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By J. A. Bownocker

THE EXISTENCE of petroleum in the rocks of Ohio and Indiana seems to have been first shown by wells dug for salt. The fuel, however, was objectionable owing to its odor and inflammability. Not until the brake well was drilled in 1859 did the people appreciate the value of rock oil, and then they at once began plans to secure the coveted fuel.. The first successful well in these two states was near . Macksburg, in southeast .Ohio, where at a depth of 59 ft. (17 m.) :oil was found in commercial quantity (1860). A year later this fuel was secured on Cow Run, in the same county, and at about the same time in Noble, Morgan and perhaps other counties in that part of Ohio. The second great step in the production of oil in Ohio and Indiana was taken in 1884 when the reservoir of natural gas in the Trenton limestone of northwest Ohio was tapped, and where a year later oil was secured in the same formation. Petroleum in this limestone was obtained in Indiana in 1889.1 The third step in the production of oil' in Ohio and Indiana is associated with the Clinton sand of Ohio. Natural gas in large volume was discovered in that rock at Lancaster, in 1887, and the area has been extended until it has become the largest individual producer in the world. The presence of natural gas in such great volume all but demonstrated to the driller that-oil lay hidden near by. Soon the search for it was started but not until 1899 was petroleum in commercial quantity found in the Clinton sand, and a large pool was not located in it until 1907. The fourth step in the development of the industry was taken in 1913, when the pool in Sullivan County, in western Indiana, was opened. The producing rock is the Huron sandstone, which is the topmost member of the Mississippian system.2

Jan 2, 1920

By Rogers M, Sullivan B

Golden Crown Mine is a narrow vein gold mine producing 75000 tpa. Production has been predominantly by shrink stoping using hand held machine and airleg. Bogging from these stopes is done with Toro 150 LHD units.Previously the standard development method consisted of developing a sill drive, a footwall drive and millholes every 7 m. This meant that for every metre of ore development, 2 m of waste development was required.

Jan 1, 1993

A paper presenting an overview of legislative and best practice approaches to the management of OHS&E and business risk for Australian tunnelling operations. Best practice can be achieved in Australian tunnelling through ærisk awarenessÆ by decision-makers and line personnel. This will identify problems before they occur and lead to implementing controls appropriate to avoiding loss throughout the life cycle of the underground opening. The author draws on legislative approaches from all Australian states together with practical experience from risk management and risk engineering work from six recent tunnelling projects. This describes a process that:commences with concept risk assessment,involves quantification of major hazards,conducts assessments of operating risks, andleads to implementation of an integrated management system that keeps construction activities connected with the controls identified in the design and planning phases and minimises the losses sustained as a result. Key points addressed include:where the industry is going with respect to risk û methods and considerations,how tunnelling risks are perceived by the industry and legislation,how tunnel constructors and owners can minimise exposure by using proper risk engineering ætoolsÆ, andreflections on best practice methods for transferring knowledge from designers to contractors/operators.

Jan 1, 2008

By L. D. Smith

Net Present Value Impact of Discount Rate The Discounted Cash Flow (DCF) method of valuations is universally used and accepted. The main criticism of the method is that it does not recognize the value of projects long life projects. This can be seen in the preceding graph where the present value of cash flows in later years are small for discount rates over about 10%. This graph covers a project that has a 25 year operating life. It is clear from the low height of the NPV bars at 10% and 15% in the last years of the project that an additional 25 years would add almost no value to total project NPV. As an example of this effect, an colleague undertook the evaluation of a pulp and paper project. The plant could be justified, but it was not possible to justify planting the trees as they took too long to grow and so had not appreciable NPV. The plant had to purchase wood to feed the plant.

