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By Rossen Halatchev

The production sequence optimization of open pit mine is a procedure that reflects the exploitation conditions over life of mine. These conditions are determined by the geological characteristics of the deposit, requirements of the mining and processing technologies and economic parameters of the exploitation. From a technological point of view the production sequence optimization deals with two aspects - spatial and time. Each of them plays a tremendously important role in searching for the optimum solution of the problem. This paper treats the time aspect of the production sequence optimization. This aspect is revealed in the context of the problem of the working zone formation of the open pit mine in time. The problem formulation places an accent on the determination of the theoretically possible time distribution of the waste and ore quantities of each bench of the open pit mine. A mathematical solution to the problem has been developed based on combinatorial analysis. The solution provides a multi-variant investigation of the production sequencing with the use of an optimization model developed as a linear programming formulation. The model objective function uses the Net Present Value as a criterion for assessing the effectiveness of production sequencing. A case study is provided for the conditions of Assarel copper open pit mine (Bulgaria) to illustrate the applicability of the approach. The results obtained reveal the complex nature of the variation of the Net Present Value as a function of the mining factor.

Jan 1, 2002

In April 2012, work started on one of the most ambitious construction projects of Austria?s ÖBB-Infrastruktur AG ? the New Semmering Base Tunnel. Scheduled for completion in 2024, the 27.3 km (17 mile) tunnel through the Semmering range will cut the journey time on the south railway connecting Lower Austria and Styria. Before con-struction can begin at the entrance portal and tunnel bores, the work concentrates on the above ground sections with the clearance and excavation of the entrance ramp site. The slope is currently being excavated by the Baubeteiligungsge-sellschaft m.b.H. BBG-GRAZ. The cut face is shored up with shotcrete and permanent self-drilling anchors produced by Minova MAI, an economical bolting solution for softer rock formations. After completing the surface construction work, the twin-bore, single-track tunnel will be cut through the Semmering by conventional and continuous excavation beginning in 2015. Once completed, the New Semmering Base Tunnel will be one of the longest rail tunnels in Austria. It will act as a vital link on the route crossing Europe?s heartland from Northern Germany to Italy, which currently has to climb the steep Semmering pass between Gloggnitz and Mürzzuschlag on a historic mountain railway recognized as one of the UNESCO World Heritage sites. The old route imposes considerable limitations on heavy freight trans-port, and passenger trains have to slow down to a speed of around 50 kph (31 mph). The New Semmering Base Tunnel will bypass this bottleneck and cut 30 minutes off the journey time between Vienna and Graz. It represents a particular advantage for freight traffic, since the new route?s minimal incline of 8.4 percent removes all obstacles for even heavy freight trains.

Jan 1, 2013

By Francis B. Foley

From the point of view of the metallographist, the adaptation of x-rays to the study of the crystal structure of metals is of the greatest importance. While one may hardly consider the findings resulting from x-ray study as revolutionary, their positive nature, compared with the deductions we have been forced to accept from the work that had gone before, gives firmer ground on which to build and furnishes new fields for speculation. Prior to the advent of the crystallogram, the best work on the crystal structure of steel was that of Osmond and Cartaud.' They concluded, from their investigation with percussion figures formed at various temperatures, that alpha, beta, and gamma irons belonged to the cubic system and that they showed well-marked specific characteristics and could not have the same internal structure. What the internal structures were, they had no direct method of determining; but from a consideration of the fact that the 001 plane (that parallel to the cube face) is a plane of perfect cleavage and minimum hardness in alpha iron and that the 111 (octahedral) plane is by far the most important in the crystallography of gamma iron, they were led to suggest the simple cubic arrangement as that of alpha and the face-centered cubic arrangement as that of gamma iron. They suggested the body-centered cubic arrangement as that of beta iron. The atomic arrangement of the various crystal forms of iron has been quite definitely determined in recent years by means of x-rays and the work of Westgren2 and Weatgren and Phragmen3 has been rather conclusive. They not only determined the atomic arrangement of alpha, beta, and gamma iron but also that of the high-temperature modification delta.

