ 195/t FOB for a 38.6% P2O5 product, and an assumed cost of production of US$ 95/t, the netback price is calculated at US$100/t. For a daily milling rate of 55,000t/d, the improved flotation performance provides additional concentrate production of 1,203t/d. Using the netback price calculated above, this calculates to additional gross profit of US$ 120,260/d.Annualised, this equals US$ 40.7 million in additional revenue for a similar or reduced CAPEX.The use of column flotation on fine grained phosphate ore types often requires fine grinding and desliming to liberate the phosphate value, such as the Australian sedimentary phosphate ores. This may enable the development of deposits previously regarded as uneconomic.This paper discusses the potential benefits available to operators, and developers of new projects, for the use of column flotation cells in their metallurgical circuits as assessed by an engineering company.CITATION:Wingate, E, Kelahan, M, David, J-S and Bartsch, L, 2015. Does it make cent$ to use flotation columns for phosphate beneficiation?, in Proceedings MetPlant 2015, pp 353–365 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 7, 2015

By M Singh, R C. Steinhaus, J J. Rust

Metallurgical process control systems in mineral plants often employ state-of-the-art monitoring analysers in an attempt to optimise plant operations and enhance mineral recoveries. These systems are unfortunately invariably fed by simplistic ‘sampling’ designs consisting of various in-stream methods or pressurised probes. These are unfortunate compromises and provide a false picture of what a mineral flotation or other process can achieve. The situation is further aggravated by some manufacturers using misleading marketing to suggest discrete cross-stream methods for metallurgical accounting and unreliable continuous in-stream off-takes for control sampling and that they are of synonymous integrity.Reliable, absolute or representative samples are often absent in many modern day concentrator plants, due to compromises around sample taking, particularly in terms of delineation and extraction errors and thus leading to sample bias. For more reliable information from online analysers we need a continuous, but much more reliable sample taken, than is current practice.Online analysers require a fully proportional and continuous supply of sample for effective process control, otherwise maximised or benchmark recoveries will be nothing but a pipe dream. Large discrete cross-stream samples from mechanically less reliable equipment cannot be used as feed to online analysers, as it will negatively impact real-time feedback and efficient process control.It is possible to build correct sampling systems that could do both process controls online and metallurgical accounting at the same time. Multotec Process Equipment (Pty) Limited, in close association with experienced sampling consultant Francis Pitard, have jointly patented a concept to achieve this and which is embodied in the design of the unique Rotating Cone® Sampler (International Patent Application No. PCT/IB2016/057464). This versatile unit for dry and wet applications has high division ratios via two-step sampling and division.A prototype was built and tested to validate the design and levels of precision achievable when employing the unit to split dry mineral fines or even certain foodstuffs.CITATION:Steinhaus, R C, Rust, J J and Singh, M, 2017. Does process control sampling always have to be a compromise?, in Proceedings Eighth World Conference on Sampling and Blending , pp 197–202 (The Australasian Institute of Mining and Metallurgy: Melbourne).

May 9, 2017

By W. Armstrong Price

INVESTIGATION by German chemists during the World War showed that particles of iron oxide form rapidly in iron pipes carrying hydrogen gas under pressure when the gas contains small amounts of water. Under these conditions, the gas frequently exploded when expanding into a dirigible. The explanation of the explosions lies in the building up of a charge of static electricity in the flow just beyond the orifice and the ignition of the gas by a spark accompanying discharge of the electricity. Friction between the moving particles and the pipe generated the electric charge, which was manifested by a pale blue glow formed in the flow at pressures above two atmospheres. In one experiment, this glow, at eighty atmospheres, extended for a distance of forty to fifty centimetres, but did not ignite hydrogen and air mixtures until the charge was col-lected by a conductor and discharged across a gap between electrodes placed at the side of the column of gas. Autoignition did not occur when this discharge was effected at a distance from the gas column, nor if the gas used was thoroughly dried and free from impurities. The electric charge has been studied by placing various wire and screen conductors in the outcoming stream of gas, Guest having summarized these experiments. The application of these conclusions to fires in petroleum and natural gas issuing uncontrolled from wells is made in the following paper, citing the ignition of a wild gas well in Texas.

Jan 1, 1936

Sustainable development is at odds with reality in the minerals industry. Increasing world population and aspirations are leading to increased energy and mineral consumption. Non-renewable fossil fuels are being exploited at a much faster rate than they are being discovered. Mineral reserves are diminishing and of lower grade. Despite recycling, many of the economic reserves of the rarer metals on which technological society has come to depend are being depleted, and many of the bulk metals are being exploited at ever increasing rates. And yet, mining continues, with a long-term downtrend in commodity prices, matched by more efficient mining and processing. Will society turn to a low carbon economy before fossil fuels are depleted? Will prices come to better reflect the full cost of mineral production? Will technology save us, or is it at the root of the problem? The key drivers continue to be an ever increasing aspirational population and the law of supply and demand, rather than sustainability considerations. The paper illustrates this with examples of worldwide and Australian data.

Jan 1, 2011

By B. W. Cavender

Capital investments are made for a variety of reasons, ranging from providing incremental capacity at existing operations to developing and implementing new technologies intended to radically improve a company's capabilities. These projects generate very different business opportunities and create value in distinctive ways. For incremental improvements, the capital budgeting process assures at least a loose fit between short-term goals and readily available resources. However, the criteria used to evaluate capital projects often prevent a company from committing to more aggressive goals, which lie beyond the firm's current abilities or resources. Such projects may not have clearly identifiable future cash flows, and the degree of interaction with other projects and the nature of the risk incurred may be difficult to estimate. Additionally, by focusing only on quantifiable benefits, the budgeting process often fails to recognize "soft" improvements such as increased operating flexibility or new knowledge generated by such projects. By rejecting these projects, the capital budgeting process may actually harm the company's future competitive position.

Jan 1, 1999

By B. W. Cavender

Capital investments are made for a variety of purposes, from providing incremental capacity at existing operations to developing and implementing new technologies intended to radically improve a company's capabilities. These projects generate very different business opportunities and create value in distinctive ways. For incremental improvements, the capital budgeting process assures at least a loose fit between short-term goals and readily available resources. However, the criteria used to evaluate capital projects often prevent a company from committing to more aggressive goals that lie beyond the firm's current abilities or resources. Such projects may not have clearly identifiable future cash flows, and the degree of interaction with other projects and the nature of the risk incurred may be difficult to estimate. Additionally, by focusing only on quantifiable benefits, the budgeting process often fails to recognize "soft" improvements such as increased operating flexibility or new knowledge generated by such projects. By rejecting these projects, the capital budgeting process may actually harm the company's future competitive position.

Jan 1, 1998