Strategic project evaluation for open pit mining ventures using real options and allied econometric techniques

Open pit mine operations are complex businesses that demand a constant assessment of risk. This is because the value of a mine project is typically influenced by many underlying economic and physical uncertainties, such as metal prices, metal grades, costs, schedules, quantities, and environmental issues, among others, which are not known with much certainty at the beginning of the project. Hence, mining projects present a considerable challenge to those involved in associated investment decisions, such as the owners of the mine and other stakeholders. In general terms, when an option exists to acquire a new or operating mining project, , the owners and stock holders of the mine project need to know the value of the mining project, which is the fundamental criterion for making final decisions about going ahead with the venture capital. However, obtaining the mine project’s value is not an easy task. The reason for this is that sophisticated valuation and mine optimisation techniques, which combine advanced theories in geostatistics, statistics, engineering, economics and finance, among others, need to be used by the mine analyst or mine planner in order to assess and quantify the existing uncertainty and, consequently, the risk involved in the project investment. Furthermore, current valuation and mine optimisation techniques do not complement each other. That is valuation techniques based on real options (RO) analysis assume an expected (constant) metal grade and ore tonnage during a specified period, while mine optimisation (MO) techniques assume expected (constant) metal prices and mining costs. These assumptions are not totally correct since both sources of uncertainty—that of the orebody (metal grade and reserves of mineral), and that about the future behaviour of metal prices and mining costs—are the ones that have great impact on the value of any mining project. Consequently, the key objective of this thesis is twofold. The first objective consists of analysing and understanding the main sources of uncertainty in an open pit mining project, such as the orebody (in situ metal grade), mining costs and metal price uncertainties, and their effect on the final project value. The second objective consists of breaking down the wall of isolation between economic valuation and mine optimisation techniques in order to generate a novel open pit mine evaluation framework called the ―Integrated Valuation / Optimisation Framework (IVOF)‖. One important characteristic of this new framework is that it incorporates the RO and MO valuation techniques into a single integrated process that quantifies and describes uncertainty and risk in a mine project evaluation process, giving a more realistic estimate of the project’s value. To achieve this, novel and advanced engineering and econometric methods are used to integrate financial and geological uncertainty into dynamic risk forecasting measures. The proposed mine valuation/optimisation technique is then applied to a real gold disseminated open pit mine deposit to estimate its value in the face of orebody, mining costs and metal price uncertainties.

Community protest groups' perceptions of environmental risks using social contagion theory

Local communities are vulnerable to the potential environmental risks associated with construction activity. Currently, little is understood about how perceptions of environmental risks are shaped and spread within a community. A better understanding of this process can help bridge the gap between developers and communities and bring about more sustainable development practices. This paper reports a research methodology which uses social contagion theory to investigate this process. The research adopts a single case study approach of a highly controversial housing project in the greater Sydney metropolitan area. The case study is particularly significant as it investigates an extensive and on-going community-based protest campaign (dating back almost 20 years) that has generated the longest standing 24 hour community picket in the New South Wales.

Civil applications in the Magistrates Court are often set down for hearing by a judicial registrar, but there is now some uncertainty on the limitation of this practice

The decision of the District Court of Queensland in Mark Treherne & Associates -v- Murray David Hopkins [2010] QDC 36 will have particular relevance for early career lawyers. This decision raises questions about the limits of the jurisdiction of judicial registrars in the Magistrates Court.

On the relationships between self-reported bicycling injuries and perceived risk among cyclists in Queensland, Australia

The focus of governments on increasing active travel has motivated renewed interest in cycling safety. Bicyclists are up to 20 times more likely to be involved in serious injury crashes than drivers so understanding the relationship among factors in bicyclist crash risk is critically important for identifying effective policy tools, for informing bicycle infrastructure investments, and for identifying high risk bicycling contexts. This study aims to better understand the complex relationships between bicyclist self reported injuries resulting from crashes (e.g. hitting a car) and non-crashes (e.g. spraining an ankle) and perceived risk of cycling as a function of cyclist exposure, rider conspicuity, riding environment, rider risk aversion, and rider ability. Self reported data from 2,500 Queensland cyclists are used to estimate a series of seemingly unrelated regressions to examine the relationships among factors. The major findings suggest that perceived risk does not appear to influence injury rates, nor do injury rates influence perceived risks of cycling. Riders who perceive cycling as risky tend not to be commuters, do not engage in group riding, tend to always wear mandatory helmets and front lights, and lower their perception of risk by increasing days per week of riding and by increasing riding proportion on bicycle paths. Riders who always wear helmets have lower crash injury risk. Increasing the number of days per week riding tends to decrease both crash injury and non crash injury risk (e.g. a sprain). Further work is needed to replicate some of the findings in this study.

