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42 SMe Mining engineering handbook

and strongly influences the nature and degree of processing by-products, their production decisions can become complex,
at the mine site. Those products with high value-to-volume especially where, as is usually the case, the grades of the con-
ratios, such as gemstones and precious metals, can be trans- stituent elements vary throughout the ore body. Sometimes
ported long distances easily and will have global markets. At those decisions may appear perverse, as when maximizing
the other extreme, products with high volume-to-value ratios, profitability may involve concentrating on by-product recov-
such as sand and gravel and construction materials, will secure ery at the expense of the main product’s output, irrespective
only local markets. Marked reductions in the costs of deep-sea of shifts in its demand and prices. This merely emphasizes
shipping since World War II have widened the geographical that the underlying objective of mine managements is usually
markets for bulk products, such as iron ore and coal, from the creating value for shareholders rather than ensuring supplies
national to the regional and even to the global. of raw materials.
Where mineral deposits are located deeply inland, remote
from major markets for their products, they can only compete ore grades and exploration
if their products are upgraded locally in order to minimize The relative grades of ore of different deposits, even allowing
transport costs. Such upgrading will, in turn, rely on the prox- for the contributions of all the salable products, are not nec-
imity of sufficient competitive sources of energy. Whereas essarily reflected in the relative costs per unit of product. The
Chile’s copper mines are fortunate in being close to the sea, higher the grade, the more a deposit is able to support deep
which can be used to profitably ship concentrates, those of underground mining, which usually costs far more per ton of
central Africa depend on local smelting and refining to mini- ore than open-pit mining. Also higher grades may be able to
mize the volumes being transported to ports. offset the additional costs of complex treatment and processing.
In theory, the higher-grade, more easily processed, and
Competitive influences more accessible deposits are mined first. Certainly, the aver-
A mine’s ability to compete mainly depends not on relative age grades mined of some metallic ores such as copper have
transport costs, important though those are, but on the char- tended to decline over time, being substantially lower today
acteristics of its mineral deposit, on the mining method used, than in the 19th century. The tendency toward declining
and on the nature of its processing plant. These inherent influ- grades has in many cases been countered by falling transport
ences will inevitably be modified by the political, social, and costs and by improvements in the technology both of extrac-
economic conditions of the host countries, including such tion and processing and of exploration. The average iron con-
factors as wage inflation, energy costs, and exchange rates, tent of ores mined in Western Australia and Brazil today is
which are outside the mining company’s control. Such factors much higher than the typical grades of iron minerals earlier
tend to be relatively more important for manufacturing indus- processed in most of Western Europe. The uranium deposits of
tries, including mineral processing plants such as smelters and Ontario exploited in the 1950s had much lower average grades
refineries, than for mines. than the latest generation of Canadian mines.
The nature of each ore deposit normally dominates the
inherent influences on relative costs. Since few mineral depos- ore Depletion and Technological Change
its are identical in all respects, their costs, and hence their In essence, each generation will tend to exploit the best depos-
profitability, will tend to vary. Some will be close to ample its of which they are aware with the technologies at their
supplies of water and energy, and easily accessible, while oth- disposal. As geological knowledge increases, both through
ers will be more remote. Some may outcrop at or near the a better understanding of the nature and genesis of mineral
surface and be amenable to surface mining through open-cast deposits and through continued exploration with ever more
methods, whereas others may be so deep as to require extrac- sophisticated techniques, the number of known mineral
tion through shafts or adits. The nature of the host rocks and deposits also rises. Some may have higher ore grades than the
of the minerals themselves will vary from the easily worked deposits already being worked but in many cases will suffer
to the physically demanding. In some instances, the commer- from offsetting disadvantages, such as remoteness from mar-
cially valuable components may be easily liberated, whereas kets or poor accessibility. Simultaneously, the technology of
in others, complex physical and chemical processing may be ore extraction and processing is continuously changing and
needed. Perhaps the major factor is the grade of a deposit— enabling the economic development of previously sterile min-
the proportion of salable materials it contains. Other things eral deposits. Such technological changes can be driven both
being equal, which they seldom are, the higher the grade of a by end-use requirements and by a need to remove existing
mineral deposit, the lower its relative costs compared with a constraints and bottlenecks in supply.
similar but lower-grade deposit. Over time, changes in the costs of producing mineral
For many raw minerals, the average grade is less impor- products result from a continuing tug of war between the cost-
tant than the extent to which a mine can maximize its output of raising effects of ore depletion and the cost-reducing impact
the higher-priced types of the basic product without expensive of technological change and rising productivity. That leaves
processing. Typically the higher-value uses offer sizable pre- aside such general economic influences as movements in
miums over the more common uses. Metallic ores are seldom general price levels, wage rates, energy costs, and exchange
pure, but they contain a variety of different elements and com- rates. The result is never a foregone conclusion. There have
pounds. Obviously, the higher the content of the main metal, been periods where the forces of depletion have prevailed and
the more attractive the deposit, but the nature and importance inflation-adjusted costs of production have tended to rise, as
of co- and by-products are also relevant. Some are highly in the 1950s and 1960s. There have also been lengthy peri-
desirable and raise the potential value of the ore, whereas oth- ods, as in the 1980s and 1990s, where those forces have been
ers are toxic and reduce the marketability of the mine’s prod- outweighed by productivity improvements and real costs have
ucts. Sometimes the costs of their removal and safe storage tended to fall. That the real prices of most mineral products
outweigh any mining benefits. Where mines yield a range of have not shown any marked trends over long periods suggests