RESOURCES FOR THE FUTURE (RFF) is an independent nonprofit organization engaged in research and public education on natural resource and environmental issues. Its mission is to create and disseminate knowledge that helps people make better decisions about the conservation and use of their natural resources and the environment. RFF neither lobbies nor takes positions on current policy issues. Because the work of RFF focuses on how people make use of scarce resources, its primary research discipline is economics. However, its staff also includes social scientists from other fields, ecologists, environmental health scientists, meteorologists, and engineers. Staff members pursue a wide variety of interests, including forest economics, recycling, multiple use of public lands, the costs and benefits of pollution control, endangered species, energy and national security, hazardous waste policy, climate resources, and quantitative risk assessment. <...>

Mining capital is capital required to develop mines from exploration, feasibility studies, mine design, construction, and commissioning to operation; capital to refinance and modernize old mines; capital to purchase mining, processing, and related mine infrastructure equipment; and capital to acquire mines. The supply of commodities remains vital to the development of modern society.

This book is crafted against the backdrop of the commodities super-cycle that we had in the first decade of the 21st Century, and the mining industry having learnt severe lessons. Dr Ian Runge summarized the decade-long experiment with the prioritization of volumes and said, “The economics of mining is at an inflection point. For the last decade or so our focus has been on developing mines and bringing them into production. It is not production on its own that is important, it is how efficiently we can produce.”¹ The message was echoed by Ivan Glasberg, Chief Executive Officer (CEO) of Glencor at the time of penning this book: “The big guys really screwed up (during the super-cycle) by building too many mines”, and as a result he opined that miners needed to learn about supply and demand fundamentals. “The real trap in the gold industry in the past was chasing volume,” said Tom Palmer, Newmont CEO and, “No one made any real money,” according to Barrick Gold Corporation’s CEO, Mark Bristow. <...>

The distribution of ore grades within a deposit is of mixed character, being partly structured and partly random. On one hand, the mineralizing process has an overall structure and follows certain laws, either geological or metallogenic; in particular, zones of rich and poor grades always exist, and this is possible only if the variability of grades possesses a certain degree of continuity. Depending upon the type of ore deposit, this degree of continuity will be more or less marked, but it will always exist; mining engineers can indeed be thankful for this fact because, otherwise, no local estimation and, consequently, no selection would be possible. However, even though mineralization is never so chaotic as to preclude all forms of forecasting, it is never regular enough to allow the use of a deterministic forecasting technique . This is why a scientific (at least, simply realistic) estimation must necessarily take into account both features - structure and randomness inherent in any deposit. Since geologists stress the first of these two aspects, and statisticians stress the second, I proposed, over 15 years ago, the name geostatistics to designate the field which synthetizes these two features and opens the way to the solution of problems of evaluation of mining deposits <...>