Why perform pro-social behaviours? Understanding the key sources of perceived value in preventative health services

In maintaining quality of life, preventative health is an important area in which the performance of pro-social behaviours provides benefits to individuals who perform them as well as society. The establishment of the Preventative Health Taskforce in Australia demonstrates the significance of preventative health and aims to provide governments and health providers with evidence-based advice on preventative health issues (Preventative Health Taskforce, 2009). As preventative health behaviours are voluntary, for consumers to sustain this behaviour there needs to be a value proposition (Dann, 2008; Kotler and Lee, 2008). Customer value has been shown to influence repeat behaviour (McDougall and Levesque, 2000), word-of-mouth (Hartline and Jones, 1999), and attitudes (Dick and Basu, 2008). However to date there is little research that investigates the source of value for preventative health services. This qualitative study explores and identifies three categories of sources that influence four dimensions of value – functional, emotional, social and altruistic (Holbrook 2006). A conceptual model containing five propositions outlining these relationships is presented. This study provides evidence-based research that reveals sources of value that influence individuals’ decisions to perform pro-social behaviours in the long-term through their use of preventative health services. This research uses BreastScreen Queensland (BSQ), a cancer screening service, as the service context.

Stability of hydrotalcites formed from Bayer refinery environmental control processes

Bauxite refinery residues (red mud) are derived from the Bayer process by the digestion of crushed bauxite in concentrated sodium hydroxide at elevated temperatures and pressures. This slurry residue, if untreated, is unsuitable for discharge directly into the environment and is usually stored in tailing dams. The liquid portion has the potential for discharge, but requires pre-treatment before this can occur. The seawater neutralisation treatment facilitates a significant reduction in pH and dissolved metal concentrations, through the precipitation of hydrotalcite-like compounds and some other Mg, Ca, and Al hydroxide and carbonate minerals. The hydrotalcite-like compounds, precipitated during seawater neutralisation, also remove a range of transition metals, oxy-anions and other anionic species through a combination of intercalation and adsorption reactions: smaller anions are intercalated into the hydrotalcite matrix, while larger molecules are adsorbed on the particle surfaces. A phenomenon known as ‘reversion’ can occur if the seawater neutralisation process is not properly controlled. Reversion causes an increase in the pH and dissolved impurity levels of the neutralised effluent, rendering it unsuitable for discharge. It is believed that slow dissolution of components of the red mud residue and compounds formed during the neutralisation process are responsible for reversion. This investigation looked at characterising natural hydrotalcite (Mg6Al2(OH)16(CO3)∙4H2O) and ‘Bayer’ hydrotalcite (synthesised using the seawater neutralisation process) using a variety of techniques including X-ray diffraction, infrared and Raman spectroscopy, and thermogravimetric analysis. This investigation showed that Bayer hydrotalcite is comprised of a mixture of 3:1 and 4:1 hydrotalcite structures and exhibited similar chemical characteristic to the 4:1 synthetic hydrotalcite. Hydrotalcite formed from the seawater neutralisation of Bauxite refinery residues has been found not to cause reversion. Other components in red mud were investigated to determine the cause of reversion and this investigation found three components that contributed to reversion: 1) tricalcium aluminate, 2) hydrocalumite and 3) calcium hydroxide. Increasing the amount of magnesium in the neutralisation process has been found to be successful in reducing reversion.

