Search Documents

By B. H. Caudle, A. B. Dyes

In a recent publication' it was shown that wells with a free surface in a homogeneous gravity-drainage reservoir have a hyperbolic decline with index n '. This paper reports efforts to extend this theory to practical field cases. As a first step in making the extension, a large number of lease production curves from gravity-drainage fields in the stripper stage were fitted with the general hyperbolic decline equation, q/q, = 1/(1 + y) y and n in each case being determined by statistical methods. It was found that this equation is reliable for decline curve extrapolation for periods up to at least 25 years. The resrilts obtained were disturbing in the sense that values for the index, n, were often smaller than one, which fact leads to the prediction that a well would produce all infinite amount of oil in infinite time. A theoretical investigation based on the results of the previous paper provides a suitable explanation for these low values of n. It suggests that these are obtained if production occurs from two or more layers of diflerent permeabilitv and thicktress or two lnyers having different skin effects. It is predicted that as the more permeable layers are exhausted, the index of decline, n, will rise from a value smaller than 2, to n = 2. A practical method is given for fitting the general hyperbolic decline Eq. 6 to production decline data. When this method is used, the index of decline observed in gravity-drainage reservoirs in the stripper stage when wing only data over early years 01 decline usually agrees quite closely with that determined using data over 25 years or more. This indicates that the hyperbolic decline equation is reliable for predicting behavior of such reservoirs. A method is also suggested for taking into account any changes in the value of the index INTRODUCTION As a result of both experimental work with models and theoretical deductions, it was recently concluded' that wells having a free surface in a homogeneous reservoir producing by pure gravity drainage should have a hyperbolic decline with n = 2. The present report details efforts to extend this work on ideal homogeneous reservoirs to actual field cases. It should be remembered that both the previous work and the present extension are based on the assumption that the reservoir is at very low pressure, and hence, nearly all the potential available for driving fluid to the well is the gravity head. Attempts to apply conclusions of this study to reservoirs which have considerable pressures supplementing the gravity drive may lead to difficulty. WELLS WITH NO FREE SURFACE In a dipping gravity-drainage reservoir such as that shown in Fig. 1, some of the down-dip wells have no free surface. The previous study' showed that the up-dip wells, which have a free surface, should follow Eq. 1. The following approximate analysis, of a type which was justified experimentally for up-dip wells in the work just mentioned, leads to results for the down-dip wells.

By L. E. Young

The progress of mineral industry education will be limited to the period prior to World War II and will be considered as primarily a division of engineering education. Its relation to progress in the mineral industry and to the activities of the American Institute of Mining and Metallurgical Engineers will be emphasized. The history of mineral industry education has been recorded most completely and authoritatively by Dr. T. T. Read in his recent volume in the Seeley W. Mudd Series of American Institute of Mining and Metallurgical Engineers publications, entitled, The Development of Mineral Industry Education in the United States. Therefore, most of the historical details will be omitted from the discussion and an effort will be made to point out significant developments and to analyze trends. Introductory Statement and Significant Points in Progress Among the significant points in the development of mineral industry education in the United States since 1871, the following deserve particular mention: 1. The number of institutions offering undergraduate instruction has increased, particularly during the years 1890 to 1925; the number of students enrolled in undergraduate study has increased greatly, largely on account of the development of courses in petroleum engineering and increasing interest in metallurgy. 2. The selection of students to be admitted to undergraduate courses has been improved through the advisement, counseling, and guidance programs sponsored by the Engineers' Council for Professional Development. 3. Improved instruction methods all the training of the teaching staff have been promoted by the educational institutions themselves, but with the most effective stimulus and guidance of the American Society for Engineering Education and the Engineers' Council for Professional Development. 4. The accrediting of undergraduate curricula through the Engineers' Council for Professional Development, consitlering both qualitative and quantitative criteria, has done much to improve standards of instruction in engineering education for thc mineral industry. 5. Undergraduate curricula and courses are revised currently to meet the needs of the American mineral industry. New curricula are developed currently to permit specialization in technical fields, particularly in the fourth year of undergraduate work. 6. There has been a strengthening of the fundamental courses in mathematics, physics, mechanics, and chemistry, and at the same time these courses are being adapted to the most recent developments in the industry, including metallurgy, geophysics. petroleum engineering, petroleum technology, ceramics and SO forth. 7' There has been continuing improvement in plant and laboratory facilities of the educational institutions.

Jan 1, 1949

By Alexander R. Troiano, Eugene P. Klier

SINCE the very early work on quenched structures, where the products of the martensite transformation had been recognized, this transformation has provoked much interest and study. Theoretically it was desirable to account for the extreme changes in physical properties resulting from the formation of martensite, as that information might lead to results of practical importance. Desirable information, therefore, was on the kinetics of transformation from austenite to martensite as well as on the physical constitution of the martensite. It has been known for years that certain steels quenched to room temperature will contain persistent austenite as well as martensite. Other important and now well- established features of the martensite reaction are the progress of the reaction on cooling only and the independence of Ar" with cooling velocities exceeding the critical velocity. These facts have been experimentally determined by various methods and investigators. Notable among the early investigators were Tammann and Scheill and Wever and Engel.2 Unfortunately, all investigators did not fully interpret their results, which, coupled with several investigations that yielded conficting results, caused a state of confusion that was not clarified until quite recently. X-ray investigations of martensite in steels3-6 indicate it to be a supersaturated solid solution of carbon in alpha iron. This supersaturation is evident from the appearance of a body-centered tetragonal structure with the addition of sufficient carbon. The dimensions of this tetragonal structure are alinear function of the carbon content within the limits of accuracy of the determinations. Slight tempering of tetragonal martensite leads to the destruction of the tetragonal structure, which is converted to a body-centered cubic structure. This phenomenon has precipitated a controversy concerning the nature and mechanism of the tempering of martensite. The facts in the case have been outlined by Epstein7 and more recently by Antia, Fletcher, and Cohen.8 The significance of Ar" on theoretical grounds is not clear, however, although considerable study has been devoted to its determination. The precise position of Ar" as a function of carbon content was first stated by Greninger and Troianos for steels covering a range of approximately 0.7 to 1.8 per cent carbon. The effect of alloying elements on Ar" has recently been the subject matter of investigation by various methods.

