Search Documents

Factors of importance in the ntilization of coal fines are mentioned, and the results of flotation tests on coal fines from three important coal seams in New South Wales are presented.INTRODUCTIONEconomic utilization of fine coal is an important problem in the Australian coal industry, particularly as the proportion of fines mined is increasing with progressive mechanization.While the use of uncleaned coal fines may be economic, it may be preferable to beneficiate them, but the most economic process must be selected.For beneficiating coal finer than about 28 mesh, froth flotation can be applied, but mining engineers should avoid practices that may be detrimental to flotation. Such practices include the indiscriminate use of water, particularly that containing a wetting' agent, for dust suppression. In addition, clay stemming in wet conditions may produce slimes which could adsorb on coal surfaces, while the use of oils and greases as well as the application of stone dust and chlorides in roadway consolidation may influence adversely fine coal beneficiation.This paper deals with the application of flotation to samples of fine coal from the Bulli, Greta, and Victoria Tunnel seams. In addition a discussion is given of the mineralogical constitution, size analysis, and degree of liberation of ash constituents of the various samples.COAL SAMPLESRepresentative samples of coal from the Bulli, Greta, and Victoria Tunnel seams were obtained for testing.

Jan 1, 1961

By Lv Guozhi, Niu Liping, Shi Guanyong, Liu Yan, He Jicheng, Du Yanjun, Dou Zhihe

"We proposed thermit reduction-electroslag remelting method of preparing the large scale CuCr alloy. But there are pores and oxide inclusions in CuCr alloy prepared by thermit reduction process. This paper studied mainly the effects of ratio of reactant and additive on the inclusion type and their occurrences in CuCr alloy. The alloy prepared in different process conditions was characterized via XRD, SEM, OM and TEM and metallographic microscope, in which the existing state and micro-structural defects of inclusions are analyzed. The results show that there are three distinct regions: copper-rich regions, chromium-rich regions and the inclusion regions. Inclusions are mainly in the form of stomata and Alz03 phase, mainly locating in the copper-rich phase and the interface area of chromium-rich phase and the copper-rich phase. Adding Na3AlF6 and heating agent can effectively reduce the inclusion content in the alloy.1 IntroductionIn recent years, with the development ofhigh power vacuum and high-pressure technology ,the CuCr alloy contact material which has many advantages gradually replaced the traditional W-Cu and Cu-Bi series alloy contact material, and become the first choice of material in high-voltage and high-power vacuum switch contacts['-3l. The traditional powder metallurgy method, infiltration method and vacuum arc melting method[4-SJ are using metal Cu powder and Cr powder as raw material by casting molding, and have disadvantages such as high production costs, complicated process, poor product density and low yield, especially in the large size alloy ingots[9-12l. At present, the world regards CuCr alloy new preparation technologies as the first place, and how to achieve a large size the CuCr alloy ingot preparation has become a hot research of CuCr alloy[3l. Zhang Ting-an and Dou Zhihe[l-3l who are supported by national natural science fundation of china successfully successful developed new technologies and core equipment to prepare large-size copper-chromium alloy through aluminum thermal reduction-secondary refining method, and obtained two national invention patents. The method includes two key steps: one is get CuCr alloy consumable ingot by Thermit-SHS with electromagnetic stirring, the other is to refme the CuCr alloy ingot to remove the pores, inclusions and other defects by electroslag remelting technology to get dense and uniform CuCr contact material. The preliminary study results show that means of electromagnetic stirring evidently inhibit effect of alloy ingot macrosegregation during the electromagnetic casting stage, but there are still microstructure defects such as alumina inclusions and pores in the alloy ingots. Therefore, Zhang Ting-an et al refer new ideas of using the electroslag remelting to refine Cu Cr alloy ingots and effectively remove the defects of the ingots such as pores and inclusions [3l _ At present, there is no report of study on the electroslag remelting refining processes of CuCr alloy (the refining slag, remelting current). This article will research mode of occurrence and distribution law of inclusions in the large-size CuCr alloy ingots by Al Thermit-SHS under magnetic field stirring action and provide a theoretical basis for chosing refining slag to remove inclusions by electroslag refining. Meanwhile the article analyses the effect of reduction conditions of Thermit-SHS on the types of inclusions, mode of occurrence and distribution of regular inclusions in alloy ingot, and refer theory for inclusions regulation in the large-size alloy ingots."