Jan 1, 1926

By R. G. Woolery

INTRODUCTION Since 1975, Union Carbide Corporation has been conducting uranium exploration in southwestern South Dakota. This program has resulted in the discovery of an ore body about eight miles north of Edgemont in Fall River County. The site which was previously mined for uranium in the 1950's and 1960's consists of 950 lode claims (approximately 20,000 acres) and is within the Black Hills National Forest. Preliminary development plans indicate that fewer than 200 surface acres will be involved in the mining and heap leaching of the ore. The ore occurs in both the Fall River and Lakota formations. The exploration to date has developed something in excess of two million tons of ore averaging -0.1% U308. About 75% of the ore is expected to be mined from underground with 25% coming from five to seven small pits. The surface mining will be extensions of previously mined areas with a disturbance of 35-40 new acres near 35-40 previously disturbed acres requiring a total reclamation of 70-80 acres. Several options for processing the ore including conventional milling by UCC, conventional milling in joint venture with another producer, and heap leaching are under consideration. This paper is concerned with the preliminary assessment of the heap leaching option based on the limited test work conducted on surface samples and on available cores from the deeper ones. The final design for a commercial operation will not be available until an underground bulk sample has been obtained and evaluated. Union Carbide has been operating heap leach facilities commercially since 1973 at Gas Hills, Wyoming and Maybell, Colorado. During this period, we have made considerable progress in heap construction

Jan 1, 1983

By J. A. Holmes

Venezuela has continued during 1929 to demonstrate that it is destined for many years to come to be one of our most important sources of crude petroleum. The producing fields of the Bolivar Coastal district along the east side of Lake Maracaibo have continued their phenomenal production, and two new fields have reached the near producing stage, while the results of deep test wells have strengthened the predictions and expectations that oil will be found and produced from many other pools and from several different geological formations. The finding of these new oil pools is not going to be easy, because the surface evidences of geological structure are scanty, and the subsurface problems are difficult, but intelligent effort backed by ample resources may be counted upon to overcome these obstacles and lead to a continued increase in the number of producing fields in Venezuela. During 1929 the total production of Venezuela was approximately 135,953,000 bbl., an increase of nearly 30,000,000 bbl., or 28 per cent., as compared with the preceding year. During 1929 oil in steel storage in Venezuela decreased from 13,000,000 to about 11,000,000 barrels. Tables 1, 2 and 3 briefly summarize Venezuelan production by fields and by years, and show the trend of production since its establishment on a commercial basis. Table 1.---Production of Crude Oil in Venezuela by Years, 1917 to 1929 All Figures in Barrels of 42 Gallons Total PRodUction Total PRoduction Year VeneZUela, Bbl. Year Venezuela, Bbl. 1917....................... 227,000 1927.................... 63,181,000 1918....................... 368,000 1928.................... 106,000,000 1919....................... 258,000 1929.................... 135,953,000* 1920..................... 548,000 Grand Total Since Ineep- 1921...................... 1,544,000 tion................... 380,791,000 1922....................... 2,448,000 Increase, 1929 over 1928.. . 29,953,000 1923..................... 4,170,000 Per cent. Increase......... 28.2 1924....................... 9,234,000 Per cent. 1929 Production 1925....................... 20,219,000 of Total............... 35.7 1926....................... 36,641,000 * Includes estimate for closing period of 1929.

Jan 1, 1930

By AIME AIME

JOHN HUNTER NEAD, chief metallurgist of the Inland Steel Co., Chairman of the Iron and Steel Division for 1939, a native of Missouri and graduate of the University of Michigan, first taught chemistry after graduating from college and then decided to follow the field of his college specialization and be a metallurgist. In succession he was associated with the H. H. Franklin Co., Syracuse, N. Y., the Watertown Arsenal, the Racine Steel Castings Co., and the Minneapolis Steel and Machinery Co. During the World War he held a commission as Captain in the Ordnance Department and served both overseas and on the technical staff in Washington. Returning to civilian life, Hunter Nead was research metallurgist and then chief metallurgist of the American Rolling Mill Co. from 1919 until 1931, when he went to his present position with Inland.

