If It Cant Be Grown, It Must Be Mined

IF IT CAN’T BE GROWN…IT MUST BE MINED Metals and Minerals The building blocks of the earth are called elements, which are substances that cannot be broken down by chemical or physical action into simpler entities. Elements that are 'workable' (eg malleable) are termed metals (they are also usually good conductors of heat and electricity).

Of the 92 elements, eight account for 98% of the composition of the crust (the earth's outer layer; see later): oxygen (46.5%), silica (27.5%), aluminium (8%), iron (5%), calcium (3.5%), sodium (3%), potassium (2.5%) and magnesium (2%). By contrast, gold constitutes less than 0.0000004% of the earth's crust. Elements bond together in chemical compounds of definite ratios to form solid crystalline substances known as minerals, of which there are many thousand different types. (Coal is a mineral, mainly comprising the carbon element.) Rock is a solid mass of mineral grains, and there are four main rock-forming mineral groups: Silicates contain silicon and oxygen Oxides the elements bond to oxygen Sulphides " " " " sulphur Carbonates " " " " carbon/oxygen.

The most common minerals are all oxides: SiO2 (comprising 59.1% of the earth's crust), Al2O3 (15.2%), CaO (5.1%) and FeO (3.7%). 1

Where minerals are sufficiently concentrated (see later), they are called 'mineral deposits' and these become 'ore deposits' when the elements within the mineral can be recovered economically. Mining is usually about the recovery of the 'metal' elements. These concentrations are usually measured as the proportion of the constituent metal in the overall deposit (this might include several different minerals but the measurement will exclude the surrounding 'waste' rock). For the less valuable metals (copper, lead etc) this is usually measured as a few parts per hundred (eg 3% copper; Cu) while the precious metals will be measured in terms of parts per million (eg 6 grams/tonne gold; Au). Note that there are 1,000 grams in a kilogram and 1,000 kilograms in a tonne, so that 1 gram/tonne = 1 ppm. The search for diamonds is akin to looking for the proverbial 'needle in a haystack'. Diamond grades are typically 5 carat per 100 tonne (the normal 'unit' of measurement), ie 1 gram for every 100 tonnes (1 part per 100 million). Because of the huge range in the value of diamonds (based on size, colour and clarity), grades are often given in terms of value. A typical mined-diamond value is US$200/carat, ie an ore grade of only US$10/tonne in the example above. Note also that if the size of the average stone is 1 carat, then there will only be one stone per 20-tonne truck ! As an aside, it is often said that only one kimberlite pipe in one hundred is diamondiferous, and only one diamondiferous pipe in a hundred is economic to mine. Metals are often categorised into groups to reflect common usage or properties. Precious (Noble) Metals These are resistant to weathering (ie they do not rust) and are usually mined in their native (ie pure, elemental) state. Examples are gold, silver and the platinum-group metals (PGMs). Base Metals So called because they are capable of combining with an acid to form a salt, eg: Copper

Chalcopyrite (CuFeS2) and Chalcocite (Cu2S)

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Lead

Galena (PbS), Anglesite (PbSO4) and Cerusite (PbCO3)

Zinc

Sphalerite (ZnS) and Smithsonite (ZnCO3)

Nickel

Pentlandite (2FeS.NiS) and laterites

Ferrous Metals In addition to iron itself, this category includes those metals that have a strong chemical affinity with iron, eg: Chromium

Chromite (FeCr2O4)

Cobalt

Cobaltite (CoAsS) and Smaltite (CoAs2)

Molybdenum

Molybdenite (MoS2)

Manganese

Braunite (Mn2O3), Hausmanite (Mn3O4) and Pyrolusite

Non-Ferrous Metals These are the metals that have no affinity with iron (and also included the base metals), eg: Aluminium

Bauxite (Al2O3.2H2O)

Magnesium

Magnesite (MgCO3) and brines

Tin

Cassiterite (SnO2)

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Speciality Metals These are those metals whose unusual (exotic) properties make them valuable in specific usages, eg:

Cadmium

Greenockite (CdS), which is found as a coating on zinc ores, and is usually mined byproduct of base-metal sulphides

Mercury

Native metal and as Cinnabar (HgS)

Titanium

Ilmenite (FeO.TiO2) and Rutile (TiO2)

Zirconium

Zircon sand and Baddeleyite

Other Mined Minerals These are those valuable minerals that either can not be characterised as metals (eg coal) or where the mineral is used in its mineral form without extracting the metal (eg salt, which is sodium chloride): Industrial minerals

