A practical real option methodology for the evaluation of farm-in/out joint venture agreements in mineral exploration

Although the “real option valuation” (ROV) methodology offers extremely valuable insights in optimising investment decisions in the face of uncertainty, its practical acceptance in the mining industry has until recently been slow because of its perceived computational complexity. Recent conceptual advances in the use of binomial lattices and software developments in the areas of decision trees and dynamic programming, have significantly simplified ROV analysis and made it of practical application in day-to-day financial evaluations and decisions involving uncertainty. This paper provides general background on the ROV methodology and an example of how a typical farm-in/out agreement, as a preliminary to the establishment of a joint venture (JV), can be valued as a series of sequential and compound real options. For illustrative and quality assurance purposes, a simple farm-in/out agreement is valued from the point of view of the party acquiring equity in the project (the farm-inee) using two distinct methods, i.e. (a) a binomial lattice and (b) a decision tree in combination with binomial stochastic processes, in both cases neutralising risk using the user-friendly “risk-neutral probability”. The fact that exactly the same ROV is obtained by both methods provides confidence in the modified decision tree approach, which opens up the capacity to value the more complex sequential/compound real options inherent in real-life farm-in/out agreements. The model is then modified to incorporate a number of realistic contractual conditions often encountered in typical exploration and mining farm-in/out deals. The paper demonstrates how the increased complexity of the model can be relatively easily addressed using a decision tree with dynamic programming capability.     

Design,Modelling and Assessment of Emission Scenarios Resulting from a Network of Wood Biomass Boilers

The use of wood biomass as a fuel for domestic and industrial heating systems allows for a reduction of CO₂ emissions at a global scale, but it may also result in worse local air quality conditions, due to their emissions of particulate matter. The aim of this study is to assess the actual trend of atmospheric pollution in a study area, assuming that all heating systems are replaced by small size biomass boilers linked to the buildings through district heating network. Ground level concentrations of particulate matter, emitted by different heating systems, are therefore evaluated through numerical simulations performed by means of an atmospheric dispersion model (Sirane). As a first step, we have compared the environmental impact of a woodchip boilers network with that given by the use of traditional heating systems, i.e. wood stoves and natural gas boilers. As a second step, we have analysed the impact of such a network taking into account different emission scenarios, related to different boilers operating conditions. Results show that the environmental performances of a woodchip boilers network can be optimized by combining it with other renewable sources of energy devoted to the supply of hot water. The adopted analysis methodology can be applied to other real or hypothetic punctual sources on the territory.     

Pollination syndromes ignored: importance of non-ornithophilous flowers to Neotropical savanna hummingbirds

Generalization prevails in flower–animal interactions, and although animal visitors are not equally effective pollinators, most interactions likely represent an important energy intake for the animal visitor. Hummingbirds are nectar-feeding specialists, and many tropical plants are specialized toward hummingbird-pollination. In spite of this, especially in dry and seasonal tropical habitats, hummingbirds may often rely on non-ornithophilous plants to meet their energy requirements. However, quantitative studies evaluating the relative importance of ornithophilous vs. non-ornithophilous plants for hummingbirds in these areas are scarce. We here studied the availability and use of floral resources by hummingbirds in two different areas of the Cerrado, the seasonal savannas in Central Brazil. Roughly half the hummingbird visited plant species were non-ornithophilous, and these contributed greatly to increase the overall nectar availability. We showed that mean nectar offer, at the transect scale, was the only parameter related to hummingbird visitation frequency, more so than nectar offer at single flowers and at the plant scale, or pollination syndrome. Centrality indices, calculated using hummingbird–plant networks, showed that ornithophilous and non-ornithophilous plants have similar importance for network cohesion. How this foraging behaviour affects reproduction of non-ornithophilous plants remains largely unexplored and is probably case specific, however, we suggest that the additional energy provided by non-ornithophilous plants may facilitate reproduction of truly ornithophilous flowers by attracting and maintaining hummingbirds in the area. This may promote asymmetric hummingbird–plant associations, i.e., pollination depends on floral traits adapted to hummingbird morphology, but hummingbird visitation is determined more by the energetic "reward" than by pollination syndromes.     

Using non-equilibrium biosorption column modelling for improved process efficiency

An unsteady-state biosorption column model in one space variable is considered in this paper. The theoretical study is motivated by the need for predicting the dependent variables of biosorption columns for removal of heavy metals from wastewater, which is potentially an important technology in cleaner production. Pollutant concentrations in the bulk phase, in the liquid filling the pores and in the solid biomass along the axial coordinate of the column were evaluated for a wide range of physical and chemical parameters of the global process. In particular, the assumption of instantaneous chemical reactions is replaced by a more realistic expression taking into account chemical kinetics and fluid advection time scales separately. The resulting system of partial differential equations was solved by means of a reliable numerical algorithm based on the method of lines. The data obtained using the model described in this paper are compared with published experimental data and an estimation of the increased efficiency is made.     

pp´DDT and pp´DDE Accumulation in a Food Chain of Lake Maggiore (Northern Italy): Testing Steady-State Condition

