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By Brian W. Mackenzie

The paper addresses five questions concerning the economic of gold exploration in the western Canadian shield. Can historical footprints be used to project future gold prices for exploration planning? Experience suggests that gold price forecast are too clo ely tied to current market events to provide meaningful guidelines. What range of breakeven gold price will typically be required to ju tify gold exploration in Canada? Minimum price requirements. initially asses ed at $540 to $1080 per ounce, probably lie in the range of $480 to $760 per ounce (expressed in 1985 Canadian dollar). Within Canada, what role do regional conditions and taxation policies play in determining the viability of prospective gold exploration targets? Striking interprovincial differences are found to exist, given the same geological circum tance -Nova Scotia, ew Brunswick, and Quebec rank towards the top in term of motivating exploration, Briti h Columbia provides the least investment incentive, while Saskatchewan and Manitoba place around the middle of the Canadian league. How can minimum acceptable tonnage-grade conditions for gold targets in the western shield be established and, then, constructively applied to provide exploration planning guidelines? Minimum target conditions, realis tically defined in terms of a broad band of doubt, can be used judiciously to help balance the direct costs of uneconomic exploration with the opportunity costs associated with rejecting economic deposits. How does the average cost per ounce of gold discovered in the western shield compare with the overall Canadian experience? Average discovery costs for the we tern shield, apprai ed at $100 per ounce, are shown to compare favourably with the Canada-wide record.

Jan 1, 1986

By J. J. Quinn

Several mineral flotation plants utilize process water with high soluble salt content. The processing of semi-soluble minerals, the use of recycle streams, sea or well water give rise to this situation. It is unclear as to the overall effect on flotation response though there does seem to be evidence of bubble size reduction, increased froth stability and reduced reagent dosage. The present work aims to quantify the effects of salts present in process water on gas dispersion (bubble size and gas holdup) and froth properties. The salts examined were NaCI, CaCl2, Na2SO4, Na2S2O3 and Al2(SO4)3. Tests were conducted to determine the effects of salt type and concentration on gas holdup and bubble size distribution. The salts containing multivalent ions had a greater impact than the monovalent ions, in keeping with the literature. A relationship between gas holdup and ionic strength was established. The concentration of frother (methyl isobutyl carbinol, MIBC) giving equivalent gas holdup was determined. The effect of salt and frother combinations was also explored.Proposed mechanisms for coalescence inhibition in salt solutions are briefly reviewed in light of the current findings.

Jan 1, 2006

By Steve Custer, Chris Bennett, Patrick Garretson, Glenn Dobby, Jacques McMullen

"Barrick Gold is in the process of expanding one of its grinding circuits at the Goldstrike property as a response to both increasing ore hardness and increased ore sensitivity to finer grinding as it relates to gold recovery. The plant currently operates with two parallel grinding lines, each with a SAG mill, a pebble crusher, and a ball milling arrangement. As part of determining what additional equipment was to be required, a CEET evaluation program was conducted (CEET is an acronym for Comminution Economic Evaluation Tool). The work included: Development of a hardness ‘model’ for the ore body, as described by SAG Power Index and Bond Work Index;Site benchmarking surveys to fine tune the SAG and ball mill calibrations within CEET;Conducting CEET studies to examine the process options;Comparing CEET results to standard grinding circuit design techniques.The recommendation of the study, presently being implemented, is the installation of an additional ball mill on one of the two grinding lines. This paper reviews the sizing techniques applied, providing a CEET case study for circuit performance analysis and circuit design. OVERVIEW OF COMMINUTION AT GOLDSTRIKEOre feeding the autoclaves at Goldstrike are first processed through two parallel grinding lines. Both lines use SAG mills with cone crushing of pebbles followed by ball milling. A summary of the key circuit parameters is provided in Table 1. Line 1 primarily processes underground Meikle ore, although when no Meikle ore is available, it processes open pit Betze ore. Line 2 processes Betze ore exclusively. The Mill Line 1 P80 objective for Meikle ore is 74 microns. According to the recovery optimization analysis, a P80 of 90 microns was recommended for Betze ore. The potential however exists to perform co-mingling of both ore types and feed the higher grade Betze ore to Line 1, in which case the P80 of 74 microns would be retained."