Evaluation of an Australian solar community : implications for education and training

1.1 Background What is renewable energy education and training? A cursory exploration of the International Solar Energy Society website (www.ises.org) reveals numerous references to education and training, referring collectively to concepts of the transfer and exchange of information and good practices, awareness raising and skills development. The purposes of such education and training relate to changing policy, stimulating industry, improving quality control and promoting the wider use of renewable energy sources. The primary objective appears to be to accelerate a transition to a better world for everyone (ISEE), as the greater use of renewable energy is seen as key to climate recovery; world poverty alleviation; advances in energy security, access and equality; improved human and environmental health; and a stabilized society. The Solar Cities project – Habitats of Tomorrow – aims at promoting the greater use of renewable energy within the context of long term planning for sustainable urban development. The focus is on cities or communities as complete systems; each one a unique laboratory allowing for the study of urban sustainability within the context of a low carbon lifestyle. The purpose of this paper is to report on an evaluation of a Solar Community in Australia, focusing specifically on the implications (i) for our understandings and practices in renewable energy education and training and (ii) for sustainability outcomes. 1.2 Methodology The physical context is a residential Ecovillage (a Solar Community) in sub-tropical Queensland, Australia (latitude 28o south). An extensive Architectural and Landscape Code (A&LC) ‘premised on the interconnectedness of all things’ and embracing ‘both local and global concerns’ governs the design and construction of housing in the estate: all houses are constructed off-ground (i.e. on stumps or stilts) and incorporate a hybrid approach to the building envelope (mixed use of thermal mass and light-weight materials). Passive solar design, gas boosted solar water heaters and a minimum 1kWp photovoltaic system (grid connected) are all mandatory, whilst high energy use appliances such as air conditioners and clothes driers are not permitted. Eight families participated in an extended case study that encompassed both quantitative and qualitative approaches to better understand sustainable housing (perceived as a single complex technology) through its phases of design, construction and occupation. 1.3 Results The results revealed that the level of sustainability (i.e. the performance outcomes in terms of a low-carbon lifestyle) was impacted on by numerous ‘players’ in the supply chain, such as architects, engineers and subcontractors, the housing market, the developer, product manufacturers / suppliers / installers and regulators. Three key factors were complicit in the level of success: (i) systems thinking; (ii) informed decision making; and (iii) environmental ethics and business practices. 1.4 Discussion The experiences of these families bring into question our understandings and practices with regard to education and training. Whilst increasing and transferring knowledge and skills is essential, the results appear to indicate that there is a strong need for expanding our education efforts to incorporate foundational skills in complex systems and decision making processes, combined with an understanding of how our individual and collective values and beliefs impact on these systems and processes.

Mapping of shallow coastal groundwaters, their hydrology and environmental geochemistry : Pumicestone catchment, Southeast Queensland

Blooms of the toxic cyanobacterium majuscula Lyngbya in the coastal waters of southeast Queensland have caused adverse impacts on both environmental health and human health, and on local economies such as fishing and tourism. A number of studies have confirmed that the main limiting nutrients (“nutrients of concern”) that contribute to these blooms area Fe, DOC, N, P and also pH. This study is conducted to establish the distribution of these parameters in a typical southeast Queensland coastal setting. The study maps the geochemistry of shallow groundwater in the mainland Pumicestone catchment with an emphasis on the nutrients of concern to understand how these nutrients relate to aquifer materials, landuse and anthropogenic activities. The results of the study form a GIS information layer which will be incorporated into a larger GIS model being produced by Queensland Department of Environment and Resource Management (DERM) to support landuse management to avoid/minimize blooms of Lyngbya in Moreton Bay, southeast Queensland, and other similar settings. A total of 38 boreholes were established in the mainland Pumicestone region and four sampling rounds of groundwater carried out in both dry and wet conditions. These groundwater samples were measured in the field for physico-chemical parameters, and in the laboratory analyses for the nutrients of concern, and other major and minor ions. Aquifer materials were confirmed using the Geological Survey of Queensland digital geology map, and geomaterials were assigned to seven categories which are A (sands), B (silts, sandy silts), C (estuarine mud, silts), D (humid soils), E (alluvium), F (sandstone) and G (other bedrock). The results of the water chemistry were examined by use of the software package AquaChem/AqQA, and divided into six groundwater groups, based on groundwater chemical types and location of boreholes. The type of aquifer material and location, and proximity to waterways was found to be important because they affected physico-chemical properties and concentrations of nutrients of concern and dissolved ions. The analytical results showed that iron concentrations of shallow groundwaters were high due to acid sulfate soils, and also mud and silt, but were lower in sand materials. DOC concentrations of these shallow groundwaters in the sand material were high probably due to rapid infiltration. In addition, DOC concentrations in some boreholes were high because they were installed in organic rich wetlands. The pH values of boreholes were from acidic to near neutral; some boreholes with pH values were low (< 4), showing acid sulfate soils in these boreholes. Concentrations of total nitrogen and total phosphorus of groundwaters were generally low, and the main causes of elevated concentrations of total nitrogen and total phosphorus are largely due to animal and human wastes and tend to be found in localized source areas. Comparison of the relative percentage of nitrogen species (NH3/NH4< Org-N, NO3-N and NO2-N) demonstrated that they could be related to sources such as animal waste, residential and agricultural fertilizers, forest and vegetation, mixed residents and farms, and variable setting and vegetation covers. Total concentrations of dissolved ions in sampling round 3 (dry period) were higher than those in sampling round 2 (wet period) due to both evaporation of groundwater in the dry period and the dilution of rainfall in the wet period. This showed that the highest concentrations of nutrients of concern were due to acid sulfate soils, aquifer materials, landuse and anthropogenic activities and were typically in aquifer materials of E (alluvium) and C (estuarine muds) and locations of Burpengary, Caboolture, and Glass Mountain catchments.

