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Technology Development and Competitive Advantage

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Technology Development and Competitive Advantage: Sustainable or Short Term?
By John O. Marsden Phelps Dodge Mining Company, Phoenix, AZ Technology development has played a crucial role in the minerals industry throughout history. The development of new technology allows mankind to produce metals and minerals at progressively lower cost of production in real terms, and therefore at progressively lower prices, improving their availability, accessibility and utilization worldwide. However, the developers of such technology are not guaranteed to reap the benefits from this effort: There is an expectation that technology developers will gain an advantage over their competitors. Is this a short-term benefit that results from a temporary cost or efficiency improvement, or is it a sustainable longer term “edge” that prevails even after metal or mineral price has been eroded by the implementation of a major step change technology? This issue is examined by reference to several case study examples in the copper industry. modity producers to gain a cost advantage over their competitors, at least for a period of time. The more sustainable and longer term, the greater the competitive edge achieved. Technology development is costly and, in general, the greater the potential benefit, the higher the cost. The commercial implementation of new technology is inherently risky — the technology has not been applied before and must be proven over time. The risk must be managed, and this involves additional cost and intellectual effort. Finally, both technology development and commercial implementation typically requires significant investment of time. This latter factor is significant where the metal/ mineral of interest is a commodity that exhibits cyclical pricing with extended periods of depressed pricing followed by periods of strong pricing. This will be discussed further later. and trade secrets as confidential and proprietary information is an alternative (or complimentary) way to protect competitive technology in both the short and long term. 2. Make it hard for competitors to use or duplicate the technology In some cases, maintaining technical know-how, operational expertise and trade secrets as confidential and proprietary information may be a successful strategy in achieving competitive advantage. The downside with this option is that it is difficult to keep such information as truly confidential and proprietary for a significant period of time. In addition, such a strategy stifles technical and operational interchange between mining operations and companies, and this approach is probably unproductive in the long term. 3. Apply the technology more rapidly than competitors Being the first to apply a particular technology cost effectively, to rapidly improve the technology, and quickly make a significant impact on a substantial proportion of overall production and costs may provide significant competitive advantage. Alternatively being a “fast follower “ or a rapid adapter of technology may provide similar benefits. 4. Apply the technology better than competitors If you apply a particular technology better than your competitors, either with greater efficiency, at a larger scale, or at lower cost (capital or operating), then competitive advantage may be achieved. A company’s ability to do this depends largely on the quality of people and the resources at their disposal to effectively apply technology and innovate within their operations. As a practical matter, it is difficult to achieve sustained competitive advantage by this manner alone because of the mobility of staff (much greater in recent years than historically) and the relatively rapid and free interchange of information throughout the mining industry. 5. Apply the technology to a greater proportion of metal production than competitors If a technology can be applied broadly across multiple operations or divisions within a company, it is likely to be more advantageous than its application at a single operation by a competitor. For example, a company that can effectively apply a new nickel laterite hydrometallurgical process to 50% of their mineral reserves will derive greater advantage than a similarly sized company that applies the same process to only 5% of their reserves. 6. Derive more value than competitors due to specific geographical, geological or other conditions One company may have specific geographical or geological factors or other site-specific conditions that renders the application of a particular technology to be more favorable at one or more of their sites than for others. This can be a source of sustained competitive advantage. An example might be a blend of potential acid-producing mineral resources located close to acid-consuming mineral resources that can utilize a technology that produces acid as a by-product. 7. People development and motivation Technology development activity excites, invigorates and motivates capable and energetic technical and

Background
The development and adoption of new technology has played a crucial role in the commodity minerals industry throughout history. As new, cost-efficient technologies are commercialized, the cost of production decreases, and this enables lower grade ore to be processed profitably. This in turn increases the availability and supply of the metal or mineral of interest, and ultimately (in a free market environment where the supply-demand balance determines price) inevitably decreases the metal or mineral price. This leads to the question: Why should mining companies invest in (new) technology development if the result is a decrease in the product price? The answer is to achieve competitive advantage, where the application of new technology enables one or more com-

Sources of Competitive Advantage
There are many sources of competitive advantage that can result from the development and application of new technology. Each of these is listed and briefly reviewed below: 1. Prevent competitors from using the technology The mining industry is well-accustomed to the use of patenting of technology, processes, equipment, chemicals and reagents, non-commodity supplies, and other aspects of the mining industry. Patents can provide companies with an effective way to protect competitive technology for a significant period, up to twenty (20) years. In addition, the ability to maintain technical know-how, operational expertise

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Technology Development and Competitive Advantage: Sustainable or Short Term? Continued technology development in the copper industry throughout the 20th century. Figure 1 shows the annual average copper price from 1900 to 2003, with the price expressed in constant 2003 dollars. The period is characterized by peaks and valleys that reflect the market forces for the commodity traded in the western world and, more recently, on a more global basis. During periods where demand has outpaced supply, the peaks occur. Conversely during periods where copper supply exceeds demand, then periods of low price prevail. In general terms, peaks have occurred in 1907, 1912, 1916, 1929, 1937, 1947 – 48, 1956, 1970, 1974, 1979 – 80, 1989, and 1995. Similarly, valley “troughs “ have occurred in 1911, 1914, 1921, 1932, 1945, 1958, 1972, 1978, 1986, 1993 and 2002. During the period 1900 – 2003 shown in Figure 1 (103 years), there have been approximately 9 major price cycles. Table 1 shows the major periods of increasing copper price. Without exception, these periods of increasing price are related to strong copper demand and consumption, low production (either slow recovery of curtailed production and/or insufficient new production brought onstream to keep pace with demand), or combinations of the two. Table 2 lists periods of decreasing copper price. The periods of decreasing price are related to 1) periods of weak copper demand, with excess copper going into exchange inventoNo. of Years 2 4 5 3 8 2 16 4 8 52