Jan 1, 2001

By CH. Liu, H. X. Jiang, X. Xiao

"A study has been conducted to characterize the fatigue life in 7050-T7451 thick plate by the comparison between an experimental alloy and commercial alloy. The fracture origins were specified and their sizes were measured by scanning electron microscope (SEM). Additionally, the size, number density and spatial distribution of porosity in the experimental material and commercial material were characterized and compared, using X-ray Computed Tomography(XCT). The results showed that microporosity was the predominant site for crack nucleation and subsequent failure of the experimental alloy. However, as for the commercial alloy, fatigue cracks were found to originate from constituent particles. The presence of microporosity in 7050-T7451 thick plate reduced fatigue life of an order of magnitude or more compared to the commercial alloy. The relationships between size of origin and fatigue life were proposed. It was showed that the fatigue endurance was reduced when the size of porosity increased.INTRODUCTION 7xxx series aluminum alloys, due to their combination of high strength, high resistance to stress corrosion cracking, and good fracture toughness, are widely used in structural engineering applications where high-strength and low-density characteristics are fundamental design requirements (Williams& Starke, 2003). Every designer is striving to find an optimal combination of properties including strength, corrosion resistance and fatigue resistance (Wanget al., 2016). Based on the design principles of aircraft, a higher fatigue resistance of aluminum alloys are required. Thus, many investigations have been carried out on the microstructures and its effect on fatigue properties of the 7xxx series aluminum alloy (Robson, 2004; Schubbe, 2009).Microporosity, which is a common defect in casting materials, can lead to a significant deterioration of mechanical performance and fatigue resistance, especially in the high alloyed 7xxx aluminum alloys. The actual valid loading area decreases due to microporosity, which results in detrimental effect on the mechanical properties. Many experimental studies have been conducted in this research field. Mayer et al.(2003) investigated the fatigue properties of magnesium alloys produced by high-pressure die-casting. The results show that porosity in magnesium alloys greater than0.18mm diameter may be considered as the most important material defect for high cycle fatigue and fully reversed loading conditions. Nadot et al.(2004) found that the near surface defects are much more dangerous than the internal defects. Wang et al.(2001a) used the Weibull statistics method to analysis the influence of the microporosity, oxides and particles on the A356-T6 alloy fatigue life. The results show that, the porosity is more detrimental to fatigue life than oxide films and particles. With regard to fatigue resistance, although the deleterious effect of microporosity has been generally acknowledged, a quantitative understanding between casting microporosity and fatigue life in 7050-T7451 plate is not well established."

Jan 1, 2018

By N. Gharib, F. Hassani, P. Nekoovaght

"Novel rock breakage techniques are becoming more viable and attractive to industry. Microwave energy, as a thermal energy capable of inducing micro cracks through differential heating (therefore expansion) is a technology gaining considerable attention in mineral processing and ore comminution applications. Recently, the use of microwave radiation has been evaluated as a possible avenue for terrestrial and extra-terrestrial drilling applications as well as full face tunneling or rock breaking machines. As part of an overall research on use of microwave in rock breaking systems, the influence of microwave energy on the mechanical properties of common hard rock types as basalt has been investigated. The results revealed that microwave energy irradiation imposes micro and macro cracks to the surface of the rock being irradiated. In explosive free tunneling applications using TBM, jointed and cracked surface of rock eases the cutting process and increases penetration rate. The experimental setups have been simulated with the help of a multi-physics numerical modeling and the results have been compared with practical experiment. The wave propagation of microwave has been simulated and the distances where the power intensity is higher are identified. Experimental and simulation results underlined the potential impact of the use of microwave energy in underground or surface excavation applications such as mining and tunneling. This will also contribute economically when mine-to-mill operation is fully considered to improve the efficiency of rock crusher stages. INTRODUCTIONDuring hard rock breakage (i.e., separation of a piece of a rock from its parent deposit) in mining and civil applications, the performance of mechanical equipment such as tunnel boring machines (TBMs) is limited by high levels of bit wear and maintenance. Preweakening natural rock prior to breaking it by machine is one approach to lower bit wear and maintenance costs. Some preweakening methods apply heat directly or indirectly. For example, flame torch-assisted TBMs (Lauriello et al., 1974; Resource Technology, 1984) have been deemed economical in terms of equipment, but their feasibility is limited by high fuel consumption. Microwave energy could offer several advantages over the flame torch method: it does not produce emissions or increase fuel consumption (electricity source is available on the machine), and is easy to control (quick power on and off)."

