Archive for the ‘minerals and mining’ Category

DOD OIG — Procedures to Ensure Sufficient Rare Earth Elements for the Defense Industrial Base Need Improvement

July 10, 2014 Comments off

Procedures to Ensure Sufficient Rare Earth Elements for the Defense Industrial Base Need Improvement
Source: U.S. Department of Defense, Office of Inspector General

We determined whether DoD effectively planned for life-cycle sustainment of rare earth elements (REE) for the defense industrial base (DIB). Specifically, we determined whether DoD effectively implemented procedures to maintain a sufficient and available supply of REEs for the DIB.

DoD lacked a comprehensive and reliable process to assess REE supply and demand. Specifically, Defense Logistics Agency, Strategic Materials Division officials did not ensure that its modeling and simulation contractor used: REE supply forecasts that considered market and environmental risks; complete REE demand survey results; and verified economic consumption data to forecast REE demand.

This occurred because the Defense Logistics Agency, Strategic Materials Division did not have adequate verification and validation procedures in place to ensure realistic supply and demand inputs and did not require that the contractor use an accredited model to forecast REE supply and demand.

As a result, DoD may not have identified all REEs with expected shortfalls, increasing the risk that those shortfalls will adversely affect critical weapons systems production in the DIB, and overall DoD readiness.

We recommend that the Director, Defense Logistics Agency–Strategic Materials Division:

  • develop and implement a verification and validation plan for REE supply and demand forecasting model inputs;
  • develop and implement procedures to ensure that future shortfall analyses compare DoD demand and supply for REEs under the same scenarios;
  • develop and implement procedures for obtaining DoD REE consumption data by leveraging Service acquisition executive participation and other techniques as appropriate;
  • develop and implement an accreditation plan for theforecasting model’s intended use; and
  • ensure that current and future contracts for models, simulations and associated data include verification, validation and accreditation procedures in the contract requirements.

Management Comments and Our Response

The Director, Defense Logistics Agency, Acquisition Directorate generally addressed the recommendations; however, comments on Recommendation 2 partially addressed the recommendation. Therefore, we are requesting additional comments on Recommendation 2 by August 4, 2014.

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USGS — Global Platinum-Group Resources Estimated at More than 150K Metric Tons

May 19, 2014 Comments off

Global Platinum-Group Resources Estimated at More than 150K Metric Tons
Source: U.S. Geological Survey

The first-ever inventory and geological assessment of known and undiscovered platinum-group element (PGE) resources estimates that more than 150,000 metric tons of PGEs may exist in the two southern African countries that produce most of the global supply of these critical elements.

The USGS study identifies 78K metric tons of known PGE resources in South Africa and Zimbabwe and estimates 75K metric tons in PGE resources that may be present, but are undiscovered. This is more than 20 times the total tonnage produced since the 1920s when PGE mining began in these countries.

The U.S. is 90 percent reliant on imports of PGEs which are essential for cleaning automobile exhaust, for manufacturing glass, fertilizer, high-octane fuel, and a variety of chemicals, including cancer fighting drugs. They are widely used in jewelry and electronics such as hard drives, circuitry, and cell phones. PGEs could play a crucial role in fuel cell technology to produce clean energy for cars, homes, and businesses.

CRS — Changes in the Arctic: Background and Issues for Congress (updated)

May 8, 2014 Comments off

Changes in the Arctic: Background and Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The diminishment of Arctic sea ice has led to increased human activities in the Arctic, and has heightened interest in, and concerns about, the region’s future. The United States, by virtue of Alaska, is an Arctic country and has substantial interests in the region. On May 10, 2013, the Obama Administration released a national strategy document for the Arctic region. On January 30, 2014, the Obama Administration released an implementation plan for this strategy.

Record low extents of Arctic sea ice over the past decade have focused scientific and policy attention on links to global climate change and projected ice-free seasons in the Arctic within decades. These changes have potential consequences for weather in the United States, access to mineral and biological resources in the Arctic, the economies and cultures of peoples in the region, and national security.