Jan 1, 1939

By AIME AIME

. COUNCIL.* PRESIDENT OF THE COUNCIL. D. W. BRUNTON DENVER, COLO. (Term expires February, 1911.) VICE-PRESIDENTS OF THE COUNCIL. W. C. RALSTON SAN FRANCISCO, CAL. W. L. SAUNDERS : NEW YORK, N. Y. H. V. WINCHELL ST. PAUL, MINN. (Term expires February, 1911.) BENJAMIN B. LAWRENCE NEW YORK, N. Y. JOSEPH W. RICHARDS SOUTH BETHLEHEM, PA. ALBERT SAUVEUR CAMBRIDGE, MASS. (Term expires February, 1912.)

Apr 1, 1910

By AIME AIME

PRESIDENT OF THE COUNCIL. D. W. BRUNTON DENVER, COLO. (Term expires February, 1911.) VICE-PRESIDENTS OF THE COUNCIL. W. C. RALSTON SAN FRANCISCO, CAL. W. L. SAUNDERS NEW YORK, N. Y. H. V. WINCHELL MINNEAPOLIS, MINN. (Term expires February, 1911.) BENJAMIN B. LAWRENCE NEW YORK, N. Y. JOSEPH W. RICHARDS SOUTH BETHLEHEM, PA. ALBERT SAUVEUR CAMBRIDGE, MASS. (Term expires February, 1912.)

Nov 1, 1910

By J. B. Morrow

AMONG the most notable of Canada's many contributions to the personnel of the mining industry in the United States is J. B. Morrow, born in Halifax, Nova Scotia, April 9, 1886. Soon after completing his schooling at Dalhousie University in 1906 he emigrated to Arizona and Kew Mexico, via Cobalt and Larder Lake, Ontario. After preliminary experience in sampling and mucking he was employed by the Phelps Dodge Corp., first as chemist at the Copper Queen smelter, then, in 1908, with the Corporation's Stag Canyon coal branch at Dawson, N. M., in various capacities fro111 chemist to coke oven and coke department superintendent, and finally as general outside superintendent. While with Phelps he had some contact with the late Dr. Douglas, of whose industrial methods he has always been a great admirer.

Jan 1, 1937

By AIME AIME

NOTWITHSTANDING the metropolitan appearance of M. L. Haider, the present Chairman of the Petroleum Division, he is not a native New Yorker, but was born at Mandan, N. Dak., Oct. 1, 1904. He began his travels at an early stage in life and after attending the University of Southern California for two years he spent two additional years at Stanford University and was graduated in 1927. After a few months as an analytical chemist for the Portland Cement Co. he became research engineer in the natural gasoline department of the Richfield Oil Co. where he remained for approximately two years before taking a position with the Carter Oil Co. in Oklahoma. He was chief engineer for this company for three years before being trans-

