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By B Cooper

During the design of a new production facility for a greenfields or significant brownfields expansion many design decisions are made driven by an unquestioning objective to achieve 'lowest cash-cost' production costs. In many cases this translates to a design and operating philosophy based on largest-available, single-line equipment. Although acknowledged as an approach that is efficient from an operating cost perspective does this approach always maximise shareholder value? There is an increasing awareness in the mining industry of the value of project flexibility, robustness and value options. The design of a new production facility creates a window of opportunity which should be structured to ensure that project value options and robustness are understood and exploited. This requires the use of emerging valuation methodologies, such as Value-at-Risk and Real Options, as well as tried and trusted NPV/IRR approaches. The paper provides an overview of the basis and application of these less well known techniques in the context of metallurgical plant design. Design guidelines that demonstrate how value options and flexibility can be quantified from both a risk and value perspective are presented. Issues such as use of single versus multiple line equipment, optimum cut-off grade and improved exploitation of the inherent variability of the orebody are also examined. Finally the management issues and approaches to achieving this will be briefly discussed; for example it is common during project development to drive towards increasing certainty as rapidly as possible to facilitate 'accurate' estimation of costs. Understanding and exploiting value options requires a project culture that tolerates, and revels in, ambiguity and uncertainty û something that would make many project teams uncomfortable!

Jan 1, 2008

Members of The Australasian Institute of Mining and Metallurgy are engaged in locating, extracting, processing, marketing and converting the worldÆs mineral wealth for its consumption in a useful form. We have an ethical responsibility as professionals to carry out our roles in such a way that we seek to optimise the recovery of that wealth for the benefit of the community, not only now, but also in the future. To be able to optimise, we must be able to measure with confidence the value of the commodity through the various stages of treatment from discovery of a geological anomaly to the end use. This introductory paper will provide an overview of some aspects of the issue, including the possible extension of the coverage of The InstituteÆs Codes to production accounting and reporting.

Jan 1, 2002

By M Warren

The professional geologist or engineer on a mining operation has a particular view of their operation. This is based on the factors of the operation that have a direct impact on the daily work program of the professional, such as production rates and grades. The view that would be taken by a financier who is called upon to support the project may be somewhat different. The value of the operation to the financier is in its ability to generate surplus cash for its owners and thus repay the debts to the financiers, with as low risks profile as possible. A number of tools are used to test the sensitivity of the project to variations in the key cost/revenue drivers. The Financier may call on a team of technical specialists to assist with the assessment of the cash flow and risk profile and to monitor the development of the project. The ability to offset this risk, as all projects have some degree of risk, may be a key factor in determining the level of financial support to be offered.

Jan 1, 2002

By T. J. Otto, I. D. Ungerer, G. C. Lindeque, T. J. van Heerden

Anglo American Kumba Iron Ore (Kumba) continues to implement technologies focussed on improving safety and productivity; this forms part of the groups FutureSmart Mining initiative. The paper provides insights into the implementation of three technology solutions that improves the productivity of heavy mining equipment (HME). Enhancements to the short term mine planning (STMP) process, the effective use of a fleet management system (FMS) and the deployment of drones or Remotely Piloted Aircraft Systems (RPAS) are discussed. The implementation of these and other technologies contributed to a 13% and 22% increase in the overall equipment efficiency (OEE) of the primary HME at Kumba’s Sishen and Kolomela mines respectively. Four key success factors (KSF) are highlighted namely that Kumba’s technology implementation drive is a key enabler to the company’s strategy, has a strong focus on value-add, is underpinned by a holistic and integrated implementation approach and is people-centric.

