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By E. L. Bruce

Introduction The Outokumpu copper mine is situated in eastern Finland, 50 kilometers west of the city of Joensuu or 225 kilometers directly north of the city of Viborg (Viipuri), which is situated at the eastern end of the gulf of Finland (Figure 1). The ore-body was discovered in 1910 by Dr. Otto Trüstedt after two years of careful, scientifically-directed, search. During the early period of development of the mine, the ore was treated locally and the copper re-covered by an electrolytic process. Now the ore is concentrated by tables and by flotation. The concentrates are shipped to Germany for refining. In 1929 the mine produced 150,000 tons of ore from which between 20,000 and 25,000 tons of flotation concentrates containing 20 per cent copper were produced. Profits in 1929 were approximately half a million dollars, but the present price of copper will affect very seriously the profits for 1930. The ore reserves are given as between 7 and 8 million tons (1). The grade of ore is stated to be 4 percent to 6 percent copper, with a little zinc.

Jan 1, 1931

By Adam Moore, Peter Radziszewski, Matt Gallimore

"Stirred mill technology dates back to 1928 where the idea to use “an agitator and spherical grinding media” was presented. In the context of the mining industry, interest in stirred milling technologies has grown over the last 20 years where the typical observation reported inDespite these developments, the tumbling mills are continuing to be used in fine and ultrafine grinding applications. The main reason for this, as communicated at the Canadian Mineral Processors roundtable discussion in 2013, is that the comfort level in understanding stirred milling technologies is not at the level of that of tumbling mills.At CMP 2014, one contribution was made to explore how mill design affects power and energy in a stirred mill. While the 2015 CMP paper explored the application of one scale-up methodology to the Gibraltar case. For the CMP 2016, the aim of this paper is to contribute to increasing the general comfort level with stirred milling technologies by developing a better understanding of the different scale-up methodologies used. This will be accomplished by first completing an overview of the scale-up models found in the literature followed by a review of the different testing and scale-up procedures. This review will be supported by a number of case studies found in the literature. The paper will close with a discussion on some of the challenges that these models and methodologies have and how future research might contribute to overcoming them.IntroductionStirred mill technology dates back to 1928 where the idea to use “an agitator and spherical grinding media” was presented (Stehr, 1988). The year 1948 saw the successful application of Du Pont’s “sand mill” for pigment grinding. Subsequent years have led to the development of different types of stirred mills spanning a number of industries that require fine and ultrafine grinding."

Jan 1, 2016

By C. E. Baltzer

This is the fourth in a series of coal technology reviews being prepared. in accordance with a recommendation voted by the Coal Division C.I.M. in session at the Jubilee Meeting, Vancouver, 1948, that the Department of Mines and Resources be requested to arrange for publication by the proper Government authority of a Quarterly Review of Coal Technology for distribution among those concerned in the production and use of coal in Canada. Copies of the first review, which appeared in the November, 1948, BULLETIN, pp. 612-614, of the second review in the June, 1949, BULLETIN, pp. 272-275, and of the third review in April, 1950, BUL-LETIN, pp. 1,9?3-196 (also, respectively, in Transactions, Vol. LI, 1948, pp. 262-264 Vol. LU, 1949, pp. 117-120, and Vol: LIU, 1950, pp. 133-136), were distributed by the Dominion Coal Board and are still available on request. In this review, the first in the series in the field of combustion, development and trends during the period approximately from World War II to the present time are described and therefore the presentation is general. Later reviews will particularize developments in relation to the range of coals available in Canada.-ED. INTRODUCTION THE utilization of coal in heat and power producing equipment has become of paramount importance to the coal industry in maintaining stable and profitable markets. In the past, the chief concern was with mining, transportation, and overall supply problems, but modern conditions demand interest in and knowledge of all phases of the product, from coal in situ to its ultimate disappearance in the form of products of combustion. Even the last mentoined factor has caused complications, as is shown by current widespread activity in the field of smoke abatement

Jan 1, 1951

By C. Pelley, A. Piche

"The Canadian mining industry faces the prospects of a severe shortage of graduate mining engineers over the next decade. This arises from three factors: first, a growth in industrial activity; second, the average age of company engineering and management staff; and third, the reduced number of students in engineering faculties around the world. This paper aims to identify the critical factors underlying the trend of inadequate recruitment into higher education for mining and to examine means of alleviating the problem.This paper is based upon surveys of potential and current students and graduate mining engineers from four mining schools. An attempt is made to understand institutional and industrial images, career prospects and what is required to attract enough high-calibre young people into mining education over the next decade.IntroductionThe mining industry has started to experience a severe shortage of graduate mining engineers which is likely to persist and even worsen in the short- to medium-term.This arise s from three principal factors:1. a recent and strong growth in mining activity, which surpasses that experienced through the 70s, before the recent international industrial recession; .2. an increasingly older average age of mine engineering employees, at least in the industry's larger companies; and3. problems associated with maintaining adequate mining undergraduate recruitment levels ."