Figure 1 Annual copper price between 1900 and 2003

operating people. Technology development activity gives staff the opportunity to get involved in something new and to create value out of nothing, purely through innovation. This environment gives staff the chance to grow along with the technology being developed. Technology development breeds a contagious enthusiasm — a commodity that can’t be easily bought or traded.

mover has the potential to reap the largest benefits and, potentially, a sustained competitive advantage. “Fast Follower “ (or Adapter) The fast follower gains the benefit of the “first mover” experience with the implementation of a new technology. The fast follower or adapter has lower risk compared with the first mover, but risk may still be high because some aspects of the technology may not be fully proven. There may be some potential for the fast follower to leverage the technology and gain significant competitive advantage. In some cases, there may be an ability to gain greater competitive advantage than the first mover as a result of lessons learned. “Conservative Follower” The conservative follower takes a low-risk approach, but does whatever needed to stay competitive

over the long term, even if the benefits may not be achieved from the technology during its initial period of application. The conservative follower has little opportunity to leverage the technology to achieve competitive advantage and may end up as the one being leveraged. “Lagger” The lagger takes the lowest risk option at every opportunity and stays with well-proven technology. They are the last to adopt and apply new technologies, but rely on other ways to stay competitive (e.g., resource quality, captive market or integrated market) or end up exiting the market voluntarily or involuntarily.

Technology Development and Implementation
The “players “ in the implementation of new technology fall into four categories, as follows: “First Mover” The first mover has the highest risk in applying a new technology, and generally the highest cost. However, there is the potential to apply the technology rapidly and leverage the technology with competitors to gain advantage. The first

Case Study: Technology Development in the Copper Industry
The Copper Price Cycle Let us consider the example of
Period

Period 1902 –1907 1911 –1916 (Beginning of 1st World War) 1921 –1929 1932 –1937 (Post-depression) 1945 –1956 (Post-2nd World War) 1958 –1970 1986 –1989 1993 –1995 Total
Table 1 Periods of increasing copper price

No. of Years 5 5 8 5 11 2 3 2 41

1900 –1902 1907 –1911 1916 –1921 1929 –1932 1937 –1945 1956 –1958 1970 –1986 1989 –1993 1995 –2003 Total
Table 2 Periods of decreasing copper price

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ries or other easily accessible inventories, 2) excessive copper production, either due to slow curtailment of production during a copper cycle downturn or too much new production brought on line in excess of demand requirements during the peak period of the copper price cycle and, as some have postulated, 3) technology developments that increase production and/or lower the cost of production significantly and on a sustained basis. While there is no doubt that the supply-demand balance drives the copper price, the question of whether significant technology development adversely affects the copper price is more complex. This issue will be examined further using three examples of step change technology development in the copper industry: open pit “bulk “ mining, flotation, and solvent extraction-electrowinning (SX/EW). Large Scale (Bulk) Open Pit Mining The widespread adoption of bulk, open pit mining methods in

the 1920s and 1930s represented a significant technology development for the copper industry. During the period from 1910 to 1945 there were significant increases in ore milling rates, in large part made possible by the bulk open pit mining method. According to A. B. Parsons, Daniel C. Jackling first proposed the use of large-scale, bulk, open pit mining at Utah Copper in 1899. His proposal was based on mining 2,000 tons per day of ore. At the time his proposal was made, the largest copper concentrator was 500 tons per day, so his proposal represented a “stretch “ for both mining and processing technology. In 1905, Utah Copper made the decision to proceed with the open pit plan and production started in 1907.(1) It may seem obvious to us now that open pit “bulk” mining makes good economic sense, but at the time this was far from obvious and intuitive. Utah Copper was milling almost 15,000 tons per day by 1910, increasing to 25,000 tpd in 1913 and to about 75,000 tons per day by 1940.(2,4) By contrast,

Morenci began large-scale mining in 1942, supplying ore to a 25,000 tons-per-day concentrator, which was increased to over 40,000 tons per day by 1947. El Teniente (originally “Braden”) was processing only 6,000 tons per day of ore prior to 1920, but increased to 15,000 tons per day by 1927, and then to about 30,000 tons per day by 1947. Open pit mining started at Inspiration in 1948 and at Ray in 1950. Large-scale open pit mining started at Chuquicamata in about 1927 at a rate of more than 20,000 tons per day and increased to about 50,000 tons per day by 1952.(2) This chronology indicates that many companies were slow to adopt open pit mining methods, even though this ultimately proved to be the most effective mining method. The above discussion indicates that the major copper producing (porphyry) mines increased ore mining and processing rates dramatically between about 1925 and 1947, with the majority of the major expansions occurring between 1940 and 1947. By 1947, 73% of

the US copper production was obtained by open pit mining. (6) Similar developments in Chile followed. As open pit mining took off, the increased scales of economy for the bulk mining and significantly larger processing facilities reduced the cost of production significantly. Then, the mining engineers of the day translated the reduced costs into lower cutoff grades, resulting in a steady decrease in the average grade of ore processed. At many operations, ore grades dropped from over 2% (typical underground mining grades) to 1.5% and in some cases below 1%. Gradually, as ore grades decreased and as wages and other costs inflated over time, production costs shifted back to the prior levels. A review of the copper price curve (Figure 1) shows that the metal price experienced a sharp decrease from 1916 to 1921, but then a long period of general price increase occurred from the early 1920s to the mid-1970s. This is discussed further at the end of the flotation section.