Jan 1, 1945

By James K. Stanley

WHEN a plastically deformed metal is heated to a certain temperature, it undergoes a complete change in microstructure, the consequence of which is a marked alteration of mechanical properties such as hardness, strength and ductility. This change in microstructure occurs by recrystallization and is a process involving the formation and growth of strain-free nuclei in the deformed matrix. These nuclei continue to form with time and grow until a new grain structure replaces the cold-worked structure. The formation of the nuclei in the deformed sheet of 1 per cent silicon ferrite is illustrated in Fig. 1. If a recrystallization is conducted isothermally, a measurement of the fraction of the matrix recrystallized plotted against time leads to an isothermal recrystallization curve, first established in 1942.1 Such recrystallization curves are shown in Fig. 4. These curves show that the recrystallization of a cold-worked metal is best considered as a rate process rather than a time independent process such as is suggested by the improperly named and misleading recrystallization diagrams involving deformation, temperature, and grain size. 2-5 Any study of the rate of recrystallization resolves itself into a study of the component rates of nucleation and growth. The previous paper' provided an account of the determination of the rates of nucleation; N, the number of nuclei formed per unit time per unit of unrecrystallized area, and growth, G, the radial growth in unit time, in the recrystallization of silicon ferrite (1 per cent Si). A method was developed to furnish experimental data for evaluating the effect of the recrystallization variables on N and G. The mathematical analysis for the derivation of the isothermal recrystallization curve was developed for a two-dimensional case (in thin sheets where the diameter of the recrystallized grain is greater than the sheet thickness). The present paper is a continuation of the study of recrystallization of 1 per cent silicon ferrite begun in 1942.1 In this work the effect of the factors deformation, temperature, grain size, composition, and recovery is studied with respect to the rates of nucleation and growth. At the same time it is shown how the cooperation of N and G affects the isothermal recrystallization curve. The study of these variables on N and G has a definite bearing on the mechanism of recrystallization and should lay a foundation for a rational theory on the subject. PROCEDURE The procedure used in these experiments was essentially the same as that described previously but in certain details some changes were made in the interests of speed. With few exceptions, the procedure is the same for the study of all the variables. Where the procedure is different from standard manipulations attention is called to this fact.

Jan 1, 1945

By Richard L. Ash, J. H. Kelley, W. H. McCracken, William Bellano, J. D. Morgan, D. R. Mitchell

Rubber-tired shuttle cars are finding increased use as gathering units in under-ground mines. As the name implies, they shuttle back and forth between the loading machine and the section transportation system. In many mines their use has in-creased the efficiency of the loading and gathering operations, resulting in increased output per man employed and decreased costs per ton. A car motivated by cable reel is shown in Fig I, and a car with battery power in Fig 2. A brief chronological account of the development of rubber-tired haulage equip-ment follows: 1936. J. H. Fletcher1 installed his first unit for the Blue Bird Coal Co., Carrier Mills, Illinois. This unit consisted of a battery-powered industrial tractor and a trailer with drop-bottom doors. The coal was transported for short distances to a hopper for discharge into mine cars. 1938. A battery-powered self-contained shut-tle car with rubber-tired wheels was built by the Joy Manufacturing Co. Two units were installed for the Katherine Coal Co., Lumberport, West Virginia. The shuttle car consisted of a materials-receiving body with a conveyor in the bottom to move the coal forward during loading and to unload the coal at the discharge station. 1938. A cable-powered shuttle car with four-wheel drive and four-wheel steer was developed by A. L. Lee. Special wheels mounted on king pins on the car permitted all four wheels to be steered. The cable reel was driven by a torque motor to give the cable proper tension during the payout and uniform tension when rewound on the reel. 1940. A Joy shuttle car equipped with trolley poles and a cable reel was developed to operate on a double trolley-wire system.2 This unit was installed at a potash mine of the International Minerals and Chemicals Corporation at Carlsbad, New Mexico. It is believed to have been the first installation of its kind, and the first of shuttle cars for handling material other than coal. 1941. Truck haulage3 was introduced in the Tri State District by the Eagle-Picher Mining and Smelting Company. Storage battery electric trucks were rebuilt to handle a bottom-dump trailer. 1941—Joy shuttle cars were installed in a mine of the United States Gypsum Company, Oakfield, New York. 1943—Joy shuttle cars were installed in several bauxite mines.4,5 1945—Joy shuttle cars installed in a lime-stone mine. Because of the nature of bituminous coal beds trackless equipment has had its greatest application in bituminous coal mining. Usually a shuttle car is filled by a continuous type of loader. In Fig 3 is shown a continuous machine loading coal into a battery-powered shuttle car, 48-in. coal. However, intermittent types of load-

Jan 1, 1949

By George G. Binder Jr., James W. Lacey, Arthur L. Draper

An experimental investigation of miscible fluid displacement has been made in linear porous media under highly adverse mobility ratio conditions. Various refined oils were displaced at field rates by liquid propane in both horizontal and vertical models 9 to 36 ft in length. In horizontal tests, mixed zones or transition zones form between the two liquids early in the displace-lents. Initially, the zones grow rapidly. III 2-in. diameter models, the mixed regions become nearly stable zones from 6- to 20-ft long. From then on these quasi-stable zones apparently grow only by molecular diffusion. The lenghts of the quasi-stable zones appear to be almost independent of the core material in which displacement;; are made and increase with increasing rates of injection and oil/solvent viscosity ratios. The lengths of the quasi-stable zones. measured in 2-in. diameter models at viscosity ratios and injection rates anticipated in the field indicate that essentially piston-like displacements of oil by solvent would occur. However, the mixed zone lengths increase markedly as the model diameter increases. In vertical displacements controlled by gravity drainage, only short trans-sition zones form. The entire lenghts of these zones can be accounted for by molecular diffusion. Therefore, in reservoirs having characteristics allowing a high degree of gravity drainage, nearly complete oil recovery should be attainable by miscible fluid displacement. INTRODUCTION The oil industry is faced with an ever increasing cost for finding new oil reservoirs. This, coupled with the fact that conventional methods of oil recovery usually leave from 1 to 3 bbl of oil in the ground for every barrel produced, has aroused considerable interest in developing more efficient methods. An integral part of the mechanism of many of these new methods of recovery is a miscible fluid displacement in which oil is displaced by a much less viscous materiai such as liquid propane. A numher of irlvestigators have explored the mechanics of miscible fluid displace-ment,'.2.1.'."." but in the experiments reported many of the important factors have been varied only over a limited range far removed from norma1 oilfield values. This paper presents the results of an experimental study of oil displacement by liquid propane at field rates from linear, natural-sandstone models of various sizes. Both horizontal and vertical flow tests were made. EXPERIMENTAL APPARATUS AND PROCEDURE Refined oils with viscosities varying over a wide range were displaced at several rates by liquid Propane from both horizontal and vertical flow systems. The behavior of the displacement was observed by propane-oil analyses of the effluent and, when possible, by differential pressure measurements along the cores. A schematic flow diagram of the apParatus used to conduct the experirents is shown in Fig. 1. The cores used in the tests were 9-ft lengths cut from natural consolidated sandstone and turned to the desired diameter. These were cast in steel tubing with a low melting point (160°F) alloy which expands on solidification. Flanges welded to the ends of the steel pipes permitted sealing the ends or butting one core to another. Pressure seals were maintained with O-rings. The cores were cleaned by flushing