Salt, limestone, marble etc

Energy minerals

Coal, oil, gas and uranium

Gemstones

Diamonds, rubies etc

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2. Geology The consensus amongst scientists is that our solar system began about 5,000 million years ago, and planet Earth formed from a superheated cloud of dust and gas (following the 'Big Bang'). The Earth is believed to comprise a deep interior (the core), surrounded by a zone of heavy rock (the mantle) and a thin outer skin (the crust). Cooling from the core outwards sets up convection currents, and as these reach the crust the patterns they set up have been instrumental in forming a series of interlocking crustal plates. Plate tectonics is a relatively new theory and has revolutionised the way geologists think about the Earth. The size and position of the plates change over time. The edges of the plates, where they move against each other (the socalled mobile belts) are sites of intense geologic activity; such as earthquakes, volcanoes and mountain building (and mineralisation). Periods of mountainbuilding are referred to as orogeny, the most recent of which started 200 million years ago (about the time the first mammals appeared). Where plates 'collide', one plate might slide beneath (subduction), or ride above (obduction), another plate. Such movements are often accompanied by the intrusion into the crust of molten rock (magma) from the mantle. The magma cools to form igneous rock. There are broadly two types of igneous rock: Light (felsic) rocks that are rich in silica and aluminium, eg granites. Dark and heavy (mafic) rocks rich in iron and magnesia, eg gabbro. Where the magma reaches the surface of the crust it is extruded and cools very quickly as lava to form fine-grained volcanic rocks, eg basalt. The igneous activity associated with mobile belts is often accompanied by the introduction of hydrothermal fluids rich in minerals, giving rise to some of the world's biggest mineral deposits (eg the copper deposits of the Andes). A present-day example of such hydrothermal activity is in the South Pacific where 'black smokers' on the seafloor are currently depositing metal sulphides along the junction of two tectonic plates. 5

Over geological time, some plates fuse together and new ones form, and, away from the edges of existing plates, the older rocks form the ancient 'basement', or cratons (also termed shields). 'Fossilised' mobile belts are preserved in cratons as Greenstone belts, which are a major source of gold deposits (eg in Western Australia, the Canadian Shield and West Africa). The crust and its plates are subject to constant erosion and the resultant material is re-deposited as sediment in rivers, lakes and seas, eventually consolidating into layers or strata – sedimentary rocks.

These sedimentary rocks fall into two categories: Clastic

Fragments brought together by ice, water or wind (eg sandstone).

Chemical

Precipitation of dissolved materials (eg forming limestone); with evaporates (eg rock salt from sea water) being a particular type.

In many areas of the globe, sedimentary rocks cover the basement and cratons entirely. Minerals contained in the sediments may accumulate in economic quantities. Over millions of years, sedimentary rocks are subject to heat and pressure as a result of igneous intrusions, mountain-building activity or the weight of the overlying sediments, to form metamorphic rocks. Hence a limestone becomes 6

a marble, shale becomes a slate, sandstone becomes a quartzite, etc. The gold deposits of South Africa's Witwatersrand and the iron-ore deposits in the Pilbara district of Western Australia are examples of sedimentary deposits that have been metamorphosed. According to the amount of heat and pressure, the original sediments can eventually be metamorphosed to schists, and volcanic/igneous rocks can be metamorphosed to form gneisses. Metamorphism often remobilises and reconcentrates the contained metals to form new deposits. The world's cratons consist entirely of metamorphic rocks. General Deposit Types Sedimentary deposits can be in the form of lenses and pods, often deposited along bedding planes or in fractures, faults and fissures. Under certain conditions, eg warm climate and shallow seas, sediments accumulate in large basins, and minerals become increasingly concentrated as salts as a result of evaporation. Many of the world's large deposits of potash, nitrate, phosphate and rock salt have formed in this fashion. Deposits in igneous rocks can also occur as lenses and pods, and in fractures, faults and fissures. They can also be distributed through the rock as fine disseminations and in small quartz veinlets as stockworks (typical of porphyry copper). Such deposits tend to be of large size and low grade. They often possess a surface (or supergene) zone that has been enriched in metals as a result of weathering. Beneath this zone, the ore unaffected by weathering is termed primary (or hypogene). Massive deposits (see below) are of higher grade and consist almost entirely of sulphide minerals. They are generally associated with metamorphic terrain. Where their deposition is associated with volcanic activity, they are termed volcanic massive sulphides (VMS). Where deposits associated with volcanic activity are stratified they have been referred to as sedimentary exhalative (sedex) deposits. A number of the world's most important deposits of nickel, chromite, copper and platinum occur in mafic rocks (see above) in layered igneous intrusions. The metals occur at distinct horizons, reflecting the pressure and temperature at which they formed as the magma cooled down. The platinum and palladium deposits of the Bushveld complex in southern Africa are of this type. 7