Re-employment Listings
The re-employment program is a FREE service offered by ESWP on an ongoing basis to all unemployed members and Affiliated Technical Societies members. These individuals are eligible to submit a resume and have a one paragraph summary of their qualifications published in the e-TC, the online TechniCalendar — ESWP’s monthly newsletter and calendar, and in the Pittsburgh ENGINEER, ESWP’s quarterly publication. Potential employers contact ESWP to receive candidates’ full resume. Anyone who meets the above qualifications and would like more information should contact ESWP at 412-261-0710 or eswp@eswp.com. If your business is interested in any of the following candidates, please contact the ESWP at 412261-0710 or eswp@eswp.com. #142 — Seeking a position in construction management in operations, business development or management. Experience: construction management, business development, construction inspection, material sampling/testing. Skills: strong computer skills including proficiency in Word, Excel and other specialty applications; excellent written and verbal communication skills. Degree: BS-Env.Sci, BS-Civil Eng., MS-Civil Eng. #144 — Seeking a program/ project management position to utilize 17 years of experience in a dozen different industries, domestic/international, commercial/government projects, including P/L responsibility, all phases of project life-cycle, risk management, salvaging damaged projects, and optimizing performance of operations, processes and teams. Degrees: MS, PhD, PMP. #146 — Seeking position as chemical process engineer. Hard working, tenacious and experienced chemical process engineer; for the past 10 years, the only engineer in a chemical plant with 80 employees, five batch reactors and two Fisher-Provox DCS systems. Experience is broad and includes: process improvement, process trouble-shooting, process control, training, regulatory management, and more. Degrees: MS, BS Chemical Engineering. #148 — Results-driven manager with expertise in project management, production planning, process improvement, and operations management. Expert at turning around troubled projects. Skilled in translating between business needs and technology requirements. Excellent mentor and manager. #149 — Customer focused IT Manager with experience in network implementation and support, application, user and desktop support. Skilled at vendor management and purchasing. Experienced in NetWare, Windows and Linux. Implemented variety of systems including Citrix WinFrame, Opentext Document Management and Lotus Notes.

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Technology Development and Competitive Advantage: Sustainable or Short Term? Continued worldwide (which was dominated by the US and Chile) came from flotation plants at that time. It is notable that the concentrator operating costs for flotation were about the same as those for the traditional gravity concentration process. However, on average, flotation technology increased copper recovery by about 15%, increasing the divisor by an equivalent amount for the purposes of production cost calculation. This was a huge step change in copper production technology. Who benefited from the development of flotation? 1) The owners of Mineral Separation Company made a significant amount of money off licensing flotation technology until their patents expired in 1907. The company was liquidated at that time. 2) The first commercial users of the technology and the fast followers gained a significant and sustained production cost benefit. In addition, the reserves of many mines were increased as a result of lowering the cutoff grade of ore processed by up to 20%. This in turn allowed expansions to occur. It is possible that the widespread commercial application of flotation contributed to the dramatic copper price decline experienced in 1930 – 1932. However, undoubtedly this dramatic price decline was heavily influenced by the Great Depression in the US, which greatly reduced copper demand for an extended period. It is interesting to note that this was immediately followed by an extended period of generally increasing price from 1933 – 1973, with some relatively minor dips. It is impossible to determine the exact impact of flotation on copper price. What is clear is that the most progressive, adaptive and innovative copper producers were able to achieve 10 –15 years of competitive advantage from the rapid, broad and large-scale adoption of flotation at their operations. The slow adopters and “laggers “ eventually followed or disappeared. By the 1970s, over 90% of primary copper (excluding scrap) was produced by flotation. Flotation has

Figure 2 Annual copper production by leaching/SX/EW and flotation/smelting/refining from 1980 to 2000

Flotation Bulk-oil flotation was patented by Mr. Francis Elmore in 1898 and was first applied commercially on a small scale at the Glasdir mine in Wales in 1899. It was described as a “dirty and nasty process “ that cannot have presented much appeal to the owners and operators of the mining and smelting operations of the day. Mr. Elmore further developed this technology into a vacuum-oil flotation process in 1927, and several others developed and patented flotation processes between 1902 and 1907. The Minerals Separation Company was established in 1903 specifically to purchase and exploit the flotation patent that incorporated the use of air, water-soluble oil and dramatically reduced the amount of oil required (below 1%). The early days of flotation, between 1907 and 1923, are marked by extensive legal wrangling and litigation between many of the major copper producers of the day, Minerals Separation Company and others involved with the development and commercialization of flotation technology? This makes for highly entertaining nighttime reading.(3,4) A number of copper producers tested and used flotation on a small scale. The Central Mill of Broken Hill in Australia is generally recognized as the first commercial application of the flotation process as we know if today, where the process was used to recover zinc. A large number of companies around