Jan 1, 1989

By C. Cornejo, C. Schuffeneger, J. Rosas

"At the end of 2010 the AMSA Esperanza Concentrator started commissioning. Located in the Atacama Desert this project is the first of several large size concentrators developed recently to operate in Northern Chile. In addition to the new operations to be implemented in the short term, many existing installations are planning expansions. The use of large size equipment is one of the common characteristics of the new concentrators, but also new technologies are being considered and innovation is present in most cases. Sea water or desalinated water will be required to process large tonnages of sulphide copper ores as well as gold bearing ores, since process water supply from the Andes will no longer be available. The high cost of sea water or desalinated water supply and the high cost of energy are not a limitation as the current metal market scenario allows obtaining an attractive NPV even from installations designed to process relatively low grade ores. A review of the current concentrators being developed in Chile is presented, including a description of the main design issues related to technology and innovation. An analysis of the Chilean mining industry is also presented, detailing mine and plant capacities as well as expected final products.INTRODUCTION The mining sector in Chile has become a reference when analysing the large concentrator plants projected or currently in operation all over the world. At present and as a consequence of the high price of metal commodities, most South American countries have an active mining sector. Chile is known as a major producer of metals. First records of copper production exported to Spain are dated to the early XVII century. Since then Chile has produced over 13% of the total copper ever produced in the world. After 1990 Chilean mining and the associated cluster of activities has substantially grown to levels never reached before, especially in the production of copper, gold and other non-metallic minerals. This dramatic increase is the result of an economic policy based on delivering comparative advantages and incentives for the admission of foreign capital to offset the weak domestic investment in previous decades. Massive mining of its huge mineral resources has allowed Chile to be a world leader in the production of copper and other base metals and mineral products."

Jan 1, 2012

By R. Marleau, R. Assad, J. Dugas

"A study of the geological features of known occurrences of mineralization in Gaspe is the basis for a classification. Nickel, chromite, asbestos and some copper are pre-or syn-Taconic, whereas the most important deposits are tied to granitic post-Taconic stocks. Most occurrences are clearly related to igneous rocks: nickel, chromium and asbestos to Ordovician serpentinite; copper to volcanic rocks of different ages; and copper, zinc and lead to acidic intrusions with apparent zoning. Some lead-zinc deposits lying between the Grande Greve and York Lake formations are stratigraphically controlled. Some occurrences are tied to faults; e.g., the nickel-copper mineralization along the North Grand Pabos fault. Northerly-trending transverse structures appear to coincide with the Gaspe Copper, Mount McGerrigle (Tabletop) granite and Lemieux dome areas of mineralization. JEAN DUGAS, after graduating"

Jan 1, 1969

By H. Ranjbar

The Darrehzar porphyry Cu deposit is situated in the Urumieh-Dokhtar magmatic suite of Central Iran. The REE and trace element data suggest that the deposit lies within a continental margin setting. Phyllic and propylitic alteration are pervasive in the area but potassic and argillicalteration are not readily recognized on the surface. This is possibly the result of super gene weathering of the surface rocks or because of an intense phyllic overprint. Poor soil development and abundant outcrop make the area suitable for a case study of lithogeochemical exploration technique for Cu deposits. A total of 262 rock samples was collected over the area and analyzed for 15 elements. The geochemical data cor-relate with the mineralogical composition of the rocks with the phyllic zone being marked by high-er concentrations of Si, Al, K, and by a high sericitization index while Ca, Mg, Sr, total Fe and Mn are more abundant in the propylitic zone. The lithogeochemical study indicates a metal zonation from a Cu + Mo-rich core to a Zn + Pb ± Ag-rich outer zone. Principal component analysis is useful for separating element associations, which in turn reflect the alteration halos. Principal components 1 and 2 depict alteration zoning, where-as 3 shows an association of Cu and Mo, that roughly defines the mineralized area.