Jan 1, 2015

By D. A. Beattie

Three novel dextrin polymers of varying functional group chemistry but similar molecular weight have been used to depress talc in single and mixed mineral studies. The mixed mineral system was a model sulphide ore consisting of talc, pentlandite, and chalcopyrite. Adsorption isotherms for the three polymers on both valuable and gangue mineral phases were determined to give initial clues as to the ability of the polymers to depress talc. Flotation testing revealed a distinct hierarchy of effectiveness of the polymers in the depression of talc in the single mineral system (MP Dextrin > CM Dextrin > Dextrin TYM), reflecting the observed adsorption affinity and adsorbed amount of the polymers on talc. However, a different order of effectiveness was observed for talc depression in the mixed mineral system (CM Dextrin > MP Dextrin > Dextrin TYM). Competition between the valuable and gangue mineral phases for uptake of MP Dextrin is responsible for its observed decrease in efficiency in mixed mineral flotation. All three polymers were found to be reasonably selective in their action, although at high dosages the polymers began to affect the flotation of the valuable minerals.

Jan 1, 2006

By G. C. Nowlan, A. Illis, H. J. Koehler

At its iron ore recovery plant at Copper Cliff, INCO produces about 17 million pounds per year of a pure, acid-soluble, dense nickel oxide from nickeliferous pyrrhotite. The process used is also applicable to a broad range of ammoniacal nickel-bearing streams. The product has been widely accepted by the chemical, ceramic and electronic industries.

Jan 1, 1970

By Z. Luo, China University of Mining & Technology, C. Duan

"The magnetic separation removal rate of pyrite could be improved effectively by increasing the susceptibility of pyrite. The electromagnetic characteristics and absorption response performance of high-sulfur fine coal were studied in strengthening the susceptibility of pyrite. In the process of treating the sample through the microwave, electromagnetic energy could be converted into heat energy due to dielectric loss and magnetic loss. The RL(dB) was evaluate the performance of absorption response of coal. The microwave improved the susceptibility was in ultra-high frequency region, which is the most natural resonance. The absorption fine coal to microwave was strengthened and microwave energy was improved by adding the magnetite powder with double loss characteristics as the microwave absorber. The dielectric properties and permeability characteristics of the fine coal trend were investigated by maxing magnetite powder. The microwave absorption in different coal thickness was surveyed through the reflection of energy loss.INTRODUCTIONMicrowave desulfurization is one of the most important research directions (Haque, 1999; Makul, Rattanadecho, & Agrawal, 2014; Su, Tang, Zhang, Jing, & Bai, 2014). The working principle of microwave absorption response can be briefly described as the interaction of the sample with microwave energy, which will result in the microwave energy converting into heat energy loss (Keangin & Rattanadecho, 2013). For specific samples, the polarization effect includes multiple polarization mechanisms(Meikap, Purohit, & Mahadevan, 2005). Different polarization mechanisms have different occurrence time and dominant mechanisms. Meantime, energy consumption will be occurred during the process of polarization effect (Chelgani & Jorjani, 2011; Rowson & Rice, 1990) . The absorption of microwave energy in the fine coal is a process of electromagnetic response (Znamenácková, Lovás, Mockovciaková, Jakabský, & Briancin, 2005). Microwave transfers the electromagnetic waves into the heat energy by microwave dielectric loss and magnetic loss for achieving the absorption of microwave energy in the treatment of samples (Lee, Kim, Kim, Chung, & Kim, 2004). The additive magnetic medium is Fe3O4 belonging to microwave energy absorber of double loss medium (Uslu, Atalay, & Arol, 2003)."

Jan 1, 2016

By B. Arlyuk

On the basis of research of relations among the market participants the analytical model has been created which connects the price of industrial good at stock exchange with volume of sales and the stock of the sellers and buyers, Also a model was developed for assessment of these parameters of the market status by the actually fixed stock exchange and general market indicators. The composition of these models made it possible to create reliable system of short-term price forecasting for commodities or base metals up to one quarter ahead. Imperfectability of creation a model for reliable price forecasting by purely statistic methods (by the "black box" principle) was shown. A model of price behavior qualitative forecasting till one quarter ahead has been developed, which determines the probability of reaching in future of the given level as well as of the price maximums and minimums, Optimal values of threshold probability were determined for forecasting the future price maximums and minimums securing the maximum profit from the forecasting system application for commercial activity. The developed system of forecasting was identified for primary aluminium at the period of 1990-2003. The system was tested daily during 20 months period for speculations on 3M primary aluminium forwards at London Metal Exchange with high commercial result.