Jan 1, 2013

By Brad E. Melanson

Because mine haul trucks consume considerable quantities of fuel, they are ideal candidates for the adoption of cleaner and cheaper fuels like natural gas. Impressive fuel cost savings will be realized in regions where liquefied natural gas (LNG) has cost advantage to diesel fuel, while also providing significant reductions of air contaminants and greenhouse gases. High Pressure Direct Injection (HPDI) of natural gas utilizes the diesel cycle combustion process and therefore retains the diesel engine?s high performance and efficiency characteristics. HPDI has been demonstrated in on-road Class 8 trucks since 2001 accumulating almost 10 million kilometres to date. The supply of LNG fuel will be an essential parallel aspect in the introduction of HPDI to mining. LNG can be transported to site as diesel is today, or may be produced on or near mine operations that have access to methane sources or pipelines.

May 1, 2006

By B Nielsen, H Lehto, J Rohleder, C Robben

Sensor-based ore sorting is being increasingly used to reduce the amount of low-grade and waste material processed in mineral concentrators. This type of preconcentration provides bottom-line benefits to users by reducing the amount of energy, water and consumables, as well as reducing capital cost. Existing operations can increase metal production, while previously uneconomic deposits and low-grade stockpiles can also be exploited. The technology can also be used to separate ore types for selective processing. The path to implementing sensor-based sorting may include:• geometallurgical evaluation• first inspection testing to investigate sensor response• bench-scale testing where sensor selection is not obvious or for difficult applications• performance testing in full scale sensor-based sorting machines• larger scale site-based piloting with a temporary semi-mobile plant installation. Sorting requires material to be suitably prepared and presented to the machines and typically this consists of crushing and screening to limit top size and optimise liberation. However, where material streams are suitably sized and prepared, additional equipment may not be required (e.g. the sorting of semi-autogenous grinding (SAG) Mill pebble streams).This paper presents a case study of economic upgrading of gold ore, by preconcentrating with sensor-based ore sorting. The case study examines sorting amenability, test work, the feasibility study through to implementation, with associated flow sheet development. The development process is analysed and evaluated with a view to rationalising the process for development of future projects. In addition, limited financial modelling based on expected results is shown to illustrate the benefit to the operation.CITATION:Nielsen, B, Rohleder, J, Lehto, H and Robben, C, 2017. Sensor-based ore sorting to maximise profit in a gold operation, in Proceedings MetPlant 2017, pp 131–146 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Sep 11, 2017

The green field site is one that has no history of mining and as such it presents the designer with a blank canvas, on which any number of drill and blasting options can be drafted. No matter which mining method is selected all technology and experience will need to be acquired from outside sources, applied quickly and produce the right results. North Limited, in joint venture with the Sumitomo Group (20 per cent), have developed AustraliaÆs first block cave mine at Northparkes in New South Wales, Australia. This innovative and large scale mining project was taken from a green field site in November 1993 to a fully commissioned block cave mine in December 1997. NorthparkesÆ Endeavour 26 mine is now producing at a rate of 3.9Mt per annum from a 27Mt ore block. Prior to 1993 no history of mining activity existed at Northparkes. The rock had never been blasted and many questions were raised about how it would behave. While it was clear that the Endeavour 26 (E26) orebody contained geotechnical properties appropriate to block caving, the blasting methods required to establish a block cave mine had never been used in Australia and no designs were available. The joint venture partners had no prior experience with block caving and it was immediately apparent that this blasting technology would have to be acquired from foreign sources and applied to the unique local conditions. Conceptual designs for the block cave drill and blast were first drafted in 1994, first issued for drilling in December 1995 and first blasted in January 1996. 470 km of drill metres and four million tonnes of rock were blasted to complete the undercutting project by September 1997. This paper will provide those developing new drill and blast projects with an inside view of how one small technical team solved many design challenges to successfully construct AustraliaÆs first block cave mine under strict quality controls and ambitious time constraints.

Jan 1, 1998

By Peter Altounyan

The rate of decay of the energy from a hammer blow to a coal mine roof is related to the size and nature of the contacts between the rock being struck and its surroundings The use of this principle as a basis for testing roof condition in South African coal mines has been investigated under a SIMRAC funded project, with the objective of reducing the number of roof falls. ( I ) A prototype instrument having a simple numeric display related to the energy decay rate (the Acoustic Energy Meter) was constructed and used to carry out surveys at mines covering the range of coal mine roof geology and condition. The equipment was simple to use and provided excellent discrimination between visually intact roof and less stable conditions, once the normal/abnormal threshold had been established for a given site. Areas of potential roof failure were identified close to roof slips and igneous dykes, and confirmed in areas of visible deterioration. Directional stress effects on roof condition were also identified at some sites, with consistent differences in readings obtained depending on the direction of drivage. Repeat surveys also indicated areas where roof conditions were deteriorating with time. Based on the success of the prototype, a hand held version of the instrument. has been developed to a specification from Anglo Coal. This incorporates a simple 'traffic light' green / amber/ red display, making the device suitable for routine use by mine operatives This version is now undergoing trials at an Anglo Coal mine. It is concluded that the Acoustic Energy Meter shows great potential as a test instrument providing output which relates to the stability of the immediate roof.

