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4 Resources for Research and Development INDUSTRY RESEARCH AND DEVELOPMENT In the early 1980s, squeezed between stagnating metal prices and rising operas ng costs, U.S. mineral and metal producers took a number of steps to improve their financial outlook. Their focus was on near-term survival, however, and long-term research and development (R&D) were given very low priority. Corporate R&D facilities were reduced in size or closed, and much of the remaining research was redirected at short-term operational problems and away from long-term or high-risk projects. Expenditures for mining R&D by the metal industry reflect the cutbacks of expenses over the past decade. As shown in Table 4-1, expenditures for internal and con- tracted R&D declined from $133.5 million in 1980 to $22.5 million in 1988. A similar decline is reflected in the number of personnel committed to the R&D effort. The U.S. minerals and metals industry includes activities ranging from exploration and primary mining to the manufacture and sale of consumer goods. These activities require a correspondingly broad range of R&D. The points where R&D emphasis is placed at any given time reflect the needs of particular industry segments or even specific companies. Much of the R&D of the aluminum industry, for example, focuses on the production of finished or semifinished goods. Only a small fraction of the approximately $25Q million spent by the industry on R&D each year goes toward primary processing. The steel industry, on the other hand, focuses its research efforts on improving the steel-making process. Of the approximately $100 79

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80 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY TABLE 4-1 Industry Support of Metal Mining Research and Development Year R&D Expenditures R&D ($ millions) Personnel 1980 133.5 1,735 1985 23.0 1986 26.0 1987 25.0 1988 22.5 365 SOURCE: Expenditure and personnel data for 1980 and 1988 are from T. McNulty, 1989, research and development in Materials and Society; vol. 13, no. 2, pp. 189-191. Expenditure data for 1985-1987 are from the Bureau of the Census, based on the annual Survey of Industrial Research and Development conducted for the National Science Foundation; information on R&D personnel was not available from the Bureau of the Census. million spent annually on R&D (approximately 0.25 percent of sales), about a quarter goes toward improved iron- and steel-making processes. With a growing share of the steel production capacity in electric furnaces that process scrap and the decreasing tendency for primary producers to own their own ores, there is a decline in the emphasis on industry research for the mining and processing of iron ore. The domestic base metals (copper, lead, and zinc) are integrated only from mining through the production of refined products. At one time the larger companies were involved in finished products like wire and cable, brass, paint, and chemicals, but today they have all but disappeared through divestitures and shifts in markets. The base metal producers now depend on industry groups such as the International Copper Association (ICA), the Copper Development Association (CDA), and the International Lead-Zinc Research Organization (ILZRO) for product research. However, membership in these groups is not universal and budgets are small, generally on the order of $2 million to $4 million per year. Company-owned research labo- ratories have been closed or severely curtailed, and much of the remaining R&D capability can now be found at operating sites, where it is quite site specific and problem oriented. The gold boom enjoyed by the United States during the past decade was

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RESOURCES FOR RESEARCH AND DEVELOPMENT 81 materially assisted by Bureau of Mines research on heap leaching of very low-grade ores. Most of the Bureau's work was done before the boom really began, and it has been followed by episodes of intensive R&D by individual companies directed at problems posed by specific ore deposits. At the same time, companies that sell goods and services to gold miners have brought forth a steady stream of innovative products, ranging from hydraulic shovels to analytical equipment, which have helped the producers to improve efficiency and lower costs. However, the gold mining industry overall is probably spending less than $7 million annually on R&D, with most of that amount devoted to work on only two problems: gold-bearing refractory sulfide ores and ores containing natural carbonaceous materials. FEDERAL ROLE IN MINERALS RESEARCH AND DEVELOPMENT Several agencies of the federal government provide support for mining and minerals research and technology development. They are the Department of the Interior (DOI) Bureau of Mines (BOM) U.S. Geological Survey (USGS) National Science Foundation (NSF) Department of Energy (DOE) Department of Commerce (DOC) National Institute of Standards and Technology (NIST) National Oceanic and Atmospheric Administration (NOAA) The lead agency, accounting for the great majority of federal research funding in this field, is the Department of the Interior through its Bureau of Mines. BOM research programs focus variously on improvements in exploration and mining technology; minerals and materials science and processing technology; health, safety, and environmental technology; and ancillary programs such as methods for improving process management and management technology (e.g., through the use of computer control). The nature of the research ranges from fundamental to highly applied, although the emphasis is strongly toward the applied end. The BOM research is conducted both in-house and at university laboratories. The U.S. Geological Survey also maintains programs of research under its Office of Mineral Resources. This research involves the theoretical and technical aspects of mineral exploration and resource assessment. It encompasses both geochemical and geophysical methods for locating and modeling min- eral deposits in relation to the environments in which they occur. Other projects support the preparation of resource maps and information systems that are valuable exploration tools for industry; this research is carried out