May 1, 2013

Solid EnergyÆs project evaluation process utilises a standard staged gate approach, with five levels leading ultimately to project execution (level 6). For a project to progress through each level, specific financial criteria need to be satisfied. Solid Energy primarily use value based (discounted cash flow) metrics to support investment decisions. Within this approach Solid Energy utilise a number risk-based techniques to quantify project uncertainty. This includes the use of risk-based probabilistic analysis using Monte Carlo simulation and probability-based scenario analysis. Figure 1 shows the net present value (NPV) cumulative probability. Project risks are identified through comprehensive risk workshops. The output of these workshops (list of key risks, ranges of uncertainty and probability of occurrence), is quantified within the financial models. Incorporating this risk information on a probabilistic basis allows an investment decision to be made with a robust knowledge of the range of possible project outcomes along with the likelihood (probability) of those outcomes occurring, for example 80 per cent confidence that the project value will be greater than NZ$10 M, 50 per cent confident it will be greater than NZ$50 M and ten per cent confident it will be greater than NZ$70 M. Incorporating risk implicitly into the financial analysis allows the business to easily evaluate/measure projects with different risk profiles. The detailed risk analysis does away with the complexity of arbitrary risk-based hurdle (discount) rates, as projects can be evaluated based on their specific risk characteristics. Whether a project will progress to the next level of investment and ultimately into implementation depends firstly on the value assessment in comparison with the associated risk/uncertainty, and secondly matching this with the businesses appetite for risk. At Solid Energy standard criteria are used for specific project evaluations, but in addition projects are considered on a portfolio or strategic basis also. Solid Energy attempts to maintain a mix of low risk (low value) projects with some high risk (high value) opportunities. The mix of projects must remain in line with the shareholdersÆ risk appetite. One of the keys to a successful investment decision is ensuring that the appropriate information is available to decision-makers so that they may proceed with a comprehensive understanding of the risks and impacts associated with the decision.

Jan 1, 2007

By B. Gamble

Solid Energy's project evaluation process utilises a standard staged gate approach, with five levels leading ultimately to project execution (level 6). For a project to progress through each level, specific financial criteria need to be satisfied. Solid Energy primarily use value based (discounted cash flow) metrics to support investment decisions. Within this approach Solid Energy utilise a number risk-based techniques to quantify project uncertainty. This includes the use of risk-based probabilistic analysis using Monte Carlo simulation and probability-based scenario analysis. Figure 1 shows the net present value (NPV) cumulative probability. Project risks are identified through comprehensive risk workshops. The output of these workshops (list of key risks, ranges of uncertainty and probability of occurrence), is quantified within the financial models. Incorporating this risk information on a probabilistic basis allows an investment decision to be made with a robust knowledge of the range of possible project outcomes along with the likelihood (probability) of those outcomes occurring, for example 80 per cent confidence that the project value will be greater than NZ$10 M, 50 per cent confident it will be greater than NZ$50 M and ten per cent confident it will be greater than NZ$70 M. Incorporating risk implicitly into the financial analysis allows the business to easily evaluate/measure projects with different risk profiles. The detailed risk analysis does away with the complexity of arbitrary risk-based hurdle (discount) rates, as projects can be evaluated based on their specific risk characteristics. Whether a project will progress to the next level of investment and ultimately into implementation depends firstly on the value assessment in comparison with the associated risk/uncertainty, and secondly matching this with the businesses appetite for risk. At Solid Energy standard criteria are used for specific project evaluations, but in addition projects are considered on a portfolio or strategic basis also. Solid Energy attempts to maintain a mix of low risk (low value) projects with some high risk (high value) opportunities. The mix of projects must remain in line with the shareholders' risk appetite. One of the keys to a successful investment decision is ensuring that the appropriate information is available to decision-makers so that they may proceed with a comprehensive understanding of the risks and impacts associated with the decision.

Jan 1, 2007

By M. Kavvadas

Geotechnical design using Factors of Safety recommended by Codes of Practice is based on largely unknown ?margins of safety?, usually without consideration for the importance of the project (i.e., potential consequences of failure) directly or explicitly. On the contrary, probabilistic modelling can be a useful tool in risk management as it provides the means to measure the risk to be managed. This is achieved by calculating the probability of failure associated with a specific design, i.e., by relating the classical factors of safety with the corresponding probability of failure and by using a cost optimization procedure to achieve ?optimal? designs, accounting for the expected costs in case of catastrophic failure. This paper describes the methods used to calculate the probability of failure and its correlation with the classical Factor of Safety using sampling techniques and a simplified method based on the moments of the factor of safety considered as a random variable. These procedures are illustrated in an example which investigates the stability of a slope.

