Copper smelting and refining

Detailed research by the Commodities Research Unit (CRU) reveals a wide variation in direct operating costs at copper smelters and refineries. The cost curve for smelters is almost a straight line, indicating that so far there has been no levelling of costs as there has been in the mining industry. Operating costs at smelters using reverberatory furnaces are well below costs at plants using modern technology, but this apparent paradox is shown to be a reflection of location. CRU argues that costs are an important determinant of smelter/refinery competitiveness, but that other factors such as location and tariffs are also significant. Operating margins world-wide show enormous variations, but companies' increasing interest in their processing operations, coupled with changes in tariffs, are predicted to lead to a much more competitive market.     

MUNICIPAL WATER USE AND WATER RATES DRIVEN BY SEVERE DROUGHT: A CASE STUDY1

ABSTRACT: This paper synthesizes and interprets data pertaining to the evolution of average water revenue, water use, and the average cost of water supply in the City of Santa Barbara, California, from 1986 to 1996, a period which included one of the most devastating droughts in California this century. The 1987–1992 drought hit the study area particularly hard. The City of Santa Barbara was dependent exclusively on local sources for its water supply. That made it vulnerable as the regional climate is prone to extreme variability and recurrent droughts. The 1986–1992 drought provided a rare opportunity to assess the sensitivity of municipal water use to pricing, conservation, and other water management measures under extreme drought conditions. Our analysis indicates that the average cost of water rose more than three-fold in real terms from 1986 to 1996, while the gap between the average cost of supply and the average revenue per unit of water (= 100 cubic feet) rose in real terms from $0.14 in 1986 to $ 0.75 in 1996. The rise of $3.08 in the average cost of supplying one unit of water between 1986 and 1996 measures the cost of hedging drought risk in the study area. Water use dropped 46 percent at the height of the drought relative to pro-drought water use, and remains at 61 percent of the pre-drought level. The data derived from the 1987–1992 California drought are unique and valuable insofar as shedding light on drought/water demand adaptive interactions. The experience garnered on drought management during that unique period points to the possibilities available for future water management in the Arid West where dwindling water supplies and burgeoning populations are facts that we must deal with.     

Improving quality with waste minimization for small businesses

All businesses are continually seeking ways to increase productivity, improve customer satisfaction, reduce waste, and minimize costs. However, small businesses are frequently overlooked in discussions of the implementation of environmental quality improvements in conjunction with management practice improvements. Humes Collision Center incorporated new waste reduction techniques when it expanded its old facilities in 1992, and it was able to achieve the benefits of cost and waste reduction. Humes Collision Center repairs an average of 500 cars annually and is a very small quantity generator of hazardous waste, as defined by the Minnesota Pollution Control Agency. This case study documents the waste minimization and economic benefits at the new autobody repair facility in Hermantown, Minnesota.     

WATER SUPPLY COSTS FOR SMALL PRIVATE UTILITIES1

ABSTRACT: This paper examines the cost of water supply for small and mid-sized private water utilities. An econometric approach was employed in which data on utility costs and characteristics were used to estimate a total water supply cost function from which average and marginal costs were derived. The results suggest that although average and marginal costs decline with output, the rate of decline rapidly approaches zero, and unit costs therefore appear to remain relatively constant over a wide range of output. Implications of the results for pricing policy are examined.     

Hydropower pricing for smelters

Hydropower, in contrast to hydroenergy, is shown to be governed by depletion pricing: its real price is theoretically subject to a secular rise at the real social rate of discount. The alternative is to charge the equivalent constant cost for long term contracts with major consumers such as local authorities and smelters. Contract prices will therefore be above current marginal power cost in the initial phase and below it in the final phase of the contract.     

Alternative treatments of the cost of time in recreational demand models: an application to whitewater kayaking in Ireland

The measurement of travel costs in recreational demand modeling has been a contentious issue for many decades. This article explores the use of a number of alternative methods of incorporating time costs in the travel cost modeling process. Travel cost values where the opportunity cost of time is excluded, where it is included as a percentage of the individual's reported wage rate and where it based on an estimated wage from a secondary data source (the European Community Household Panel) are compared and then used in a conditional logit model to estimate the demand for whitewater kayaking in Ireland. We then evaluate the effect of different treatments of the cost of travel time on the welfare impacts of a number of different management scenarios for kayaking rivers in Ireland, and find that statistically significant differences emerge.     