Jan 1, 2000

By D. Brisebois, J. M. Fecteau, S. Poirier

"This paper focusses on new developments regarding thermal rock fragmentation applications. The technology consists of a strong burner powered by diesel fuel and air. The thermal reaction that is created allows for the enlargement of 125 mm to 450 mm holes by breaking the rock in a spalling effect. It has been used for over 30 years in Russian open pit mining. Following an agreement between Dynamitage T.C.G. Inc. and the owner of the technology, major improvements have been brought to this technology, allowing for the fabrication of a prototype suitable for the Canadian industry. In Russia and the Ukraine, thermal rock fragmentation is actually used to drill large diameter holes in surface mining. Upon having acquired a better knowledge of this technology, it seems that it presents a great potential for selective mining in narrow-vein operations, for either surface or underground mining.Rocmec International Inc., a subsidiary of Dynamitage T.C.G. Inc., and Natural Resources Canada are technical partners in the evaluation of the operational parameters and environmental aspects such as gas, heat, dust and fog emissions. Furthermore, Canada Economic Development is a financial partner in this project.This paper presents the technology and its history. It also reports on the changes brought to the equipment to adapt it to North American environments. A summary of the tests carried out since 1995 is provided, along with the main conclusions obtained. The anticipated applications for the use of this technology in both surface and underground environments are described such as open pit mining, bulk sampling and narrow-vein ore extraction. An estimate showing a comparison between the thermal fragmentation mining concept and the long-hole mining method is presented and, finally, the future developments planned are listed."

Jan 1, 2003

By J Howard

Following discovery in October 2004, commencement of development in February 2007 and first ore production in mid 2007, the Trident gold deposit, located in the Eastern Goldfields of Western Australia, has now been successfully mined for over three years. Three years of operational history has enabled the performance of the Trident underground mine to be reconciled against the mine plan and strategy proposed for the original feasibility study.The Trident deposit, initially based on two lode systems known as the Eastern Zone and Western Zone, has been continuously drilled, interpreted and re-interpreted over the period and as a result the addition of the Athena, Apollo and Artemis lode systems as well as numerous smaller scale lodes has been realised. The first three years has seen the Trident underground mine quickly move up to its 1 Mtpa design production rate. The mine plan and strategy used in the initial feasibility study and subsequently implemented, required sufficient flexibility to enable modification and optimisation to mine plans as ore zones were further defined. The ability to modify the mining plans has enabled Avoca to achieve its mining targets at Trident. With over 250 000 ounces gold produced to January 2010, the company is well positioned to achieve its ten year vision associated with the Higginsville Gold Project.This paper offers an account of operational experiences whilst providing comparison to assumptions and methodologies used in the original feasibility study. The paper is a sequel to a paper presented at the Tenth Underground Operators’ Conference held in Launceston, Tasmania titled Development Strategy of the Trident Underground Gold Mine.

Mar 21, 2011

By J Rutter, J du Plessis, er, M Scott, D Alex

It is generally acknowledged that bulk ore sorting is an attractive prospect for the mining industry. However, uncertainties relating to the operational performance of sensor technologies, the grade heterogeneity present in analysed material and the physical separation performance of the coupled system complicate the evaluation and deployment of bulk ore sorting strategies at operations. To assist in the quantification of these uncertainties, the Cooperative Research Centre for Optimising Resource Extraction (CRC ORE) and Anglo American have implemented a systematic methodology to evaluate the deployment of sensor technologies for bulk ore sorting. This methodology was implemented at a bulk ore sorting demonstration plant using penetrative prompt gamma neutron activation analysis (PGNAA) and surface x-ray fluorescence (XRF) measurements of base metals, as a proxy for precious metals, at Mogalakwena PGE Mine. The methodology comprises of three phases. The initial phase involves the preliminary investigation of sensor technologies and analysis to reduce identified risks prior to commissioning of the bulk ore sorting plant. The second phase executes a series of experiments to prove the sensing technologies in the operational environment and provide confidence the sensors can drive separation. The final phase demonstrates the production scale bulk ore sorting performance of the plant and validates its performance by campaign of the sorted products at the processing plant. Throughout the operational deployment and evaluation of bulk ore sorting at Mogalakwena, several key lessons were learned. These learnings relate to the calibration requirements of the sensor technologies, the application of surface vs penetrative sensor techniques and the preservation of grade heterogeneity delivered to the sensors. This paper presents the methodology used, and lessons learned, in the operational deployment and evaluation of PGNAA and XRF sensors for bulk ore sorting at Mogalakwena PGE Mine.