the world tested the process between 1907 and 1915. In 1907. The Butte and Superior Copper Co. installed a 150-tpd flotation mill for zinc recovery and, because they ignored the Minerals Separation Patent, provoked the first lawsuit. In 1912, Inspiration Copper started testing the response of chalcocite ore to flotation and achieved 87% recovery from 2% copper ore into a concentrate containing 15% copper. The concept was to use flotation in place of traditional gravity concentration. Inspiration built a 50-tpd pilot plant in 1913 and a 600-tpd facility in 1914. Inspiration subsequently agreed to license the flotation process from Minerals Separation Company in 1915, and a 15,000 ton-per-day mill was commissioned in 1915. This plant achieved about 80% copper recovery, with approximately 72% obtained by flotation and 8% by gravity concentration. At the time. This was the second largest concentrator in the world, superceded only by Utah Copper’s gravity-based concentrator (25,000 tpd). Several copper companies tested and licensed the flotation process from Minerals Separation Company, including Anaconda, Miami and Utah Copper. Chino had a 15,000 ton-per-day concentrator that utilized flotation in operation in 1915. In the case of Utah Copper, flotation was first employed at Garfield in about 1918 at a modest scale, and then subsequent expansions and remodeling resulted in the eventual

total conversion to flotation by about 1930. During this period, copper recovery increased from 64% prior to 1917, to over 80% by 1919, and then to 90% by 1930. The importance of these initial large-scale commercial applications cannot be overstated. Firstly, flotation provided a step change in concentrator efficiency and performance by increasing the recovery from typical chalcopyrite and chalcocite ores from typically 64% – 66% by gravity concentration to between 64% - 66% by flotation. Secondly, the widespread commercialization of flotation occurred in parallel with the broad application of open pit bulk mining methods in the copper industry. These two technology developments were intimately linked. Referring to the commercialization of the flotation process, Hines (4) makes the statement “the total effect on the thinking of the mining industry was enormous even if the industry was slow in accepting all the new ideas.” In this statement, he was apparently referring to the slow rate of adoption of flotation technology by the industry. But how slow really was this rate? The first large commercial facility was commissioned in 1947. By 1928, there were large flotation mills at Utah, Chino, Miami, Inspiration, Braden, Chuquicamata, and many other copper mines. By 1930, over 50% of US copper production was generated by flotation. It is estimated that over 65% of copper production

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maintained its position as the dominant technology for processing of chalcopyrite and chalcocite ores from 1930 to the present day, although heap leaching is playing an increasing role in the processing of chalcocite ores. Solvent Extraction and Electrowinning The third and final example of technology development in the copper industry is the commercialization of solvent extraction (SX )and electrowinning (EW). Liquid ion exchange technology, or “SX “ as it is now called, was first used commercially at the Ranchers’ Bluebird mine, near Miami, Arizona, in 1968 (5) SX/EW technology replaced the preexisting iron cementation process for the recovery of copper from low-grade copper solution obtained from leaching of oxide ore. Nine million pounds of copper were produced by the new process during its first full year of operation. In 1971, Bagdad installed an SX/EW facility to recover copper from stockpile leach solution. A tailings leach operation was commissioned at the Nchanga division of Zambia Consolidated Copper Mines (ZCCM) in 1974, utilizing SX/EW technology for copper recovery. Additional commercial-scale plants were then installed at Miami-BHP (1976), Miami-Inspiration (1979), Cananea (1980), Pinto Valley (1981), Tyrone (1984), Ray (1985), Gibraltar (1986), Morenci (1987), Sierrita (1987), Chuquicamata (1987), and Chino (1988). Widespread adoption in Chile did not occur until the mid-1990s with applications at Zaldivar, El Abra, Mantos Blancos, Quebrada Blanca and many others. The major advantages for most of these operations were 1) the replacement of costly and labor-intensive iron cementation process that generated a precipitate for further processing by smelting, and 2) the ability to expand heap and stockpile leaching operations significantly by the use of larger volumes of leach solution as a result

Figure 3 Estimated copper production cost curves for 1992, 1996 and 2000

of the ability to efficiently process large volumes of low-grade copper solution by SX. This provided a low-cost supplement of copper production to the core flotation concentrator facilities in many cases. The Miami-Inspiration concentrator shut down in 1986 and the Tyrone concentrator shut down in 1992, resulting in both of these operations evolving into an all-SX/ EW production base. These events were major milestones that allowed copper companies to consider stand-alone leaching and SX/EW operations to be developed, providing a lower cost process for extracting copper from chalcocite and oxide ores. While many factors affect the production cost calculation and comparison between leaching/SX/ EW and flotation/smelting/refining processes for chalcocite ores, it is apparent that the former process route initially presented a 15% – 25% cost advantage. Once again, this was not intuitively obvious at the time and it took a number of years for this concept to germinate into a commercially applicable technology. In the 1990s many stand-alone chalcocite and oxide ore leaching/SX/EW operations were developed and successfully placed into production. How did the advent of SX/EW technology affect copper market fundamentals? Figure 2 shows the production of copper by leaching/ SX/EW and flotation/smelting/re-