Jan 1, 1945

By Qixing Yang, Björn Haase, Fredrik Engström, Anita Wedholm

"MiMeR, the Minerals and Metals Recycling Research Centre at Luleå University of Technology, Sweden, started industry-related research work to stabilize an EAF slag from Höganäs AB with of CaO/SiO2 values near to 3.2. The intention was to determine the suitability of the EAF slag as construction material after stabilization. Some of the stabilizers effective for preventing disintegration of AOD slag were examined in laboratory tests for stabilization of the EAF slag. The EAF slag samples were mixed together with stabilizers for melting at 1600ºC and then cooling in a crucible system. With a laboratory granulation system, the liquid EAF slag was cooled rapidly using air. Samples from the tests were characterized by different techniques, including XRD and SEM. Some of the results from the work may be useful for preventing slag disintegration and, thus, enhancing utilization of the EAF slag as construction material, thereby saving valuable natural resources.IntroductionAt steel plants of some MiMeR member companies, steel grades with low carbon contents were produced in Electric Arc Furnaces (EAF). EAF slag was tapped out of the furnace to slag pots for transport to slag yards, where the slag was poured on the ground. Very often, the EAF slag disintegrated during cooling on the ground. Fines from the slag disintegration were often difficult to handle and use as material for road construction [1, 2]. The EAF slag disintegration was rather similar to the disintegration occurring in the slag tapped from some AOD (Argon Oxygen Decarburization) converter heats.Literature studies show that formation of dicalcium silicate (C2S) is the main reason for the disintegration or dusting of AOD slag from production of stainless steel [1-4]. The C2S can form while the content ratio of CaO to SiO2 of the slag, CaO/SiO2, exceeds 1.4 [1]. Values of CaO/SiO2 for the AOD slag are often near to 2.0, making the C2S a predominant slag component. The ß phase of C2S, ß-C2S, transforms into its low temperature ? form in the temperature range of 400-500°C, inducing a volume expansion of nearly 12% [1-4]. The volume expansion disintegrates the AOD slag."

Jan 1, 2008

By Andrew Baxter

The Crystal Bridges Museum of American Art in Bentonville, Arkansas is a beautiful glass and concrete structure cut into a valley that mingles with water ponds spanned by multiple bridges with suspended roofs. Or, at least it will be when completed in 2009. At Crystal Bridges, most of the proposed buildings involve cuts up to 50 ft high to be retained by the building structures. This requires the construction of retaining walls adequately founded to support lateral loads of up to 70 kip/ft. To add to this difficulty, the site is within a karst region with all the variability and irregularities associated with solutioning and erosion of the parent rock in this environment. The irregular rock profile made it virtually impossible to conceive a predictable arrangement of shallow footings and shear keys for the retaining walls. The existence of layers of soft soils within a hard rock formation made a caisson foundation impractical. The authors developed an innovative solution based on micropiles, which proved to be invaluable from a cost and schedule point of view. In areas where rock was shallow, micropiles were used as ?shear pins? to transfer the horizontal loads to the rock. In areas with significant overburden, a system of vertical and battered micropiles was devised to carry vertical and horizontal loads from the retaining walls. This paper presents a detailed description of the design and installation of the micropiles used as shear pins, and includes the results of lateral load tests performed on full-scale models of the grade beams on shear pins. The work performed shows that micropiles in rock can be effectively utilized for support of significant lateral loads provided that an adequate arrangement of suitably sized micropiles is provided, and that micropiles used as shear pins may develop significant tensile stresses when loaded laterally.

Jan 1, 2008

By Shun Fujieda, Shigeru Suzuki, Kozo Shinoda, Tetsuo Fujita

"Dowa Metals & Mining Co. Ltd. has developed and plant-practiced a unique scorodite synthesis technology (DMSP®) for arsenic immobilization by oxidizing Fe(ll) ions in the presence of As(V) ions. Dowa has improved the DMSP® technology and has developed the process extensively for other applications. This paper focuses on the applicability of the DMSP® for various cases of copper smelting, and introduces other technologies for fixing arsenic and recycling gallium from GaAs, simultaneously processing (fixing) arsenic and thallium, and fixing and recovering arsenic from dilute arsenic solutions. The DMSP® was found to be applicable not only for various processes in nonferrous smelting, but also for other applications with a high potential for reducing environmental problems.IntroductionDowa Metals & Mining Co. Ltd. developed a method for synthesizing scorodite at ambient pressure [1], The scorodite is precipitated by oxidizing Fe(II) ion in a high-concentration As(V) solution. The scorodite produced in this way does not readily release arsenic because of its high crystallinity. Dowa built a demonstration plant for this technology at the Kosaka Smelter and established the production of scorodite at 30 t As/month by treating intermediate products from copper smelting as the starting material. The DMSP® was demonstrated to be favorably applicable to copper smelting [2]. We are engaged in further increasing the amount of arsenic fixation by the use of this process. Further improvements in productivity, cost reduction and applicability in various processes have been devised. Dowa has been endeavoring to resolve other problems as well as to improve productivity. We have gained extensive knowledge on arsenic treatment in our endeavors, enabling us to solve problems and improve productivity. This paper introduces the investigations and developments related to DMSP®."