Nov 10, 2020

By T. Nghipulile, M. Moys, M. Bwalya, H. Simonsen

The quest for efficiency in comminution is an ongoing concern as comminution usually constitutes a major cost component in the metal production industry. Such improvements can be made by circuit optimization or development of more efficient equipment. A novel crusher, known as the rotary offset crusher (ROC), promises to deliver in this space. The ROC was invented in 2002 by Michael Hunt, Henry Simonsen, and Ian Sinclair, but failed to garner enough support to progress to production. The original design concept was recently rekindled, and a laboratory version of the crusher has been built and commissioned at the University of the Witwatersrand. The crusher is simple in design, with two cylindrical discs that are parallel to each other, and, as the name implies, there is an offset between the vertical axes of the discs. The top disc has a conical section on its lower face, and this creates a crushing zone between the opposite faces of the two spinning discs. Centrifugal motion transports particles through the crushing zone. Batch experiments have been conducted with quartz at various crusher settings (discs offset, rotational speed, and vertical exit gap) for various feed size distributions. The indications so far suggest that the disc speed is a key factor affecting the performance. Size reduction ratios as high as 11 were recorded from experiments with quartz at a speed of 830 r/min.

Jan 1, 2021

By Jae R. Lee

Keywords: Self-propagating high temperature synthesis, AlN, Powder synthesis The particle size and shape effects of starting raw powders on the synthesis of aluminum nitride by self-propagating high temperature technique under high nitrogen pressure were investigated with various AlN diluents and Al reactants. It was found that the structure of beds of the starting raw particles largely affected the pore channels for nitrogen gas infiltration as well as the passages for combustion propagation before and during the reaction, resulting in the morphology and purity changes of the synthesized products. The AlN product of purity over 98% with about 30 microns was obtained.

Jan 1, 2005

By J. A. Bakken

Thermal plasmas are interesting for a wide range of metallurgical and chemical processing applications. The 300 kW experimental reactor PRESS, which has been in use since 1987, is operated in the transferred arc mode with three or one plasma torches . Tests include remelting of silicon fines and production of ultrafine silica. Work on a novel three stage process for production of silicon metal is under way. A 1:1 model of the plasma reactor is used to measure the wall heat flux distribution calorimetrically. The cold walls of this model are divided into several water-cooled sections. The same plasma torches as in the real hot-wall reactor are used. In parallel to the experiments and calorimetric measurements theoretical work is done on numerical modelling of one and three transferred arcs. A modified version of the flow simulation program FLUENT from Creare Ltd. is used.

Jan 1, 1991

One of the earliest and continuing challenges in driving sustainable development in large scale resource industry projects is around the issue of assessment û how do you measure the sustainability of a mineral operation? One of the key road blocks when confronted with this challenge is the temptation of technical folks to reach for a definition of sustainability or sustainable development. But definitions, by definition, have boundaries and limitations that serve to constrain thinking û they limit the thinking of what we can achieve with sustainability (it also acts as a barrier that constrains innovation). Rather than seeking definitions, better understanding of the core perspectives around sustainability and their application to the minerals industry provides a much more powerful platform from which to conduct assessments. But it is only when these perspectives are combined with the right framework and supporting techniques that the complex becomes doable. With the support of the perspectives and the framework, various assessment and measurement methodologies can be used; the challenge is communicating to stakeholders the sustainability character of the project in ways that are meaningful and to which people can connect. Assessment is not about finding the best or most accurate methods that fulfil strictly academic and possibly abstract requirements. The challenge is to help people understand what the impacts are, and what the value contributions will be, in a format and language that make sense in their world-view.

