Geologists discussion thread!

[prawn_86]

Only just came across this thread (i was overseas when the bulk of the postings were done), great stuff!

Lots of big shiny words, which i have no idea what they mean

 

[dj_420]

Hey geo's - I see this thread has fallen silent for awhile which is a pity as much was learnt via the excellent contributors.

I have a coal question which may or may not belong on this thread but anyway -here goes. What does it mean when a coal deposit has a high ash content? Is this an issue for a thermal coal deposit. I know that it is not great for coking coal.

Would appreciate anyone's feedback on this.

Cheers
B'man

Although I am only early in my degree I will try to answer this question from what I have learnt.

Coal is identified by two main things, rank and quality.

Rank is decided by carbon and volatiles, ranking for different coals can be identified as:

Type Carbon Volatiles
Wood 45% 55%
Peat 55% 45%
Lignite 65% 35%
Sub bituminous coal 75% 25%
Bituminous coal 85% 15%
Anthracite 95% 5%

So from here peat is lowest rank and antracite is the highest rank according to carbon content.

However coal is then determined by quality, this is identified by ash and sulpher content.

Ash content is created by the materials (aluminum and silicon) that the original trees did not use and store in the dead wood inside the tree, this content is then transferred to the coal when it is formed. The ash is simply materials the tree did not use.

Coal quality can then be divided into high, medium and low.

High quality coal: <10% Ash <1% Sulpher
Medium quality coal: <30% Ash <3% Sulpher
Low quality coal: >30% Ash >3% Sulpher

So you can have different ranks of coals that have different quality.

Sub bituminous coal can is used primarily for thermal coal and are used for electricity production.

Bituminous coal can be used for coking coal depending on carbon content and the volatility content, coking coal is used in the production of steel and iron.

Anthracite is rarer and is used for domestic and industry and is known as smokeless coal.

So in a nutshell you really want low ash content as it determines the quality of the type of coal you are talking about. I think this gives a bit of a summary, if anyone has any further info to add please feel free. I might add that the quality and rank will help to determine the saleability of the coal and may indeed affect feasibility for particular coal deposits.

Hence the difference in price for thermal coal and coking coal. Much of the coal in eastern Australia is low rank and low quality but is suitable for electricity production.

 

[dj_420]

I forgot to put in there that the carbon content is a way of measuring energy content. The higher the carbon content the higher the energy that can be extracted from the coal.

 

[jman2007]

That's a pretty good summary dj,

I have to admit I had to scratch around for a bit and dust of some of my old textbooks etc before I could answer this effectively! It's good to see this thread being revitailsed again though.

I saw a page on Wikipedia that basically describes the ash content of a coal as anything non-combustible eg. aluminium and silicon compunds, that are left behind after oxygen, hydrogen, sulfur and water have been burned off. So in essence, I think both our definitions are saying a similar thing, in a different way.

Basically, you should be able to determine the ash content by burning a known mass of coal, and then weigh the residue and convert this to a % ash content.

This passage was interesting as well:

"The behaviour of a coal's ash residue at high temperature is a critical factor in selecting coals for steam power generation. Most furnaces are designed to remove ash as a powdery residue. Coal which has ash that fuses into a hard glassy slag known as clinker is usually unsatisfactory in furnaces as it requires cleaning."

http://en.wikipedia.org/wiki/Coal_assay#Ash

Cheers

jman

 

[Bushman]

Thanks guys- perfect.

So if I have interpreted this correctly, the higher the ash content, the lower the carbon content, and the less efficiently the coal will generate heat when it burns (or something along those lines).

So for high volume, lower energt type uses (ie electricity generation where you produce steam at boiling point of 100 degree), you can medium ash content thermal coal. Then for uses where you need very high heat transfer (ie steel production), you need high carbon-content coking coal.

Reason I asked is that REY have a massive +1 billion tonne potential thermal coal deposit but it has medium ash content. So it is fair to surmise it will not be suitable to steel making but should be ok for electricity generation (in Canning basin so will be shipped to India).

Thanks again guys.

PS: yep this thread is great esp for us 'try hard' weekend geologists!!

 

[jman2007]

Hi Bushman,

Thanks guys- perfect.

So if I have interpreted this correctly, the higher the ash content, the lower the carbon content, and the less efficiently the coal will generate heat when it burns (or something along those lines).

Yes, that sounds like the correct conclusion to me.