fining from 1980 to 2000. SX/EW accounted for about 3% of total primary copper production in 1980, increasing to about 8% by 1927, and to just over 18% by 2000. Similarly to flotation, it is difficult if not impossible to directly link the commercialization of SX/EW technology with a period of copper price decrease. The most likely period of impact is the period 1994 – 2000 when the proportion of copper produced by SX/EW more than doubled. It can be seen that the copper price decreased significantly during the period 1995 – 2001; however, other market forces played a significant role during that period and it is unlikely that technology played a dominant role. The next decade of the copper cycle will reveal more on the impact of SX/ EW technology. Based on remaining copper reserves by ore type, it is projected that leaching/SX/EW will account for about 21% of total production by 2010. This assumes that there is no technology breakthrough for the atmospheric leaching of low-grade chalcopyrite ores and excludes any impact of leaching processes to treat concentrates as an alternative to smelting and refining. Other Technology Developments There have been many other technology developments that are not discussed here. Some of the other significant developments in-

clude the reverberatory furnace, tube and ball milling, flash smelting, autogenous and semiautogenous milling, in-pit crushing and conveying, computer control of processing and mining operations, and use of increasingly large-scale mining equipment. (7) There have been many other incremental improvements, changes and innovations that have helped shape the copper industry over time. Many of these have provided sustainable competitive advantage to the users of the technology. Impact of Technology Developments on Production Costs Figure 3 shows the full production cost curve for primary copper production (excluding scrap) for 1992, 1996 and 2000. The full cost includes cash production cost plus depreciation and amortization. The graph shows that as production volume increased over time from 1992 to 2000, the cost curve flattened and the average production cost decreased from $0.74/lb to $0.61/lb. A significant portion of this decrease was due to low cost, new production coming on line, but a portion was due to technology developments. However, an important point to make from this graph is that relatively modest decreases in production cost can have a huge impact on competitiveness between mines and companies. For example, a 15% decrease in production cost, say from

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Technology Development and Competitive Advantage: Sustainable or Short Term? Continued
$0.70/lb to $0.60/lb, moves a producer from the bottom of the fourth quartile to the top of the second quartile on the cost curve. The producers who adopted open pit mining, flotation and SX/EW technology reaped the benefit of similar order-of-magnitude changes in their cost profile and changed the fate of their companies forever. Sustainable competitive advantage indeed. ward pressure on metal prices. However, other market forces including reserve and resource availability and quality, mine investment decisions, commodity metal demand, economic conditions and trends, and other factors have dominating effects on the long-term commodity metal markets. In the case of the three examples used in the copper industry case study, much of the industry was slow to adopt new technology, even after its effective use had been clearly (and publicly) demonstrated. Step change technology developments allow the innovative and progressive producers to achieve a sustained advantage over a significant proportion of their competitors for periods of 10 –15 years, and in some cases even longer. While the use of patenting and the confidential retention of proprietary know-how, trade secrets and expertise can be effective in providing short-to medium-term competitive advantage, it is probably other factors such as the speed of adoption, the effectiveness of implementation, and the scale of application of new technology that provides the biggest competitive advantage. The ability to apply technology more widely throughout an organization than a competitor is an advantage that in many cases cannot be duplicated due to geographical and geologic (resource) factors. In conclusion, this author believes that a strategically-driven and sharply focused technology development effort, along with an effective implementation program that actively manages risk, is a requirement for every thriving, sustainable mining company.

Summary and Conclusions
Competitive technology developments have reduced the production costs for all commodity metals over time, either through significant step changes, such as those discussed in detail above, or by incremental change. In the case of copper, there is some evidence that major step change technology developments have contributed to an increased availability of commodity metals, resulting in down-

References

1. Parsons, A. B. 1933. The Porphyry Coppers. New York: AIME. 2. Parsons, A. B. 1957. The Porphyry Coppers in 1956. AIME. First ed. 3. Rickard, T. A. 1916. The Flotation Process. San Francisco: Mining & Scientific Press. 4. Hines, P. R., and J. D. Vincent. 1962. The early days of froth flotation. In Froth Flotation — 50th Anniversary Volume. Edited by D. W. Fuerstenau. New York: AIME. 5. Power, K. L. 1970. Operation of the first commercial copper liquid ion exchange and electrowinning plant. In Copper Metallurgy. Edited by R. P. Ehrlich. New York: AIME. 1 – 26. 6. McMahon, A. D. 1965. Copper — A Materials Survey. IC 8225. US Bureau of Mines. US Department of the Interior. 7. Anon. Copper — Technology & Competitiveness. 1988. Office of Technology Assessment, Congress of the United States.

AACEI Association for the Advancement of Cost Engineering International, Ken Ross, 412/ 563-2111 ACHMM Academy of Certified Hazardous Materials Managers, John Quinlisk, 412/264-8701 ext. 113 ACI American Concrete Institute, Beth Rader, 724/452-1468 AFE Association for Facilities Engineers (formerly AIPE), Steve Campbell, 412/257-2111 x632 AIChE American Institute of Chemical Engineers, JoAnn Truchan, 412/578-7981 AIME/SME American Institute of Mining Metallurgy, & Petroleum Engineers / Society of Mining, Dr. Jurgen Brune, 412/831-4437 AIST Association for Iron and Steel Technology, Main Office, 724/776-6040

ASCE American Society of Civil Engineers, Patrick Kane, PE, 412/ 262-5400 ASHRAE American Society of Heating, Refrigeration & Air Conditioning Engineers, Christopher Larry, 412/257-2111 ext. 626 ASM American Society for Materials, Riad Asfahani, 412825-2081 ASME American Society for Mechanical Engineers, Doug Koebler, 412/826-5205 x5204 ASPE American Society for Professional Estimators, Mary Crawford, 412/823-0400 ASQ American Society for Quality, Sailesh Kapadia, 724/ 935-7507 AWMA Air & Waste Management Association, Robert Volkmar, 412/396-4094