Jan 1, 2009

By Thomas M. Sweeney

This open-file map is a quick reference containing location, ownership, and general lithology information on 124 active or significant Nevada gold mines. The map includes all counties, significant towns, and major highways in Nevada to aid in mine location. Several geologic trends with which the mines are associated are also depicted. General ore genesis for each deposit, including sedimentary, volcanic, plutonic, and placer-hosted deposits, are also identified. Gold mines are also listed alphabetically, by mine name, on the map. Each entry includes the appropriate county, percent of company ownership, operating company, and the property status as of May 1992. For additional information, contact Thomas M. Sweeney, U.S. Bureau of Mines, Western Field Operations Center, 360 East Third Avenue, Spokane, WA 99202; telephone (509) 353-2700.

Jan 1, 1993

By Martin Mcdermott, Kevin Tehansky, Robert Ross, Jeffrey Goodwin

A foundation value engineering redesign is a collaboration between the project owner, original design team, general contractor, foundation contractor and redesign team. Without the acceptance and collaborative effort of all the stakeholders, the redesign process is doomed to failure. For the addition at the Hackensack (New Jersey) University Medical Center (HUMC) we had just such a collaborative effort for the drilled shaft redesign. For a successful redesign effort, the collaboration between the foundation contractor and their redesign team needs to fully exploit the contractor’s specific equipment and experience and convey how to apply this to the project as a whole to ensure everyone is confident that the project design goals are being met. For the HUMC project, applied load testing of the drilled shafts (bi-directional and lateral) were used to provide ultimate geotechnical design values for the redesign effort. By utilizing the contractor’s preferred equipment and the redesign team’s testing and application expertise, the redesign collaboration was able to enhance a good design and make it into a great project.

By William Campbell

(Cleveland Meeting, October, 1912.) THE structure of iron and steel, though the object of so much study and research for the past 25 years, is by no means thoroughly understood. In the first place, we have three or more distinct iron-carbon thermal diagrams, each with its own supporters, and each representing a theory of the structure and constitution of cast-iron. In the second place, by reason of the fact that austenite, the solid solution of carbon in iron, decomposes in the solid state into ferrite, or pure iron, and cementite (Fe3C), and that quenching from above this transition-range, no matter how rapid, cannot entirely prevent the change and thus preserve the austenite by itself at ordinary temperatures, it happens that under the microscope we find, in addition to the ferrite, Fe3C, and austenite, which the thermal diagram of steel requires, it series of transition-products with distinctive structures, to which have ,been given the names martensite, troostite, sorbite, etc. Now these transition-products, in addition to the solid solution, austenite, have been the source of much controversy, at times very bitter. One side would insist that, say, troostite was an entity, which the other side would deny, pointing out that it must be a transition-mixture, with a particular structure. That austenite was a solid solution of carbon in iron has been denied by one school ; we have been told that Fe24C dissolved both Fe3C and Fe, and thus gave rise to a whole series of quenching-products-all this in spite of the fact that no matter how the thermal diagrams differ in regard to cast-iron, they all agree in regard to the solid solution, austenite, for Fe24C finds no place on the diagram. Thus it happens that while the authorities fight both in regard to the iron-carbon diagram and the structures met with in hard- * Associate Professor of Metallurgy, Columbia University in the City of New York.

Dec 1, 1912

By John Drew Ridge

Tables showing world trade in metallic mineral raw materials during the years 1953 through 1957 have been prepared for the following twenty-one commodities: alumina, aluminum, bauxite, chromite, copper concentrates, partly refined and fully refined copper metal, iron ore, pig iron, iron and steel (simple shapes), lead concentrates, lead metal, manganese ore, mercury metal, nickel ore, concentrates, and matte, nickel metal, raw pyrites, sintered pyrites, tin concentrates, tin metal, zinc concentrates, and zinc metal. In each instance, the amounts given by the importing country were used except when statistics from the importing nation were lacking, incomplete, or misleading. To show the considerable divergence between importing and exporting country totals for the same years, the complete mercury table is given and, in parallel columns, shows the comparable tonnages of importers and exporters. Tables for the other twenty commodities are presented in summary form. The data of the concentrate tables are used with those of the corresponding metals as a basis for a discussion of trade in concentrates versus trade in metals. The data of all twenty-one tables provide the basis for testing the thirteen rules governing international trade in metal raw materials which I first published in Mining Engineering for July 1955. Because the 1953 through 1957 data are far more complete and considerably more extensive than those on which the 1955 rules were based, it was found possible to deduce five additional rules and to modify three of the original thirteen appreciably. The full text of the eighteen rules is given.