Jan 1, 1997

By Kosuke Hosoda, Shuji Owada, Hiroyuki Tokuichi, Hirobumi Ohta, Chiharu Tokoro, Moto-o Sato, Katsushi Okumura, Hiroto Ogawa, Hideaki Umezawa

The Japanese government enforced the "Small Domestic Appliances (SDAs) Recycling Law" in 2013. The law targets metals such as Ta, Nd, Dy, Co, and W to be recycled. Considerable amounts of these minor rare metals are mounted on printed circuit boards (PCBs) of the SDAs and/or e-scrap (electric and electronic scraps). Although precious metals and copper can be recovered from the e-scrap in non-ferrous metals smelters, most of the minor rare metals report to the slag in these smelters in non-recoverable forms. These metals are often used in particular types of devices, and therefore it is possible to concentrate them by separating such devices before feeding to the smelters. In previous work we developed technology for "Device Separation" to concentrate several minor rare metals, but some problems remained, such as how to remove the PCBs from e-scrap bodies, and how to detach devices from PCBs after their removal from escrap bodies. This paper proposes a two-stage crushing process in which, firstly, PCBs are removed from the e-scrap body with various crushers, and secondly, devices are detached from the PCBs involving the application of elevated temperatures. It was found that in the first stage, crushers with physically flexible rotating media such as chains, which provide high collision probability with the sample and consume relatively low energy, can quite effectively separate the PCBs from the e-scrap bodies non-destructively. In the second stage, heating was found to be remarkably effective in helping to detach mounted devices from PCBs, also non-destructively. This paper will also discuss the detailed mechanism of the heating effect on the detachment of devices from PCBs.

Jan 1, 2014

By F. Hassani, K. Moozar, J. Ouellet, P. Gauthier

"This paper describes a sudden spill of waste rock used for backfilling from a waste pass at an underground mine in Canada, thus causing a major failure/accident. The mine operator immediately launched a detailed investigation to understand the causes of this accident and develop procedures to prevent any recurrence of such events in the future. The authors from McGill University were invited to collaborate with the engineers at the mine to examine this accident. The events leading to the accident were studied, appropriate measurements were taken and samples of the waste material were collected for further testing and analysis.The field visit and the interview of the witnesses allowed the detailed documentation of the events. The sequence of events related to the incident, along with the experimental results obtained in the course of the investigation, are presented. The waste material was characterized in the laboratory with regard to its behaviour in the presence of water. This information is discussed and the failure mechanism involved in the accident is identified. Finally, the full recommendations as well as the immediate operational measures implemented by the mine to prevent the future occurrence of such events are presented and discussed."

Jan 1, 2004

By Heribert F. Broicher

By the very nature of mineral deposits the quality of the raw material generally fluctuates and should be known for optimum processing. Early classification, for example, of limestone into road-metal grade or lime grade or of run-of-mine ores into high grade, low grade and waste as well as information for blending or for dosage of reagents are prerequisite for economic processing. Non-contact, real-time and on-line rock identification or assessment of quality parameters can be realised by introducing the analysis of laser-induced fluorescence (LIF) into the mining industry. LIF analysis is an optical method evaluating the basically known photoluminescence properties of matter, however, extending the application into hitherto unimagined fields by use of high-energy pulsed lasers and time-resolved analysis of fluorescence in the ultra-violet, the visible and near-infrared domains of light. LIF analysers and test work in a limestone quarry and a cement plant in Germany as well as in an iron ore mine in Sweden are described. First results of test work are available and proof this technology to be promissing.

May 1, 2002

By D. A. Trotter, G. J. Goddard

"This paper describes a method of deciding on various design parameters for a sublevel caving layout. Layout design curves are obtained from the output of a computer optimization program. The program uses mathematical relationships derived from the theory of gravity flow of material to optimize the large number of interdependent design variables which are involved.IntroductionIn the design of an efficient sublevel caving mining system, a large number of interrelated variables need to be considered. Although many papers discuss individual variables, very little exists in the literature to show how these variables interact to achieve optimum results. This can lead to trial and error in sublevel caving design, which can prove costly, particularly because sublevel caving is a mining method which requires integration with sublevels above and below. With no pillars being left, experimental stopes cannot be isolated for study. Unfortunately, the complexity of layout design and the costs associated with trial and error have caused many planning engineers to choose more tried and tested mining methods.Sublevel caving works best to extract low-value ore surrounded by incompetent rock. All phases of the mining method can be highly mechanized, allowing low operating costs and high production rates. Good safety records are achieved, as workers are always in 'good' ground and the method is regular, making it comparable to an industrial process."