Sep 1, 2021

Downstream value-adding is a strategic issue for a country like Australia, which has a resources-driven sector of a scale that has significant impact on the national economy. The question of why producers are not doing more to ævalue-addÆ is often asked. In Australia this debate takes place within the context of: an era of unprecedented growth in demand for resources driven by the rapid urbanisation of China, India and others;impending legislation and uncertainty around carbon pricing;rapidly rising energy costs;significant supply-side shortages including infrastructure, skills and manufacturing capacity; andsignificant industry consolidation of primary resource producers with commensurate improvements in market power.There are several examples of resource-based industries which have developed their business along the complete value-chain; for example large oil and gas producers successfully span upstream and downstream operations including refining and petro-chemicals as well as retail distribution of fuel and other products. Relevant frameworks that provide insight and understanding into the strategic issues around value-adding are reviewed and examples of the application of these frameworks to companies and industries which have successfully adopted a strategy of integrating along the value-chain, as well as those players who have focused on parts of the value-chain are presented. The issues around value-adding in Australia are then reviewed with reference to these frameworks and it is concluded that the issue is a conflict between the objective companies who wish to maximise financial value versus the desire of governments to increase economic benefits. An approach to aligning these objectives is proposed.

Jan 1, 2008

By Eddy Dierckx

Modernization of flat rolling plants is essential to sustainably fulfill increasing market demands and to improve competitiveness. Intelligent modernizations ensure getting maximum prime yield of existing mills, even if they have gone through half a century of operation. Existing mills were designed based on former production, consumption and quality targets. Ever increasing requirements such as increase of productivity, change of product mix (e.g. new steel grades), reduction of energy consumption and improvement of product quality lead to the necessity to adapt the existing equipment to the new target. SMS group provides, besides the reliable equipment and automation solutions to successful upgrades of existing mills, also a systematic approach to develop technical and economical solutions together with our customers (conceptual engineering). This paper describes the SMS group approach to modernizations / upgrades, introduces powerful performance modules and provides a number of successful examples that have been implemented recently.

Aug 17, 2017

By A. Noble

"Linear circuit analysis (LCA) is a fundamental tool that may be used to evaluate, design and improve the performance of mineral separation. The traditional LCA methodology provides a comparative evaluation of circuit designs purely from the unit interconnections. The quantitative approach uses the analytical circuit solution to evaluate the slope of the circuit’s partition curve at the midpoint. Since the partition slope is often associated with a separation’s general selectivity, this numeric value is used to compare and rank alternative configurations. Unfortunately, the partition curve slope only reflects the separation potential of middling material. By itself, this value does not account for the relatively high unit dollar value of pure material or the gains and losses in mass yield associated with alternative circuit configurations. Realizing the value in the LCA methodology, but respecting the limitations of the partition slope valuation, the authors have derived two new performance indicators that quantitatively address pure particle misplacement (the Partition Moment of Inertia) and circuit mass yield (the Yield Score). Together, these parameters provide a better indication of separation economics in typical mineral and coal separation systems. Since the two parameters provide independent information on circuit selectivity and circuit yield, a Pareto efficiency, multi-objective function selection approach is proposed for preliminary circuit selection.IntroductionOver the past 30 years, numerous scientific and industrial studies have proposed various mineral processing circuit design methodologies that attempt to optimize the allocation of separation resources within the processing plant. Over this period, the methodologies have undergone various transitions, including the increased inclusion of process models and computationally intensive algorithms, as well as a general shift from a purely technical solution (Lauder and McKee, 1986) to partially economic solutions (Abu-Ali and Sabour, 2003; Cisternas et al., 2014). Today, circuit design is largely driven by flowsheet simulation; however, no consistent design methodology is used across the industry.One intriguing approach for circuit evaluation is linear circuit analysis (Meloy, 1983a). This method evaluates the separation potential of the circuit solely considering the unit configuration and stream interconnections. No preliminary data other than the basic circuit configuration is required to use the approach."