So for high volume, lower energt type uses (ie electricity generation where you produce steam at boiling point of 100 degree), you can medium ash content thermal coal. Then for uses where you need very high heat transfer (ie steel production), you need high carbon-content coking coal.

Again, I would agree with that.

Reason I asked is that REY have a massive +1 billion tonne potential thermal coal deposit but it has medium ash content. So it is fair to surmise it will not be suitable to steel making but should be ok for electricity generation (in Canning basin so will be shipped to India).

This is a slightly trickier question, I know a Geo who worked in coal for a few years so I'll run it by him this week. Just want to make sure you get a proper informed answer.

Cheers
jman

 

[jtb]

Thanks guys- perfect.

So if I have interpreted this correctly, the higher the ash content, the lower the carbon content, and the less efficiently the coal will generate heat when it burns (or something along those lines).

So for high volume, lower energt type uses (ie electricity generation where you produce steam at boiling point of 100 degree), you can medium ash content thermal coal. Then for uses where you need very high heat transfer (ie steel production), you need high carbon-content coking coal.

PS: yep this thread is great esp for us 'try hard' weekend geologists!!

Hey Bushman, yes ash content is important as its rubbish and has to be disposed of.
Us anthracite burners over here consider ash greater than 10% as crap coal but if you were to compare it too many brown coals (NSW/Vic) than thats as pure as the driven snow.
A significant proportion of ash (Silicates or sand being common, clay if brown coal) is also Iron products particularly iron pyrites (fools gold).

As a rule of thumb 1 tonne of coal will give 5 tons of steam or 2.5MW (in generation).

As to boiling at 100deg C thats only your kettle

Boiling point is governed by pressure not temperature (atmospheric pressure being 101 kPaA) and generators usually make steam from at least >12MPa. The site I'm on atm will be sub-critical @ 17.8MPa and places like Kogan Creek in Qld run critical @ >22MPa (critical being when water and steam exist in the same phase).

Carbon content is all important in coal as the heat (energy) from combustion comes from the chemical reaction converting carbon to CO2.

Hence gas produces less CO2 than coal as its hydrocarbon is dominated by hydrogen not carbon.

Yes theres a lot of coal in the Canning also.

What are you studying btw DJ ?

We can never have enough rocklickers imo:

 

[dj_420]

Hey Bushman, yes ash content is important as its rubbish and has to be disposed of.
Us anthracite burners over here consider ash greater than 10% as crap coal but if you were to compare it too many brown coals (NSW/Vic) than thats as pure as the driven snow.
A significant proportion of ash (Silicates or sand being common, clay if brown coal) is also Iron products particularly iron pyrites (fools gold).

As a rule of thumb 1 tonne of coal will give 5 tons of steam or 2.5MW (in generation).

As to boiling at 100deg C thats only your kettle

Boiling point is governed by pressure not temperature (atmospheric pressure being 101 kPaA) and generators usually make steam from at least >12MPa. The site I'm on atm will be sub-critical @ 17.8MPa and places like Kogan Creek in Qld run critical @ >22MPa (critical being when water and steam exist in the same phase).

Carbon content is all important in coal as the heat (energy) from combustion comes from the chemical reaction converting carbon to CO2.

Hence gas produces less CO2 than coal as its hydrocarbon is dominated by hydrogen not carbon.

Yes theres a lot of coal in the Canning also.

What are you studying btw DJ ?

We can never have enough rocklickers imo:

Hey jtb

I am studying Distance Education at Macquarie Uni, go down to the Uni twice a semester for lab work. Its a lot of fun though, where do you work at?

Its a great thread this one, even better for someone who has only just started their degree and can get a lot of info from it.

 

[derty]

good to see the thread active again.

Rememberances from uni (should be pretty close to the mark).

From my understanding the main component of ash in coal is silt and sand that has either washed in with, or has been deposited as layers over and interbedded with the original organic matter. The more woody the original organic matter the more ashy it is too.

Sulphur in the coal is usually in the form of pyrite, as a result of the microbial reduction of sulphate and reaction with ferrous iron to produce iron sulphide. The origin of the sulphur can be a mixture of organic and inorganic sources. The Fe component will contribute to the ash as FeO when burnt though the S will be released as gas and not contribute to the ash content.

It is interesting to the amount of compaction that occurs to get the original organic matter into the form of coal. I cannot remember what the compaction is to get to the peat stage, though the thickness of coal may be as little as 10% as the original peat thickness. As the coal compacts water and volatiles are removed or squeezed out and the relative carbon content increases. If the end product is anthracite then the level of compaction is even greater.