New From the GAO

April 9, 2014 Comments off

New GAO Reports and Testimonies
Source: Government Accountability Office


1. Defense Infrastructure: In-Kind Projects Initiated during Fiscal Years 2011 and 2012. GAO-14-280R, April 9.

2. Mine Safety: Basis for Proposed Exposure Limit on Respirable Coal Mine Dust and Possible Approaches for Lowering Dust Levels. GAO-14-345, April 9.
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1. Health Care Workforce: Federal Investments in Training and the Availability of Data for Workforce Projections, by Linda T. Kohn, director, health care, before the Subcommittee on Primary Health and Aging, Senate Committee on Health, Education, Labor, and Pensions. GAO-14-510T, April 9.
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2. VA Health Care: Ongoing and Past Work Identified Access Problems That May Delay Needed Medical Care for Veterans, by Debra A. Draper, director, health care, before the House Committee on Veterans’ Affairs. GAO-14-509T, April 9.
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3. Social Security Disability Programs: SSA Could Take Steps to Improve Its Assessment of Continued Eligibility, by Daniel Bertoni, director, education, workforce, and income security, before the Subcommittee on Energy Policy, Health Care, and Entitlements, House Committee on Oversight and Government Reform. GAO-14-492T, April 9.
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Mining, Quarrying, Oil and Gas Extraction Booming, According to First Results from the Census Bureau’s 2012 Economic Census

March 27, 2014 Comments off

Mining, Quarrying, Oil and Gas Extraction Booming, According to First Results from the Census Bureau’s 2012 Economic Census
Source: U.S. Census Bureau

The mining, quarrying, and oil and gas extraction sector of the economy showed tremendous growth from 2007 to 2012 as the number of establishments rose by 26.4 percent, according to the 2012 Economic Census Advance Report released today by the U.S. Census Bureau.

First Look: 2012 Economic Census Advance Report Shows Changes

These results provide the first comprehensive look at the U.S. economy since the 2007 recession. The economic census is the most authoritative and comprehensive source of information about U.S. businesses from the national to the local level. It provides the foundation and benchmark for gross domestic product, monthly retail sales, as well as other indicators of economic performance.

“The economic census is one of the Commerce Department’s most valuable data resources,” U.S. Secretary of Commerce Penny Pritzker said. “By providing a close-up look at millions of U.S. companies in thousands of industries, the economic census is an important tool that informs policy at the local, state and national level, and helps businesses make critical decisions that drive economic growth and job creation. At the Department of Commerce, one of the top priorities of our ‘Open for Business Agenda’ is to make our data easier to access and understand so that it can continue enabling startups, moving markets, protecting life and property, and powering both small and large businesses across the country.”

Revenue for mining, quarrying, and oil and gas extraction grew 34.2 percent to $555.2 billion from 2007 to 2012. It also was among the fastest growers in employment as the number of employees rose 23.3 percent to 903,641.

Value of U.S. Mineral Production Decreased in 2013

March 20, 2014 Comments off

Value of U.S. Mineral Production Decreased in 2013
Source: U.S. Geological Survey

Last year, the estimated value of mineral production in the U.S. was $74.3 billion, a slight decrease from $75.8 billion in 2012. According to the U.S. Geological Survey’s annual Mineral Commodity Summaries 2014 report, the 2013 decrease follows three consecutive years of increases. Net U.S. exports of mineral raw materials and old scrap contributed an additional $15.8 billion to the U.S. economy.

“To put this in context, the $90.1 billion value of combined mined, exported, and recycled raw materials is more than five times greater than the 2013 combined net revenues of Internet titans: Amazon, Facebook, Google, and Yahoo. This illustrates the fundamental importance of mineral resources to the nation’s economy, technology, and national security,” said Larry Meinert, USGS Mineral Resources Program Coordinator.

Minerals remain fundamental to the U.S. economy, contributing to the real gross domestic product at several levels, including mining, processing, and manufacturing finished products. The U.S. continues to rely on foreign sources for raw and processed mineral materials.

This annual USGS report is the original source of mineral production data for the world. It includes statistics on about 90 mineral commodities essential to the U.S. economy and national security, and addresses events, trends, and issues in the domestic and international minerals industries.

Chinese Engagement in Africa: Drivers, Reactions, and Implications for U.S. Policy

March 17, 2014 Comments off

Chinese Engagement in Africa: Drivers, Reactions, and Implications for U.S. Policy
Source: RAND Corporation

Most analyses of Chinese engagement in Africa focus either on what China gets out of these partnerships or the impacts that China’s aid and investment have had on African countries. This analysis approaches Sino-African relations as a vibrant, two-way dynamic in which both sides adjust to policy initiatives and popular perceptions emanating from the other. The authors focus on (1) Chinese and African objectives in the political and economic spheres and how they work to achieve them, (2) African perceptions of Chinese engagement, (3) how China has adjusted its policies to accommodate often-hostile African responses, and (4) whether the United States and China are competing for influence, access, and resources in Africa and how they might cooperate in the region.