CSI Construction Specifications Institute, Scott Keener, 412/2433430 IEEE Institute of Electrical & Electronics Engineers, Harry Hagerty, 412/487-8235 IIE Institute of Industrial Engineers, Jeffrey Arnold, 412/ 921-2400 Ext. 245 ISA Instrument Society of America, Mariruth Cotter, 412/ 371-9161 NACE National Association of Corrosion Engineers, William Widmer, 724/428-3503 PMI Project Management Institute, Ed Rosenstein, 412/3377737 PSPE Pennsylvania Society of Professional Engineers, Main Office, 412/391-0615

SACP Society for Analytical Chemists of Pittsburgh, Gerry Churley, 412/825-3220 ext. 204 SAE Society of Automotive Engineers, National Office, 724/ 776-4841 SAME Society of American Military Engineers, Darlene Muntean, 412-254-4400 x211 SFPE Society of Fire Protection Engineers, Harold Hicks, 724/ 327-6715 SPE Society of Plastics Engineers, Matthew Nagy, 412/777-4910 SSP Spectroscopy Society of Pittsburgh, Gerry Churley, 412/ 825-3220, x204 SWE Society of Women Engineers, Alka Patel, 412/227-3089 TS-CUC Tri-State Construction Users, Ann Billak, 412/922-3914

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Fall 2004…...

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...Essay by Mashell Chapeyama University of the People Competitive advantages of Chipinge Banana Company A competitive advantage refers to any asset or capabilities that a company has that gives value to it or its products and services, which competitors do not have. Competitive advantage creates cost leadership to a firm or enables the firm to produce differentiated products. An example of a competitive advantage is being able to sell the products at low price but still be able to get some profits. This essay explores the competitive advantages which Chipinge Banana Company has. Chipinge Banana Company is a company that is found in Zimbabwe. The company produces bananas only. The bananas are sold to customers in the country and abroad. This company is located in the region where there is abundance of rainfall as well as good soils. One competitive advantage of Chipinge Banana Company is the natural resources it has. Firstly, the company is located in a region with a lot of rainfall. This enables the storage of water in some dams. Most parts of Zimbabwe have got very low rainfall. The land there is also very flat, unlike most parts of the country, where there is ample rainfall, which are mountainous. The flat terrain makes it possible for the use of modern technology in banana farming. At this company, there is usage of overhead cable tractors. This makes it easier and cheaper to harvest bananas. Therefore, the cost of production of bananas is very low, as compared to......

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Competitive Advantage

...Chapter 4 Building Competitive Advantage Page 57 4 Building Competitive Advantage Enterprise in Ireland over the next decade will operate in a global competitive environment that will be considerably more challenging than in the past. The strengths and experience that we have built up will continue to contribute to the success of enterprise, but companies in Ireland will have to differentiate themselves from their competitors in new ways in order to create sustainable competitive advantage. In the past, Ireland has set a standard for change and growth that is admired around the world and we can continue to do so. The biggest barrier to this is complacency: there is a real danger that enterprise in Ireland will be overtaken by more agile competitors in other countries. Overcoming this complacency and taking decisive action requires a renewed sense of national cohesion, with a commitment to execution throughout the entire enterprise community and the support systems. As outlined in Chapter 3, in the years ahead, our ability to build sustainable enterprise in Ireland will depend critically on a unique combination of: Knowledge of customers and market needs The ability to develop new products and services to satisfy those needs A world-class education and training system that is responsive and flexible and that supplies the skills required by the changing needs of enterprise A competitive taxation regime An effective, agile government system. The first two of......

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Competitive Advantages

...Competitive Advantages in Today’s Global Climate Ovelinda Garcia, Justin Hightower, Shyann Fontenot, Alex Jacobs MGT/498 July 14, 2013 Perry Martin Competitive Advantages In Today’s Global Climate Organizational sustainability and viability occur when a business strives to set itself apart from its competitors. Organizations that seek to become and maintain themselves as industries leaders typically thrive in the global marketplace. Industry dominance is dependent upon the development and implementation of corporate strategies. Organizations that continuously seek to examine their portfolios, improve operational activities, conduct research and development, and implement their strategic planning and strategies are innovated and profitable; both key characteristics in maintaining the competitive advantage within the global marketplace. Leading organizations analyze and predict the changing environment and situations in which they operate in and perform with the objective to maintain competitive advantage and sustainability. Riordan Manufacturing is poised to capitalize on establishing the organization as an industry leader in using polymer materials and providing solutions to its customer base. The global plastics manufacturing giant’s rigorous focus on R&D sets the company advantageously as a leader in identifying trends. Although the company’s initial focus was on...