Costs and benefits of urban erosion and sediment control: The North Carolina experience

The EPA’s new nonpoint source pollution control requirements will soon institutionalize urban erosion and sediment pollution control practices nationwide. The public and private sector costs and social benefits associated with North Carolina’s program (one of the strongest programs in the country in terms of implementation authority, staffing levels, and comprehensiveness of coverage) are examined to provide general policy guidance on questions relating to the likely burden the new best management practices will have on the development industry, the likely costs and benefits of such a program, and the feasibility of running a program on a cost recovery basis. We found that urban erosion and sediment control requirements were not particularly burdensome to the development industry (adding about 4% on average to development costs). Public-sector program costs ranged between $2.4 and $4.8 million in fiscal year 1989. Our contingent valuation survey suggests that urban households in North Carolina are willing to pay somewhere between $7.1 and $14.2 million a year to maintain current levels of sediment pollution control. Our benefit-cost analysis suggests that the overall ratio is likely to be positive, although a definitive figure is elusive. Lastly, we found that several North Carolina localities have cost recovery fee systems that are at least partially self-financing. This article is based on research by the authors for the North Carolina Department of Environment, Health and Natural Resources (DEHNR). The views are those of the research team and do not necessarily reflect the position of DEHNR.     

Impact of Animal Welfare on Costs and Viability of Pig Production in the UK

The European Union welfare standardsfor intensively kept pigs have steadilyincreased over the past few years and areproposed to continue in the future. It isimportant that the cost implications of thesechanges in welfare standards are assessed. Theaim of this study was to determine theprofitability of rearing pigs in a range ofhousing systems with different standards forpig welfare. Models were constructed tocalculate the cost of pig rearing (6–95 kg) in afully-slatted system (fulfilling minimum EUspace requirements, Directive 91630/EEC); apartly-slatted system; a high-welfare,straw-based system (complying with the UK-basedRoyal Society for the Prevention of Cruelty toAnimals, Freedom Food standards) and afree-range system. The models were also used toassess the consequences of potential increasesin space allowance, and to estimate the cost ofrearing pigs under organic standards.The cost of rearing pigs ranged from92.0 p/kg carcass weight (cw) and 94.6 p/kgcw forthe partly-slatted and fully-slatted systems,to 98.8 p/kgcw and 99.3 p/kgcw for the FreedomFood and free-range systems respectively. Whenspace allowance was increased by 60% to levelsin a recent proposal to revise pig welfareDirective (91/630/EEC), the rearing costs wereunchanged for the free-range system but rose by4.6 p/kgcw for the fully-slatted system. Rearingcosts under organic standards were 31% higherthan in the free-range system. These resultssuggest that improved pig welfare can beachieved with a modest increase in costAt present, price premiums received for meatproduced under high welfare systems in the UKoffset the higher costs of production in thesesystems. To ensure profitability in the longterm, it is important that these premiums aremaintained.     

Economic evaluation of sewage treatment processes in India

This paper evaluates the total annual cost including capital and operation and maintenance (O&M) costs for the up-flow anaerobic sludge blanket (UASB) and waste stabilization pond (WSP) systems operated in India. It also compares UASB and WSP systems with the activated sludge process (ASP) and biological aerated filter (BAF) systems in terms of total annual cost and chemical oxygen demand (COD) removal cost by assuming various annual interest rates and land prices. It was found that the relationship between capital and O&M costs per unit size of a UASB or WSP system and its treatment capacity can be established by a first-order equation. The relation between the cost of organic removal and capital or O&M cost for various sewage treatment systems at various annual interest rates revealed that, for the Indian context, UASB could be the most suitable option in terms of expenses and treatment efficiency.     

Wave energy vs. other energy sources: A reassessment of the economics

The large scatter in the predictions of wave energy costs, which is caused in part by the simplifications assumed by existing models, is a hindrance for the development of this promising renewable. In this context, the main objective of this paper is to reassess the cost of wave energy taking into account a number of elements that are usually overlooked, or not considered simultaneously. This analysis has been performed in relation to the European context. The direct and indirect costs of a wave farm are examined, and a value for each is presented. The levelized cost (€/MWh) of wave energy is then calculated for different scenarios in order to compare the profitability of wave energy with that of other energy sources. After that, a sensitivity analysis is carried out to identify the main parameters affecting the total cost, considering in particular the effect on the levelized cost of considering: (i) the cost reductions arising from economies of scale and technological effects; (ii) an O&M cost variable throughout the useful life of the farm; and (iii) the externalities. In sum, this work sets the basis for a thorough economic comparison of wave energy with other sources of energy.     