Jan 1, 2005

By Behdeen Oraee

Constructing tunnels underground is generally described as a high-risk activity because conditions in the surrounding area tend to be unpredictable. This would and can create unique dangers in every situation. It is important to gain a deep understanding of the risks associated with tunneling in order to reduce the likelihood of their occurrence and severity of their consequences should they occur. For this to be achieved, different risks should first be evaluated and ranked according to their relative importance and criticality. The Amir Kabir tunnel is considered one of the most dangerous tunnels in Tehran, Iran, in terms of the risks involved in its excavation and their potential consequences. In particular, part T4 of the tunnel passes through a zone of different strata and also a compound of various soils. This paper studies part T4 of the Amir Kabir tunnel from a risk analysis and risk management point of view. In doing so, factors increasing total cost, causing delay in the project completion time, decreasing the operation rate and downgrading project quality were identified and ranked according to their importance using the aggregate primary index risk method. For this purpose, a comprehensive questionnaire was designed and completed by tunneling experts. By responding to the questionnaires, the experts determined the relative likelihood of occurrence of the studied factors and their potential consequences. As a result, the experts suggested several alternatives to reduce the risks involved in this particular study. Moreover, the experts completed new questionnaires whilst taking into account different alternatives. In the next step, the risks before and after applying the alternatives were compared. As a result of performing the said analyses, it was concluded first that the aggregate primary index risk is an effective tool in identifying the risks involved in such projects. Second, it was concluded that, by taking into account different alternatives when analyzing and ranking the risks, severity of the said risks can potentially be reduced. Also, by considering such matters when analyzing tunneling risks, the projects? efficiency can greatly increase as a result of reducing risks that threaten financial and human resources. The approach introduced in this paper, together with the methodology described, can be adopted by the mining design engineer in all similar situations. They will be of particular advantage in such methods as room and pillar mining, where the number of similar tunnels required is high.

Jan 1, 2014

This paper examines the concepts of risk analysis and uncertainty in open pit mine design. It describes the relationship between risk analysis and uncertainty, describes methods that can be used to quantify uncertainty, and suggests ways of reducing the geological and geotechnical uncertainties that are inherent in open pit mining.

Jan 1, 1994

By R. J. Pine

Procedures are described for the application of risk analysis or probabilistic methods to mining geomechanics. The methods are widely applicable to existing mine design models. Detailed examples are given of plane slope failure and of pillar design based on displacement-discontinuity stress modelling and empirical strength assessment. The modelling techniques assessed are the Latin hypercube sampling method, incorporated in a spreadsheet environment, and the general point estimate method (GPEM), programmed in TurboBasic. An example GPEM program listing is included. Both methods are very convenient to use. Probabilistic acceptance criteria for slope stability after Priest and Brown are examined and alternatives are proposed where output distributions of factor of safety are approximately normal or lognormal and output distributions of safety margin are normal. The reliability index is included as a useful measure of variability with proposed acceptance criteria.