Jan 1, 2012

By A. Taylor

IN a previous communication,l the quaternary system Ni-Cr-Ti-A1 was described in detail and it was shown how certain alloys used for high-temperature applications could be construed as consisting of Ni,Cr suitably modified by the addition of aluminum and titanium in relatively small amounts. With the correct aging treatment, the ordered face-centered-cubic Berthollide phase, y'-Ni,Al, could be precipitated from the face-centered-cubic primary y-solid solution. By increasing the proportion of titanium with respect to aluminum, it was also possible to precipitate the very brittle hexagonal-close-packed Daltonide phase, ?-Ni,Ti. From the nature of the system it seems reasonable to expect the y and y'-phases to take appreciable amounts of cobalt and iron into solid solution. In the case of the present investigation it was decided to confine the work to iron additions only. This element may be introduced in two quite distinct ways: 1) as a simple replacement for nickel; and 2) as a replacement for chromium, titanium, and aluminum. The second method of iron addition forms the basis of the present investigation, which is, in effect, a study of the pseudo-quaternary system Ni,Cr-NiPe-Ni,Ti-NLAl. For purposes of reference, Figs. 1, 2, and 3 have been included and illustrate the quaternary system Ni-Cr-Ti-A1 described in the previous paper along with sections through N&Cr-Ni,Ti-Ni,Al at 750" and 1000 "C respectively. As will be shown below, the pseudo-quaternary system with components Ni,Cr, NiPe, Ni,Ti, Nihl is remarkably similar in many ways to the face defined by Ni,Cr-Ni,Ti-Ni,Al because of iron re-

Jan 1, 1958

By H. M. Wolflin

SOMEWHAT more than a year ago the writer collected some extensive notes on metal-mine fires and a paper on metal-mine fire prevention and fighting, a summary of these notes, was hastily pre-pared, with the assistance of G. Chester Brown, chief mining engineer, Industrial Accident Commission for the National Safety Council meeting. This summary, which is admittedly incomplete, is submitted in the hope that it will evoke some discussion that may result in a reduction in metal-mine fire hazard along the line. To accomplish such a reduction does not require the application of complicated scien-tific data. The use of just a little care, a small amount of thoughtfulness and a bit of common sense will work wonders. UNDERGROUND FIRE FIGHTING There may be some interest in a short list of con-clusions of a rather general nature that were reached in connection with some recent mine-fire fighting opera-tions. No effort has been made to cover the field; the items have been jotted down loosely, and very hastily, in the order in which they occurred to the writer. Originality is claimed for, only a few of them. 1. Temperature readings and analyses of mine-air samples, systematically taken, are invaluable aids to effective metal-mine fire fighting and recovery opera-tions. The analysis of the return-air samples fre-quently gives a surprisingly accurate indication of conditions existing underground. 2. Employees must be thoroughly trained in the use, of mine rescue apparatus, because a relatively slight difference in the amount of training makes a vast difference in the amount of work they can per-form under oxygen. In general, slender, wiry men make better apparatus men than those of heavy, more muscular physique, although there are frequent excep-tions to any such general statement. 3: Surprisingly high temperatures, up to 165° F. or 170° F. pan be endured for short periods by wearers of mine rescue apparatus if the air is dry, but lower temperatures, 135° to 140° F. are almost unbearable if the air is very moist.