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82 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY through field studies as well as laboratory experimentation. There is some overlap between the USGS and BOM research in support of exploration and economic assessment of mineral deposits. Another agency providing very modest support for mining and minerals research is the National Science Foundation. Through its Materials Engi- neering and Processing Program, the NSF funds a small amount of work (under $700,000 in FY 1988) in extraction, smelting, and solidification processes. The Division of Materials Research supports a program of research in metallurgy; however, the program focuses on basic scientific research in physical rather than extractive metallurgy. NSF research in related topics, such as tunneling technology, could benefit the mining industry, but the lack of an infrastructure for the transfer of research results to the mining industry limits the opportunity to apply research from other fields to the needs of the mining industry. The NSF was a source of more substantial funding in the past, but NSF management apparently came to view mining as a "sunset industry" and moved away from it, judging from its responses to mining-related proposals in recent years. The Department of Energy has more than 20 program offices responsible for aspects of materials research, from basic to applied. In FY 1989, $384 million was spent on materials-related R&D departmentwide, including over $200 million of DOE's $450 million budget for basic energy sciences the largest single materials research program in the federal government. How- ever, little DOE work is relevant to mining and extraction; much of it is directed at materials science for advanced energy-related materials, and most of the rest concerns processing and refining electronic materials and specialized alloys, uranium, and weapons-grade plutonium. Some of the research with relevance to the present study is connected with the management of nuclear wastes; some is connected with drilling in hot rock to tap geothermal energy. DOE programs relevant to this study include development for high-temperature applications and corrosion-resistant alloys, conducted at Oak Ridge National Laboratory under sponsorship of the Division of Materials Sciences of the Office of Basic Energy Sciences. Another program, the Steel Initiative under the Office of Industrial Programs, was mandated by Congress in support of the steel industry. It has many facets, including automated process control, continuous casting, and alternative methods of direct extraction of iron from iron ore. This program was expanded to include aluminum and copper by the Steel and Aluminum Energy Conservation and Technology Competitiveness Act of 1988. The DOE has prepared a research plan that identifies specific opportunities for research to contribute to the competitiveness of the steel, aluminum, and copper industries through increased energy efficiency. The Department of Commerce supports mining and minerals research through two of its agencies, the National Institute of Standards and Technology and the National Oceanic and Atmospheric Administration. NIST currently supports a single project covering the bioactive extraction of metals. Some

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RESOURCES FOR RESEARCH AND DEVELOPMENT 83 of its work on sensors for use in processing is planned to be relevant to metals processing. NOAA, through its Sea Grant program, sponsors a lim- ited amount of academic research relating to ocean mining and minerals. The Department of Defense (DOD) currently sponsors very little research in the areas covered by this study. The Defense Advanced Research Projects Agency, the Strategic Defense Initiative Office, and the military services (particularly the U.S. Air Force) conduct research in advanced materials processing and manufacturing, including physical metallurgy, extrusion, rolling, and joining. The National Aeronautics and Space Administration (NASA) sponsors research in many of the same areas. But none of these materials user agencies (with the possible exception of some scattered research on excavation by the U.S. Army Corps of Engineers) is involved at all in the upstream end of materials. Other federal agencies do not support significant amounts of R&D in this area, but do provide input into the research programs of the Bureau of Mines and others. These contributing agencies include the Mine Safety and Health Administration, the National Institute for Occupational Safety and Health, the Office of Surface Mining Reclamation and Enforcement, and the Environmental Protection Agency. Several advisory groups participate in the shaping of government policies with respect to minerals. The National Critical Materials Council (NCMC) is supposed to advise the President on national materials policies and issues. The National Strategic Materials and Minerals Program Advisory Commit- tee has performed a similar function for the Secretary of the Interior. The Committee on Mining and Mineral Resources Research also advises the Secretary of the Interior on a number of matters relating to minerals research, particularly in the Mineral Institutes program. A fourth group, the Committee on Materials (COMAT), functions under the auspices of the Office of Science and Technology Policy in the Executive Office of the President. Through a subcommittee, the Interagency Materials Group, COMAT attempts to enhance cooperation and coordination between agencies involved in the support of materials research. The effectiveness of these advisory groups has been quite mixed. (The subject of mineral policies, including R&D policies, is addressed in Chapter 5.) Research Resources The overall R&D resources of the federal government in the minerals and metals field include both the R&D expenditures of the various agencies and the various federal laboratories, including in-house agency laboratories and national laboratories, that may devote all or part of their efforts to R&D in this field. Agency funding of R&D in FY 1989 is presented in Table 4-2. Only the Bureau of Mines is oriented explicitly toward mining and extrac- tive metallurgy; it was difficult to obtain exact budget figures for the other