Jan 1, 1981

By Rajiv Kalra, Ji Jiangang

"This paper reviews the following aspects of the world’s largest manufactured Grinding Mill’s in terms of diameter and power, along with the world’s biggest shop assembly and trial run of the mills delivered to Sino Iron Magnetite Project in Australia.1. An overview of the basic flow sheet of the Sino Iron (Magnetite) Project located in Australia2. An overview of in-house designed CITIC Heavy Industries 12.2 m (40ft) F x 11 m(36ft) LG – 28MW AG mills including FEA and major components3. In-house manufacturing at CITIC-HIC work in Luoyang China of all major components for 6 off Ø12.2 m(40ft) AG mills and 6 off Ø7.9 m(26ft) x 13.6 m(44.6ft) LG – 2 x 7.8 MW Ball Mills4. Major aspects of design and preparation of the biggest shop trial run of Ø7.9 m(26ft) x 13.6 m(44.6ft) LG Ball Mill witnessed by international EPCM’s and clients in July 2009.5. Major aspects of one piece assembly of 1300 tonne rotating element of the Ø12.2 m(40ft) x 11 m(36ft) LG AG Mill and Ø7.9 m F (26) x 13.6 m(44.6ft) LG Ball Mill at the port of the export China and transport to Australian Port and then to site.6. An insight to unique installation methods used for Ø12.2 m(40ft) and Ø7.9 m(26ft) rotating element lifting on the mill foundation in one piece assemblies.7. CITIC Heavy Industries present capability for in house design and manufacture of Grinding Mills up to Ø13.7 m (45 ft) with 35 MW Gearless drives and Ø12.2 m(40ft) with 2 x 10 MW Geared Mill drives"

Jan 1, 2012

By D. M. Doyle

A study of the various components contributing to energy costs and their relationships to generally trended operating data, such as tonnage, operating costs, etc., over progressively shorter time periods provides information for an energy audit. A study of annual data gives some insight into the importance of various energy components. As the time frame of the study progresses through monthly, daily and, finally, into quarter hourly data, the variations become more evident and, most important, strategies develop to minimize energy costs. The results of an audit conducted during the summer of 1978 at Wesfrob Mines Limited are reported to illustrate this important phase, prerequisite to a meaningful energy cost avoidance program. The balance of the paper deals with the energy conservation program at Falconbridge Nickel Mines Limited's Sudbury operations, the metering and control equipment, the commitment, the new energy accounting practices and, lastly, the policies. Examples of successful energy conservation endeavours include automatic peak electrical load control, waste heat recovery from mine air and compressor cooling water, energy reductions resulting from lower building temperatures and curtailment of idling loads. The use of pulse meters to measure the flow of gas, steam, compressed air and electrical energy, with their signals interfaced to process computers, allows monthly, daily and, if necessary, immediate reporting of energy and energy per unit of production information The program so reported at Falconbridge's Sudbury Operations is credited with an annual cost avoidance of .9 million dollars in a 14.0-million-dollar annual energy account

Jan 1, 1979

By Ian R. Muirhead

Over the past year or so, a number of mining companies have been meeting to examine the role of research in surface mining and, in particular, how to establish a collaborative research effort for the surface mining industry. A review has been completed which has identified the topics that are of interest to the surface mining companies for undertaking collaborative research. This has identified key subject areas such as Operations & Equipment; Maintenance; Environment & Reclamation; and Stability. Specific research projects for the initial research effort have been selected which include Wireless Data Communications, Analysis and Management; Application of GPS in Mining; and Tires for Heavy Haulers. In addition, attention has also been focussed on finding a suitable low cost, but effective, organization to coordinate and manage the collaborative research. The recently formed CONRAD Organization (Canadian Oilsands Network for Research and Development) appears to be a suitable candidate and discussions are ongoing with that group. This paper provides a summary of the review of surface mining research needs and of the status of the establishment of a collaborative research body for surface mining.

