Mineral Economics

An accurate forecasting model for the price volatility of minerals plays a vital role in future investments and decisions for mining projects and related companies. In this paper, a hybrid model is proposed to provide an accurate model for forecasting the volatility of copper prices. The proposed model combines the adaptive neuro-fuzzy inference system (ANFIS) and genetic algorithm (GA). Genetic algorithms are used for estimating the ANFIS model parameters. The results of the proposed model are compared to other models, including ANFIS, support vector machine (SVM), generalized autoregressive conditional heteroscedasticity (GARCH), and autoregressive integrated moving average (ARIMA) models. The empirical results confirm the superiority of the hybrid GA–ANFIS model over other models. The proposed model also improves the forecasting accuracy obtained from the ANFIS, SVM,
GARCH, and ARIMA models by a 62.92%, 36.38%, 91.72%, and 42.19% decrease in mean square error, respectively.

Developing an accurate forecasting model for long-term gold price fluctuations plays a vital role in future investments and decisions for mining projects and related companies. Viewed from this perspective, this paper
proposes a novel model for accurately forecasting long-term monthly gold price fluctuations. This model uses a
recent meta-heuristic method called whale optimization algorithm (WOA) as a trainer to learn the multilayer
perceptron neural network (NN). The results of the proposed model are compared to other models, including the
classic NN, particle swarm optimization for NN (PSO–NN), genetic algorithm for NN (GA–NN), and grey wolf
optimization for NN (GWO–NN). Additionally, we employ ARIMA models as the benchmark for assessing the
capacity of the proposed model. Empirical results indicate the superiority of the hybrid WOA–NN model over
other models. Moreover, the proposed WOA–NN model demonstrates an improvement in the forecasting accuracy obtained from the classic NN, PSO–NN, GA–NN, GWO–NN, and ARIMA models by 41.25%, 24.19%,
25.40%, 25.40%, and 85.84% decrease in mean square error, respectively.

Change is an intrinsic factor in societies, industry, and life in general, although the degree of change is neither constant nor does it develop in a linear pattern. If things go well, change results in innovation or increased efficiency or is generally regarded as a kind of improvement. However, in real life, phases of more intense change commonly alternate with phases of stagnation, typically when no pressure to change or to improve is felt by a majority of the stake holders. It is by now beyond doubt to almost all regional and global decision makers that the industrial behaviour of our modern societies affect our climate negatively and far beyond nature's buffering capacities. The awareness of the negative effects of our increasing carbon footprint has grown steadily over the last decades and energy-intensive industries like mining and mineral processing have started to take action to reduce emissions already. Major as well as smaller mining houses have started to search for more energy efficient mining and mineral processing techniques and also attempt to reduce water consumption significantly. In recent years the concepts of renewable energy and electro-mobility have gained substantial momentum and are discussed intensively and partly controversially in most societies. Amazing innovations and energy production have been achieved in the fields of solar and wind energy and electro-mobility is suddenly regarded as a major part of the solution but here, innovation is still at an early stage and surely more is still to come. One aspect, however, is hardly mentioned in any of the public debates on renewable energy and electro-mobility and that is the drastically increasing " intensity of use " of metallic and mineral resources that comes with this " game changing " change of technical direction. Superficially easy promises that the necessary supply of mineral resources for our industries can be provided by " 100 % recycling " or a seemingly autonomous " circular economy " have only helped to delay the recognition that drastically increased exploration efforts and mining are required to provide the necessary primary mineral resources for these new technical solutions. Strategic mass metals such as copper can come from recycling only up to 60 % – even at the highest possible recycling rates. Recycling can only reach the copper metal that was produced and used some 25 to 30 years ago, which is far less than today's consumption. Periods of use are shorter for catalytic metals such as platinum or palladium but still leave a substantial supply gap. High-tech metals such as cobalt, lithium, and the rare earth elements are currently hardly recycled at all or have been introduced so recently into their first life cycle that no recyclable quantities are available yet. These facts had already necessitated a constant exploration effort for new primary mineral resources prior to the new demands from the new techniques that come with an addition of or conversion to renewable energies and electro-mobility. What has gone widely unnoticed so far outside the world of mining and metallurgy, is the dramatic increase of copper needed for hybrid and full electrical cars. While

'Country risk', including the threat of 'resource nationalism', market-related 'commodity price risk' and corporate-level 'going concern risk' are identified as amongst the principal non-technical risk types having the greatest impact on the mining industry. 'Exchange rate risk' acts alongside commodity price risk at the corporate level where mine-related revenues are in United States dollars (US $) and the mine cost-base in a local currency. Other market-related risks comprise the various indirect price-influencing forces that drive mineral...