By J. F. Gallie

From the standpoint of exploration and new discoveries, South Arkansas had a discouraging year in 1944. In January there were 73 untested drilling blocks, and 60 additions were made during the year. Of the total, 65 were condemned by dry holes on or adjacent to them, while 5 proved productive. The latter resulted in the discovery of the Salem Church, Calhoun Wilks, and Strong fields, and the extension of the Village field to the southeast. The year ended with 63 untested blocks, 41 of which were scheduled for tests to the Smackover lime, the state's deepest oil-producing formation. Geophysical activity in 1944 totaled 164 crew weeks, of which 110 were seismic, 43 gravity, and 11 radioactive (Fig. I), in contrast with 674 crew weeks reported for 1943, of, which 563 were seismic and in gravity, Five seismograph and two gravity crews were engaged in exploration in South Arkansas during January 1944. but only two seismograph crews were working there at the end of the year. In addition, exploratory core drills were used for a total of 38 weeks during the year. The year's few discoveries, none of which is considered as having added appreciably to state reserves, were the meager results obtained in the drilling of 62 wildcat wells 2000 ft. or deeper. Of this total (a detail of which appears in Table 2), 42 were drilled to the Smack-over lime or below, The average depth of the 62 wells was 5384 ft., as compared with 4992 ft. in the preceding year, while the average depth of the 42 wildcats in the lime was 5913 ft. in 1944. Fig. 2 has been prepared to show all , wells penetrating to the Reynolds oölitic lime. The 1944 dry holes are circled lightly, while discoveries are heavily circled and shown as producers. Smackover lime fields, producing from the Reynolds oolitic lime member, are indicated in black, and the locations of dry wildcat wells drilled prior to 1944 are also shown. Table 3 provides a listing of all Smackover lime wells drilled through the end of 1944. Production for the year was slightly more than in 1943, totaling 29,282,747 bbl., as compared with 27,521,943 bbl. for the preceding year. The increase was 1,760,804 bbl., or 6.4 per cent, bringing production to a peak exceeded only in the 1923 to 1928 period of flush production from the older shallow fields, principally Smackover. The increase was largely attributable to additional development in the Dorcheat-Macedonia, Atlanta, Fouke, Stephens-Smart, Haynesville, and Village fields, little production deriving from 1944 discoveries. These six fields accounted for loo of the 122 field wells drilled during the year. Annual and cumulative production for the producing life of the state are presented graphically in Fig. 3. Fig. 6 has been prepared by the author to show the producing ages and present known productive limits of all fields in South Arkansas. Production data, as usual, are assembled in Table 2, and provide a further breakdown of producing formations in the individual fields.

Jan 1, 1945

By Fred C. Bond, Jen-Tung Wang

Comminution energy is principally energy of deformation before breakage, which appears as heat An empirical equation is presented which covers the entire comminution range. The new strain-energy theory considers comminution from the known principles of mechanics and the reduction ratio. Energy requirements according to the different theories the romnnred. THE present status of the theory of comminution is extremely unsatisfactory. The amount of various ores and rock products crushed and ground annually approaches the staggering sum of perhaps one half billion tons. Yet the basic concepts underlying an operation of such magnitude are unknown, and actual knowledge of what takes place in comminution is almost entirely empirical. The responsibility for this situation cannot be charged to apathy or lack of appreciation of the importance of the problem. Many attempts have been made to evolve a workable hypothesis, but none has been completely successful. General Considerations In order to break rock, it must be subjected to a stress which strains the rock beyond its critical breaking point. The stress imparts energy to the rock, most of which is released in the form of heat when the stress and resulting strain are removed. If the strain induced exceeds the critical strain, the energy is released by breaking; if the induced strain does not reach the critical point, the energy is released with removal of the stress as energy of resilience. Rock is a brittle material and it is assumed that it breaks approximately at its yield point, so that no permanent deformation results from strains below the critical. When rock is broken the total energy input is accounted for by the heat liberated, and by the surface energy of the new surface produced. A small and probably negligible amount is released as noise. Rock is commonly broken under compression and the applied stress is ordinarily compressive. However, for breakage to occur, it is only necessary that the induced strain exceed the critical value, and this strain may represent the resultant of compressive, shearing, and tensile forces. The stress-strain diagram of rocks under compression, and the modulus of elasticity as determined therefrom, should be fundamental considerations in the development of any theories of rock breakage. Crushing in jaw or gyratory crushers results primarily from a squeezing action, and reduction in a hammer mill is the result of impact. The action in rod and ball mills is a combination of impacting, squeezing, and wearing away by attrition, or rubbing. In ordinary crushing and grinding, the forces are applied at protruding points and are not distributed evenly throughout the rock. This is one of the features of comminution which theoretical considerations have not covered adequately. Another feature is the effect of impact velocities, which may greatly influence the total energy required for breakage. Impact velocities may vary from 1 or 2 fps in crushers to 10 or 20 fps for ball mills, and as high as 100 or more for hammer mills. However, according to the findings of geophysicists, the velocity of sound and of compression waves in stone is many times greater; the primary longitudinal compression waves travel at perhaps 15,000 fps, and the secondary transverse waves, which may reach the surface and cause cracks to form thereon, travel at perhaps 5000 fps. When a crack tip forms, the total surrounding stresses are concentrated in this tip, which rapidly extends throughout the rock particle.1 It would seem that the energy required to deform the rock beyond its critical strain, resulting in the formation of a crack tip, represents practically all of the energy required. Most of the primary crack tips presumably form on the surface. A simple method of designating feed and product size is necessary for the evaluation of crushing and grinding results. Taggart's suggestion2 that the 80 pet passing size be used has been found very practical. In this paper, the square opening screen size which 80 pct of the feed passes is designated as the feed size F, and the size which 80 pct of the product passes, or the product size, is designated as P. The reduction ratio at the 80 pet passing size, or F/P is designated as n. The feed and prod-