- DOI: http://dx.doi.org/10.1065/espr2006.01.010 Background, Aims and Scope Although pp'DDT usage was strongly limited or banned in most parts of the world during the last three or four decades, the parent compound, its homologues and their metabolites still occur at levels which might pose a risk for many ecosystem components. A case of DDT pollution of industrial origin was discovered in 1996 in Lake Maggiore, the second largest (212 km2) and deepest (370 m) lake in Italy, causing concern for wildlife and human health. The extensive monitoring of many biotic and abiotic compartments which followed from 1998 in order to assess the pollution level and its trend in time, provided a great availability of data referring to DDT contamination of the different fish species of the lake. In this study, the recent contamination levels in selected fish species were compared to those measured in 1998 to evaluate the temporal pollution trend of the lake and its natural recovery, given that no remediation measures were carried out on the contaminated soils and sediments in this time span. Moreover, a modelling approach to test the equilibrium condition between water and pelagic fish species was used. Analytical results of pp'DDT and pp'DDE concentrations in lake water were used as input data in the bioenergetic model by Connolly & Pedersen (1988) to calculate concentrations in two fish species and to compare the predicted and the measured contamination. Methods Sampling and analytical determination of DDT homologues in lake water: Five water sampling campaigns were carried out from May 2002 to February 2004 in three sampling sites of Lake Maggiore. Suspended and dissolved pollutants were determined separately. Quantitative DDT homologue analyses were performed by HRGC coupled with ECD detection by the external standard method. Single water extracts were put together in correspondence with the stratification zones of the water column inferred on the basis of the temperature profile to improve analytical sensitivity. Selection of fish data: Concentrations of DDT and DDE in fishes were selected from recent literature (CIPAIS 2003, 2004). Bioaccumulation model: The bioenergetic model proposed by Connolly & Pedersen (1988) was used to assess the bioaccumulation of pp'DDT and pp'DDE of Alosa fallax (landlocked shad) and Coregonus spp. (whitefish), selected among the different species as representative of a secondary consumer level. Results and Discussion The average concentrations of pp'DDT and pp'DDE in water to be used as input data in the bioenergetic model were obtained considering all the concentrations measured at the three sampling stations in the epylimnion where the fish species considered in this study spend most of their life. The resulting values were 0.05 and 0.16 ng/L for pp'DDT and pp'DDE, respectively. Average measured pp'DDT and pp'DDE concentrations in landlocked shad were 0.81 +/- 0.39 and 1.69 +/- 0.71 mg/kg lipids, respectively, and were 0.29 +/- 0.12 and 1.06 +/- 0.41 mg/kg lipids for the whitefish. Calculated and measured values turned out to be in quite good agreement for pp'DDT, while measured pp'DDE concentrations were higher than expected on the basis of the bioenergetic model in both species. Probably metabolic transformations of pp'DDT accumulated in fish tissues in the past are responsible for the observed differences between calculated and expected pp'DDE concentrations in fish. Conclusions Pelagic fishes of Lake Maggiore seem to maintain the DDT accumulated during their life time and the most efficient mechanism responsible for the fish population recoveries is probably their generation changes; for this reason, equilibrium models cannot be used until negligible pp'DDT concentrations are reached in fish tissues. Recommendations and Outlook The limit proposed for pp'DDT in water by the EU Directive 2000/60, which will come in force in 2008, is 0.2 ng/L, four times higher than the average concentration measured in Lake Maggiore waters. Nevertheless, concentrations measured in Lake Maggiore fish were very close and sometimes exceeded the Maximum residue limits (MRLs) settled by the Italian legislation for foods (0.1 mg/kg w.w. for fish containing 5–20% lipid). It seems, therefore, that the 'environmental quality standard' of 0.2 ng/L cannot guarantee the suitability of fish for human consumption.     

Chemical degradation and biodegradability increase

The mill waste water holds a large amount of polyphenols, preventing the biodegradation processes because of their inhibitory action on microbial growth. Thus, its disposal represents an environmental problem for the great olive oil producing countries in the Mediterranean area. In this work, we present the preliminary results from the application of a photo-oxidative process on mill waste water to evaluate the organic matter degradation potential and the biodegradability of the treated residue. The total organic carbon is reduced up to 35% after 6 hours but the cost-effectiveness is unfavourable. In contrast, the aim of toxicity reduction is less expensive and shows good applicable chances; after 2 h, the polyphenols concentration drops by 60%.     

The Johannesburg summit and the difficulty with the term ‘sustainability’

Many different events occurred at the Johannesburg World Summit on Sustainable Development (WSSD). In fact, WSSD was a ‘container” of high politics, social issues, ethics and science, a display of their purposes and wishes, with little or no connection between them.     

Critical Review of Norms and Standards for Biodegradable Agricultural Plastics Part II: Composting

The critical review of norms and standards and corresponding tests to determine the compostability of biodegradable plastics, possibly applicable also to biodegradable agricultural plastics, shows that many norms concerning testing and labelling of compostable plastics have been established at the international level. Some of them are about plastic materials, some others are about products like packaging. The media and conditions of testing cover mainly the conditions designed for industrial composting facilities, and only a few concern home composting conditions. Considering that the end of life management of biodegradable agricultural plastic products will be done at the farm to reduce the management of the waste and also its cost, only a few of these norms are considered to be suitable for adaptation to cover also biodegradable agricultural plastic products. The biodegradability validation criteria under composting conditions, such as the threshold percentage of biodegradation and disintegration, the time and temperature, and the ecotoxicity, are presented for the main norms and standard testing methods. Based on these different norms and their content, a list of specs and technical requirements that could be adapted to meet farm composting conditions for agricultural compostable plastics is proposed. These requirements may be used as criteria for the establishment of a new integrative norm for agricultural compostable plastics.