Incentive pricing and cost recovery at the basin scale

Incentive pricing programs have potential to promote economically efficient water use patterns and provide a revenue source to compensate for environmental damages. However, incentive pricing may impose disproportionate costs and aggravate poverty where high prices are levied for basic human needs. This paper presents an analysis of a two-tiered water pricing system that sets a low price for subsistence needs, while charging a price equal to marginal cost, including environmental cost, for discretionary uses. This pricing arrangement can promote efficient and sustainable water use patterns, goals set by the European Water Framework Directive, while meeting subsistence needs of poor households. Using data from the Rio Grande Basin of North America, a dynamic nonlinear program, maximizes the basin's total net economic and environmental benefits subject to several hydrological and institutional constraints. Supply costs, environmental costs, and resource costs are integrated in a model of a river basin's hydrology, economics, and institutions. Three programs are compared: (1) Law of the River, in which water allocations and prices are determined by rules governing water transfers; (2) marginal cost pricing, in which households pay the full marginal cost of supplying treated water; (3) two-tiered pricing, in which households' subsistence water needs are priced cheaply, while discretionary uses are priced at efficient levels. Compared to the Law of the River and marginal cost pricing, two-tiered pricing performs well for efficiency and adequately for sustainability and equity. Findings provide a general framework for formulating water pricing programs that promote economically and environmentally efficient water use programs while also addressing other policy goals.     

Export efficiency of large projects: The case of aluminium smelters

We draw attention to a number of key factors in the evaluation of major projects, such as smelters, which are highly capital- and energy-intensive as well as export-orientated. The practice of justifying such projects by upvaluing foreign exchange is considered, as is the cost of distortion. Export efficiency is introduced as the key criterion: the efficiency of some recent smelter proposals in Oceania was between 36 and 50 cents in the dollar. A correct power price is essential: hydropower (in contrast with hydroenergy) should be priced as a depletable resource.     

Economies of scale in global iron-making

In this paper, we investigate the presence of economies of scale in the global iron-making industry for integrated steel plants, iron making being the first stage in the steel-making process. Iron making depends on basic commodities, such as iron ore, coke and various forms of energy, required in the operation of the blast furnace, which can be classified as essential inputs and used in fixed proportions to produce iron. A generalized Leontief cost function is estimated using panel data for 69 integrated plants, such a specification being appropriate for technologies with essential inputs that are used in fixed proportions in production. A significant scale effect is observed due to the existence of fixed costs and a linear dependence of the cost function on production. Under a simple linear cost function, a rough estimate of the breakeven scale of plant, where costs equal revenue, is 4.5 Mt per year. Competitiveness, as measured by the ratio of plant average cost per tonne to best practice cost per tonne, can be shown to be positively related to the scale of production as well as the cost of essential inputs. Therefore, low-cost producers are also often producers with low raw material costs and production levels below the estimated breakeven scale of operation. Labor costs, although significant, are comparatively less important as a driver towards low costs.     

A cost and benefit analysis of future end-of-life vehicle glazing recycling in France: A systematic approach

As with other European countries, the French automotive industry needs to improve the end-of-life vehicle (ELV) recycling rate in order to reach the minimum reuse and recovery rate required by EU directives. This paper proposes a model to investigate the potential cost and benefit of ELV glazing recycling for all value-chain stakeholders, and for the network as a whole. Key parameters of future changes, namely glass cullet price, landfill cost, network coverage and transportation costs are identified at the level of field research. A system dynamics approach is then used to simulate the net economic balance of the recycling network under different future scenarios. The simulation reveals an increase in the income and considerable cost savings as a result of the recycling network in some of future scenarios.     

Oil and gas reserves of the Middle East and North Africa

A quantitative estimate of the petroleum reserves of the Middle East and North Africa is presented and analysed in terms of the region's ability to meet current market demand for a sweet light crude. Costs of Middle East production are compared with those of other oil-producing regions. With an average costs of US$4/bbl, the Middle East has both the largest oil reserves and the lowest cost oil in the world. While new and improved technology of exploration and production may lessen this price advantage in the future, it will not eliminate it. Because of these two factors, the Middle East will continue to play an important role on the world energy stage well into the next century.     

COSTS AND EFFECTS OF A WATER PROGRAM FOR A SMALL STRIPPING COMPANY-SOUTHEASTERN OHIO1

The purpose of the study was to use economic analysis in determining the ability of a small strip mining company to incure the financial burden of carrying out various alternative mine drainage abatement programs. The quantity and quality of water with which the company has to deal were determined and treatment and diversion programs were costed out. The company's market area and the market structure were analyzed. It was found that pricing policies were determined by a dominant firm, so the target company had no control over its price per ton of coal. The costs and revenue of the firm were analyzed for the period 1960-1970 and, even without a water quality program, losses were incurred in six out of eleven years. Analysis of the average cost curve indicates that the per unit cost could have been reduced by increasing output thereby increasing efficiency. The conclusions of the study were that the small company could not unilaterally implement mine drainage programs because the added costs would seriously worsen its already precarious financial position. Even uniformly enforced legislation might reduce the small firms competitive position because of economies of scale associated with the large treatment facilities used by big mining companies.     