Jan 1, 1951

By C. G. Fink, G. L. Putnam

The dissolution of gold by cyanide solutions was studied by determining the time required for the solvents to dissolve gold leaf. Minute traces, even 0.5 ppm, of sulphide ion retard the dissolution of gold, and this behavior cannot be accounted for by the presently accepted hypotheses involving oxygen-depletion or thiocyanate formation. On the other hand, traces of the salts of lead, bismuth, mercury, and thallium considerably accelerate the dissolution. The beneficial effect of lead is dependent upon the pH and cyanide ion concentration of the solution. ALTHOUGH cyanide solvents are used very ex-x*. tensively for the recovery of gold from ores and concentrates, the normal rate of solution of the precious metal as determined by Barsky, Swainson, and Hedley,1 and others2 is less than about 3 mg per sq cm of exposed gold surface per hour, corresponding to a corrosion depth of approximately 1.5 microns (0.00006 in.) per hr. Although the slow rate may be increased to some extent in certain cases, as, for example, when the the gold is partially imbedded in iron pyrites,3 the leaching operation is generally the most time-consuming step of the cyanide process. Frequently it is necessary for the leaching solvents to remain in contact with the ores for 50 to 200 hr in order to dissolve all of the gold particles.' Not only does the slow solution rate cause some increase in the capital costs, but the cyanide consumption also may be increased because of vaporization of hydrocyanic acid and secondary reactions with minerals such as malachite (CuCO3 • Cu(OH)2), and pyrrhotite, which often are associated with gold. It is not surprising that numerous attempts have been made to accelerate the dissolution of gold in cyanide solutions. Experimental Gold Leaf Test: The gold leaf test was apparently originated by M. Faraday, who, by means of it, discovered that dilute cyanide solutions would dissolve gold readily in the presence of oxygen. The usefulness and reliability of the test have been discussed elsewhere.5,6 Essentially, the method consists of determining the time required for 5-ml portions of cyanide solvents to dissolve squares of 23 carat gold leaf, 0.5 cm on edge, when shaken in 10-ml test tubes with the solvents. The weight of gold leaf per test was 0.051 mg as determined by the direct weighing of a leaf 8.6x8.6 cm (weight = 15 mg) and measuring the area of the test sample (0.25 sq cm). Gold leaf is of remarkably uniform thickness.6 Since gold leaf, like native gold, contains small amounts of copper and silver, the results are comparable with those one might expect in cyaniding gold ores. As six or more tests can be made simul- taneously, the relative efficiencies of the solvents can be evaluated readily. All dilute solutions of lead, bismuth, thallium and mercury salts were prepared by the ordinary dilution method used by chemists. Our C.P. sodium cyanide and buffering reagents had no detectable amounts of either sulphide ion or heavy metals. Soluble Sulphides in the Cyanide Process: The action of soluble sulphides is of interest in the study of the dissolution of gold in cyanide solutions. That gold ores which contain compounds of arsenic and antimony often are not amenable to direct cyanide treatment is well known, and it said that arsenic and antimony are "cyanicides."7 It is commonly believed that part of the sulphur content of such ores is soluble in alkaline solutions to give sulphide ion, which reacts with the free cyanide content of the leaching solutions to form inert thio-cyanates or reacts with the dissolved oxygen to form sulphites or sulphates.8 A purpose of this paper is to demonstrate that sulphide ion may behave in a manner that cannot be explained by either the oxygen-depletion or thiocyanate formation theories and to prove directly that concentrations of sulphide ion which cannot be detected even by colorimetric methods may retard the dissolution of gold.

Jan 1, 1951

By Fred C. Bond, Jen-Tung Wang

Comminution energy is principally energy of deformation before breakage, which appears as heat An empirical equation is presented which covers the entire comminution range. The new strain-energy theory considers comminution from the known principles of mechanics and the reduction ratio. Energy requirements according to the different theories the romnnred. THE present status of the theory of comminution is extremely unsatisfactory. The amount of various ores and rock products crushed and ground annually approaches the staggering sum of perhaps one half billion tons. Yet the basic concepts underlying an operation of such magnitude are unknown, and actual knowledge of what takes place in comminution is almost entirely empirical. The responsibility for this situation cannot be charged to apathy or lack of appreciation of the importance of the problem. Many attempts have been made to evolve a workable hypothesis, but none has been completely successful. General Considerations In order to break rock, it must be subjected to a stress which strains the rock beyond its critical breaking point. The stress imparts energy to the rock, most of which is released in the form of heat when the stress and resulting strain are removed. If the strain induced exceeds the critical strain, the energy is released by breaking; if the induced strain does not reach the critical point, the energy is released with removal of the stress as energy of resilience. Rock is a brittle material and it is assumed that it breaks approximately at its yield point, so that no permanent deformation results from strains below the critical. When rock is broken the total energy input is accounted for by the heat liberated, and by the surface energy of the new surface produced. A small and probably negligible amount is released as noise. Rock is commonly broken under compression and the applied stress is ordinarily compressive. However, for breakage to occur, it is only necessary that the induced strain exceed the critical value, and this strain may represent the resultant of compressive, shearing, and tensile forces. The stress-strain diagram of rocks under compression, and the modulus of elasticity as determined therefrom, should be fundamental considerations in the development of any theories of rock breakage. Crushing in jaw or gyratory crushers results primarily from a squeezing action, and reduction in a hammer mill is the result of impact. The action in rod and ball mills is a combination of impacting, squeezing, and wearing away by attrition, or rubbing. In ordinary crushing and grinding, the forces are applied at protruding points and are not distributed evenly throughout the rock. This is one of the features of comminution which theoretical considerations have not covered adequately. Another feature is the effect of impact velocities, which may greatly influence the total energy required for breakage. Impact velocities may vary from 1 or 2 fps in crushers to 10 or 20 fps for ball mills, and as high as 100 or more for hammer mills. However, according to the findings of geophysicists, the velocity of sound and of compression waves in stone is many times greater; the primary longitudinal compression waves travel at perhaps 15,000 fps, and the secondary transverse waves, which may reach the surface and cause cracks to form thereon, travel at perhaps 5000 fps. When a crack tip forms, the total surrounding stresses are concentrated in this tip, which rapidly extends throughout the rock particle.1 It would seem that the energy required to deform the rock beyond its critical strain, resulting in the formation of a crack tip, represents practically all of the energy required. Most of the primary crack tips presumably form on the surface. A simple method of designating feed and product size is necessary for the evaluation of crushing and grinding results. Taggart's suggestion2 that the 80 pet passing size be used has been found very practical. In this paper, the square opening screen size which 80 pct of the feed passes is designated as the feed size F, and the size which 80 pct of the product passes, or the product size, is designated as P. The reduction ratio at the 80 pet passing size, or F/P is designated as n. The feed and prod-