Jan 12, 1992

By Michael Gobla

"Since 1994 the Bureau of Reclamation (BOR) has used risk analysis to evaluate dams. Risk considers both the likelihood of failure and the expected consequences should failure occur. Risk analysis relies on the detailed formulation and critical analysis of all possible potential failure modes. Potential failure modes are formulated by describing the sequence of events that must occur to result in failure, where failure is defined as the uncontrolled release of the impounded reservoir. Failure occurs in response to loadings such as water seepage through a dam (static forces), shaking from an earthquake (dynamic forces), sudden flood inflows (hydrologic forces), or accidental overfilling (operational errors). Reclamation has, to a limited extent, applied risk analysis to inactive and abandoned mines to evaluate tailings dams, pit lakes and flooded underground mines. Case histories of potential failure mode analysis, as applied to mine impounded water, illustrate what critical technical information is needed to determine if failure is likely, what the consequences of failure are likely to be, and what are the highest risks that should be addressed first.IntroductionImpounded water and high water content wastes at mining and industrial processing sites are potential threats to public safety and the environment. Recent failures such as the TVA Kingston flyash impoundment failure in Tennessee in 2008 (4.1 million m3 or 5.4 million cu yd) release, the Mt. Poly Tailings Dam failure in British Columbia in 2014 (4.4 million m3 or 5.8 million cu yd) release, and the Samarco Fundao Tailings Dam failure in Brazil in 2015 (59 millon m3 or 78 million cu yd) release have renewed attention to this issue. Potential risks from impounded water at mining and industrial sites originate not only from tailing dams, but also from water in process ponds and conveyance pipelines, sediment retention dams, water retention dams, mine pit lakes and flooded underground mine workings.Conventional water retaining dams also have a record of failure. Notable examples of failure include Vajont Dam in Italy in 1963 (2,600 lives lost), Banqiao and Shimantan Dams in China in 1975 (171,000 lives lost), and Machhu-II Dam in India (10,000 lives lost). After the 1976 Teton Dam failure in Idaho, the U.S. Bureau of Reclamation (BOR) established a Dam Safety Program. By 1984, the agency developed and began using risk analysis methods. BOR operates and maintains an inventory of hundreds of aging dams which were designed and constructed over a period of 100 years. Many of these facilities were designed and constructed prior to the development and adaptation of modern soil mechanics in dam engineering. Diligent observational monitoring, detailed site investigations and the application of risk evaluation to the BOR dam inventory has identified many deficiencies resulting in significant demands on available funding for remediation efforts. The application of risk analysis has allowed the agency to rank sites by risk. By giving priority of remedial efforts to high-risk sites, significant improvements to dam safety have been achieved."

Dec 1, 2016

By M. Gobla

"Since 1994 the Bureau of Reclamation has used risk analysis to evaluate dams. Risk considers both the likelihood of failure and the expected consequences should failure occur. Risk analysis relies on the detailed formulation and critical analysis of all possible potential failure modes. Potential failure modes are formulated by describing the sequence of events that must occur to result in failure, where failure is defined as the uncontrolled release of the impounded reservoir. Failure occurs in response to loadings such as water seepage through a dam (static forces), shaking from an earthquake (dynamic forces), sudden flood inflows (hydrologic forces), or accidental overfilling (operational errors). Reclamation has applied risk analysis methods to inactive and abandoned mines to evaluate tailings dams and flooded underground mines. Case histories of potential failure mode analysis as applied to mine impounded water illustrates what critical technical information is needed to determine if failure is likely, what the consequences of failure are likely to be, and what are the highest risks that should be addressed first. INTRODUCTION Impounded water, and high water content wastes, at mining and industrial processing sites are potential threats to public safety and the environment. Recent failures such as the TVA Kingston flyash impoundment failure in Tennessee in 2008 (5.4 million yd3 released), the Mt Poly Tailings Dam failure in British Columbia in 2014 (5.8 million yd3 released), and the Smarco Fundao Tailings Dam failure in Brazil in 2015 (78 million yd3 released) has renewed attention to this issue. Potential risks from impounded water at mining and industrial sites originates not only from tailing dams, but also from water in process ponds and conveyance pipelines, sediment retention dams, water retention dams, mine pit lakes, and flooded underground mine workings. Conventional water retaining dams also have a record of failure. Notable examples of failure include Vajont Dam in Italy in 1963 (2,600 lives lost), Banqiao and Shimantan Dams in China in 1975 (171,000 lives lost), and Machhu-II Dam in India (10,000 lives lost). After the 1976 Teton Dam failure in Idaho, the Bureau of Reclamation (BOR) established a Dam Safety Program. By 1984 the agency developed and began using risk analysis methods. Reclamation operates and maintains an inventory of hundreds of aging dams which were designed and constructed over a period of one hundred years. Many of these facilities were constructed using engineering design and construction methods which would not be considered good practice according to present day standards. Diligent observational monitoring, detailed site investigations, and the application of risk evaluation to the BOR dam inventory has identified many deficiencies resulting in significant demands on available funding for remediation efforts. The application of risk analysis has allowed the agency to rank sites by risk. By giving priority of remedial efforts to high risk sites, significant improvements to dam safety have been achieved. BOR has also applied risk analysis to evaluate and reclaim inactive and abandoned mining and industrial sites. The application of risk analysis methods in the mining industry is not new, the methodology was transferred to the mining industry more than 15 years ago as discussed in ICOLD Bulleting 121 (ICOLD, 2001), yet failures persist. This paper is meant to convey the lessons learned from BOR’s use of risk analyses in its work on mine sites."