One particular type of mafic rock, kimberlite, is the world's principal source of diamonds. Diamonds are formed (from carbon) in the mantle under extreme temperature and pressure, and are carried to the surface in kimberlite pipes. These occur throughout the world but very few contain diamonds, and even fewer have diamond concentrations of economic interest (as noted above). Alluvial deposits are formed where material resulting from weathering and erosion is transported by rivers and streams and re-deposited. The mineral must be chemically stable and physically resistant to survive the process (restricting such deposits to precious metals, diamonds and other gemstones). Alluvial deposits are relatively recent in age and are generally unconsolidated. Laterite deposits are a product of tropical weathering and comprise a mixture of oxide and hydroxide minerals and clays. Bauxite, the chief ore of aluminium, is a laterite, and there are vast deposits in Brazil and Guinea. There are also important deposits of nickel laterite (eg in New Caledonia and Cuba). Where mineral deposits are formed at the same time as the host rock they are termed syngenetic. Where they have been introduced afterwards, they are termed epigenetic. Deposit Summary Diamond Pipes: Formed at least 150 km below the surface (where temperatures and pressures are extreme enough to create diamonds, rather than graphite or coal, from the element carbon). These kimberlite mineral accumulations only become economic when they are brought to the surface by volcanic activity. Epithermal: Formed by hydrothermal volcanic activity that pushes magma (and the contained minerals) through vents (to form extensive vein systems). An important source of gold and silver, normally as 'native' metal rather than in a mineral (and are the most likely type of deposit for high-grade, 'bonanza'-type discoveries). Laterites: A deeply weathered mixture of oxide and hydroxide minerals and clays (usually found in the tropics). These form the main orebodies for aluminium, and an increasingly important source of nickel (although recovery of the latter is a still problematic process).

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Lode: Found in Greenstone belts (see above), these deposits are an important source of precious metals and cluster around large regional fault zones. Although usually narrow and inconsistent (and so hard to identify) they can extend to great depths. Magmatic: As molten rock cools, the minerals crystallise and sink to the base. They are usually tabular, or lens-like, in shape, and form many of the world's great base-metal sulphide deposits, especially copper and nickel (and also some oxide deposits of iron, titanium and chrome). Massive: Nothing to do with size, rather a mineralisation (made up almost entirely of sulphides) that is homogeneous and conforms to the host rock's structure (usually indicating that it was formed at the same time). These orebodies are relatively easy to understand and mine. Placer: Minerals that have been eroded from the primary source and transported (normally by water action) and then deposited in a sedimentary bed. The mineral must be chemically stable and physically resistant to survive this process (restricting such deposits to precious metals and gemstones). Porphyry: Typical of deposits (especially copper) formed by igneous activity, with both the intrusion and host rock being severely fractured, with the mineralisation forming veins. The deposits are usually large but low grade, although subsequent leaching and precipitation can form areas of substantially higher grades (supergene enrichment). 3. Exploration As mentioned above, minerals must group in a sufficient concentration if they are to be economically recovered. This circumstances that are likely to lead to this process must be understood, and suitable locations identified, before a deposit stands any realistic chance of being identified. Geologists will examine general structural maps (rock types and faulting patterns) before making a decision on where to drill. Most of the world's mines are centred on the ancient 'shield' rocks of the Precambrian orogeny (comprising 9

the Archaean period of 4.6 billion to 2.6 billion years ago, and the Proterozoic period of 2.6 billion to 570 million years ago). This is because the mountainbuilding activity, which helped concentrate many minerals, was intense in this early period of the planet's life. The stages of exploration for these various orebodies might include: Geophysical Surveys - Airborne evaluation of magnetic or density anomalies, which are good indications of areas prospective for mineral deposits. Mapping - Consolidation of the surface expressions into a single plane for better understanding of the likely deposit configuration. Sampling - Collection of stream sediments, surface boulders or earth (the latter usually from trenches dug across a prospective area). The material is then analysed to test for anomalous concentrations of metals to establish drilling targets. Drilling - Recovery, for analysis, of either rock chips (at various depths) or cores (collection of the latter is by using diamond-encrusted circular drill bits and core barrels). Modelling - Evaluation of grades and known structures (often using computer models) to determine the likely deposit configuration. Infill Drilling - The drilling of extra holes to increasing confidence in the orebody model. Feasibility Studies - Various scenarios tested (at different metals prices) to determine if the deposit can be extracted profitably. The last such study is called a 'bankable' feasibility study as it is used to secure funding. There are various classifications for ore deposits, depending upon the certainty that the configuration is understood (this is usually a function of the number of drill holes):