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84 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY TABLE 4-2 Federal Expenditures for Mining- and Minerals-Related R&D, 1989 (1989 Appropriation) Agency/Program Federal Expenditures ($ thousand) Bureau of Mines Health, Safety, and Mining Technology Minerals and Materials Science Environmental Technology Mineral Institutes and Generic Centers TOTAL U.S. Geological Survey Development of Assessment Techniques Strategic and Critical Minerals National Mineral Resource Assessment TOTAL National Science Foundation Department of Energy National Institute of Standards and Technology National Oceanic and Atmospheric Administration Sea Grant Program: Marine Geological Resources Deep Seabed Mining Research TOTAL FEDERAL TOTAL 51,672a 24,643a 1 4,S74a 10,012b 100,901 10,000 3,70oc 9,300C 23,000 669d,e 12,186f 350 571d 7SOa 14,526 1 38,427C aIncludes Bureau of Mines in-house laboratories ($66.3 million in nine labs) plus a variety of externally funded projects in industry and universities. bDoes not include $2.35 million for Respirable Dust Generic Center, budgeted as a separate line item under Environmental Technology. CEstimated ~ 1 ). ~1988 amount. eNine grants (FY 1988) in extraction, smelting, and solidification processes (in Materials Engineering and Processing Program). fDerived from a count of apparently relevant materials R&D projects. (Does not include the so-called Steel Initiative. Authorizations under the Steel and Aluminum Energy Conservation and Technology Competitiveness Act of 1988 are $2 million in 1989, $20 million in 1990, and $25 million in 1991.)

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RESOURCES FOR RESEARCH AND DEVELOPMENT 85 agencies that support R&D in this field, but their involvement is so small that rounded estimates will suffice. Only in the case of DOE are the esti- mates problematical, and here a conservative estimate was reached by add- ing the reported budgets of projects that appear relevant. This estimate may ignore a considerable amount of relevant DOE basic research in surface chemistry, thermodynamics, interphase and microstructure studies, and reaction mechanisms. As noted above, BOM provides the majority of the funding in this area. Figure 4-1 charts appropriations for the Bureau's research throughout the 1980s. Funding, in current dollars, actually declined by several percentage points during the period. Although the R&D budget is now trending upward from the low of 1986, after adjusting for inflation it is still well below the level of a decade ago. Most of this money is spent in BOM's in-house laboratories, although BOM is also a major supporter of academic R&D in this field (see below). Federal R&D resources also include the extensive federal laboratories, many of which are equipped for basic and applied research in relevant areas. BOM's nine in-house Mining and Metallurgy Laboratories, for example, perform almost half of the research funded by the federal government in these areas. Table 4-3 lists these laboratories, along with their FY 1989 funding levels and primary areas of specialization. Also relevant to R&D needs in the minerals and metals industry are some of the national laboratories. Oak Ridge National Laboratory, for example, conducts research in metal- lurgy, metals characterization, and processing theory. A primary focus of this research program, which totaled between $25 million and $30 million in FY 1989, is high-temperature alloys such as nickel aluminizes. Argonne In o . _ . _ - ~n is o _ ,~ 50 ~ - O - ~ _ , ~~ ~ . _ _ 1987 1988 cat u 1980 ~ 1981 1982 1983 1984 1 1985 YEAR 986 1989 Total Research(1982 dollars) ~3 External Research ~ Internal Research FIGURE 4-1 Bureau of Mines research budgets, 1980-1989. Source: Bureau of Mines.