Jan 2, 1922

By E. G. Dean

A method of top slicing has been devised at the Miami Copper Co.'s mine at Miami, Aria., which differs radically in some ways from the customary methods of top slicing. The area of that section of the orebody in which top slicing is used is about 800 ft. square. The ore, while for the most part soft, is, nevertheless, considerably harder than the capping. The latter is siliceous, seldom containing any clay or other binding material, and breaks into fine particles so that it runs like sand if given the opportunity. Because of these facts, and because the ore is above the average grade of the mine ore, it has been mined by top slicing. Haulage levels are opened up 150 ft. apart, vertically, with two sub-levels between at 50-ft. intervals, to facilitate the putting up of ore chutes. These sublevels are used during slicing for distributing air in the ventilation system. On the haulage level the drifts are spaced on 50-ft. centers, and raises along these drifts are also spaced on 50-ft. centers, except the incline raises as hereafter noted. The raises are cribbed where necessary. Where the wear will be excessive, 1/4-in. iron plates are spiked to the top of every third set of cribbing, for its protection. When top slicing was first used, an attempt was made to carry a slicing face from fifty to several hundred feet long. Timber and other supplies were brought in through long drifts from an auxiliary shaft. Great difficulty was experienced in keeping these drifts open, the side pressure breaking the posts and the top weight breaking both caps and posts. Furthermore, the men could not work efficiently while these drifts were being repaired. The slicing faces advanced irregularly, due to varying conditions, and in many ways the results were not all that could be desired. It was then decided to divide the slicing area into blocks 200 ft. square and this was later changed to 250 ft. square. At the center of each block a two-compartment raise is put up as a supply raise, the compartments being 2 ft. 6 in. and 4 ft. by 4 ft. 4 in., the smaller being used as a manway. Station sets of 12 by 12 timber with

Jan 1, 1917

By Douglas Fuerstenau

"Comminution not only is the major energy cost in mineral processing but it also can limit the grade of ores that can economically be processed. Rittinger first postulated that the energy for comminution is proportional to the new surface produced. Because most of the strain energy needed to initiate and propagate cracks in particles cannot be recovered, researchers reported woefully low comminution efficiencies. Recognizing this, Schoenert proposed that the baseline for assessing comminution efficiency should be the mechanical energy needed to break single particles. After extensive single-particle studies, Schoenert turned to comminuting beds of particle in piston dies. Finding particle-bed comminution to be energy efficient, he had the brilliant conception of making the process continuous, namely his invention of the choke-fed high-pressure roll mill (HPGR). Practical comminution involves masses of particles, which can lead to energy efficiencies far less than that of single-particle breakage. A three-way classification of grinding modes in terms of the mobility of the particle mass provides the necessary insight into the low efficiency of different comminution machines: namely, single-particle breakage, confined particle-bed grinding (HPGR), and loose-bed grinding (ball mill). Examples are given for determining and comparing comminution efficiencies. The size distribution of comminuted products become self-similar, and a single parameter, the median size, can be used to quantify the extent of comminution. The reduction ratio, expressed in terms of the mean size of the feed and product, varies linearly with expended energy and the slope of such plots is a measure of the grindability of the mineral. This approach clearly gives the order of energy efficiency as single-particle > particle-bed > loose-bed comminution. HPGRs are more efficient at low reduction ratios but lose that advantage at higher reduction ratios. Extensive hybrid grinding experiments carried out with our instrumented ball mill and HPGR showed significant energy savings by first comminuting the material in the HPGR and followed by the ball mill. At Cerro Verde an industrial-scale hybrid HPGR/ball mill system is reported to have a 13 percent energy savings over a SAG mill/ball mill system."