So if you have a 1m coal seam chances are that it was originally a bed of organic matter greater than 10m thick. No wonder it makes such a great form of energy.

 

[Wysiwyg]

Can anyone tell me how 1970`s and 80`s 2 dimensional seismic can estimate 2 billion barrels of oil in a 21 km by 21 km area?

It is okay if no one can, I understand the difficulty of making such an estimate.

 

[jman2007]

Can anyone tell me how 1970`s and 80`s 2 dimensional seismic can estimate 2 billion barrels of oil in a 21 km by 21 km area?

It is okay if no one can, I understand the difficulty of making such an estimate.

Cripes!...

Now that is a tough one for a land-lubber geo, I might have to pass on that one for now I'm afraid. Geophysics was never my favourite area

jman

 

[jman2007]

Reason I asked is that REY have a massive +1 billion tonne potential thermal coal deposit but it has medium ash content. So it is fair to surmise it will not be suitable to steel making but should be ok for electricity generation (in Canning basin so will be shipped to India).

Bushman,

If you look through some of REY's data, try and find out if they have done any preliminary testing on the coal. Apparently, rather important parameter (among several others) will be the mositure content, which is also related to the volatile content and naturally the energy released during combustion. Coal with a moisture content above 15% would be of questionable quality.

Almost all thermal power stations are set up to accept coal of a specific blend, ie. a particular moisture and ash content, or else the coal can wreak havoc with equipment such as the injectors in the plant. So in terms of marketing and selling the product, it may require blending with other coals to reach a certain "composition" before export.

So this is quite a different scenario compared to talking about coking coal used for making steel.

Hope this helps.
jman

 

[Bushman]

Bushman,

If you look through some of REY's data, try and find out if they have done any preliminary testing on the coal. Apparently, rather important parameter (among several others) will be the mositure content, which is also related to the volatile content and naturally the energy released during combustion. Coal with a moisture content above 15% would be of questionable quality.

Almost all thermal power stations are set up to accept coal of a specific blend, ie. a particular moisture and ash content, or else the coal can wreak havoc with equipment such as the injectors in the plant. So in terms of marketing and selling the product, it may require blending with other coals to reach a certain "composition" before export.

So this is quite a different scenario compared to talking about coking coal used for making steel.

Hope this helps.
jman

Hey Jman;

Thanks for the reply my man. Great info.

I have done some further reading on coal and note that the mettalurgical coal has attained these properties due to it being placed under greater pressure over the ages, further compressing the original plant matter. So it seems the older the deposit, the more likely it is to be of the black gold variety. A bit like a good red it seems

Cheers
Pete aka Bushman

 

[jtb]

Hey jtb

I am studying Distance Education at Macquarie Uni, go down to the Uni twice a semester for lab work. Its a lot of fun though, where do you work at?

Hey DJ,

I'm presently on a site where Griffin Energy are building two 208MW coal fired boilers.



So is it geology that your studying?

J

 

[dj_420]

Hey DJ,

I'm presently on a site where Griffin Energy are building two 208MW coal fired boilers.

So is it geology that your studying?

J

Yeah studying Exploration Geology and Geophysics majors. Want a job with the big boys when I have finished the degree.

Nice pic by the way jtb!

 

[jtb]

Yeah studying Exploration Geology and Geophysics majors. Want a job with the big boys when I have finished the degree.

Good on ya mate, glad to hear it.

You'll soon be able to blind us with the glory of severely altered, igneous, intrusives then

If you ever get the opportunity to go underground, I recommend you take it too.Super cool to walk around in fresh rock and look at the formations and structures, particularly if you've spent some time sieving surface samples that have been pounded to smithereens.
Absolutely awesome when you can see native mineralisation.

Sometimes your geo-pick will also accidentally smack itself repeatedly into a show and when you get home theres gold in your shaving kit too

Keep us updated

J

 

[gazelle]