Jan 1, 2015

By Rachael M. Fischer, Daniel J. Woeste, Terence P. Holman

"A new 50 MW biomass renewable energy power plant was planned for construction in southwestern Georgia. The original foundation design consisted of very conservatively designed H-pile groups with vertical and battered piles to carry the axial and lateral loads. The authors conducted a testing program to value-engineer the foundations with the goals of increasing the working axial pile resistance and reducing or eliminating battered piles. Seven test piles were installed and dynamically monitored with a Pile Driving Analyzer (PDA). Two lateral load tests and one tension load test were conducted. The results of our testing program allowed the project team to: (i) increase working pile resistances by factors of 1.5 to 2, reducing the total number of piles by more than 30%, (ii) eliminate the battered piles, and (iii) lessen overall project risk. Poor communication and documentation in a critical area of the site required some piles to be spliced and re-driven after additional PDA testing, establishment of new driving criteria, and consideration of longterm soil setup. This case study emphasizes the economic and risk reduction benefits of a design phase testing program, and the need for consistent communication between parties in the field.INTRODUCTIONA new 50 MW biomass renewable energy power plant (Plant) was planned and constructed in southwestern Georgia. The Plant converts clean wood-based and paper-based waste from existing forestry and pulp operations, waste timber, and maintenance operations into steam that is used by an adjacent manufacturing facility. The Plant also generates electric power with limited greenhouse or particulate emissions for use by a local utility provider.The project site (Site) is located in Dougherty County, in the Coastal Plain physiographic province of Georgia; an area of known karstic activity. Specifically, the Site is underlain at depths of 30 to 45 ft by the Ocala Formation, a light-colored fossiliferous limestone of the Eocene era. According to Watson (1981), the Ocala Formation is 125 to 200 ft thick in the vicinity of the Site and increases in thickness to the southeast. Due to differential weathering, this formation is characterized by an irregular upper surface that transitions from sandy clay/clayey sand into a dense to very dense silt and fine sand locally referred to as limestone. This subsurface stratum is most relevant to the foundation design of the Plant."

Jan 1, 2016

By J. H. Zietsman, S. Maharajh, J. Muller

In the chlorination process for TiO2 pigment production, blends of titania feedstocks such as ilmenite, synthetic rutile (SR), natural rutile, upgraded slag, and chloride-grade slag are reacted with coke and chlorine at a temperature of around 1000°C to form TiCl4, which is the main product, and other waste metal chlorides. TiCl4 is the main feed material for the TiO2 pigment-making process. Feeding different titania materials to the chlorinator affects the amounts of coke and chlorine required for the process, the amount of waste generated, waste disposal costs, the amount of TiCl4 produced, and bed build-up rates. These factors influence the value of the feedstock. Generally, a higher TiO2 feedstock is more valued since less waste is generated and less reagents are consumed. To quantify the impact of different feedstocks on the chlorinator, a techno-economic model was developed to describe the chlorination process and estimate process variables at steady state. This paper describes the development of the model and studies in which the model has been used to quantify the effects of using different feedstocks.

Jan 1, 2014

By J. H. Zietsman, S. Maharajh, J. Muller

In the chlorination process for TiO2 pigment production, blends of titania feedstocks such as ilmenite, synthetic rutile (SR), natural rutile, upgraded slag, and chloride-grade slag are reacted with coke and chlorine at a temperature of around 1000°C to form TiCl4 (the main product) and other waste metal chlorides. The TiCl4 is the main feed material for the TiO2 pigment-making process. Feeding different titania materials to the chlorinator affects the amount of coke and chlorine required for the process, the amount of waste generated, waste disposal costs, the amount of TiCl4 produced, and bed build-up rates. These factors influence the value of the feedstock. Generally, a higher TiO2 feedstock is more valued since less waste is generated and less reagents are consumed. To quantify the impact of different feedstocks on the chlorinator, a techno-economic model was developed to describe the chlorination process and estimate process variables at steady state. This paper describes the development of the model and studies in which the model has been used to quantify effects of using different feedstocks.

Jan 1, 2015

By M. J. Fairweather

"The nature of minor element values and impurities are important both in the assessment of new properties and in the continuing improvement of operating plants. Impurity elements are frequently present as fixed solid solution impurities in association with the constituent minerals of a deposit or process streams in a concentrator. This paper uses five case studies to illustrate the application of simple regression analysis to the evaluation of minor element distribution in both operating mines and new deposits using analytical information readily available. This information maybe used to determine opportunities for improvements to the performance of an operating mine, to the economic assessment of anew deposit, or to the subsequent planning of an experimental study.IntroductionThe nature of minor element values and impurities are important, both in the assessment of new properties and in the continuing improvement of operating plants. Minor element values often contribute appreciable incremental revenue to a complex base metal deposit. Examples of valuable elements include precious metals, but may also include elements such as indium and bismuth which can be recovered at a profit by smelters provided with the necessary recovery circuits. During preliminary metallurgical studies of a new property there is usually a strong incentive to maximize the recovery of such valuable by-product elements. For example, the extent to which the by-product gold in a porphyry copper deposit is associated with chalcopyrite rather than pyrite may determine theeconomics of developing a new property.The nature of impurity elements in base metal concentrates is correspondingly important in minimizing the penalties which may be imposed by smelters in the treatment of such concentrates. Penalty elements include silica, dolomite (magnesia), arsenic, antimony, mercury, nickel and cobalt. The mineralogical association of these minor elements determines the ability of the mine to remove them in the concentrating process. This paper discusses means of assessing the mineralogical nature of such impurities without the use of sophisticated micro-analytical techniques."