Jan 1, 1951

By C. G. Fink, G. L. Putnam

The dissolution of gold by cyanide solutions was studied by determining the time required for the solvents to dissolve gold leaf. Minute traces, even 0.5 ppm, of sulphide ion retard the dissolution of gold, and this behavior cannot be accounted for by the presently accepted hypotheses involving oxygen-depletion or thiocyanate formation. On the other hand, traces of the salts of lead, bismuth, mercury, and thallium considerably accelerate the dissolution. The beneficial effect of lead is dependent upon the pH and cyanide ion concentration of the solution. ALTHOUGH cyanide solvents are used very ex-x*. tensively for the recovery of gold from ores and concentrates, the normal rate of solution of the precious metal as determined by Barsky, Swainson, and Hedley,1 and others2 is less than about 3 mg per sq cm of exposed gold surface per hour, corresponding to a corrosion depth of approximately 1.5 microns (0.00006 in.) per hr. Although the slow rate may be increased to some extent in certain cases, as, for example, when the the gold is partially imbedded in iron pyrites,3 the leaching operation is generally the most time-consuming step of the cyanide process. Frequently it is necessary for the leaching solvents to remain in contact with the ores for 50 to 200 hr in order to dissolve all of the gold particles.' Not only does the slow solution rate cause some increase in the capital costs, but the cyanide consumption also may be increased because of vaporization of hydrocyanic acid and secondary reactions with minerals such as malachite (CuCO3 • Cu(OH)2), and pyrrhotite, which often are associated with gold. It is not surprising that numerous attempts have been made to accelerate the dissolution of gold in cyanide solutions. Experimental Gold Leaf Test: The gold leaf test was apparently originated by M. Faraday, who, by means of it, discovered that dilute cyanide solutions would dissolve gold readily in the presence of oxygen. The usefulness and reliability of the test have been discussed elsewhere.5,6 Essentially, the method consists of determining the time required for 5-ml portions of cyanide solvents to dissolve squares of 23 carat gold leaf, 0.5 cm on edge, when shaken in 10-ml test tubes with the solvents. The weight of gold leaf per test was 0.051 mg as determined by the direct weighing of a leaf 8.6x8.6 cm (weight = 15 mg) and measuring the area of the test sample (0.25 sq cm). Gold leaf is of remarkably uniform thickness.6 Since gold leaf, like native gold, contains small amounts of copper and silver, the results are comparable with those one might expect in cyaniding gold ores. As six or more tests can be made simul- taneously, the relative efficiencies of the solvents can be evaluated readily. All dilute solutions of lead, bismuth, thallium and mercury salts were prepared by the ordinary dilution method used by chemists. Our C.P. sodium cyanide and buffering reagents had no detectable amounts of either sulphide ion or heavy metals. Soluble Sulphides in the Cyanide Process: The action of soluble sulphides is of interest in the study of the dissolution of gold in cyanide solutions. That gold ores which contain compounds of arsenic and antimony often are not amenable to direct cyanide treatment is well known, and it said that arsenic and antimony are "cyanicides."7 It is commonly believed that part of the sulphur content of such ores is soluble in alkaline solutions to give sulphide ion, which reacts with the free cyanide content of the leaching solutions to form inert thio-cyanates or reacts with the dissolved oxygen to form sulphites or sulphates.8 A purpose of this paper is to demonstrate that sulphide ion may behave in a manner that cannot be explained by either the oxygen-depletion or thiocyanate formation theories and to prove directly that concentrations of sulphide ion which cannot be detected even by colorimetric methods may retard the dissolution of gold.

Jan 1, 1951

By F. L. Wolf

THE catenary system of line construction possesses so many desirable characteristics from the operating standpoint that it has wide application for all types of electric traction. Many steam roads are electrifying sections of their lines, and in most cases are operating both steam and electric locomotives over the same track. This' means that the overhead catenary system is subjected to the severe corrosive action of locomotive smoke, and data concerning the resistance of various alloys to this form of corrosion are very desirable from every point of view. Reliable and specific information and data on the subject of corrosion due to steam and smoke from locomotives are extremely meager and, on this account, extensive service tests, together with accelerated tests, have been made on a number of commercial metals and alloys. The observations and data recorded in this paper are the result of a, preliminary test which was started in 1923 and which has been carried on to the present time. The recognition of the need for even more detailed and accurate data has resulted in the undertaking of another test which has been in progress for about a year. The result of this test will be published in due course. Some years ago The Ohio Brass Co. was asked by one of the large steam railroad companies to furnish data on construction details for a catenary system which it was considering for one of its divisions. The selection of, materials which would give the necessary physical characteristics as well as withstand the severe corrosive action of locomotive gases caused electrical railroad engineers considerable concern. At that time, there were available no specific or authentic data on these important questions: no systematic investigation of the problem appeared to have been made, even though its importance was generally recognized. Such observations as had been made were crude in that they had been limited largely to visual inspection which too frequently is most misleading. However, the scattered information which was collected gave important clues as to how best to start an investigation.

Jan 1, 1930

By Henry Phelps Howland

During the last decade no topic has created more interest or received more thought among blast-furnace men than coke. One reason for this is, undoubtedly, the remarkable increase in the use of byproduct coke. Formerly our coke was made at a distance from the furnaces and by a distinct organization. There was little cooperation or development possible under these conditions. Today the situation is greatly changed. Much of our coke is made by the organization operating the furnaces and the coke oven is operated with the primary object of obtaining the best results in the blast furnace. The effect of changing the method of coke manufacture, even in some minor detail, is often felt almost immediately at the blast furnace. There naturally results one of the most valuable assets of the byproduct coke oven, i.e., the possibility of increased blast-furnace efficiency due to close observance and correct operation of the ovens. The results are evident, but often it is difficult correctly to account for them. In attacking the solution of a problem of as much importance as why one coke is better than another, there are facts which should be kept clearly in mind. The author hopes, in this paper, to bring out some points relative to the use of carbon in the blast furnace which will be of value in solving this question. GeÜner's Ideal Working Years ago GrÜner made a statement regarding the use of carbon in the blast furnace, which has been very generally accepted by metallurgical and blast-furnace men. I quote this theory as given by Prof. Richards on p. 248 of Metallurgical Calculations: "From the standpoint of the generation of the maximum quantity of heat in the furnace, GrÜner was right in formulating his dietum of the ideal working of a blast furnace, vie.: All the carbon burnt in the furnaee should be first oxidized at the tuyères to CO and all reduction of oxides above the tuyères should be caused by CO, which thus beeomes Co2."