Inferred

Evidence suggests that there are minerals worth investigating; sometimes described as 'Potential'.

Resource

- Indicated 10

Initial drilling has identified that there is mineralisation but the configuration is uncertain. - Measured Tonnage has been calculated but drilling not sufficient to be sure of the orebody's continuity. - Probable Further testing has raised the level of confidence such that initial funding can usually commence. Reserve - Proved Orebody is well understood, and the tonnages and grades established beyond reasonable doubt.

4. Mining There are four main types of mining: dredging, surface mining, underground mining and insitu mining. 1. Dredging This is a high-volume mining technique for low-value products near a plentiful source of water. Scoops/buckets are used to extract material from shallow water (often man-made lagoons). A high-tech variation of this is undersea mining, where material is sucked from the seafloor (although the only successful application of this to-date has been for gem diamonds in shallow waters). 11

The mining process is usually combined with the processing (typically drying and concentration) on a floating barge, which is anchored in the middle of the lagoon. 2. Surface Mining Called 'Open-cast' if soft-rock mining (eg coal or limestone) and 'Open-pit' if hard- rock mining (eg copper and diamonds). The mining process is fundamentally different between these soft- and hard-rock operations. The

former operations are usually rectangular in general shape (and advance along the seam, with waste infill behind as they advance) while the latter are oval. Surface mines normally only extend to a depth of about 200 m, below which it is usually cheaper to extract the metal from underground. The cut-off point will depend on the economies of the two methods, with surface costs being dominated by the ore:waste (stripping) ratio, which, in turn, will depend on the shape of the orebody, the amount of overburden to be removed and the safe steepness of the wall (ie bench height v width). This latter item will depend on the type of rock and the number of fractures etc. Hard-rock surface mining is dominated by drilling/blasting and then lifting of the broken ore either into trucks or onto conveyors for transportation to the processing plant. This lifting is usually by excavator (electric or hydraulic; with 12

shovel or backhoe configuration) or front-end loader. The softer rocks can be recovered directly by using very powerful excavators (including the huge bucketwheel machines). 3. Underground Mining Access is via vertical shafts or inclined roadways (adits). There are usually two access routes (one for men and materials, and one for the ore) for safety and for ease of ventilation (fresh air comes in one and is then exhausted out of the other). Once at the correct depth, horizontal tunnels are driven to reach the ore deposit. These are permanent structures so require strong roof supports (often including 'bolts' into the rock to tie the layers together for strength). In contrast, tunnels into the ore deposit itself are often temporary, and so the support is less substantial. Transport for men and materials can be by train, truck or man-riding conveyor belts. There are a multitude of different extraction techniques but the main ones are: Room and pillar - Matrix of excavated rooms with pillars left between them to hold up the roof. This method is popular for shallow mines where the mineral is thick but of relatively low value (it is a relatively wasteful method as subsequent removal of the pillars is dangerous). This method lends itself to the use of mechanised extraction. Longwall systems (Stoping in hard-rock mining) - The mineral (which is usually in a relatively narrow seam) is extracted as a face (advancing or retreating) between two parallel roadways. This system is very popular in coal mining; using shearers (rotating drums with teeth) or plows (a fixed, chisel-like, machine that cuts slices). Block Caving - Tunnels are driven under the ore deposit and the rock above is fragmented (by drilling/blasting and then the rock collapsing under its own weight) and the material is drawn down through 'ore passes' (see below). Cut and Fill - Suited to irregular ore deposits of high-value minerals, this method involves mining upwards in horizontal slices, with each slice being backfilled (usually with a concrete mix to provide a suitable floor) once the fragmented ore from above has been collected.