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86 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY TABLE 4-3 Bureau of Mines Mining and Metallurgy Laboratories Research Center FY 1989 Funding Research Specialties Albany Research $7,244,000 Minerals characterization; materials Center science; pyre-, hydrometallurgy; re- cycling; wear and corrosion; refrac- tory metals Denver Research Center 5,362,000 Pittsburgh Research 24,446,000 Center Reno Research 3,258,000 Center Rolla Research Center Salt Lake City Research Center Spokane Research 5,764,000 Center Tuscaloosa Research Center Twin Cities Research Center Underground mine design; theoretical rock mechanics; prediction and control of failures/hazards; geomechanical field data collection; microseismic monitoring; modeling of rock Mine explosions; dust and noise control; subsidence prediction and control; acid mine drainage prediction and control; electrical safety; mine automation; survival and rescue; expert systems and artificial intelligence; safety; ventilation 2,923,000 4,627,000 ~ectro-, pyro-, ant . nyorometa~urgy; precious metals; microwave technol- ogy; rare earths; superalloy scrap recycling; complex sulfide treatment; magnets; catalysts; bioleaching Electro-, hydra-, and pyrometallurgy Hydrometallurgy; beneficiation; super- critical fluid solvent systems; waste treatment; brine chemistry; column flotation; advanced materials extrac- tion; in situ mining solution treatment Rock and soil mechanics; hydrogeology and geochemistry; mining methods; waste management; subsidence con- trol; deep mine design 3,383,000 Beneficiation; hydrometallurgy; miner- 9,275,000 als waste treatment; comminution/ turbomilling; expert systems for processing In situ mining technology; blasting and drilling technology; equipment safety; seabed mining; mechanical and ther- mal fragmentation; subsidence; fire protection; hydrology SOURCE: Data provided by Bureau of Mines.

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RESOURCES FOR RESEARCH AND DEVELOPMENT 87 National Laboratory conducts research in support of the downstream pro- cessing of materials to meet specialized needs of the laboratory. This work amounts to about $1 million to $2 million per year in electrochemistry and other specialized processing techniques. Argonne also supports the DOE Steel Initiative through research in continuous casting and chill casting using magnetic confinement. Similarly, Los Alamos National Laboratory conducts some research in hot-rock boring that has relevance for in situ fragmentation and solution mining; the Idaho National Engineering Laboratory performs some $3 million/year in Bureau of Mines research; and other laboratories, such as Pacific Northwest Laboratory, carry out small amounts of research in this field. Taken together the national laboratories are a resource of great potential, now only partially tapped, for the performance of research that could improve mining, extraction, and metals processing technologies and their use in industry. That resource includes state-of-the-art facilities, people, and experience in working with a variety of governmental agencies and industry. The DOE Work-for-Others Order requires permission to exceed 20 percent of the work at a DOE laboratory being done for a sponsor other than DOE; however, the work must be consistent with the laboratory's mission. Work for the Nuclear Regulatory Commission is outside this guideline. Other federal laboratories, in particular those of the DOD and NASA, offer a similar potential; however, these laboratories (such as the Air Force Materials Laboratory and the NASA Lewis Research Center) do not appear to be involved in any such research at present. ACADEMIC RESEARCH RESOURCES AND CAPABILITIES U.S. preeminence in most technological fields has traditionally rested on the base of research conducted at colleges and universities. In most engineering fields, both basic and applied academic research have been important stimulants to progress in industry. Academic R&D capabilities are also important for the infusion of state-of-the-art concepts into engineering education, whose graduates bring new ideas and approaches into industrial practice. In the mining-related fields, however, the connection between academic R&D and industrial practice has been poor. There are serious questions about both the relevance of university research in these fields and the ability of the industry to assimilate and apply the research results. Academic Capabilities The limited infrastructure for industrial R&D in this field is matched by limitations in academic capabilities. Measures of the strength of the academic

