An Overview of the Mining Industry

(General Characteristics)

According to the broadest definition, mining includes discovering, extracting and processing of all nonrenewable resources up to the point at which they are used for fabricating or for producing

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energy. This broad definition includes the energy minerals such as coal, petroleum and natural gas; refined or processed metals such as copper, steel and the ferroalloys; and nonminerals such as diamonds, phosphate and potash. A much narrower definition of mining includes only crude or nonprocessed mine products, such as mineral ores and coal, and excludes petroleum and natural gas. We deal mainly with the major metals from the exploration and mining stages to the processing stage from which they are normally marketed for use in manufacturing.

The production of useful minerals involves several stages that are generally carried on by large mining firms, although small mining operations may engage in the initial stage. The first stage is exploration of areas identified by geological reports as possessing potential mineral resources. Modern exploration methods are quite sophisticated and include geological, geochemical and geophysical investigation; three-dimensional sampling by core drilling or other methods; laboratory analyses, including ore treatment, concentration, and recovery tests; and economic appraisal. The objective is to discover and evaluate an orebody that can be economically exploited.

Geochemical exploration is used to measure the chemical properties of the area surrounding the deposit in order to delineate abnormal chemical patterns that may be related to potentially economic mineral deposits. Geophysical investigations employ electronic equipment that can detect contrasts in such physical properties as specific gravity, electrical conductivity, heat conductivity, seismic velocity and magnetic susceptibility. Where much of the bedrock is concealed, telegeologic or remote sensing techniques measure various geologic properties from aircraft or satellites. Exploration is commonly carried on by teams of specialists that include geologists, geochemists and geophysicists. There are different levels of exploration beginning with regional geologic mapping of areas up to 50,000 square km (20,000 square miles) and ending with intensive investigations of orebodies by means of numerous drillings to obtain bulk samples which are then metallurgically tested to determine the dimensions and character of the orebody.

If the results of exploration activities suggest that an economical deposit has been found, the second stage involves engineering and economic evaluations of the mining project. It is on the basis of this study that companies decide whether to go ahead with a mining project; the study may also be reviewed by prospective

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lenders. The feasibility study for a large mining project may be quite costly, running to $25 million or more in some cases. The total cost of exploration and the feasibility study for a large mine may run to $50 million or more. It is uncertain whether a profitable mine will be constructed until all the stages have been completed. In the initial exploration stage, several million dollars may be spent with less than a 10 per cent chance of a successful outcome.

The third stage is the construction of the mine, the metallurgical plant, and infrastructure. There are two basic types of operations to extract mineral ores: open-pit or surface mining, and underground mining. An open-pit mine is largely a quarrying operation that handles a large volume of material. Such mining involves drilling and blasting the ore and hauling it out of the pit in large trucks with capacities ranging up to 200 tons, or in ore trains. The ore is hauled to crushers and then to the metallurgical plant. In underground mining, shafts are dug into ore deposits below the surface, from which ore is drilled, blasted and removed through underground passages to the surface. Iron, bauxite and copper ores are extracted by means of open-pit mining, while lead, zinc, silver and gold are largely extracted by underground mining. There are also some underground copper mines. Economies of scale in open-pit mining permit the mining of relatively low-grade ores. As much as 100,000 tons of ore per day containing less than 1 per cent metal are extracted in the larger open-pit operations. Higher ore grades are necessary for underground mining to be profitable.

One recent advance in mining and processing of lower-grade ores is in situ mining. In situ mining may be defined as the extraction of metals from ores located within a mine (broken or fractured ore, caved material, slag heaps, etc.). These materials represent an enormous potential source of all types of metals.

Large mines involve huge capital outlays running to a billion dollars or more. The mining complexes usually include concentration of ores for production of concentrates with 25 per cent or higher metal content. In the case of copper, large mine complexes include plants for smelting copper or for producing copper metal by hydrometallurgical methods, but in the case of other metals such as gold, lead, zinc, tin and iron, metal is produced in separate plants which may or may not be owned by the mining company. The degree of processing that usually takes place at the mine differs widely among metals, but refining the product for market-

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ing to fabricators nearly always takes place in separate plants that refine the products of several mines.

As is known, modern methods of processing are dense medium separation, jigging and froth floatation. Operations prior to coal preparation include: blending, screening, crushing, dewatering and others. The aim is to get clean coal for metallurgical plants, etc.

Since mines tend to be located far away from developed areas, infrastructure is often a substantial proportion of capital cost. It is frequently necessary to provide sources of power and water, as well as highways, railroads and port facilities. In addition the mining company may be responsible for constructing living quarters for workers and their families and for providing education and other public services required by the mining community.

PHASE I Before Mining

PHASE II Mining

PHASE III After Mining

Prospecting: Finding Proving Planning Opening and Developing		Extracting: Surface Underground Dredging	Ore to processing	Processing	To further processing or
		consumer products