Jan 1, 2017

By Luis Alberto Martinez Tipe

The paper show how the inclusion of the uncertainty of the geology of the orebody into the mine planning and design process can be of great help, for the mine planner, in both assessing and quantifying the existing risk in the key project indicators such as DCF, and ore tonnage. This is achieved by using conditional simulation and Monte Carlo techniques which provide equally probable models of the original orebody model of the deposit. In this fashion, it is possible to assess the sensitivity of the pit design and related long-term production scheduling (cutbacks) to grade uncertainty.

Sep 12, 2005

Sophisticated pit optimisation software has allowed mine planning engineers to generate mining outlines that consider the numerous factors that have a major effect on the success or otherwise of a mine plan. The outlines are generally generated using a range of values for which one can assume a fixed mining cost and a variable revenue. During analysis, the expected costs and revenues are used to investigate the cashflow and sensitivities. Ultimately, the final pit and incremental outlines, or shells, are selected for a given expected price. This paper proposes an alternative method for incremental pit shell selection that considers the risk the mine be prepared to accept. The life of mine is divided into a number of Business Risk Periods (BRPs). The BRP represents the period of time over which the owner is prepared to invest capital. During each BRP, the mine will then operate at a selected investment cost which is generally equal to or greater than the minimum required to meet production targets. In this way, a robust mine plan can be produced which allows the mine to react to change without having to alter the incremental shell limits while maintaining a strategic risk profile. This paper will summarise factors to be considered in selection of the BRP and the incremental pit shells within the BRP.

Jan 1, 1998

By R. Heuberger

South Africa?s Mining Industry operates in an uncertain world. The industry is buffeted by problems regarding retrenchments, unemployment, low productivity, rising costs, volatile exchange rates, commodity prices and government regulations. With these uncertainties facing the decision makers, what does applied technology offer the industry?s management? Modelling languages with risk analysis have been available for decades, but in the past their use has been very expensive, requiring large mainframe computers and lots of computer time. Today, PCs and laptops have incredible power, which makes interactive risk analysis affordable and viable for all enterprises, whether small or large. ?What is risk analysis? ?What is Monte Carlo simulation? ?What kinds of computer models need to be created to use risk analysis and Monte Carlo simulation effectively? This paper addresses these questions and illustrates, with a practical example in the mining industry, how risk analysis techniques can be used to support decisions in the climate of uncertainty.

Jan 1, 2005

By Denis Yaychuk, Gary Billingsley

The economic eva luation of a mineral property or mining venture should include the quantification of ri k as part of the analy is. The re ults of such an analysis provide the decision-makers not only with the most likely financial outcome and the probability of achieving that or any other outcome. but al o with a ranki ng of the relative impact of all the ri sk factors. These type of resu lts offer more complete information for investment and technical deci ions than the traditional cash flow/ ensitivity analysis. In addi tion. by attempting to quantify ri sk. the personnel providing the va ri able input are forced to take a much clo e r look at the data involved, and are fo rced to work together. the reby increa ing substantially the awa reness of the impact their work and others· work has on th e outcome of the analysis.

Jan 1, 1986

By Champigny N, Grimley P. H

To a bank that granted his request for a loan, the late American humorist Robert Benchley responded, `I don't trust a bank that would lend money to such a poor risk'. This quotation is unlikely to be the norm among mining companies that secure project financing. However, a poor appreciation of one of the key risks of a mining project, the reserves, often results in disastrous financial consequences. This conclusion is the subject of the discussion and analyses presented in this paper.