Jan 1, 1917

By D. Turnbull, J. E. May

THE (110) [001] texture in silicon iron is of considerable interest both from the technological and scientific points of view. Its occurrence was reported more than 20 years ago.1-4 The texture develops by means of secondary re crystallizatjon5 and can be very strong, that is, greater than 90 pct alignment even thouh the primary re crystallization texture is weak or complex. This behavior is in contradistinction to the face-centered metals which develop their strong secondary recrystalliza-tion texture from a strong primary recrystalliza-tion texture.', The microstructural changes accompanying the (110) [001] texture formation in silicon iron are as follows: When properly prepared cold-rolled sheet (i.e., 0.015 in. thick) is annealed at about 800°C, primary recrystallization occurs and a fairly stable fine-grained primary recrystallized matrix of about 0.02-mm-diam grain size is produced. The material at this stage does not have the strong (110) [110] texture. As the temperature is raised to about 900°C, relatively large grains appear in the finegrained matrix and they grow at the expense of the smaller grains to many times the sheet thickness. In time the complete sample is consumed by these large grains. This process of the growth of relatively few grains (about one in 105 primary grains) at the expense of many grains is called secondary recrystallization. Since all the secondary grains are of essentially (110) [001.] orientation, the strong texture is developed by this secondary recrystallization process. Theories of the (110) [001] texture in polycrystal-line silicon iron have been proposed by Decker and Harker and by Dunn.Decker and Harker have shown that grains initially in the (110) [001] orientation will upon annealing after cold-rolling, re-crystallize back to the initial orientation. To account for the sharp texture in silicon iron they propose that (110) [001] grains become more highly strained than grains in other orientations and therefore recrystallize first. They are then the lowest energy grains and can consume their higher energy neighbors. Grains in orientations other than (110)

Jan 1, 1959

By R. A. Morse, C. R. Holmgren

The production of oil by water flooding can be substantially increased by the maintenance of free gas saturation in the reservoir during the flooding operation. This effect is accomplished by the alteration of oil relative permeability characteristics and the occupation by gas of pore space that would otherwise be filled with residual oil. The amount of reduction In residual oil can be calculated from appropriate water-oil relative permeability characteristics. This paper presents experimental data in support of the foregoing conclusions and an example of the calculations. The microscopic pore saturation concepts of the mechanism are discussed. A method of practical application to field floods is presented together with discussion of certain limitations. INTRODUCTION The presence of free gas has been reported by a number of investigators to significantly affect the oil recovery which can be obtained from sandstone flow systems by water flooding.1,2,3,4,5 The effect of gas, noted in every instance, has been to cause lower residual oil saturations than could be obtained by water flooding the same systems in the absence of free gas. The degree of improvement in recovery has been observed to vary widely, depending on the systems used and the conditions of the tests. The increased oil recovery obtained because of the presence of gas during a water flood has been variously attributed to changes in physical characteristics of the oil, selective plugging action of the gas, inclusion of oil mist in the free gas phase, and the additional sweeping or driving action of the free gas. All but the first of these suggestions imply changes in the displacement mechanism. The change in viscosity and inter-facial tension of the oil phase, within the pressure range used for all the experimental work, is certainly not sufficient to account for the differences in residual oil saturation noted dess there is a drastic change in the displacement process. One other effect which logically seems capable of causing differences in residual oil saturation of the magnitude noted in the experimental work is that of simple replacement. In a water-wet system containing oil, water, and gas, it is to be expected that the gas will exist inside the oil. This is the position of minimum free surface energy, since the gas-oil interfacial tension will be less than the gas-water interfacial tension. There is no apparent reason to expect that the existence of free gas within the oil phase should alter the saturation at which the non-wetting phase (now oil and gas) should become discontinuous and hence trapped so as to be unrecoverable by direct displacement by water. If this is the situation, then trapping of a certain percentage of gas saturation during water flood should result, at infinite water-oil ratio, in a like reduction of oil saturation below that attainable by flooding in the absence of free gas. It is visualized that the gas will exist as bubbles inside the discontinuous residual oil as illustrated in Fig. 1, with the size of the oil bubbles being substantially unchanged due to the presence of the gas. As a practical matter, it can be anticipated that the presence of a free gas saturation inside the oil phase will reduce the relative permeability to oil which will exist at any particular water saturation. This reduction will be caused by two factors — -the addition of the gas-oil interface, and the reduction of area available for oil flow in the pores containing gas. This reduction in oil permeability at any particular water saturation will result in water breakthrough at a lower water satu-

Jan 1, 1951

By A. D. Mutch

IT has long been known that there are wide variations in the thermo-electric potential of pyrite. In the last few years a study of this variation and other properties of pyrite was carried out at the University of Toronto by F. G. Smith on specimens of pyrite from many loyalities. As a result of these studies the pyrite geothermometer was developed by Professor Smith. The calibration of the pyrite geothermometer is based on the assumption that "crystals of any one electronically conducting mineral species deposited at a high temperature have a more positive thermoelectric potential than crystals deposited at a low temperature, and the thermo-electric potential varies continuously between any given limits of the temperature of deposition." The cause of the variation was postulated to be crystal discontinuities, such as lineage boundaries. As yet this postulated relationship has not been established as fact. On theoretical grounds it is indicated that the thermo-electric potential of pyrite or any other partial conductor is dependent upon a number of factors as well as the temperature of formation. For this and other reasons there is ground for doubt as to the validity of the relationship postulated above. To date a large number of readings have been made with the pyrite geothermometer which have been recorded in terms of the calibration of the instrument in degrees centigrade. So far most of the pyrite tested by this technique has been in association with gold ore. The values for the temperature of formation obtained in these tests appear to be reasonable and, in relation to geological problems, to vary in the right sense. Determinations on some specimens not in association with gold ore have given readings that appear to be much too high, taking into account the probable maximum temperature of the host rock. To sum up, although many determinations made with the pyrite geothermometer appear to give reasonable values for the temperature of formation of the pyrite, there are at the same time other readings which seem anomalous. On the basis of an examination of available results of work with the pyrite geothermometer, two problems must be considered: 1—the validity of the calibration of the pyrite geothermometer; and 2— the nature of the distribution of the thermo-electric potentials of pyrite in relation to the specific problems that have been examined. In this paper the academic problem relating to the validity of the calibration of the pyrite geothermometer will not be discussed. Instead, the variations of thermo-electric potential of pyrite in association with gold veins will be discussed with regard to specific examinations. The first of these two examinations deals with the distribution of thermo-electric potentials of pyrite in association with a gold vein and was carried out in the McIntyre Porcupine Mine, Schumacher, Ont., in the summer of 1949 as part of a study with this technique. The second problem deals with variations of thermo-electric potential of pyrite in gold ore specimens from all over the world. The specimens used in this study were part of the private collection of Frank Ebbutt, geologist for Howe Sound Exploration Co. Results of Detailed and Reconnaissance Studies In discussion of the results of determinations made in these two studies the values of thermo-electric potential in millivolts will be used. It will be noted that in some of the diagrams the determinations are recorded in terms of pyrite geothermometer temperatures. Fig. 1 is a calibration chart relating pyrite geothermometer temperatures and thermoelectric potentials. A full discussion of the technique is given in the original paper by F. G. Smith.' Briefly, the determinations are made by placing two stainless steel probes, one hot and the other cold, against the surface of the pyrite crystal being tested. The thermoelectric potential that is developed is read with a null-point potentiometer that is calibrated in what