Mineral commodity prices are subject to volatility over both the short and longer run – driving fluctuating operating margins for mining companies over time. Such market dynamics influence mine operating decisions depending on the interplay of company-specific and mineral market factors. The company factors include corporate financial strength and price-risk management strategy, as well as mining practices and methods at the operation level. The critical mineral market factor is the price of the ex-mine product. This results from underlying microeconomic and macroeconomic root-causes pertaining to mineral supply and demand, in addition to the activities of financial participants within commodity markets. Significant changes in commodity prices of an extended duration, either up or down, remain the principal influence upon mine economics – and therefore on mining practices too. Accurate and precise forecasting of commodity prices (and of relevant exchange rates) continues to prove el...

The purpose of this paper is to evaluate the efficiency of the global primary aluminum industry. Efficiency is here taken to be evaluated relative to some benchmark, i.e., the smelter or smelters identified as the most efficient in the data set, thus forming the production frontier. The performance of individual smelters, specifically their technical, allocative, and scale efficiencies are calculated by the means of data envelopment analysis. A proprietary database containing data on inputs used, output, and cost of production for 151 primary aluminum smelters operational globally in 2003 were used in the efficiency estimations. In order to assess and contrast the performance of smelters at different locations, facing dissimilar policy and factor supply environments, smelters are grouped into geographical regions. Furthermore, the technology used will also be evaluated in terms of the above efficiency measures. For each region, measures of potential technical and cost-wise factor savings will be calculated in order to assess specifically in what way production factors improvements can be made and approximately how large these improvements are. The findings indicate that; (a) smelters are overall highly efficient given the scale of operation, (b) many smelters operate with increasing returns to scale and thus we find significant scale inefficiencies, (c) substantial allocative inefficiencies exist within the industry, and (d) there are significant variations in the level of efficiency across regions. The allocative efficiency is particularly low in regions such as China and the Commonwealth of Independent States (CIS) region. Finally, the greatest potential for factor reductions is in labor input in China, the CIS region and in Asia.

ABSTRACT The abandoned Picher mining district in northeastern Oklahoma, part of the Tri-State mining district, was the largest source of sulfide ores of lead and zinc in the U.S. A. in the early twentieth century. After abandonment in the 1960s, numerous environmental problems caused by the abandoned mines and large tailings piles affected the district and surrounding areas with contamination of water, soils, vegetation, wildlife, and humans with lead and other metals. Current (2011) cleanup efforts in the district include separation of coarse and fine tailings particles, sales of the coarse particles (which consist mostly of dolomite and chert) for use as aggregate in asphalt, and burial of metals-rich fine tailings below ground to reduce exposure to and transport of toxic metals. Analysis in this paper indicates that reprocessing these tailings to extract remaining aluminum, titanium, lead, and zinc may be feasible. The value of lead and zinc in the tailings of this abandoned mining district probably are not sufficient to justify recovery of metals from the tailings at current market prices, but potential recovery of aluminum and titanium from these tailings may provide sufficient returns to justify the costs associated with reprocessing the fine tailings remaining in this district.

Following a review of Life of Asset work at MMG’s Rosebery mine in which a proposal to increase production from 0.8 Mtpa to 1.2 Mtpa was mooted, questions were raised as to the seemingly arbitrary reasoning for the production increase.  Questions raised included: did the proposal actually add value, was the production rate from the mine sustainable, and was it the best identifiable value adding configuration.