Jan 1, 1994

By K Broadley

Risk and dispute resolution are linked. Dispute resolution techniques are brought to bear on a dispute - which is an outcome of a risk being wholly or partially realised. There has been an increasing awareness by business of risk as a component of doing business. There is an accompanying awareness of the need to manage risk - including legal risk. Many companies have undertaken a systematic review of their potential risks and endeavoured to put in place systems to help to avoid or manage risks. A legal risk management program will not prevent disputes arising. However, such a program should prescribe how that dispute will be managed. The management of the dispute will involve consideration of the dispute resolution procedure to be adopted. The most appropriate processes will take into account the practical, personal and commercial considerations surrounding the dispute and be as efficient, cost-effective and user friendly as achievable in the circumstances for the benefit of all the parties. Carrying on business in South East Asia, whether as an explorer or a mining operator, brings additional considerations to bear in legal risk management and the dispute resolution process. A significantly different perspective is required due to the varying nature of the legal systems in many South East Asian jurisdictions. These jurisdictions often have relative uncertainty as to the law. This impacts on the dispute resolution processes and also raises further timing and cost issues. The authors contend that this is all the more reason to endeavour, as practically as possible, to adopt a legal risk management and dispute resolution profile which will provide business with the greatest prospects of maintaining control of the dispute resolution process. This presents a greater chance of a successful outcome to the dispute. In these times of increasing pressures on profitability because of low mineral prices, all costs of a minerals business are being reviewed. In such times, a significant legal dispute may have even greater potential to adversely impact on the companies concerned, together with the careers of the people involved. In this paper possible approaches to managing disputes and a case study a legal dispute in which Freehill Hollingdale and Page were involved are discussed. The dispute concerned an international mining company developing a gold mine in Indonesia and one of its contractors in Indonesia. Described is how that dispute was resolved. This achieved a very satisfactory result for the client - all things considered. Given the æadditionalÆ problems associated with ascertainment and enforcement of ærightsÆ in South East Asia, the longer the parties can retain control over their dispute the better off they will be. For this reason, the authors set out in this paper the main additional dispute resolution tools available - that are appropriate for use throughout South East Asia.

Jan 1, 1999

By Harvey W. Parker

The underground industry is challenged by many complex technical and non-technical issues and risks. The most obvious of these are the traditional technical issues that we usually try to address with risk management techniques. However, there are many other non-technical risks that our projects face on a daily basis which we often fail to fully recognize or appreciate. This paper addresses some of the less-technical broad-based risks in order to put them into perspective with the technical risks we face day to day in underground planning, design and construction. The good news is that Risk Management techniques are not always about bad things. For obvious reasons Risk Management is always thought of in terms of the ?downside? of risk (i.e., the identification and mitigation of things that can go wrong). On the contrary, there is an ?upside? of things that might go better than expected. Fortunately, if a deliberate effort is made, the same principles and techniques that our industry uses in Risk Management can be applied toward identifying and quantifying the Opportunities and Benefits that might occur. In this way, the process of conducting risk management programs can not only identify the downside risk but can be used to identify and direct projects to take advantage of the upside of uncertainty (i.e., Opportunities as they arise). This beneficial aspect of risk management programs will be highlighted in this paper together with the importance of the non-technical issues.

Jan 1, 2008

By L. H. Pye

For large mining sites in the west, the traditional method for performing an ecological risk assessment (ERA) provides little useful information for risk managers faced with selecting and designing sound remedial options. Current U.S. Environmental Protection Agency (EPA) risk assessment guidance largely supports quantitative risk characterization of individual species as surrogates for population and ecosystem-level effects. Developing a work plan for investigating and remediating ecosystem-level changes potentially caused by large-scale historic mining/smelting contaminant release requires a decision process that incorporates a more holistic ecosystem management approach. Some of the most wasteful efforts associated with mine site ecological risk assessments arise when the risk analysis and data collection programs are not specifically linked up-front to the risk manager's decision needs. The following paper discusses the importance of employing a decision-based, ecosystem management framework when conducting ecological risk assessments at large mining sites. A case study of an ecological risk assessment currently being performed at a large New Mexico copper mine site is presented.

Jan 1, 1999