Jan 1, 1953

By A. G. Guy

In a special type of electrodiffusion experiment the entire specimen is at constant temperature. The vacancies are then created at one end of the specimen and flow to the other end where they are destroyed. The energy required to operate the corresponding sources and sinks results in a super saturation of vacancies at one end of the specimen and an under -saturation at the other end. This gradient in vacancy concentration produces a chemical-diffusion flux, J(D), of vacancies in addition to the flux, J(E), caused by the electric current. Using the experimental data of Ch. Herzig,5 it is shown that a super saturation of 1 pct can cause J(D) to be about 25 pct of J(E), and thus account for the anomalous behavior of short specimens. THERE are advantages in a phenomenological treatment as contrasted to an atomistic one. For example, there are many reactions involving the element copper that are quantitatively and usefully understood from a phenomenological viewpoint, even though electron theory is not yet able to predict whether copper should be fcc or cph.' Similarly, the lack of a complete atomic theory of vacancies need not prevent the development of a treatment based on thermodynamics and chemical kinetics. In the following discussion, models will be used for the vacancies and for the mechanisms by which they move or are created or destroyed, but the phenomenological treatments are not dependent on the details of these models. The important product of a phenomenological analysis is an equation that describes the relation among the measurable quantities determining the behavior of the system. Based on such an equation, experiments can be performed to study these quantities in detail. Eventually atomic theory will supply an adequate theoretical base for the phenomena in question. A chemical species whose chemical potential was invariant during reactions in binary and ternary systems of varying composition would indeed be an anomaly. Yet this is the role that has frequently been assigned to the vacancies in pure metals, in dilute solutions, and even in ordinary alloys. The weight of available evidence supports the view that supersatu-rations of vacancies are on the order of 1 pct in usual diffusion processes.' Although it may seem strange that such a small deviation from equilibrium could significantly affect the thermodynamic properties of the vacancies, it is well known that the driving force for an ordinary chemical reaction is the departure of the components from their equilibrium state. Similarly, the reaction of vacancies that results in the formation of pores in various types of diffusion3 can reasonably be attributed to the supersaturation of vacancies. In the present paper, it will be shown that small degrees of supersaturation can significantly affect the kinetics of the diffusion process itself. ISOTHERMAL ELECTRODIFFUSION Two different experimental techniques are convenient for studying the behavior of vacancies in a pure metal in the presence of an electric field. Gilder and Lazarus4 studied self-electrodiffusion in a gold specimen in which only the central portion was at high temperatures. In this case the significant vacancy sources operate inside the specimen in the presence of a temperature gradient. In the laboratory of Th. Heumann a method has been devised for studying self-electrodiffusion at constant temperature.5 In principle, there is then no effect of thermodiffusion. It will now be shown why in this case the significant ATungsten disks \^^ ^^ ^Gold disks^^ ^^"T>.... "TTZA ? Up Iy'7 markers ///// ////// initial plane p I y/y/y of joining \I 7//// V7//A_________I_________V//// -I 0 +I Distance from center of specimen (a) -— Direction of flow of electrons —Direction of flw of vacancies %yy} Matano I z~irkendall /%W, vy/A inlerfacej "interface ///// -} HfiK- +/ 0 Distance from center of specimen (6) Fig. 1—-Schematic illustration of the essential features of isothermal self-electrodiffusion. (a) Initial condition of specimen. (b) Condition of specimen after electrodiffusion.

Jan 1, 1970

By R. Schuhmann, E. J. Michal

Experimental measurements are reported for the oxygen pressures of iron-silicate slags in equilibrium with solid silica. CO2-CO mixtures were bubbled through the slags in silica crucibles to find equilibrium values of p co2/p co over the entire composition range of silica-saturated slags at 1250°, 1300°, and 1350°C. From the data, the activity vs. composition relationships were calculated for O, FeO, and Fe. SLAGS composed primarily of silica and iron oxides have particular practical importance in copper smelting,' in acid steelmaking, and in accounting for the service behavior of silica refractories. These slags all contain both ferrous and ferric iron, so that, strictly speaking, they are ternary or three-component liquid solutions. For convenience, the components may be taken as the three oxides, FeO, Fe2O3, and SiO2. The constitution of the FeO-Fe,O,-SiO, system at slagmaking temperatures has been studied in a recent investigation described in a separate paper.' This work showed the compositional ranges of iron-silicate melts at temperatures up to 1450°C and also the temperature-composition relationships for melts in equilibrium with various solid phases, including iron, wüstite, magnetite, and silica. Broadly speaking, the compositions of iron-silicate melts at a given temperature should be thought of as varying over a two-dimensional field. In the first place, the silica/total iron oxide relationship varies from maximum silica for silica-saturated melts to minimum silica for wüstite-saturated melts or, at higher temperatures, to zero silica for straight iron oxide melts. In copper smelting, for example, the converter slags approach the low silica limits while the reverberatory-furnace slags have intermediate silica contents, perhaps approaching silica saturation in some circumstances. Liquids formed in the pores of silica refractories presumably are close to silica saturation. The second type of composition variation is in the ferric/ferrous relationship, which depends on how oxidizing or how reducing the process conditions are. Relatively reducing slags, such as acid-steelmaking slags, are lower in ferric oxide and ap- proach saturation with metallic iron. Oxidized slags, such as copper-smelting slags, contain larger percentages of ferric oxides and approach or reach saturation with magnetite. Since these two kinds of compositional variations are closely related to two general properties of interest for all metallurgical slags, basicity, and oxidizing power, it is hoped that the thermodynamic study of iron-silicate slags eventually will throw further light on the significance and nature of these long-recognized but as yet poorly understood slag properties. Measurements of oxygen activity as a function of slag composition, using CO-CO2 gas mixture to fix oxygen activities, afford an experimentally convenient approach to the study of the thermodynamic properties of iron-silicate slags. In a preceding investigation,³ his approach was used in a systematic study of iron-silicate slags in equilibrium with solid iron. The present paper gives the results of a similar study of the iron-silicate slags in equilibrium with solid silica. The experimental work consisted in the determination of CO2: CO ratios in gas mixtures at equilibrium in the system: gas: liquid slag: silica Determinations were made at temperatures from 1250° to 1350°C for slags ranging in composition from iron saturation to magnetite saturation. Also, equilibrium CO,: CO ratios and slag compositions were determined for the univariant systems: gas: liquid slag: silica: iron gas: liquid slag: silica: magnetite Experimental Methods The experimental procedure was essentially the same as that used in the previous study of iron-silicate slags saturated with solid iron," but in order to work with the silica-saturated slags an all-silica crucible assembly was used. A liquid slag was prepared from pure prefused stock materials and brought to equilibrium with the silica crucible at the desired temperature. Then a mixture of CO2 and CO was continuously bubbled through the melt