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88 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY research infrastructure include the number of university programs and the number of faculty teaching in those programs. Table 4-4 shows the number of academic programs and faculty members in six disciplines that directly support the minerals and metals industry. In formulating the totals some informed judgment was necessary to estimate the content of programs and overlaps between them. This was particularly difficult to do in the case of metallurgical engineering, because the subdiscipline of primary interest, extractive metallurgy, is often not distinguished from physical metallurgy within most program descriptions. The distribution of academic programs by institution is shown in Table 4-5. Several conclusions can be drawn from the information in these tables: There are far more programs and faculty devoted to exploration (geo- logical and geophysical engineering) and mining (42 programs and 275 faculty members) than to extractive metallurgy and mineral processing (15 programs and 52 faculty members). The latter numbers appear inadequate to meet the nation's needs across all the metals subindustries. The average number of faculty members per program (5.5) is small. Many are not tenured. It is difficult to attract high-quality students and funding, or to conduct coherent and stable programs of research, within such a limited group. As a result, the faculties overall tend to fall below the "critical mass" needed to maintain secure programs. This helps to explain why very few of the programs in these disciplines represent full depart- ments. In terms of geographic distribution the great majority of the programs are located in the Midwest and West, near the regions with metal mining and processing operations. This means that many high-quality prospective engineering students from the East no longer come in contact with programs in mining and metals processing. TABLE 4-4 Academic Programs and Faculty by Fields, 1989 Field Programs Faculty Geological engineering Geophysical engineering (Extractive) metallurgical engineering 9 Mineral processing engineering Mining engineering Mineral economics TOTALS 19 6 20 6 150 17 30 22 108 20 63 347 SOURCE: E. Ashworth, J. Schanz, personal communications, 1989.

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RESOURCES FOR RESEARCH AND DEVELOPMENT 91 These numbers do not reflect the changes in academic programs over time, particularly the significant decrease in undergraduate programs. Of 26 such programs in 1980, only 20 remain, and 5 of the programs were lost just since 1986. Of the remaining 20 programs, 3 or 4 are in jeopardy because of critically low enrollments and lack of financial support. The Pennsylvania State University, for example, had only one freshman mining engineering student in the spring of 1989; the Colorado School of Mines had 8; Columbia University (designated as a Mineral Institute) had none. To maintain accreditation an engineering program must have at least 4 faculty members devoted to undergraduate teaching. Accreditation is granted by the Accreditation Board for Engineering and Technology and is a crucial determinant of program quality in the eyes of most employers, prospective students, and university administrators. With low enrollment some schools have had to combine departments or programs, and the declining number of faculty members may threaten accreditation, which would further endanger the remaining university programs. More importantly, declining enrollments and limited research funds have forced most academic investigators either to focus on their established do- mains, producing small advances in conventional areas, or to switch their focus to new areas outside the minerals and metals industry where greater funding is available. Both responses have reduced the research results available to the mining industry and further increased the separation between academe and industry. The U.S. minerals and metals industry has benefited greatly from aca- demic research in the past. In rock mechanics, for example, fundamental studies on the failure modes of materials led to useful applications in mine design and excavation equipment design. Research in geologic modeling has advanced exploration technology, and in mineral processing industrial applications have resulted from fundamental work at universities on comminution, minerals beneficiation, electrochemistry, solvent extraction and ion exchange, and thermodynamics. Computer science applications have led to a wealth of technology for operations research, modeling, and mine design, and mineral economics research has greatly improved the forecasting of supply and de- mand, commodity prices, and other business factors. In the health and safety area, academic research has led to important advances in respirable dust control technology and electromechanical technology in the mine; in the environmental area, academic research has led to substantial advances in mine hydrology, acid mine drainage, sediment control, and vegetation/ revegetation. In recent years, however, academic research in the mining and minerals field has tended to be more scientific and theoretical in nature, with less attention to practical engineering contributions. Such contributions are essential if university-developed knowledge and technology are to con- tribute to the competitiveness of the U.S. industry.

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92 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY Research Centers and Institutions The Bureau of Mines, like other mission agencies, supports research at universities on topics relevant to its mission. Under its Mineral Institutes Program, BOM sponsors a number of State Mining and Mineral Resources Research Institutes (referred to as Mineral Institutes) and Generic Mineral Technology Centers (GMTCs). Currently there are 32 Mineral Institutes located in 32 states (see Table 4-61. Each institute functions as an administrative mechanism for the distribution of funds to academic departments for research in the mineral sciences and engineering. The overall budget of the program, which includes both Mineral Institutes and GMTCs, was $10 million in 1989. BOM makes allotment grants to the institutes based on a 2-for-1 match- ing of nonfederal (usually state) funds with federal funds. In 1988 the grant was the same $138,000 for each institute, for a total of $4.4 million. All the universities achieved the necessary matching amounts. About $1.5 mil- lion of the allotment grant funding was used to support 269 graduate stu- dents (in full or in part) and 99 undergraduate scholarships; additional allotments supported 187 research miniprojects. In addition to allotment grants, research grants are also made to six GMTCs covering major aspects of the minerals industry. The GMTCs are located at universities with Mineral Institutes and are intended to facilitate TABLE 4-6 Bureau of Mines Mineral Institutes 1. University of Alabama 2. University of Alaska, Fairbanks 3. University of Arizona 4. University of California, Berkeley Colorado School of Mines Georgia Institute of Technology University of Idaho 21. 8. Southern Illinois University 22. 9. Purdue University 23. 10. Iowa State University 24. 11. University of Kentucky 25. 26. 27. 28. 29. 12. Louisiana State University 13. Massachusetts Institute of Technology 14. Michigan Technological University 15. University of Minnesota 16. University of Mississippi 17. University of Missouri, Rolla 18. Montana College of Mineral Science and Technology 19. University of Nevada, Reno 20. New Mexico Institute of Mining and Technology Columbia University University of North Dakota Ohio State University University of Oklahoma Pennsylvania State University South Dakota School of Mines University of Texas University of Utah Virginia Polytechnic Institute and State University 30. University of Washington 31. West Virginia University 32. University of Wyoming