Thanks for the extensive input everyone , interesting topic .
Could someone please help me establish a fundamental framework so that I can work towards a realistic valuation of a mining stock .
I can appreciate there are alot of variables and cross market considerations involved in such an estimation so I will outline some figures and general estimates in the hope of learning a few things .
The Company is based in Australia and all of their operations are based in Australia as well . The Company is GLM and they have several active areas of exploration on the go , but the main project of interest is the iron ore project in Eastern Victoria of all places . Gulf have approx 148M units in stock and 7M in cash at time of writing . The initial estimate for their iron ore project was for 50M + tonnes of iron ore but since then the estimate has been upgraded towards 75M - 100M tonnes of ore . Their recent announcement indicates that significant massiive hematite and mixed hematite and magentic were revealed with samples from several outcrops in the range of 50 - 60% iron .
Geophysical interpretation of the data collected and modelled so far indicates massive magnetite at surface which supports the volumes ( or the tonnages that have been reported previously ) I believe they need to do more geophyisical mapping and modelling work but the initial estimates do look quite interesting . NITON Fe % measure 41.63 55.44 up to 62.57% . There was a recent brokerage presentation and a projection of 210.00 per tonne was put fwd as an approximate figure . The director said it is early days yet but the results to date indicate the potential for several large iron ore deposits . 210.00 per tonne seems like a fairly high price but I guess with the high grade ore its a bit different from ( Chinese steel mills paying US$171/t on the spot market for India's low-grade iron ore. They pay US$136/t for domestic Chinese ore which is also of a low grade ) from an article on ore prices .
From my understanding Gulf are positioned very close to port and supporting infrastructure and I would be interested to know who pays the freight cost and how much it would work out to per metric tonne , I have seen estimates between 40 - 70.00 per metric tonne which would bring the figure back to 140 - 160 but even then after assaciated costs they could still be looking at 75 - 100M tonnes at 140.00 ( 140M ) and this constitutes only one arm of their operations . Any advice would be appreciated .

 

[jman2007]

Thanks for the extensive input everyone , interesting topic. Could someone please help me establish a fundamental framework so that I can work towards a realistic valuation of a mining stock .
I can appreciate there are alot of variables and cross market considerations involved in such an estimation so I will outline some figures and general estimates in the hope of learning a few things.

Hi gazelle,

Glad you've found the thread useful, I'm not totally convinced this is the best thread for discussing the pros and cons of GLM vs other prospective iron ore companies, and I know there are a large number of threads dealing with valuations for mining stocks, but I can perhaps point you in the right direction.

I've never actually heard of this crowd before (doesn't mean the stock can't/wont perform over the long term ), they seem to have their fingers into a bit of everything... iron ore, gold, copper, uranium...the list is pretty extensive. I would start by doing a very fundamental analysis on GLM; what kind of background do the senior guys have, are they geologists with experience in finding/developing the types of targets they're aiming for?..or are they predominantly businessmen who thought getting into mining, and jumping on the iron ore bandwagon might be fun?

I've also noticed many of their releases are "share market" releases, meaning that they are designed to stimulate a disproprotionate level of interest compared to their content... a good example was the one on the 21/04 stating "Potential for 50 million tonnes of iron ore"...based on what?...some ground magnetics, chip samples and surface geological mapping... not on holes in the ground as far as I could see.

Numbers based on "potential resources" can be very compelling, but in all honesty GLM will be a very long way from releasing a resource for these targets, let alone progressing to production. That really is putting the cart before the horse at this stage imho. Follow this story though, once they start drilling this iron ore target, the market will have a much better idea of what to make of GLM. But a real speculator from what I can see so far...

Cheers
jman

 

[GREENS]

J-Man, derty, JTB or DJ, was just wondering if any of you geos would mind sharing your knowledge to help me answer some queries I have over nickel grades and in particular Kagara’s latest Lounge Lizard (nickel) resource release.

They have stated that the resources includes approx 5.5m tonnes of ore grading 0.82% Ni and 263,000t grading 6.43% Ni, to give a total initial resources of 5.72m tonnes @ 1.08%.

My question is this, considering Kagara opts to mine low cost resources would it be fair to suggest that investors should probably focus more on the massive sulphide section (i.e. 263,000t @ 6.43% = 16,900t contained nickel), and disregard the low grade section because this part of the resource will likely have considerably higher operating costs. That is they have included the low grade resource just to drive up their contained nickel resource and in turn attempted to make the announcement seem more impressive than it really is. Or is this lower grade resource still potentially valuable. Well I suppose that last question may depend on nickel prices? Any thoughts would be much appreciated.

Also I’m not inferring that this is a bad announcement considering the resource is still open at depth and along strike, because the high grade section looks to potentially be one of the higher grade nickel sulphide mines going around if you take Western Areas NL presentation material to be accurate (pg 6 June 2008).

Cheers in advance and keep up the good work, an excellent thread.

 

[GREENS]

Still no takers?