Jan 1, 1997

By R Polmear, G Mauger

You wouldnÆt start excavating before testing core samples, so why would you approve a project plan before all factors have been identified, reviewed and addressed? Even a champion sports team made up of the best players canÆt produce optimal results without a well understood and agreed game plan. Could an F1 racing team produce their outstanding performance without rigorous evaluation and testing of the factors for successful performance? Why would we expect a capital works project team to be able to get it right without an understanding and an involvement in setting and implementing the overall game plan and without an understanding of all stakeholder requirements? For International PowerÆs Hazelwood (IPRH) mine in Victoria, the challenge was development and delivery of a 40 year mine plan, ultimately involving relocation of existing mine operations into an adjacent new coal field, land acquisitions and major environmental and other approvals to allow diversion of three streams, a highway, an Over Dimension route and other infrastructure in a political and environmentally sensitive atmosphere. The lessons from International Power HazelwoodÆs (IPRH) experience are: that the clear set of project principles and guiding values ensured delivery of a robust plan; a robust plan can withstand significant change; and value management (VM) played an important role in providing assurance, to all, that the plan was sound at both the strategic and micro levels. This Hazelwood mine project included five major VM workshops. The first was a critical review process in addition to design and cost reviews. This VM workshop was used to analyse, at a high level, the preferred coal mining sequence and design concepts, together with the interaction between design elements, risks and costs. In addition to this, the workshop provided an agreed common pathway for all downstream decisions. A second VM study was conducted to ensure that the proposed plan and design for relocation of the conveying systems from the existing mine into the new field were planned for optimum achievement from a whole of life cost, time, operational and maintenance perspective, plus the logistics of continuing operations while relocating assets. A third study followed to review the Conveyor Transfer Alliance and review functional design. A fourth VM study workshop was formed at the start of Phase 2 Alliance to ensure that the best value for money was being achieved through the current design, schedule and project arrangements and that all interfaces between parties had been reviewed and responsibilities were clear and understood. Other studies are outlined later in this paper. This paper details the evaluation criteria and processes used in the project evaluation that led to the WestField Mine Development.

Jan 1, 2007

By R. McGregor

You wouldn't start excavating before testing core samples, so why would you approve a project plan before all factors have been identified, reviewed and addressed? Even a champion sports team made up of the best players can't produce optimal results without a well understood and agreed game plan. Could an F1 racing team produce their outstanding performance without rigorous evaluation and testing of the factors for successful performance? Why would we expect a capital works project team to be able to get it right without an understanding and an involvement in setting and implementing the overall game plan and without an understanding of all stakeholder requirements? For International Power's Hazelwood (IPRH) mine in Victoria, the challenge was development and delivery of a 40 year mine plan, ultimately involving relocation of existing mine operations into an adjacent new coal field, land acquisitions and major environmental and other approvals to allow diversion of three streams, a highway, an Over Dimension route and other infrastructure in a political and environmentally sensitive atmosphere. The lessons from International Power Hazelwood's (IPRH) experience are: ? that the clear set of project principles and guiding values ensured delivery of a robust plan; ? a robust plan can withstand significant change; and ? value management (VM) played an important role in providing assurance, to all, that the plan was sound at both the strategic and micro levels. This Hazelwood mine project included five major VM workshops. The first was a critical review process in addition to design and cost reviews. This VM workshop was used to analyse, at a high level, the preferred coal mining sequence and design concepts, together with the interaction between design elements, risks and costs. In addition to this, the workshop provided an agreed common pathway for all downstream decisions. A second VM study was conducted to ensure that the proposed plan and design for relocation of the conveying systems from the existing mine into the new field were planned for optimum achievement from a whole of life cost, time, operational and maintenance perspective, plus the logistics of continuing operations while relocating assets. A third study followed to review the Conveyor Transfer Alliance and review functional design. A fourth VM study workshop was formed at the start of Phase 2 Alliance to ensure that the best value for money was being achieved through the current design, schedule and project arrangements and that all interfaces between parties had been reviewed and responsibilities were clear and understood. Other studies are outlined later in this paper. This paper details the evaluation criteria and processes used in the project evaluation that led to the WestField Mine Development.