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Competitive Advantage

...CONCEPT OF COMPETITIVE ADVANTAGE IS CENTRAL TO THE STUDY OF STRATEGIC MANAGEMENT, AND EXAMINE THE USE OF PORTER’S GENERIC STRATEGEIS BY COMPANIES TO COMPETE. KEY TERMS Competitive advantage. This is the favourable position an organization seeks in order to be more profitable than its competitors. Strategic management. It is the systematic analysis of the factors associated with customers and competitors (the external environment) and the organization itself (the internal environment) to provide the basis for maintaining optimum management practices. The objective of strategic management is to achieve better alignment of corporate policies and strategic priorities. Porter’s generic strategies. These are three general types of strategies developed by Michael Porter that are commonly used by businesses to achieve and maintain competitive advantage. Company. It is a voluntary association formed and organized to carry on a business. Types of companies include sole proprietorship, partnership, limited liability, corporation, and public limited company. INTRODUCTION The concept of competitive advantage is central to the study of strategic management, since a company or an organization must follow an aligned strategy to outperform their rivals in the industry. Michael Porter introduces three generic strategies that a firm may apply in order to do so they include; overall cost leadership, Differentiation and Focus. In order to create and sustain competitive advantage,......

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Competitive Advantages

... Competitive Advantages Paper Christopher Crehan, Sarah Franzen, Nicole Hadad, Kimberly Scott, and Leeza Steindorf MGT/ 498 April 26, 2014 Cheryl Boehm Competitive Advantages Paper Among large corporations there are many similar competitive advantages and they often share the same thought process on which competitive strategies will best result in long-term organizational performance. With that being said, this paper will discuss Riordan’s competitive advantages in association to some other major corporations, the competitive strategies that may help to increase the innovation and sustainability of their operations, how these strategies will affect the long-term performance of the business, and what global consideration should be taken into account for their business strategy. Coca Cola, Starbucks and Riordian have a number of competitive advantages in common, with the most significant as market leaders, having a strong brand, having a focus on corporate climate, and focusing on a product or product group. Other areas of strengths are being leaders in their field: Coca Cola as a giant in the beverage industry, Starbucks masters the art of producing, brewing, and serving high quality coffee in an upscale environment, and Riordian dominates in the plastics industry by using plastic injection molding for their containers, producing medical equipment parts, and the various fans and parts they produce. Another competitive advantage that these companies possess is......

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Competitive Advantages

...Competitive Advantages Trisha Sadler, Darryl Warren, Josephine Ives, Rebecca Smith, Beth Sexton MGT/498 May 19, 2014 Rolando Espiritu Competitive Advantages Competitive Advantages - Riordan Riordan is a plastic manufacturing company, which was started in 1991 (University of Phoenix [UOP], 2013). The company has locations in California, Michigan, Georgia, and China. The company’s business units are plastic parts manufacturing, plastic beverage containers, and the plastic fan facility. Riordan’s customers consist of beverage makers, medical supply firms, electronic supply firms, and pharmaceutical companies (UOP, 2013). A competitive advantage allows companies to increase sales, resources, and market share. Team B’s analysis will provide insight on Riordan’s competitive advantages by identifying competitive strategies, competitive sustainability, and the effect of the global market changes to the company’s business strategy. Riordan’s Competitive Advantages Every organization must establish some type of competitive advantage. The recent research of FedEx, Southwest, and McCain Foods’ competitive advantages assists in identifying Riordan’s competitive advantage. The first step in competitive advantage is creating a mission statement and developing a strategic plan. Firms that operate with a strategic plan develop focus and alignment. Introducing unique products or services leads to the establishment of a competitive advantage. In the case of FedEx, the core service...

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...this course as well as learning objectives I did not meet. Integrate Porter's Five-Forces Model into developing a solid global strategy. Porter’s five forces model of competitive analysis allows business managers to better understand where they are strong and how they can improve weaknesses before changing market positions. The model can also be a useful tool for firms moving to compete internationally because it provides a uniform framework for evaluating the competitive landscape. Porter’s model does have limitations that business managers should regard carefully. The five forces model is intended more for line of business rather than industry or segment application. The model also does not readily account for strategic alliances or the unique capabilities some firm’s resources may bring to the marketplace. Last, the model has been somewhat outdated by the rapid advances in technology and the effect of globalization on market economies. Assess and integrate business functions and processes in an organization. In summary, it is important to consider benchmarking and best practices in order to determine the most cost effective and efficient means to operate in a country. Benchmarking and the adaptation of best practices provide a means of continuous quality improvement which fortifies competitive advantage particularly in foreign markets. If regional traditional partners do not satisfy the firm’s quality standards, even after being encouraged to do so by local......

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Competitive Advantage

...Competitive Advantage Marina Castaneda, Lynn Clark, Tyler Anderson, & Linda Young MGT 498 Paul Kramer Competitive advantage in business is something all organizations use as a concept to allow an organization to outperform its competitors. For an organization, there can be many types of competitive advantages. This includes cost structure, product offerings, distribution network, and customer support. We will compare different companies to Riordan Manufacturing and explain which competitive advantages they might have in common and also what competitive advantages Riordan can use to improve innovation and sustainability of business operations in the United States and in the Global Market. Riordans Competitive Strategies Riordan use similar tracking systems as the other companies that were evaluated in week three. They track their sales as do the other companies. They also track trends and utilize customer feedback and information in order to strategically plan for emerging trends in the market. These strategies have allowed them to meet customer demands and the strategies used to do this are similar to Apple, Google, McDonalds, and Starbucks. The information and technology used by these companies have allowed for them to better plan and have allowed for better marketing to customers. Market research is another strategy that is used in determining. These companies have all used market research and a trend to ensure that they are offering......