Jan 1, 2004

By Vincent Doyon

For several years, the GDD SSW EM Probe is being used in nickel?s mines in Canada and Brazil to define ore limits, reduce dilution and predict nickel grades. It is used with success to test most if not all percussion blast holes at all Falconbridge Mines in Sudbury and Raglan and all Inco?s Thompson mines. However, after testing the SSW Probe in other metal mines, we realized that EM conductivity does not define ore limits by testing blast holes for copper, zinc or gold. For non-conductive ores, no instrumentation is yet available on the market to reduce dilution, by outlining quickly and inexpensively the real shape of an orebody. To that effect, Instrumentation GDD Inc has developed a new revolutionary photonic probe that will make the reduction of dilution possible by probing blast holes. Once surveyed with the probe, a computer draws graphs of the ore grade as a function of depth for each blast hole. A contribution by Canada Economic Development made possible the development of this new technology. Canmet and Soredem also cautioned this technology developed by Instrumentation GDD Inc. This new photonic probe will allow: 1) to better understand the shape of the orebody 2) to raise the grade of the ore fed to the mill 3) a more complete extraction of the ore 4) to raise the competitiveness of mines

Oct 1, 2004

By M. Hekmati, M. R. Garmsiri, S. M. Hosseini

"SAG/AG mills have been most common choice in grinding circuits last decades. In the most cases, at the discharge of SAG/AG mills, a trommel screen is used that is equipped with baffles to provide appropriate residence time and improve separation efficiency. Using baffles, with the resultant maintenance requirements could lead to decrease in mill availability. In this research, an innovation in the structure of baffles of a trommel is presented. The results show that using new baffles led to 67% decrease in SAG mill downtime due to problems of baffles and 80% decrease in fine particles on recycle conveyor.INTRODUCTIONComminution is a vital operation in mineral processing circuits and it helps to achieve a certain level of fineness in the ore material. About 60-80 % of the overall energy used in mining is consumed in comminution, and this is the reason that much research has been performed in this field (Kochnev, 2008).During the last decades the configuration of grinding circuits has been changing due in large part to the decrease in the grade of mineral resources and the need for large scale, energy efficient processes. The previous configuration of conventional grinding circuits was based on parallel primary circuits (mostly using ball mill), such as the grinding circuit of Sarcheshmeh concentrator plant no.1 (Figure 1). The new configuration of grinding circuits is based on using SAG/AG mills, such as Shahrebabak concentrator plant (Figure 2), sometimes incorporating new technologies like the HPGR. Nowadays, application of new configuration of grinding circuits using large SAG/AG mills up to 40 feet (Allan, Major, Flintoff, Klein, & Mular, 2006), in the minerals industry is continuing increase due to the significant reduction in capital and operating costs, and increase in the plants throughput (Banisi & Hadizadeh, 2007)."

Jan 1, 2012

By D. S. Hines

The purchase of mechanical equipment for mines is not unlike the purchase of other materials or supplies in general principle, but on account of the major part such equipment plays in the operations, and of the fact that life and valuable property are at stake, the matter demands the most careful attention on the part of the purchaser. The problems and difficulties encountered are dealt with below in their sequence in the purchasing procedure. Requisiting Although it is quite a common practice to submit a tentative specification of requirements to recognized manufacturers of equipment- soliciting alternative propositions or recommendations for study in the selection of certain equipment-as a rule the first step in purchasing procedure is the requisition. Primarily, it is the form that carries to the purchasing department the record of equipment wanted. A full and complete description or specification, and accuracy of record, are the important points to be insisted on in a requisition. Too much attention cannot be given to this detail, as this is one of 'the most important phases of purchasing work. Incomplete information, either in specification or detail, leads to delay in handling the requisition, and, if not detected in the purchasing department, may mean receipt of material which cannot be used for the purpose intended. In addition to description of material or equipment to be ordered, the requisition should also show where or what the equipment is for, whether for operating or new work. If for capital account, the number of the authority for expenditure should be given for record and distribution purposes.

Jan 1, 1930

By B. Fang

Electrochemical behavior of an X-80 pipeline steel, including frequency-sweep electrochemical-impedance spectroscopy (EIS), time-sweep EIS at a constant frequency and open-circuit potential (OCP) monitor, was investigated using four-point bending specimens subjected to a stress-corrosion cracking (SCC) test in a near-neutral pH environment, The capacitive loop became smaller with test duration, revealing an increase in the corrosion rate, The resistance obtained in the constant-frequency EIS test showed two regions, of which the region with a remarkable decrease in resistance transformed into a region of slow decrease, whereas the capacitance increased with test time indicating that iron dissolution was fast at first, and then a corrosion product or film formed and covered the surface, leading to the pitting formation.