Regulating coal seam gas in Queensland : lessons in an adaptive environmental management approach?

The current regulatory approach to coal seam gas projects in Queensland is based on the philosophy of adaptive environmental management. This method of “learning by doing” is implemented in Queensland primarily through the imposition of layered monitoring and reporting duties on the coal seam gas operator alongside obligations to compensate and “make good” harm caused. The purpose of this article is to provide a critical review of the Queensland regulatory approach to the approval and minimisation of adverse impacts from coal seam gas activities. Following an overview of the hallmarks of an effective adaptive management approach, this article begins by addressing the mosaic of approval processes and impact assessment regimes that may apply to coal seam gas projects. This includes recent Strategic Cropping Land reforms. This article then turns to consider the preconditions for land access in Queensland and the emerging issues for landholders relating to the negotiation of access and compensation agreements. This article then undertakes a critical review of the environmental duties imposed on coal seam gas operators relating to hydraulic fracturing, well head leaks, groundwater management and the disposal and beneficial use of produced water. Finally, conclusions are drawn regarding the overall effectiveness of the Queensland framework and the lessons that may be drawn from Queensland’s adaptive environmental management approach.

Environmental reporting and its relation to corporate environmental performance

This study examines how both the level and the nature of environmental information voluntarily disclosed by Australian firms relate to their underlying environmental performance. Disclosure is scored using an index developed by Clarkson et al. (2008) based on Global Reporting Initiative (GRI) Guidelines and the environmental performance measure is based on emission data available from the National Pollutant Inventory (NPI). The sample consists of 51 firms that reported to the NPI in both 2002 and 2006. The findings are as follows. First, descriptive statistics indicate that while there was modest improvement in disclosure between 2002 and 2006, the highest disclosure score obtained was just slightly in excess of 50% of the maximum available based on the GRI Guidelines. Second, the results consistently indicate that not only do firms with a higher pollution propensity disclose more environmental information; they also rely on disclosures that the GRI views as inherently more objective and verifiable. Taken together, these results suggest that concerns regarding the reliability of voluntary environmental disclosures in the Australian context remain valid and thereby potentially signal a need for both enhanced mandatory reporting requirements and improved enforcement. In this regard, our study also informs regulatory policy on mandatory disclosures of environmental performance.

(Un)doing gender : ways of being in an age of uncertainty

Children’s literature has conventionally and historically been concerned with identity and the often tortuous journey to becoming a subject who is generally older and wiser, a journey typically characterised by mishap, adventure, and detours. Narrative closure in children’s and young adult novels and films typically provides a point of self-realisation or self-actualisation, whereby the struggles of finding one’s “true” identity have been overcome. In this familiar coming-of-age narrative, there is often an underlying premise of an essential self that will emerge or be uncovered. This kind of narrative resolution provides readers with a reassurance that things will work for the best in the end, which is an enduring feature of children’s literature, and part of liberal-humanism’s project of harmonious individuality. However, uncertainty is a constant that has always characterised the ways lives are lived, regardless of best-laid plans. Children’s literature provides a field of narrative knowledge whereby readers gain impressions of childhood and adolescence, or more specifically, knowledge of ways of being at a time in life, which is marked by uncertainty. Despite the prevalence of children’s texts which continue to offer normative ways of being, in particular, normative forms of gender behaviour, there are texts which resist the pull for characters to be “like everyone else” by exploring alternative subjectivities. Fiction, however, cannot be regarded as a source of evidence about the material realities of life, as its strength lies in its affective and imaginative dimensions, which nevertheless can offer readers moments of reflection, recognition, or, in some cases, reality lessons. As a form of cultural production, contemporary children’s literature is highly responsive to social change and political debates, and is crucially implicated in shaping the values, attitudes and behaviours of children and young people.