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Depending on the mine configuration, the target mineral can be collected directly from ore passes (effectively vertical tunnels used to store rock) or lifted from the floor using load-haul-dump (LHD) vehicles. Transportation to the shaft or incline can be by train, truck or conveyor. Ore: This is separated from the waste rock at the earliest opportunity to avoid dilution (which would involve extra cost). 'Run-of-mine' is used to describe the ore as it emerges from the mine, ie before treatment. Waste: Although some rock can be stored underground (and is ideally used to provide roof support by grinding it and pumping it back into the excavated areas) most has to be taken to the surface. (See end of article for cross-section of an example mine)

4. Insitu Mining There are two main types of insitu mining; solution and thermal. Solution - Involves the injection of water down drill holes into soluble deposits (most commonly salt). The mineral-rich solution is then pumped back to the surface. Thermal - Although only still at the research stage, it is theoretically possible to burn coal insitu (by creating cracks, then injecting oxygen and a heat source) and recovering the resultant heat (in effect, an underground power station without going to the trouble of extracting the coal). This has happened spontaneously in numerous areas (particularly in India) but the difficulty has always come in controlling the burning process. 5. Processing The valuable metal needs to be separated from the surrounding gangue (uneconomic) material. Much of this can be done by efficient mining methods so that there is not too much dilution of the ore. Initial stages usually involve crushing (e.g. Jaw Breakers) and grinding (e.g. Ball Mills) of the ore to reduce the material to sand and silt sizes. Classifiers (essentially giant sieves) are used to check particle sizes, with the oversize material being recycled. This process makes handling the ore easier and raises the likelihood of being able to liberate all of the valuable metal elements (and 14

maximising the surface area that will come into contact with subsequent chemical processes). The next stage is normally a series of concentration processes; e.g. removing water and waste material. Where the ore has to be transported a considerable distance, this concentration will occur at the mine site rather than at the processing operation. (In these circumstances, the ore can be transported as slurry via a pipeline.) Processing methods include: Carbon in Leach - Recovery (of gold and silver) from finely-ground ore by simultaneous dissolution and adsorption of the precious metals onto fine carbon in an agitated slurry tank. Flotation - This process has been used to separate minerals since the early 1920s, and involves treating the ground ore in a bubbling mixture of water and chemical constituents. The metallic minerals bond with the chemicals (ie they stick and rise to the surface) and can then be skimmed off and the chemicals washed or burnt off. The resultant material can then be subjected to refining and/or smelting processes to improve the product's purity.

Heap Leach - The dissolving-out from mined rock of the contained soluble metals by percolating a chemical solution through mounded material. ISA Process - Patented by Xstrata this process is used in more than 35% of the world's copper refining operations. The technology is used to bypass complex processes by utilising permanent stainless-steel cathodes in electro-winning 15

applications. Xstrata also developed the ISAsmelt high-intensity coppersmelting furnace. Solvent-extraction Electro-winning (SX-EW) - Dissolving of copper from the rock by organic solvents, with the metal then being recovered from solution by electrolysis. Examples of metals-recovery processes include: Mined bauxite is ground and mixed with caustic soda to form slurry. This is treated, and the alumina trihydrate particles recovered and smelted to form alumina. Oxygen is driven off by electrolytic action (in a refinery) to produce aluminium. Copper ore is concentrated by grinding and flotation, and smelted in a furnace to create copper matte. Iron and sulphur impurities are then removed in a converter (heated air is blown through the material) to create blister copper, which is fire-refined and then electrolytically-refined to produce copper cathodes. Zinc concentrates are roasted and the resulting calcine is leached and purified. Electrolyte zinc is deposited on sheets, stripped from them and then melted in a furnace (with the molten metal being cast in slabs.

The waste material from these processes is usually transported to a tailings dam (although they are sometimes dumped, controversially, at sea). There are various types but all are expensive, and so generally the retaining walls are built with either the waste product itself or with material that is available locally.

6. Marketplace There are a huge number of mines in the world (for example, there are over 8,000 small-scale coal and metals mines in China alone), and the total amount of material extracted has been estimated at over 35,000 Mt/y. This is summarised as: Ore (Mt)

Waste (Mt)

Total (Mt)