Jan 1, 1960

By Wang Zhi

High-Mg-content concentrates are usually treated in Jinchuan flash smelting Furnace. Because the viscosities of high-Mg-content slag is very high, the operation of flash smelting becomes very difficult. To solve this problem, the viscosities of the semi-synthesized FeO-MgO-SiO2 slag of different compositions were measured. The results showed that when in the slag the weight percentage of MgO [w(MgO)] is 6-10%, the ratio of the weight percentage of iron to that of Si02, w(Fe)/w(Si02) is 1.1-1.4 and the temperatures are within 1473-1773K, the slag viscosities increased with the increase of W(MgO) and w(Fe)/w(SiO,). When w(Mgo)<6%, the smelting temperature should be controlled at I 300°C in order to to keep the smooth operation. When w(MgO)>10%, the temperature should be kept above I 633K. When the content of MgO is higher, a lower viscosity slag can be produced by decreasing the ratio of w(Fe)/w(SiO,). The appropriate ratio of w(Fe)/w(SiO,) for Jinchuan flash smelting furnace is about 1.2.

Jan 1, 2003

By T. Holmes

Investigations reveal that the throughput difference between a perfect production day and the average is often on the order of 40%, and that bulk solids handling system deficiencies are the largest (>50%) class of lost opportunities. Root causes for underperformance of elements in material handling systems can often be traced back to the detailed design and even study-stage oversights. To reduce or eliminate bulk solids handling problems in an existing system requires an analysis of troublesome handling equipment – for example, a concentrate transfer chute that experiences plugging, poor flow to the furnace, unacceptable dust generation, and spillage. These problems often lead to significant maintenance costs related to downtime and personnel time. Understanding the cause and cost of flow issues is the first step in troubleshooting the problem. Next, measuring the material’s flow properties is critical to providing design data required to develop a comprehensive scientific solution. In the case of a new installation, the design data is required to properly design the system right first time and prevent flow problems from occurring so that the new equipment works correctly from start-up. This paper highlights the cost of material handling problems and discusses the best approach to evaluate material handling system deficiencies. A case study is given of how Anglo American's operation in Barro Alto Brazil enjoyed a 5-month payback from a bulk solid transfer chute debottleneck project. INTRODUCTION When operating a plant or designing a greenfield or brownfield operation, the intent is to have perfect production days (PPD) each and every day. Money is made by moving material through the plant in a controlled manner to produce the desired product. Mining operations and copper concentration processes are at the most basic level a practice in bulk solids handling (BSH). Unfortunately, many of the project planning steps are overlooked, particularly related to BSH. Investigations reveal that the throughput difference between a PPD and the actual average is often on the order of 40%, and that BSH system deficiencies are the largest (>50%) class of lost opportunities (Wellwood, 2017). Root causes for underperformance of elements in material handling systems can often be traced back to the detailed design and even study-stage oversights. BSH issues are essentially baked into the fabricated plant and left to operations to accept the deficiencies and deal with them for the life of the mine. These deficiencies then become part of the normal operation of the mine and plant.

Jan 1, 2019

By C. Musingwini, A. S. Nhleko

"Since the Global Financial Crisis (GFC) in mid-2008, capital has been more difficult to access. Mining projects must contend with projects from other industries for scarce capital. A decision to invest available capital in mineral projects requires that valuation be conducted to assess the expected return on the projects. The discounted cash flow (DCF) analysis is generally applied for the valuation of mining projects, whereby future cash flows are discounted to present value using an appropriate discount rate. The discount rate significantly affects the outcome of a valuation. Economic and finance theory provides tools to calculate discount rates. The discount rate must account for factors such as the risk and stage of development of the mineral project; hence the appropriate discount rate to utilize in a project is often a subject of debate.The discount rate is the weighted sum of the cost of debt and equity. There are several methods for determining the cost of equity. This study considers the commonly applied Capital Asset Pricing Model (CAPM) and Gordon’s Wealth Growth Model because of their simplicity and availability of parameters required to estimate the cost of equity. This study explores how differences in the cost of equity obtained by these two methods can be explained for a mining environment. Data for empirical analysis were collected from the I-Net Bridge, McGregor BFA, and Bloomberg databases. It was found that Gordon’s Wealth Growth Model provides better estimates of the cost of equity compared to the CAPM under depressed market conditions. Therefore, this research recommends that Gordon’s Wealth Growth Model be used to estimate the discount rates for mining projects during periods of depressed market conditions."

Jan 1, 2016