Jan 1, 2005

By Gerald Sanders

Presentation Topics ? We?re Going to the Moon Again? ? What is Lunar Mining ? In-Situ Resource Utilization? ? What Are The Challenges to Lunar Mining? ? What is NASA Currently Doing?

May 1, 2009

By S. G. Enns, E. W. Yarrow

"Situated about 200 km southeast of Juneau, Alaska, within the lower Stikine River region of northwestern British Columbia, the Galore Creek porphyry Cu-Au deposits are hosted by Upper Triassic to Lower Jurassic alkaline volcanic rocks and comagmatic syenite intrusions. Early and late breccias are also locally important host rocks for mineralization. Of the twelve identified Cu-Au deposits, the most important are the Central zone, Southwest zone and the Junction deposits with a combined resource of 284 million tonnes at 0.67 % Cu.The composition of the intrusive rocks is predominantly silica-undersaturated, alkaline, and metaluminous. Four intrusive suites are identified from field, petrographic and petrochemical data. Variation within suites or lineages can be explained by alkali feldspar fractionation. An oscillation between porphyritic and equigranular intrusions is suggested by the sequence of different intrusive lineages. The youngest intrusive phase is silica-saturated.A complex succession of intrusive and hydrothermal events is demonstrated at Galore Creek, with the most intense alteration and mineralization developing early in its history. In the Central zone, early Ca-K-silicate alteration, dominated by garnet, biotite, Kfeldspar, and anhydrite grades outward into K-silicate alteration. Both are locally overprinted by retrograde sericite± anhydrite± carbonate (SAC) alteration. The most intense Ca-K-si/icate alteration, a magmatic-hydrothermal breccia, and an early syenite intrusion are all coincident with copper mineralization in the core region of the Central zone. However, higher grade mineralization in the zone, exceeding 1 % Cu with more than 0.5 g/ t Au, is typically associated with intense biotite-rich, K-silicate alteration primarily hosted by altered volcanic rocks. The highest gold grades, commonly exceeding 1 g/t, are associated with bornite-rich mineralization situated in the northern and southern parts of the Central zone.Mineralization in the Southwest zone occurs as disseminated chalcopyrite within a late, diatreme breccia and adjacent K-feldspar porphyry. In the other satellite deposits, disseminated chalcopyrite and bornite occur in volcanic rocks with alteration that is similar to the Central zone."

Jan 1, 1995

By C. P. Verschuren, P. W. Kingston, W. F. Caley

"In recent years, there has been rapid growth in the use of natural stone building and construct ion products. The largest growing markets are for pre-fabricated natural stone panels for interior and exterior wall facing and flooring. This increased demand is attributed to advanced quarrying and processing technologies, renewed appreciation for the aesthetic appeal of natural stone, and to the superior durability of natural stone when compared to glass, steel, and concrete. Geologically, plutonic rocks, and to a lesser extent marble and limestone/dolostone, are used extensively for these applications. This paper details the economic structure of the dimension stone industry, describes the necessary characteristics of a stone quarry, and outlines the geological criteria which favour an economic quarry.INTRODUCTIONThe world building stone industry has remained relatively stable over the last 5 to 6 years. In contrast, the North American stone industry has experienced substantial growth during that period. The increased use of commercial granite is primarily responsible for this growth, where use as exterior wall veneer for commercial, industrial, and institutional buildings represents the largest and fastest growing market.This increased usage in the construction industry has been sparked by the application of new technologies in quarrying, processing and installation , ma king natural stone more competitive with man-made materials which are energy intensive to produce, and have risen dramatically in price. The development of safer, time-saving stone installation techniques has also appealed to the liability-conscience construction industry. Finally, there is a trend by designers and architects toward utilizing long-la sting weather-resistant building materials, and a renewed appreciation of the aesthetic appeal of natural stone. The other large user of granite is the monument industry of North America which, although it has decreased slightly in recent years, still consumes approximately 40% of all commercial granite produced. The local use of commercial marble has remained relatively stable, and North America still relies heavily on European sources and suppliers. There has been some concern over the use of marble for exterior applications in areas subject to acid rain, and in colder climates where the marble ma y be vulnerable to freeze thaw cycles. Despite these concerns, the greatest problem is not with the structural breakdown of marble but the inability of some marbles to retain their polished finishes in the se environments. As a result, there has been an increase in the use of granite at the expense of marble for exterior applications. Finally, commercial marble is used extensively for interior flooring, wall s, counter tops, furniture, sculptures, and stairway components"