Jan 1, 1953

By A. D. Mutch

IT has long been known that there are wide variations in the thermo-electric potential of pyrite. In the last few years a study of this variation and other properties of pyrite was carried out at the University of Toronto by F. G. Smith on specimens of pyrite from many localities.1-3 As a result of these studies the pyrite geothermometer was developed by Professor Smith. The calibration of the pyrite geothermometer is based on the assumption that "crystals of any one electronically conducting mineral species deposited at a high temperature have a more positive thermo-electric potential than crystals deposited at a low temperature, and the thermo-electric potential varies continuously between any given limits of the temperature of deposition." The cause of the variation was postulated to be crystal discontinuities, such as lineage boundaries. As yet this postulated relationship has not been established as fact. On theoretical grounds it is indicated that the thermo-electric potential of pyrite or any other partial conductor is dependent upon a number of factors as well as the temperature of formation. For this and other reasons there is ground for doubt as to the validity of the relationship postulated above. To date a large number of readings have been made with the pyrite geothermometer which have been recorded in terms of the calibration of the instrument in degrees centigrade. So far most of the pyrite tested by this technique has been in association with gold ore. The values for the temperature of formation obtained in these tests appear to be reasonable and, in relation to geological problems, to vary in the right sense. Determinations on some specimens not in association with gold ore have given readings that appear to be much too high, taking into account the probable maximum temperature of the host rock. To sum up, although many determinations made with the. pyrite geothermometer appear to give reasonable values for the temperature of formation of the pyrite, there are at the same time other readings which seem anomalous. On the basis of an examination of available results of work with the pyrite geothermometer, two problems must be considered: 1-the validity of the calibration of the pyrite geothermometer; and 2-the nature of the distribution of the thermo-electric potentials of pyrite in relation to the specific problems that have been examined. In this paper the academic problem relating to the validity of the calibration of the pyrite geothermometer will not be discussed. Instead, the variations of thermo-electric potential of pyrite in association with gold veins will be discussed with regard to specific examinations. The first of these two examinations deals with the distribution of thermo-electric potentials of pyrite in association with a gold vein and was carried out in the McIntyre Porcupine Mine, Schumacher, Ont., in the summer of 1949 as part of a study with this technique. The second problem deals with variations of thermo-electric potential of pyrite in gold ore specimens from all over the world. The specimens used in this study were part of the private collection of Frank Ebbutt, geologist for Howe Sound Exploration Co. Results of Detailed and Reconnaissance Studies In discussion of the results of determinations made in these two studies the values of thermo-electric potential in millivolts will be used. It will be noted that in some of the diagrams the determinations are recorded in terms of pyrite geothermometer temperatures. Fig. 1 is a calibration chart relating, pyrite geothermometer temperatures and thermo-electric potentials. A full discussion of the technique is given in the original paper by F. G. Smith.' Briefly, the determinations are made by placing two stainless steel probes, one hot and the other cold, against the surface of the pyrite crystal being tested. The thermo-electric potential that is developed is read with a null-point potentiometer that is calibrated in what

Jan 1, 1952

By William L. Langdon

PRELIMINARY COMMENTS Recent years have been difficult for the mining industry, as reported in the most recently published Minerals Yearbook (Volume III), the estimated value of world crude mineral production has been generally declining since an historical peak in 1979 (16).* The costs of mineral extraction have, however, been rising rapidly. Individual project costs are, in general, exceeding the growth rate of mining companies, while operating and technical risks continue to increase (16). Risks resulting from currency flotation and political actions in the host country are also on the increase. Labor difficulties (such as those experienced by Phelps Dodge) and the Reagan Administration's recent rejection of a proposal by the International Trade Commission for higher tariffs and/or quotas on copper imports have also contributed to the mining industry's difficulties. The net result of these factors has been financial difficulties for mining companies with respect to paying for their current financial obligations as well as trouble finding new financing. It may be that one of the main factors in determining the future of the mining industry will be centered upon capital structure, i.e. how its assets are financed. Historical Perspective on Capital Structure In The Mining Industry As discussed by Isreal Borenstein in (4) and Thomas Navin in (7), mining firms typically have used a financial model based upon high financial leverage, i.e. large amounts of debt relative to equity. This has been especially true for American firms developing orebodies discovered overseas. Problems sometimes occurred for those who were forced to commit themselves to completion guarantees in order to obtain bank loans. Mines under these circumstances must be brought into operation regardless of market conditions. Politicians in overseas countries also may use the high profits required by these high risk ventures to argue for nationalization of mines. Coupled with the frequent use of high leverage, mining companies traditionally have paid out a higher percentage of earnings in the form of dividends than manufacturing firms. This is significant, in that such funds paid out in dividends are not available for other uses. Hence, a greater reliance upon debt and/or additional stock issues than would ordinarily be the case for manufacturing firms. Thomas Navin has stated in (7), that the theory behind the high dividend payout was that, "most mining investors thought of themselves as investing in a wasting asset, one that would gradually deplete over time until it ultimately became valueless." Investors, therefore, required a receipt, in the form of dividends, of a percentage of current earnings and a return on original capital. This view of reality, apparently, has not changed in some quarters, even though modern mine management ordinarily replaces depleted mines with new ones. It may be that this practice of high dividend payout coupled with relatively high financial leverage should be reexamined. Current capital structure theory could prove interesting and useful for those concerned with current conditions. Capital structure patterns and related practices in this industry are not, in many cases, congruent with those thought by some to be theoretically optimal. Prelude to Capital Structure Discussion With a few notable exceptions (such as the Guggenheims and Anaconda's chief operating,. officer in 1971) mining companies' chief executives and boards of directors have not been persons with financial backgrounds. This, one could conjecture, might have accounted for the relatively nonsophisticated nature of capital structures of mining companies. In order to appreciate the possibilities with respect to alternative influence on a firm's performance, one must be acquainted with the basics of financial theory. This paper is an attempt to familiarize the reader with (1) capital structure in general, (2) the usual components of this structure, (3) the general theory behind the use of financial leverage, and

Jan 1, 1985