Jan 1, 2014

By Pieter Barendsen

INTRODUCTION One of the main problems in tunneling without the use of explosives lies in the development of tools which, at an economically acceptable level, are capable of continuous breakage of the rock, resulting in a fragmentation suitable for a smooth, uninterrupted transportation of the muck away from the tunnel face. Tools employed on tunneling machines have, so far, always been of the mechanical kind which break up the rock by a crushing and shearing action. Other methods of rock breaking are possible but, even if some of them have reached the laboratory testing stage, nearly all of them are still too "exotic" to be of any practical use in the immediate future. One must admit, however, that some highly interesting results are beginning to be reported from the USA on the use of high pressure water jets for the destruction of rock through erosion, a field pioneered in Europe(USSR and Great Britain). Mechanical breakage of the rock is effected by inducing stresses exceeding its compressive/shear strength, by loading it with a wedge of cone shaped tool, until cracks are formed and chips loosened. In order to allow the tools to act upon the rock face continuously, they are commonly shaped as rotating bodies, "roller bits" or "disc cutters", spinning freely and mounted on a revolving boring head of tunnel diameter. The thrust of the tools against the face is generally exerted in a direction which is parallel to the tunnel axis.

Jan 1, 1997

By John Birkinbine

Modern advances in practically all lines of industrial develo1)ment have occurred in such rapid succession, and have been accepted so readily as accomplished facts, that a retrospect surprises us, by showing how comparatively few of the acknowledged factors of improved conditions may be considered as old. While these advances have not been confined to any country, they have been more pronounced in some than in others, and nowhere more so than in the United States, the population of which, having multiplied nearly three-fold between 1870 and 1910, demanded a proportionately greater increase in materials, supplies, and manufactured products. It therefore appears desirable to discuss mainly conditions in the United States, as concrete evidence of industrial progress throughout the world. Looking backward for but three generations, me mar trace the introduction and developmerit of canal- and steamboat-narigation ; railroad-transportation; artificial illumination beyond that f'urnished by candles and animal-oils; quick communication by mail, and subsequently by telegraph or telephone; the manufacture of iron, beyond forms of small dimensions; the production and utilization of steel in large quantities; the economic use of mineral fuel, oil and gas, etc. The practical coincidence of the fortieth anniversary and the 100th technical meeting of the American Institute of Mining Engineers, offers temptation to recall and compare the conditions of milling and metallurgy in or about the years 1871 .and 1911. A complete résumé would cover phenomenal changes in mining-methods and equipment by which the output of individual exploitations has grown from scores to hundreds and even thousands of units in equal time-intervals. Extension of operations in depth and area, demanding machinery of great power and efficiency, high percentage of extraction, utilization of what

Jan 1, 1912

By Barnabas Bryan

During the boom period of 1928 and 1929, several oil companies took advantage of high security prices to sell stocks, thereby securing money for the company very cheaply. Few if any of those companies realized that the money received was not at all cheap in view of the fact that it was for investment in fixed assets at inflated prices. Suppose a company borrowed twenty millions of dollars to expand its marketing facilities during the boom. It diluted its capital and acquired fixed property which could not earn its interest requirements during the following deflation and therefore consumed income from other company activities. The company also had to stand the deflation in the capital value of all the property it bought. Since the mistaken expansion during the boom accelerated the decline in net income during deflation, the financial position of the company was harmed in proportion to the amount of that expansion. Thus the company was unable to get money to buy fixed assets in the depression when all property is cheap. The same condition holds for the company that sold common stock for the purpose of developing potential production in a newly discovered oil field. Regardless of what the ultimate value of the new field may be, potential production does not increase the net income of the company. The difficulty of meeting the enlarged dividend requirements due to the increased number of shares outstanding impairs the financial position of the company during deflation in some relation to the probability of decreased dividends. This company also is not in a position to expand during the depression when properties and companies can be bought for a fraction of their real value. Expansion of fixed assets during boom times has been the ruin of many otherwise good companies. Some of those which most extensively bought property during the post-war boom have not yet recovered. A number of cases could be cited in sugar, leather, fertilizer and wool. This does not seem to be governed by the quality of the property bought, for examination shows the assets to have been of individual high quality in many cases. When recovery is long deferred it is likely to be true, as in sugar or textiles, that the industry has a large "potential" capacity for overproduction.

Jan 1, 1931