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Metals mines

5,000

10,000

15,000

Coal

5,000

7,000

12,000

Aggregates

7,000

Industrial Minerals

500

0 1,000

7,000 1,500

If only 'industrial-scale' operations are included, there are probably around 2,500 metals-producing mines in the world, and a similar number of coal mines. (Almost 60% of these mines are surface operations, which are usually also larger than underground operations.) There are perhaps 25,000 industrial-minerals mines and up to 100,000 quarries producing aggregate for construction purposes. (On a national scale, for example, there are a total of 1,100 mines in South Africa, of which only 400 are metals and coal mines, and 30 are diamond mines.) However, for most practical purposes (e.g. targeted equipment sales), this list can be reduced even further. An estimated 2,000 coal, metals and diamond mines account for almost 90% of the world's total mined output (by value). Also, because of the high proportion of transport costs in the overall price, and also to their widespread geological occurrence, aggregates are generally consumed close to where they are mined (ie they are not generally traded internationally). The total value of annual mined production in recent years has averaged US$450 billion, with US$200 billion of this being attributed to coal/lignite, US$150 billion to metals (and gems) and US$100 billion to industrial minerals and aggregates. Some other statistics: ● Surface mines account for about 80% of all ore and rock extracted. ● The top ten mining companies produce 25% of the mined production (by value). ● Half of the world's mine and exploration expenditure is in the Americas. ● The total mining equipment sector is worth around US$50 billion per annum. 17

● There some 3,000 stock exchange-listed exploration and mining companies (almost half of these being in Canada).

Coal Sector Coal production amounts to around 4,600 Mt/y of 'hard' coal, and 900 Mt of lignite. At prices varying from US$30 to US$60/t, depending on its calorific value etc, the value of this output dominates total mine production, and is valued at slightly more than ALL metals production combined (see below). The coal sector probably accounts for over one-third of all mining-equipment purchases. However, much of coal output is for consumption in local power stations, and the sector has nothing like the global media impact and influence of the metals sector. Metals Sector Some 15,000 Mt of rock is moved every year, two-thirds of it being waste. Around US$5 billion is spent every year on exploration and mine-feasibility studies, slightly more on mine construction, and up to US$80 billion on the actual cost of mining and processing. The eight most important metals/gems (ranked by the average annual value of mined production over recent years) are:

US$ billion pa Aluminium

32

Gold

30 (although US$44 billion at current prices)

Copper

23

Iron Ore

15

Diamonds

10

Zinc

9

18

Nickel

6

PGMs

5

Note that these are MINED values, not fabricated values. For example, there are almost 160 Mct of 'rough' (ie uncut) diamonds mined every year. (Carat = 0.2 grams and is not to be confused with '24-carat gold', which signifies 100% purity.) These diamonds are worth twice as much when cut ('polished') and seven times as much when sold in jewellery (ie almost US$70 billion per annum). Gold production is currently some 2,500 t/y (80 Moz/y), with South Africa accounting for 14%, the US 11% and Australia 10%. However, there has only been a total of 175,000 t of gold ever mined (at least as measured going back 25 centuries), and 100,000 t of this is in identified stocks (one-third being held by Central Banks). Because of its high density (over 19 t/m3), this total mined amount could fit into a cube with sides of under 21 m.

Industry Structure In Africa, Asia and Latin America, there are hundreds of thousands of garimpero miners (individuals who respond to 'gold-rush' conditions). However, if we exclude these people, there are perhaps 20,000 prospectors active in the world. (Note that 11,000 exploration licences were awarded in Brazil during 2003, and this is estimated to represent almost half of the Latin American total, itself under 25% of the world total; say 100,000 exploration licences awarded per year worldwide.) At any one time there are probably 8,000 drilling projects underway, 1,500 reserve-definition studies, 800 feasibility studies and 400 mines under construction. Early stage work requires funding through equity finance (ie offering shares for funding) but later-stage projects can utilise debt finance (ie borrowing cash). Large companies can also take on corporate debt, often split between so-called 'mezzanine' debt (medium risk; shareholder loans and debentures) and 'senior' debt (low risk; secured loans).

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The metals' industry's annual equity and debt financings are averaging around US$40 billion, with about one-third of this currently being spent on acquisitions. (The proportion of equity to debt has been rising recently, and is currently around 35:65, because of the increased activity of junior companies and the higher level of acquisitions.) Most metals require significant processing before they are in a form that can be traded. (Note that the prices quoted on the London Metal Exchange often relate to 'four-nines' purity, ie 99.99%.) This requires substantial capital expenditure, expertise and infrastructure, and so the sector is dominated by large companies. If juniors discover base metals, they tend either to sell the prospect to a larger company (directly or by being taken over) or develop a mine and sell the mineral at the 'concentrate' stage.

 

Ramoutar  Seecharran (MEIZ) 

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