Jan 1, 2007

By Michael Samis

NOFLEX valuation results ? CF deviations and net CF risk discount factors ??Cash flow deviations indicate average cash flow variability. ??Net cash flow riskdiscount factors (NCFRDFs) indicate the size of the risk adjustment applied to a cash flow. NCFRDFs profile should change with variations in cash flow uncertainty since the risk adjustments applied to the project cash flow reflect investor sensitivity to uncertainty.?DCF and RO will often produce different NCFRDFs for the same project since they use different methods of risk-adjustment.

May 1, 2006

Water is an integral and essential part of mining business. Two issues crucial in the management of this resource, scarcity and excess, are increasing awareness of the importance of water and changing the value perceptions of the industry because they affect both the existence and continuation of the business. Therefore its value should be reflected in the water management that is practised on site. Historically water in mining has been perceived to be of low value so management practices have not been good or well implemented. Political and social transformation in South Africa has been accompanied by the promulgation of new legislation. South African water law is now underpinned by Integrated Water Resource Management (IWRM) principles. It impacts water pricing, provides for water pollution charges, prioritises water users, has specific mining and water related components and requires water licensing as part of the licence to mine. Mining no longer has a priority on water resources and has to compete with other water users to gain access to resources. New institutional arrangements are being put in place to implement the regulations. All this requires a paradigm shift in miningÆs view of water. Generally the sector is still catching up with the new requirements, principles and philosophies. However, the way in which South African mining values water is changing. This is demonstrated in partnerships between the industry and other water users. These partnerships are Integrated Water Resource Management (IWRM) in practice and they achieve sustainable development goals. These partnerships are essential for mining to stay in business, expand operational capacity, reduce impacts, prevent legal action and reduce reputational risks.

Jan 1, 2006

By Robert T. McKnight

"Traditional techniques for valuing resource projects companies have been primarily based on discounted cashflow methods (DCF) or by comparison to similar projects with an apparent market capitalization. Many resource projects are really forms of options to invest rather than a future cashflow stream. Employing the DCF method to value a resource project which is really an option to invest, can dramatically underestimate the real value of the project. The analytical tools required to evaluate options, while more complicated than the usual spreadsheets used for DCF, are becoming more easily available and usable by managers. This paper will discuss the background of options valuation and some of the tools which will make it easier for managers to estimate the value of projects and companies which have significant real option values.ResumeBob McKnight is a graduate of the University of British Columbia in Geological Engineering, supplemented by an MBA from Simon Fraser University. Following several years in the oil patch with Cities Service and Brascan, Bob returned to Vancouver in 1979 to work for Wright Engineers. He subsequently went on to work for Cassiar Mining, Getty Resources and Endeavour Financial before joining Pincock Allen & Holt Ltd. in 1998. His experience ranges from exploration to feasibility studies, financial evaluations of mining and oil & gas projects, due diligence, project finance, valuations and mergers and acquisitions. He has extensive international mining experience pertaining to such countries as Chile, Mexico, Uruguay, Thailand, Indonesia, Angola, Papua New Guinea, Kazakhstan.What are Options?Options have been around for centuries. They were familiar to Roman and Phoenician traders who were shipping cargoes from Mediterranean seaports. In the financial world, options are types of contracts that generally include the right, but not the obligation, to buy or sell a share, currency or commodity. The underlying commodity price or share price changes are assumed to be lognormally distributed. In this context, options are of two general types, ""call"" options and ""put"" options. Call options have the characteristic of having the right to buy a tradable commodity or currency at a predetermined price for a specified period of time. For the owner of call options, they become more valuable as the price of the underlying commodity increases. For the seller of call options, these options become an increasing liability as commodity prices rise, since there is the obligation to sell the commodity at a predetermined (perhaps lower-than-market) price. This characteristic of call options recently became high profile with the sharp rise in gold prices last year. The value of gold call options sold by certain producers increased their associated liabilities to the point where margin calls were made."