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RESOURCES FOR RESEARCH AND DEVELOPMENT 93 government-industry-university cooperation and research in each generic area. Each GMTC has a lead institution to coordinate research, provide for seminars, and operate a reference center that disseminates research results. A number of affiliate institutions (all Mineral Institutes) are associated with each GMTC. Table 4-7 lists the six GMTCs, their focus areas, and the lead institutions. In 1989, 93 separate research projects were supported by the GMTCs. Budgets of the centers average about $1 million each, for a total of $7.95 million in 1989. Of this amount, the Respirable Dust Center, at Pennsylvania State University, has $2.35 million budgeted as a separate line item. The other five GMTCs shared some $5.2 million in funding in 1989, with an additional $400,000 used for administrative purposes for a total of $5.6 million. The independent Mined Lands Reclamation Center, with the University of West Virginia as the lead institution, resembles the GMTCs in structure but is not part of the Mineral Institutes/GMTC program; its $1.5 million funding is included under the Bureau of Mines's Environmental Technology program area. Research in undersea minerals is conducted under the National Sea Grant TABLE 4-7 Bureau of Mines Generic Mineral Technology Centers Mine Systems Design and Ground Control Lead institution: Virginia Polytechnic Institute and State University Covers conditions from permafrost to tropics; fuels, nonmetallics, metals, brines, and open pit and underground mines Comminution Lead institution: University of Utah Crushing and grinding Mineral Industry Waste Treatment and Recovery Lead institution: University of Nevada, Reno Fumes, dusts, liquid and solid wastes Pyrometallurgy Lead institution: University of Missouri, Rolla Applies high temperatures to mineral processes such as smelting, refining, and alloying Respirable Dust Lead institution: Pennsylvania State University Concerned with particles causing diseases Marine Mineral Technology Lead institution: University of Mississipp: Manganese and phosphate crust mining; sampling and measurement SOURCE: Information provided by Bureau of Mines.

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94 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY College Program of the National Oceanic and Atmospheric Administration. Twelve Sea Grant institutions conduct research in areas relevant to mining and minerals, such as undersea minerals characterization and surveys. As with the Mineral Institutes program, the administration has recommended that funding for the Sea Grant program be ended, but the funds have been restored by Congress. NOAA also has a Deep Seabed Mining Research Program that conducts mainly environmental research related to mining of nodules on the ocean floor. Federal research funding in these two programs totals about $1.3 million. The U.S. Geological Survey sponsors a program of State Water Resources Research Institutes at universities. This program resembles the Mineral Institutes program in its structure and operation. Some of these institutes address problems relevant to mineral resources, such as acid mine drainage and the uses of water in mining operations. ISSUES AFFECTING FUTURE RESEARCH AND DEVELOPMENT Industrial Issues In the minerals and metals industry, where profit margins are generally low, uncertainties over the costs and effectiveness of new technology are potent barriers to support of R&D and the implementation of new technology. While successful implementation of a new technology may be anticipated to increase the profitability of a firm by a limited amount, the potential costs (e.g., the impact of delays as technologies are debugged, the possibility that a technology fails to meet its performance specifications, and the cost of modifying systems to deal with unanticipated problems) may be viewed as a threat not only to the firm's profit margin but also to its competitiveness or even its survival. As a result, incremental technological advances are com- mon, but firms do not put a high priority on the development of major new mining or processing technologies. In times when they are capital rich, mining companies have secured new deposits rather than invest in the development of new technology. Such a strategy ensures that the benefits of success (i.e., the discovery of a valuable new deposit) are captured by the firm, unlike a technological advantage that may eventually be acquired by competitors, but the difficulty, cost, and high failure rate of exploration for new high-grade deposits limits the value of this approach, particularly in the United States and other industrialized countries that have already-been heavily explored. It is easiest to introduce major new technologies when an industry is new and rapidly expanding and when investment capital is readily available. Considering these factors, domestic mining and metals firms have been at a disadvantage relative to mining operations in developing countries. However,