The authors find that Chinese engagement in the region is primarily concerned with natural resource extraction, infrastructure development, and manufacturing, in contrast to the United States’ focus on higher-technology trade and services as well as aid policies aimed at promoting democracy, good governance, and human development. African governments generally welcome engagement with China, as it brings them political legitimacy and contributes to their economic development. Some segments of African society criticize Chinese enterprises for their poor labor conditions, unsustainable environmental practices, and job displacement, but China has been modifying its approach to the continent to address these concerns. China and the United States are not strategic rivals in Africa, but greater American commercial engagement in African markets could generate competition that would both benefit African countries and advance U.S. interests.

Frequently Asked Questions — Responsible sourcing of minerals originating conflict-affected and high-risk areas: towards an integrated EU approach

March 13, 2014 Comments off

Responsible sourcing of minerals originating conflict-affected and high-risk areas: towards an integrated EU approach
Source: European Commission

Profits from the extraction of and trade in minerals sourced from unstable regions affected by armed conflict can play a role in intensifying and perpetuating violent conflict. This can take various forms including where armed groups or their affiliates illegally control mines and mineral trading routes, use forced labour or commit other human rights abuses, or tax or extort money or minerals.

As a result, armed groups and security forces in conflict regions can finance their activities from the proceeds of mining and trading of minerals which later enter the global supply chain. Companies further down the production chain run the risk of supporting armed activities and have an interest in sourcing from such regions responsibly.

The best documented and known case relates to the problems in the eastern Democratic Republic of Congo (DRC) where the United Nations frequently reports on the devastating instability created by foreign and national armed groups generating revenues through their control over natural resources. The Heidelberg Institute for International Research estimates that, together, natural resources and conflict account for roughly 20% of global conflicts.

Under the US Dodd-Frank Act, section 1502, ‘conflict minerals’ are defined as minerals containing tin, tantalum, tungsten and gold originating in the DRC and the adjoining countries. The Organisation for Economic Co-operation and Development’s (OECD) Due Diligence guidance is based on the same four minerals but is not geographically specific. The EU proposal uses the same basis as OECD.

New Maps of Afghanistan Provide “Fingerprint” of Natural Resources

March 11, 2014 Comments off

New Maps of Afghanistan Provide “Fingerprint” of Natural Resources
Source: U.S. Geological Survey

A coalition of scientists from the United States and Afghanistan today released high tech maps that will help Afghanistan chart a course for future economic development. These maps represent a milestone as Afghanistan is the first country to be almost completely mapped using hyperspectral imaging data.

The coalition of the U.S. Geological Survey, the Afghanistan Ministry of Mines and Petroleum, and the Task Force for Business and Stability Operations (TFBSO), was created by the U.S. Department of Defense, to share American international science and technology as a strategic tool for promoting economic development.

“Hyperspectral data from this research provides a fingerprint that identifies Afghanistan’s natural resources,” said Dr. Suzette Kimball, acting USGS director. “This detailed data serves as the backbone of crucial scientific information needed for economic development of natural resources as well as the potential to identify water, biological and natural hazard information.”

Hyperspectral imaging is an advanced imaging technique that measures visible and near-infrared light reflecting off the Earth’s surface. Researchers use hyperspectral imaging spectrometer data to identify and characterize mineral deposits, vegetation, and other land surface features.

Global Undiscovered Copper Resources Estimated at 3.5 Billion Metric Tons

March 7, 2014 Comments off

Global Undiscovered Copper Resources Estimated at 3.5 Billion Metric Tons
Source: U.S. Geological Survey

The first-ever, geologically-based global assessment of undiscovered copper resources estimates that 3.5 billion metric tons of copper may exist worldwide. The U.S. Geological Survey outlined 225 areas for undiscovered copper in 11 regions of the world. The amount of undiscovered global copper estimated by the USGS would be enough to satisfy current world demand for more than 150 years.

According to the assessment, South America is the dominant source for both identified and undiscovered copper resources. Particularly important, several regions of Asia including China have a large potential for undiscovered copper resources.

CRS — The Specialty Metal Clause: Oversight Issues and Options for Congress

February 11, 2014 Comments off

The Specialty Metal Clause: Oversight Issues and Options for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

This report examines the specialty metal clause, potential oversight issues, and options for Congress. The specialty metal clause in the Defense Federal Acquisition Regulation Supplement (DFARS) prohibits the Department of Defense (DOD) from acquiring end units or components for aircraft, missile and space systems, ships, tank and automotive items, weapon systems, or ammunition unless these items have been manufactured with specialty metals that have been melted or produced in the United States. Thousands of products used for defense, aerospace, automotive, and renewable energy technologies rely on specialty metals for which there are often few, if any, substitutes. Specialty metals covered by this provision include certain types of cobalt, nickel, steel, titanium and titanium alloys, zirconium, and zirconium base alloys.