Jan 1, 1996

By Brad Hewitt, Jeff Belke

"Murrin Murrin Operations has not had a successful beginning. Numerous reliability and operability issues many of which are the result of design decisions have been addressed through mechanical and operational changes and the CCD circuit is no exception. Four design aspects of the CCD circuit that have caused and continue to cause operational problems are:1. the inclusion of solution neutralisation gypsum in the CCD circuit feed which was designed solely for HPAL residue without proper investigation of its impact on the achievable underflow density and resulting wash efficiency;2. the decision to construct the thickener base from thickened solids;3. the lack of redundancy in the overflow, underflow and tailings pipe work; and4. the lack of thickener operational flexibility in the central rake-lift and feedwell dilution system.In November 2002, the lack of operational flexibility in the rake-lift and the feedwell dilution system through mechanical modification as follows:•, CCD1 has a modified rake mechanism that now allows central vertical lift of 600 mm;•, CCD1 has forced dilution using the Outokumpu Turbodil® technology and replacing the E-Duc® technology of Eimco;The decision to install, the installation and the results of the CCD1 rake-lift mechanism and feedwell dilution system are discussed in this paper. The installation was justified on improved operational robustness and an increase in the in the underflow density of 1 per cent (per cent w/w). At approximately the same time process modifications in the solution neutralisation circuit were implemented and these changes altered the rheology of the slurry reporting to CCD1. Since the modifications to CCD1 and the solution neutralisation circuit, the CCD circuit has averaged a 2 per cent improvement in the circuit underflow density.The CCD1 modification was completed on time and mechanically has performed well. From a risk point of view, the central rake-lift and Turbodil®dilution system add a degree of freedom and robustness to CCD1 operation that has extended the range of operational confidence. In this respect, the modification has been a success and is complementary solution neutralisation improvements."

Jan 1, 2005

By Rajiv Kalra

This paper reviews the following aspects of the world?s largest manufactured Grinding Mill?s in terms of diameter and power, along with the world?s biggest shop assembly and trial run of the mills delivered to Sino Iron Magnetite Project in Australia. 1. An overview of the basic flow sheet of the Sino Iron (Magnetite) Project located in Australia 2. An overview of in-house designed CITIC Heavy Industries 12.2 m (40ft) F x 11 m(36ft) LG ? 28MW AG mills including FEA and major components 3. In-house manufacturing at CITIC-HIC work in Luoyang China of all major components for 6 off Ø12.2 m(40ft) AG mills and 6 off Ø7.9 m(26ft) x 13.6 m(44.6ft) LG-2 x 7.8 MW Ball Mills 4. Major aspects of design and preparation of the biggest shop trial run of Ø7.9 m(26ft) x 13.6 m(44.6ft) LG Ball Mill witnessed by international EPCM?s and clients in July 2009. 5. Major aspects of one piece assembly of 1300 tonne rotating element of the Ø12.2 m(40ft) x 11 m(36ft) LG AG Mill and Ø7.9 m F (26) x 13.6 m(44.6ft) LG Ball Mill at the port of the export China and transport to Australian Port and then to site. 6. An insight to unique installation methods used for Ø12.2 m(40ft) and Ø7.9 m(26ft) rotating element lifting on the mill foundation in one piece assemblies. 7. CITIC Heavy Industries present capability for in house design and manufacture of Grinding Mills up to Ø13.7 m (45 ft) with 35 MW Gearless drives and Ø12.2 m(40ft) with 2 x 10 MW Geared Mill drives

Jan 1, 2012

By A. Tylczak, C. Shook, A. Doogan-Smith, S. Loif, B. Hilscher, P. Nayak

"This paper discusses how to effectively conduct energy efficiency studies during the design of new mineral processing plants and plant expansions. Energy management studies for new plants are ideally conducted as part of the feasibility study, but can also be done at the detailed design stage prior to the purchasing of equipment. Energy management engineers work as part of the mineral processing plant design team.Such studies usually result in energy savings of approximately 3-8% of the predicted plant’s energy consumption and energy demand. Potential cost savings can be significant. A variety of mineral processing systems – crushing/grinding, pumping, materials handling, fans/blowers, compressed air, and others – are assessed within this study.Energy Management Information System (EMIS) studies can also be performed for the new plant or plant expansion, as an independent study. EMIS can be incorporated into the electrical and controls design of the plant.Most Canadian Utility companies fund new plant design studies and provide financial incentives based on the predicted energy savings and incremental cost of the more energy-efficient design. A new plant energy efficiency study improves the potential for energy reduction because only the incremental equipment cost is included in the project return-on-investment calculation. After the design and construction phases, energy efficiency projects must justify the entire cost of the upgrade, which is significantly higher than the incremental cost alone.This paper outlines the major steps of a new plant/plant expansion energy efficiency study, the available utility company incentives, and the areas yielding the largest potential energy savings.IntroductionThis paper discusses energy efficiency studies and energy management systems with regards to mining operations. Energy management refers to the systems of monitoring, analyzing, and optimizing energy usage within a facility. It includes energy efficiency optimization of the initial plant design as well as the implementation of an Energy Management System (EnMS) and Energy Management Information System (EMIS) for optimizing energy usage over the lifetime of the facility. An EnMS is the organizational framework and procedures for managing energy use; an EMIS is the system of monitoring, reporting, and tracking process energy use against targets."