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RESOURCES FOR RESEARCH AND DEVELOPMENT 95 under the pressure of depressed metal prices and new environmental restric- tions, the domestic industry did make a rapid and widespread adoption of hydrometallurgical technology. While driven by financial and regulatory pressures, the speed of the shift was due in part to the demonstration that the technology was effective and dependable and that it could be implemented with little risk. Even the success of the adoption of hydrometallurgy by the copper in- dustry reveals a problem in industry R&D. The solvent extraction/elec- trowinning technology that the industry adopted was based on research that was conducted for the processing of uranium. While there are many problems that are common to broad segments of the mining and metals industry, there is no industrywide effort to deal with them. In this industry there is no advanced industry research center (equivalent to Bell Laboratories or IBM Research Laboratories) that can afford to remain committed to substantial programs of research over a long period. Nor is there a consortium such as the Electric Power Research Institute or Gas Research Institute to conduct industrywide R&D. In fact, much of the innovative research for the miner- als industry is done by companies that are not directly involved in mining and metallurgy but rather in sensors and automatic process controls. As a result, the minerals and metals industry does not have a dependable source of technology to meet its future needs. Weaknesses and Limitations of Academic Research The limited funding for the Mineral Institutes program, distributed across many institutions, results in a large number of small uncoordinated projects. The research projects funded through the Mineral Institutes program repre- sent an average of less than three projects at each institute and far less than $30,000 per project. With such small projects, research tends to focus on incremental contributions rather than on revolutionary opportunities to im- prove technology. In general, academic research in some of the disciplines may not address the immediate problems of the mining and metals industry. For example, some research in geological and geophysical engineering focuses on areas such as earthquake prediction and underground nuclear waste storage that are not central to the needs of the minerals and metals industry. Because of the dwindling number of programs and faculty and limited research funding, the technological pipeline is emptying. As the research base declines, it will become more difficult to reestablish vigorous programs of research relevant to the needs of the industry. An even more fundamental problem, however, is the lack of an adequate base in the geophysical and geochemical sciences relevant to mining and extraction technology. This work has sim- ply not been done. For example, with most of the major equipment used in

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96 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY rock fragmentation having been developed 100 to 150 years ago, it is possible that new basic science (i.e., increased understanding of fracture mechanisms) could disclose an entirely different approach to fragmentation. Bureau of Mines-Supported Programs The university research programs supported by the Bureau of Mines also show some serious problems. Projects conducted through the Mineral Institutes are not subject to peer review (although peer review is instituted on occasion), and the institutes themselves are reviewed against criteria that are specified in the authorizing act but that are not technical in nature (the emphasis is on "eligibility" for the program, and all existing institutes appear routinely to pass the review). The committee has the impression that the geographical and political distribution of institutes and program funds may be the most important consideration in allocating them. The administration has not supported the Mineral Institutes program and has deleted the program from its budget request for the past several years, on the grounds that "this program is no longer an appropriate use of federal funds." Congress has consistently restored funding for the program. The funding for this program is hardly substantial. Indeed, at $138,000 per school it is distributed so thinly that it has only a minor impact on research. Most engineering programs today require $50,000 to $60,000 to support one graduate student, so at best each Mineral Institute may support two or three full-time equivalent fellowships through federal funds. As a result, many of the 269 graduate students, equivalent to an average of 8.4 per institute, must be supported by matching state and industry funds. Since there were 858 graduate students enrolled in mining- and minerals-related disciplines in 1988, funding by the Bureau of Mines provides at least partial support for 31 percent of the total. Thus, the program's effect is probably greater on education than on research, which may provide a partial justification for its continuation. The GMTCs present a somewhat stronger picture. The mining industry in general sees them as pursuing more immediately relevant research than do the Mineral Institutes. But there are obvious gaps in coverage; for example, there are no GMTCs covering hydrometallurgy, mining technology, or fine particle processing. Research review is also a problem. The Department of the Interior's Committee on Mining and Mineral Resources Research (CMMRR) a committee mandated by Congress to advise the Secretary of the Interior on the implementation of the Mineral Institutes program has evaluated the five original GMTCs every year since they were established in 1984; however, these reviews have been based on reports submitted by the GMTCs, without systematic or rigorous site visits, and the evaluating committee has routinely recommended continuation of all five with equal