Hedging a Commodity Power Rate

Many of the aluminium smelters in the Pacific Northwest served by the Bonneville Power Administration (BPA) have become non-competitive and operate in the role of swing producer in the US and world markets. To avoid these cyclical swings in power demand, BPA is presently studying methods designed to link the price of power charged to smelters with the market price of aluminium. A linked-rate system tends to stabilize incomes to smelters, but increases fluctuations to the utility. These, in turn, could be stabilized by a hedging operation on the London Metals Exchange.     

Emergy evaluation perspectives of a multipurpose dam proposal in Korea

The 'emergy' concept was used to evaluate the economy of Korea and the contributions of a multipurpose dam proposal to the real wealth of the Korean economy. Emergy is defined as the available energy of one kind previously used up directly and indirectly to make a product or service. The indices for Korea calculated from the emergy evaluation were close to those of developed countries. Even though its monetary balance of payments was negative in 1997, the economy of Korea showed positive balance in trade when exports and imports were expressed in emergy. The emergy evaluation showed that the Korean economy places a large stress on its environment. Water supply and generation of electricity were the most important contributions of the proposed dam in terms of emergy; 46.5 and 45.1% of the total benefit, respectively. Flood control contributed 8.4% of the total benefit. Major costs associated with the proposed dam were from sediments (33.2% of the total cost), construction services (22.8%), and social disruption of the region (21.6%). In terms of emergy, the ratio of benefits to costs of the proposed dam was 2.78 if sediments are not included, and 1.86 if sediments are included, which result in more benefits than costs in both cases. The benefit to cost ratio of the dam was larger than that of the current system (1.42) without the dam whether sediments are included in the total cost or not. The environmental stress of the proposed dam was considerably lower than that of the Korean economy, but the dam might increase stress on local environment.     

An assessment of ecosystem services of Corbett Tiger Reserve,India

This paper examines the economic value of selected ecosystem services of Corbett Tiger Reserve, India. The direct cost was derived from secondary sources, and indirect and opportunity costs through socioeconomic surveys. For recreational value the individual approach to travel cost method was used, and to assess carbon sequestration the replacement cost method was used. The maintenance cost of the reserve was estimated as US $2,153,174.3 year⁻¹. The indirect costs in terms of crop and livestock depredation by wild animals ranged from US $2,153,174.3 year⁻¹. The indirect costs in terms of crop and livestock depredation by wild animals ranged from US 2,408 to US $37,958 village⁻¹ over a period of 5 years. The dependence of local communities was for fuel wood (US $37,958 village⁻¹ over a period of 5 years. The dependence of local communities was for fuel wood (US 7,346 day⁻¹), fodder (US $5,290 day⁻¹), small timber, and other nontimber forest products. The recreational value of the reserve was estimated as US $5,290 day⁻¹), small timber, and other nontimber forest products. The recreational value of the reserve was estimated as US 167,619 year⁻¹. With the cost per visitor being US $2.5, the consumers’ surplus was large, showing the willingness of visitors to pay for wildlife recreation. The forests of the reserve mitigate carbon worth US $2.5, the consumers’ surplus was large, showing the willingness of visitors to pay for wildlife recreation. The forests of the reserve mitigate carbon worth US 63.6 million, with an annual flow of US $65.0 ha⁻¹ year⁻¹. The other benefits of the reserve include US $65.0 ha⁻¹ year⁻¹. The other benefits of the reserve include US 41 million through generation of electricity since 1972. The analysis reveals that, though the benefits outweigh costs, they need to be accrued to local communities so as to balance the distribution of benefits and costs.     

EFFECT OF SYSTEM LAYOUT ON SUBSURFACE DRAINAGE COST IN FLAT IRRIGATED LAND1

ABSTRACT: The economic feasibility of large-scale subsurface drainage projects in irrigated land is affected by construction costs. This study was conducted to evaluate the effect of two different types of subsurface drainage system layout on construction costs for a 1000 ha pilot area located in the Nile Delta of Egypt. The two types of layout studied were the conventional layout currently used in Egypt and the modified layout that was developed for reducing water losses from rice fields. When compared to the conventional layout, the modified layout resulted in a reduction of 6.74 percent in construction costs (714,464 US$ versus 766,142 US$). This cost reduction is explained by the need for lesser lengths of large diameter collector pipes with the modified layout, which results from the smaller drainage area of subsurface drainage systems (average 23.7 versus 30.8 ha). We have found that the cost of subsurface drainage can be minimized by reducing the area drained by each subsurface drainage system.