Jan 1, 2016

By M. H. Attia

The concept of sustainable development has been evolved into a working framework for sustainable manufacturing, in which the environmental requirements are introduced into product development at the design stage. This keynote paper is discussing a number of issues pertaining to the impact of manufacturing on the environment. The conflicting requirements of sustainable development, sustainable manufacturing (SM) and economical growth are presented in the light of successful case studies that were able to convert conflicts into opportunities. Integration of SM into the product life cycle is also presented. A number of concepts that are related to Ecoefficiency, e.g., inverse manufacturing, demanufacturing and re-manufacturing are also discussed. The paper underlines the fact that the positive impact of this new philosophy is equally applicable and beneficial to both; developed and developing countries. The paper concludes with an overview of Global trends in environmentally benign manufacturing (EBM); e.g., product-take back and emerging material and processing technologies. The state-of-the-art approach to Life Cycle Impact Assessment and integration of design for the environment DfE principles are demonstrated through some case study.

Jan 1, 2006

By D. Kachongo, Y. Cheng, A. Kashala, D. Samal, G. Mitshabu

Many copper processing flowsheets in the Democratic Republic of Congo include the leaching of oxide ores containing copper and cobalt, copper solvent extraction, copper electrowinning, and precipitation of cobalt salt. Recently, cobalt price gained momentum, driven mostly by the fast-growing electric vehicles battery market. The ore blending scenarios tend to prioritise high cobalt grade ore, whatever the content of copper and other impurities. Therefore, many copper solvent extraction circuits are running below design capacity. The variability of feed induces a variability of the leach solution with respect to copper, manganese, and silica contents. It is thus important to adjust hydrodynamic and metallurgical parameters of the solvent extraction plant to optimise metallurgical performance, production cost, and the quality of the copper electrolyte. This paper presents some results on how solvent extraction plant parameters have been managed in two solvent extraction plants running with lower than designed copper input. INTRODUCTION Referring to a report of the chamber of commerce of the Democratic Republic of Congo (DRC) the online publication Agence Ecofin (2019) indicated that the DRC ranks in the fifth position of the world top copper producing countries with over 1.2 million tons produced in 2018. The same year, 66% of the world’s cobalt was produced in the DRC at over 106,000 tons. If the political situation remained stable and the new tax regime introduced in 2018 did not deter private investors, copper production could reach 1.4 million tons/a in 2020 as pointed out in Mining.com (2019). Forecast figures for DRC cobalt production vary widely depending on analysts. The DRC online magazine Actualité.cd (2018) referring to a ministerial source forecasts over 141,000 t cobalt/a for 2020. The reality will depend on many factors, including the selling price, the supply compared to the demand, and finally the reaction of investors to the new DRC tax regime. The growing electric vehicle batteries market has been the major key driver of the price of cobalt. The five years historical cobalt price graph in figure 1 from infomine.com (2019) shows that the price of cobalt peaked at over 40 USD/lb in the first quarter of 2018. Cited by the online Magazine Creamer Media, Smith (2019) has indicated that the long-term demand of cobalt will likely remain strong.

Jan 1, 2019

By Eric Low

Raising capital by issuing debt or equity is necessary in almost every corporation. In the field of corporate finance, the raising of capital is a heavily-studied topic. However, some of what is studied on this topic in corporate finance is not applicable in the mining industry. There are also many financing options that were created for the mining industry such as flow-through shares, prepaid forwards, and royalty sales. The cyclical nature of the industry makes the risk-return profile of financings more difficult to estimate than in other industries. Additionally, the methods used to assess firm value are different than other industries, as the values of orebodies are not included on balance sheets. For precious metals companies, which are a hedge against most other securities, there are additional complications with determining investor expectations and cost of equity. This thesis puts forth a decision-making framework to explain mine financing choices from the perspective of mining companies. The approach is threefold. First, all of the major equity and debt financing instruments available to mining companies are presented and analyzed. Each financing method is assessed on a wide range of criteria. Next, these concepts are applied in case studies of four companies: BHP Billiton, Barrick Gold, Teck Resources, and Noront Resources. For each company, the overall choice of financing methods is shown and analyzed. The effect of financing choices on the weighted average cost of capital (WACC) is calculated. The final section deals with case studies of individual mine finance decisions during the past two years.

May 1, 2011