Jan 1, 2003

By Michael Samis

Conventional project valuation techniques, such as discounted cash flow (DCF) method, are more frequently being criticised for the manner in which they consider the interacting effects of uncertainty and project structure (including management flexibility) on project value. Modern asset pricing (MAP; often called ?real options valuation? when applied to the analysis of flexibility) is a more general valuation framework that corrects many of the shortcomings of common valuation methods. Previous mining applications of MAP have tended to treat the ore deposit as a homogenous entity. While useful for demonstration purposes, this is inadequate for practical application in industry. This paper presents a MAP valuation example that allows for the heterogeneous nature of an ore deposit. It shows that deposit structure may increase the complexity of the mine planner?s decision so that results of a standard DCF analysis, or a simple MAP analysis that ignores the details of deposit structure, are misleading. In the example, a management is considering the development of an adjacent low-grade zone while mining operations in a high-grade zone are ongoing. If the low-grade zone is developed before high-grade reserves are exhausted, the proposed development will include both low-grade zone development and a capacity expansion to handle additional low-grade reserve production. If development of these reserves is delayed until the high-grade reserves are depleted, then the low-grade reserves can be developed without a capacity expansion. A typical DCF analysis would reduce the management?s decision problem to three alternatives: 1) continue mining only in the highgrade reserves, 2) immediately develop the low-grade reserves and expand capacity, and 3) delay low-grade zone development until the high-grade reserves are exhausted. The model presented here allows the management to reconsider the development and capacity expansion decision on a discrete half-year basis. It delineates price regions, for given levels of high-grade zone reserves, in which it is optimal to develop the low-grade zone, defer low-grade zone development and abandon the mine irrevocably. The model presented here extends the ability of mine planners to describe actual project structure while using the MAP valuation framework that is already noted for its capacity to combine project uncertainty and risk insights with a dynamic project description.

May 1, 2001

By Silvio Hernández Aquije

El presente texto señala el descubrimiento del vanadio en el Perú, así como las cualidades de resistencia que imprime este elemento en los aceros. De otro lado, se menciona la clasificación que hizo L.Lunay de los depósitos vanadíferos que tienen un interés económico en la minería.

May 1, 1955

By Silvio Hernández Aquije

El presente texto señala el descubrimento del yacimiento vanadífero de Minasragra a través del reporte de Yeatman-Berry en 1916 y el de Kett-Sproul en 1931. Así también señala los tipos de mineralización como la mineralización primaria y por impregnación.

Jul 1, 1955

By Alan U. Seybolt

UNLIKE its sister elements, columbium (niobium) and tantalum, vanadium has not been available until recently in fabricated form. While Vanadium Corporation of America has offered the metal in fairly pure form for sale for many years in small lots for research purposes, this grade of vanadium has been brittle, probably because of a high oxygen content. Hence, when in 1950 the announcement1 was made that wrought vanadium was available as a commercial material, this represented a large step forward in the metallurgy of vanadium. While vanadium is generally regarded as a rare metal, data on its occurrence in the earth's crust show it to be as abundant as copper, zinc, and lead combined. Vanadium is widely distributed, but it does not seem to occur in massive deposits except in a few localities, principally in Colorado, Utah, and Arizona, where it is found in sandstone formations, and in Mina Ragra, Peru. Only in Colorado or Peru are ores mined solely for the vanadium content. Ores in the United States are principally carnotite and roscoelite; the former is of particular interest because of its uranium content. It is a uranium-potassium vanadate containing approximately 52 pct of UO2 and 18 pct of V2O5. Production in the United States during the war years averaged around 2000 tons a year, but dropped to 636 tons in 1946. In recent years, ferrovanadium has been selling for about $2.80 per pound of contained vanadium. This suggests that the price of the pure metal will never be as low as $2.80 per pound, but it could

Jan 1, 1953