Communities Under Stress: Understanding and Managing Growth in Resource–Based Regions–The case of the Western Downs, Queensland

The Western Downs region, located in Southern Queensland, about 200 kilometres west of Brisbane, has been experiencing rapid and significant changes over the past years, due to a massive boom in the energy sector. The rapid growth triggered by the development of mining and energy sectors has generated environmental, socio-economic and land use issues, and has revealed strong weaknesses within the region’s current governance arrangements. The present paper develops a four-stage approach to managing current and expected changes in a resource-based region under tremendous stress and uncertainty.

Risk, uncertainty and complexity in science education

Increasingly societies and their governments are facing important social issues that have science and technology as key features. A number of these socio-scientific issues have two features that distinguish them from the restricted contexts in which school science has traditionally been presented. Some of their science is uncertain and scientific knowledge is not the only knowledge involved. As a result, the concepts of uncertainty, risk and complexity become essential aspects of the science underlying these issues. In this chapter we discuss the nature and role of these concepts in the public understanding of science and consider their links with school science. We argue that these same concepts and their role in contemporary scientific knowledge need to be addressed in school science curricula. The new features for content, pedagogy and assessment of this urgent challenge for science educators are outlined. These will be essential if the goal of science education for citizenship is to be achieved with our students, who will increasingly be required to make personal and collective decisions on issues involving science and technology.

A sequential Monte Carlo algorithm to incorporate model uncertainty in Bayesian sequential design

Here we present a sequential Monte Carlo (SMC) algorithm that can be used for any one-at-a-time Bayesian sequential design problem in the presence of model uncertainty where discrete data are encountered. Our focus is on adaptive design for model discrimination but the methodology is applicable if one has a different design objective such as parameter estimation or prediction. An SMC algorithm is run in parallel for each model and the algorithm relies on a convenient estimator of the evidence of each model which is essentially a function of importance sampling weights. Other methods for this task such as quadrature, often used in design, suffer from the curse of dimensionality. Approximating posterior model probabilities in this way allows us to use model discrimination utility functions derived from information theory that were previously difficult to compute except for conjugate models. A major benefit of the algorithm is that it requires very little problem specific tuning. We demonstrate the methodology on three applications, including discriminating between models for decline in motor neuron numbers in patients suffering from neurological diseases such as Motor Neuron disease.

Property, planning and purpose : legal concerns facing broadband rollout in Australia

The Australian government, and opposition, are committed to facilitating high-speed broadband provision. In April 2009 the (then) Labor government announced a proposal to facilitate provision by mandating “…the use of fibre optic infrastructure … in greenfield estates ….” Separately, the installation of (usually overhead) cables commenced in select brownfield areas throughout Australia. In the lead up to the 2010 federal election, the broadband policy focus of the (then) federal opposition was to enabling private investment rather than direct investment by government itself. High-speed broadband is essential for Australia’s economic future. Whether implementation is undertaken by government, government owned corporations or private investors, will impact on the processes to be followed. Who does what, also will determine the rights available to land owners. The next stage, of necessity, will involve the establishment of procedures to require the retrofitting of existing urban environments. This clearly will have major property, property rights and valuation impacts. As Horan (2000) observed “…preserving... unique characteristics … of…regions requires a compromise between economic ambitions and social, cultural, and environmental values”. The uncertainty following the federal election, and the influence of independants with individual agendas; presents unique challenges for broadband implementation. This paper seeks to identify the processes to be followed by various potential broadband investors as they work to establish a ubiquitous network. It overviews current legislative regimes and examines concerns raised by stakeholders in various government reviews. It concludes by plotting a clear way forward to the future, with particular regard to property rights and usage.