A multiple scenario analysis study was commenced to model how various cut-off grade values against mill throughput, along with associated capital expenditure, would impact on the potential value of the operation. This was carried out utilising the “Hill of Value” approach promotedby AMC Consultants.

The traditional approach to these studies uses a constant cut-off value (Net Smelter Return) for the whole mine analysis.  . This was thought to potentially introduce a large amount of variability to the model as different ore types were thought to have different processing costs and different underground lenses were thought to have different mining costs. With the aim of developing a consistent value measure which would be comparable between the lenses, an alternative measure was suggested for all ore block values in this model, irrespective of lens location. 



The new measure used was a Mine Variable Value (MVV) this allowed for the variable factors of final metal concentrate production to be removed from the ore value. From a mining point; this was the haulage distance from ore source to ROM.  Whilst for the mill; it was the amount of reagents required, varying based on grade, together with the amount of power required for crushing, grinding and tailings handling.

From the initial run of the model, preliminary results lead to a conclusion of increased value being gained by either increasing cut-off grade or increased mill throughput rate. The validity of the result was tested using alternative price scenarios, which although changing the absolute value achieved did not significantly change the identified value adding strategies..  The realisation of these value increases identified are however contingent on higher sustainable development rates being able to be achieved mine-wide; higher backfilling rates being able to be achieved and overcoming recognised ventilation constraints.  Further detailed studies are being put into place to identify the practicality of overcoming these recognised constraints to achieving the higher value strategies identified.

The ongoing objective of the Hill of Value model that has been built is to keep the model alive as a Life-of-Asset planning tool and to continue refining the foundation data, such that various mining strategies can be analysed with increased confidence.

The practical application of Lane's theory on optimum cutoff grade policy has to date proved difficult for selective stoping in large-scale underground mining. The key to determining an optimum cutoff grade is the ability to rapidly perform complex mine layout designs combined with rapid output of multiple potential schedules. This paper describes aspects of the detailed investigation into estimating a practical static cutoff grade for the two main orebodies in Mount Isa Mine's Enterprise Mine. Rule based automated scheduling software was used to evaluate thirteen different stoping layouts (including design infrastructure and capital development) of the Enterprise Mine's two main orebodies, with over 200 schedules generated. The investigation illustrates the application of commercially available software to solve the problems of generating multiple cutoff grade stope designs and achieving the otherwise insurmountable task of rapidly generating and valuing multiple scenarios for each stoping layout. Each scenario was evaluated using modelled net cash flows of the mining, concentrating and smelting operations of the company and calculating NPV. The cutoff grade for each orebody was selected based on the cutoff grade that achieved maximum NPV – with an appropriate production rate. Underground mine scheduling is a complex task involving the adherence to a number of simple scheduling rules and the balancing of several competing drivers. The study also found that: • while each scheduling rule itself is simple, the compounding complexities of their interaction preclude manual scheduling from being a realistic option. • there is a maximum sustainable rate of production possible for any given stoping layout, and that the actual maximum production rate is also a function of the required number of years of sustainable production. • the optimal cutoff grade was different for each orebody – a recognition of the impact of the different characteristics of each orebody.

A 'critical metal' is one that has important economic uses, but which also faces supply risks for geopolitical or environmental and sustainability reasons. The constrained nature of critical metals supply means proposed solutions to the problem commonly involve reducing demand and therefore reliance, via recycling, substitution and thrifting. However, most critical metals are presently only small markets and therefore such an approach ignores the potential of transformational market growth to reduce supply risk, by creating large, diverse, transparent markets with multiple sources of primary mine supply, akin to modern base metals markets. Research is therefore required into which critical metals have the greatest potential for such transformational market growth. This study therefore conducts an evaluation of 49 critical metals to determine which are nearest to the combined breakthroughs in discovery, supply and demand that may lead to transformational market growth. The study concludes that 13 markets from the 49 critical metals, being magnesium, silicon, barium, boron, lithium, cobalt, chromium, vanadium, gallium, strontium, cerium, lanthanum and scandium have the highest potential for transformational market growth and thus efforts to resolve supply risk in these markets may be better focussed on overcoming current market constraints and growing these markets, rather than lessening reliance by reducing demand.