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Competitive Advantage

...WEMC FS#5-08 Strategies for Competitive Advantage Cole Ehmke, M.S. Extension Educator, Department of Agricultural and Applied Economics University of Wyoming Overview A competitive advantage is an advantage gained over competitors by offering customers greater value, either through lower prices or by providing additional benefits and service that justify similar, or possibly higher, prices. For growers and producers involved in niche marketing, finding and nurturing a competitive advantage can mean increased profit and a venture that is sustainable and successful over the long term. This fact sheet looks at what defines competitive advantage and discusses strategies to consider when building a competitive advantage, as well as ways to assess the competitive advantage of a venture. The Essence of Competitive Advantage To begin, it may be helpful to take a more in-depth look at what it means to have a competitive advantage: an edge over the competition. Essentially a competitive advantage answers the question, “Why should the customer purchase from this operation rather than the competition?” For some ventures, particularly those in markets where the products or services are less differentiated, answering this question can be difficult. A key point to understand is that a venture that has customers has customers for a reason. Successfully growing a business is often dependent upon a strong competitive edge that gradually builds a core of loyal customers, which can be expanded...

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Competitive Advantage

...Competitive Advantage Introduction Why do you buy a cup of coffee in Starbucks? Why will you choose KFC for your lunch rather than other brands? The answer lies on the term competitive advantage. It becomes the main reason to build brand loyalty for customers. (Boundless 2015) Nowadays, most firms both in local and global markets all face a challenge for a marketing strategy is to find a way of achieving and sustain a competitive advantage compared with the other products and companies. The basic condition of competition has changed a lot and the speed of this tendency is increasing. And with the change of competitive environment, traditional competitive such as economical scale or advertisement expenditure cannot be such effectively as past time. What’s more, traditional management ideas are unlikely to lead a firm competing with other companies. Therefore, managers need to build a new managerial mind-set about competitive advantage. (Barney&Mackey 2005) This article will introduce the definition of competitive advantage in a market and emphasis the importance of it. It will also be presented two main strategies including cost strategy and differential strategy. And then some issues will be stated that organizations facing in trying to gain and maintain competitive advantage. Then it gives some reasons that why competitive advantage is still a significative concept at present. Body Definition of Competitive Advantage A competitive advantage means one firm has...

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Question 2: the Reason Sinosteel Pursue the Development of an Erp System Is Because Information Technology Is One of the Main Competitive Advantages in the 21st Century

...common central database, meaning the internal management can be improved and optimized, by consolidating the information sharing: - Through the Supply Chain Management (SCM), a better and optimized management of resources (and so cost decrease) - Through the Customer Relationship Management, a higher customer satisfaction. 2) Why did Sinosteel pursue the development of an ERP system? What were the objectives? What challenges (risks) does ERP address for Sinosteel? The main goal was to consolidate the management existing in a decentralized corporate structure, and optimize the management processing in all core business functions. An ERP system improves the information sharing, so the management efficiency. The President lists several objectives that can be reached thanks to an ERP system: - Checking inventory levels at any time, and optimizing resources assignments. - Optimizing human resources management - Preventing from all kinds of potential information risks Question 2: The reason Sinosteel pursue the development of an ERP system is because information technology is one of the main competitive advantages in the 21st century. A worldwide enterprise like Sinosteel must strengthen itself in this aspect for managing subsidiary enterprises abroad, having the information in time and executing the decision in distance. By using ERP system, the company can collect data and then use them from all the department of the enterprise regardless of time or place limit,......

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...It is no surprise that today in most companies be it diminutive or immense, competitive advantage runs through their daily operations. Simply by wanting to achieve higher profit than the average competitor in the product market (Porter,1980).Companies seek to use their understanding to outline their market offers to deliver more value to the customers. They do so by applying competitive strategy; which according to Porter (1980) is the search to find a favorable competitive position in an industry. It aims is to establish profitable and sustainable position against the forces that determine industry competition. Therefore competitive strategy is about beating the competition. To achieve such goals Michael Porter and other advocates such as Mintzberg, McGee and Bowman suggested few market positioning approaches and models. The three main approaches are Porter Generic Competitive Strategies, Mintzberg market positioning and customer matrix. To add up, models such as product life cycle, Porter Five forces model, Strategic Grouping and Scenario planning also help to formulate the competitive strategy of a business. Porters Five forces model is the key influence to other models. This model determines industry profitability because it influences the price, cost and return on investment. Porter believes that the five forces is more than just competing with direct competitors but also fighting for profits. In any industry no matter what it produces whether product or service of......

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Competitive Advantage

...Cost advantage/ Competing in distinctive way “If a company cannot be more operationally effective than its rivals, the only way to generate higher level of economic value is to gain a cost advantage or price premium by competing in a distinctive way”. Does this apply to the digital economy? Assess critically. It has been claimed that “value can be created with Internet communication either through finding ways of reducing costs or, on the demand side, by improving the match between buyer preferences and the goods they purchase”. Do you agree? “Internet technologies tend to reduce variable costs and tilt cost structure towards fixed cost, creating significant greater pressure for companies to engage in destructive price competition.” Do you agree? INTRODUCTION o It is argued that “If a company cannot be more operationally effective than its rivals, the only way to generate higher level of economic value is to gain a cost advantage or price premium by competing in a distinctive way”. o I will first give a definition of the digital economy and what is economic value. o This is followed by a briefly discussion on operational effectiveness. o I will then talk about the importance as well as limitation about cost advantage and price premium strategies. o The last part of the essay will look at other strategies and other elements besides cost advantage and price premium a firm can consider gaining competitive advantage. MAIN......

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