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RESOURCES FOR RESEARCH AND DEVELOPMENT 97 priority. Because the GMTCs represent a considerable and concentrated investment of scarce federal research funds in this area, review of their programs deserves more careful attention. Cross-Cutting Issues To be effective, R&D must draw on both the theoretical strengths of the academic community and the practical knowledge of the industry. Government also has an integral role in promoting R&D on specific matters of public concern and broader interests of international competitiveness and national security. Two issues of importance to the future of minerals and metals R&D cut across the boundaries between industry, academe, and government: transfer of technology and development of a base of trained personnel for the research and operational needs of the industry. Technology Transfer A healthy situation in a technology-based field is for university research- ers to expand the fundamental science base in a systematic way while per- forming a limited amount of research with an applied focus. Research results are communicated to industrial laboratories through frequent and substantive technical contacts between academic researchers and their industry counterparts, who then carry the process forward with advanced R&D of competitive processes and products. This pattern is not evident in the minerals and metals field. With so few academic programs and faculty and so little research funding, academic research as a whole offers little of interest to industry. At the same time the industrial R&D infrastructure is now far too weak to provide a cadre of researchers who could interact effectively with faculty on a nationwide basis. Where such a gap exists between academic research and its industrial application, the technology often cannot be transferred. In many cases, for example, the technology requires large-scale, expensive, proof-of-principle experiments that lend themselves well to neither university research nor industrial plants. In addition, both academic research programs and poten- tial industry users of academic research are scattered at dozens of indepen- dent sites with limited communication. This technology-transfer gap be- tween universities and industry is a major barrier to the improvement of competitiveness through technology in the minerals and metals industry. Human Resource issues Another factor affecting the current and future competitiveness of the minerals and metals industry is the availability of qualified engineers, especially

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98 COMPETITIVENESS OF THE U.S. MINERALS AND METALS INDUSTRY 700 600 in a, i_ 500 a, 400 a) ._ LL ~ 300 ._ ._ 200 100 ~~. ~ - , . .. . Estimated Entry-level | Job Market \ ~ \ by/ / ASH Predicted \ Graduates \~; V777" 72 74 76 78 80 82 84 86 88 90 Academic Year (78 represents 1978-79) FIGURE 4-2 Mining engineering graduates and estimated job market, 1972-1990. Source: Information provided by E. Ashford, South Dakota School of Mines and Technology. recent graduates who could bring new technological capabilities to bear on exploration, mining, and extraction operations. The supply of engineering graduates in relevant disciplines has shrunk drastically over the past decade. The decrease in the number of academic programs, described earlier, is a reaction to this drop in student enrollments. Perhaps the most serious decline has been seen in mining engineering. In 1978 there were 3,117 undergraduate students enrolled in mining engineering nationwide, of whom 850 were freshmen; in 1988 there were 560 undergraduates,

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RESOURCES FOR RESEARCH AND DEVELOPMENT 99 with 142 freshmen. In 1981, 702 B.S. degrees in mining engineering were conferred; in 1988 the number was 141, and only 100 students nationwide are expected to graduate with B.S. degrees in mining engineering in 1990. As a case in point, for the first time since its program began, there were no mining engineering graduates at the University of Idaho in May 1988 (Soci- ety of Mining Engineering, 1989~. Figure 4-2 compares the number of mining engineering graduates and the number of entry-level jobs since 1972. It appears that a turnaround has just begun in mining engineering enrollments, but the increase is not yet re- flected in the number of graduates, and, given attrition rates and the current low output of B.S. mining engineers, the supply of graduates is projected to fall short of industry demand for the predictable future. Anecdotal reports suggest that mining companies were more aggressive than ever in recruiting 1989 graduates, even utilizing headhunters in some cases. As entry-level salaries become more attractive (reported as $33,000 for mining engineers at many companies in 1989), most B.S. graduates leave for industry and few enter graduate school to train for careers in research and education. REFERENCE Society of Mining Engineering. Minerals Schools. 1989. Minerals Program Data. SME Guide to