Jan 1, 1989

By Moatassem Abdallah

Buildings in the United States account for 72% of electricity consumption, 40% of energy consumption, 13% of water consumption, 39% of carbon footprint, and 30% of waste output. In order to minimize these negative environmental impacts, many public and private owners are requesting that their buildings be more sustainable and certified under the widely known programs such as leadership in energy and environmental design for existing buildings (LEED-EB). To accomplish this, buildings are increasingly integrating green building measures including energy efficient lighting, motion sensors, thermal pane glass, geothermal heat pumps, EnergyStar rated HVAC systems, photovoltaic systems, and wind turbines. This research paper presents the development of an automated decision support system (DSS) that is designed to optimize the selection of green building measures which can be used to upgrade existing buildings. The developed DSS incorporates two optimization models that are capable of (i) minimizing the total upgrade costs required to accomplish a specified LEED-EB certification level such as silver or gold; and (ii) maximizing the number of accredited LEED-EB points within a specified budget of upgrade costs. The DSS is designed to identify a set of optimal upgrade decisions that accomplishes these two optimization objectives. An application example is used to illustrate the capabilities of the DSS and to validate its result.

Aug 1, 2013

By Dillon. Patricia

Business Growth ?Coal ?Targeting 30 million tonnes by 2013 compared to 19 million tonnes produced in 2009 ?Expanding Energy Business unit (Oil Sands) ?Copper -Strong growth potential for existing operations and development projects ?New gold strategy recently launched ?New markets for zinc Need to retain existing and attract new employees to support growth Engaged Employee ?Has a positive attitude towards the organization and its values ?Is a person who is fully involved in, and enthusiastic about, his or her work Engaged employees are more likely to stay with the organization.

May 1, 2010

By W. A. Dixon Edwards

Industrial mineral production in Alberta, worth $468 million in 1997, comes from a dozen types of industrial minerals, mined by about 400 producers. Cement and lime from Paleozoic limestone formations exposed along the Rocky Mountains account for the greatest production value. Sand andgravel is the primary source ofmineral aggregate. Almost two-thirds of this aggregate is consumed in the Edmonton and Calgary regions. Sulphur produced at 48 sour gas processing plants and two oil sands plants was valued at $84.8 million in 1997 and accounted for 80% ofCanadian sulphur production. Four companies solution mine the Elk Point salt beds to produce chlor-alkali chemicals, industrial salt and sodium chlorate. Natural brine is also produced as a dust control product. Al $22 million, peat moss is a major industrial mineral product in Alberta. Other minerals with noteworthy production include shale, stone, silica and ammolite. The commodities with the greatest development potential are diamond, silica and oil sands tailings by-product minerals.

Jan 1, 2001

By Keith C. Hendrick

"Metal prices are frequently the most critical and least predictable element in determining the profitability of mining operations. Short -term fluctuations can be offset in varying degrees by hedging or other market actions. Such solutions are not practical for the longer term, The paper investigates the nature and extent of metal price risks and evaluates methods to reduce them.IntroductionIt is management's responsibility to improve the odds by managing the-risks by identifying them clearly, assessing them accurately, minimizing them where possible-and, then, timing decision s success fully.In determining the profitability of current operations, preparing forward plan s or developing feasibility studies for new projects or expansions, pr ices are usually the most critical input. Being market determined rather than cost based, they can also be the most unpredictable As a result, commodity prices are frequently the greatest of all risk factors.Nature of Commodity PricesThe cyclical nature of commodity prices is well known. They are stable only when supply is in balance with demand and forecast to remain that way. An imbalance on either side of the equation can lead to a price reaction completely out of proportion to the actual or perceived surplus or shortage.This exaggeration arises through the cumulative effect of market forces. When the market senses an uptrend, consumers buy for the expected increase in activity. They also seek additional quantities for inventory before price s rise. Merchants defer spot sales anticipating higher price s, speculators go along for the same reason, and producers raise prices in response to demand. Events tend to confirm the expectation of each party and strengthen their reaction causing prices to move higher."

Jan 1, 1983