Trends in metal prices for Olympic medals

February 10, 2014 Comments off

Trends in metal prices for Olympic medals
Source: Bureau of Labor Statistics

Reverse the curse: Maximizing the potential of resource-driven economies

January 3, 2014 Comments off

Reverse the curse: Maximizing the potential of resource-driven economies
Source: McKinsey & Company

Rising resource prices and expanded production have raised the number of countries where the resource sector represents a major share of the economy, from 58 in 1995 to 81 in 2011. That number will rise: to meet soaring demand for resources and replace rapidly depleting supply, the world should invest a total of up to $17 trillion in oil and gas and in minerals by 2030, double the historical rate. In 20 years, almost half of the world’s countries could depend on their resource endowments for growth.

Economies with natural-resource endowments have a huge opportunity to transform their prospects. But history suggests that they could all too easily squander the windfall.

CRS — Rare Earth Elements: The Global Supply Chain

January 2, 2014 Comments off

Rare Earth Elements: The Global Supply Chain (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The concentration of production of rare earth elements (REEs) outside the United States raises the important issue of supply vulnerability. REEs are used for new energy technologies and national security applications. Two key questions of interest to Congress are: (1) Is the United States vulnerable to supply disruptions of REEs? (2) Are these elements essential to U.S. national security and economic well-being?

CRS — Mountaintop Mining: Background on Current Controversies

December 27, 2013 Comments off

Mountaintop Mining: Background on Current Controversies (PDF)
Source: Congressional Research Service (via Open CRS)

Mountaintop removal mining involves removing the top of a mountain in order to recover the coal seams contained there. This practice occurs in six Appalachian states (Kentucky, West Virginia, Virginia, Tennessee, Pennsylvania, and Ohio). It creates an immense quantity of excess spoil (dirt and rock that previously composed the mountaintop), which is typically placed in valley fills on the sides of the former mountains, burying streams that flow through the valleys. Mountaintop mining is regulated under several laws, including the Clean Water Act (CWA) and the Surface Mining Control and Reclamation Act (SMCRA).

Critics say that, as a result of valley fills from mountaintop mining, stream water quality and the aquatic and wildlife habitat that streams support are destroyed by tons of rocks and dirt. The mining industry argues that mountaintop mining is essential to conducting surface coal mining in the Appalachian region and that it would not be economically feasible there if operators were barred from using valleys for the disposal of mining overburden. Critics have used litigation to challenge the practice. In a number of cases, environmental groups have been successful at the federal district court level in challenging permits for mountaintop mining projects, only to be later overturned on appeal. Nonetheless, the criticisms also have prompted some regulatory changes.

Increased Risk of Depression for People Living in Coal Mining Areas of Central Appalachia

October 10, 2013 Comments off

Increased Risk of Depression for People Living in Coal Mining Areas of Central Appalachia
Source: Ecopsychology

This study examines the relationship between depression symptoms and living in areas where mountaintop removal coal mining is practiced. Data were analyzed from a survey of 8,591 adults residing in Central Appalachian areas both with and without coal mining. The survey included a validated measure of depression severity. Results showed that diagnosable levels of major depression were present in almost 17% of respondents in mountaintop removal mining areas, compared to 10% of residents in non-mining areas. This disparity was partly attributable to socioeconomic disadvantage, but after statistical control for income, education, and other risks, depression risk for residents in the mountaintop removal area remained significantly elevated (odds ratio=1.40, 95% confidence interval 1.15–1.71). This study contributes to the empirical evidence in support of the concept of solastalgia and indicates that persons who experience environmental degradation from mountaintop removal coal mining are at elevated risk for depression.

CRS — Rare Earth Elements in National Defense: Background, Oversight Issues, and Options for Congress

September 23, 2013 Comments off

Rare Earth Elements in National Defense: Background, Oversight Issues, and Options for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Some Members of Congress have expressed concern over U.S. acquisition of rare earth materials composed of rare earth elements used in various components of defense weapon systems. Rare earth elements consist of 17 elements on the periodic table, including 15 elements beginning with atomic number 57 (lanthanum) and extending through number 71 (lutetium), as well as two other elements having similar properties (yttrium and scandium). These are referred to as “rare” because although relatively abundant in total quantity, they appear in low concentrations in the earth’s crust and extraction and processing is both difficult and costly.

From the 1960s to the 1980s, the United States was the leader in global rare earth production. Since then, production has shifted almost entirely to China, in part due to lower labor costs and lower environmental standards. Some estimates are that China now produces about 90- 95% of the world’s rare earth oxides and is the majority producer of the world’s two strongest magnets, samarium cobalt (SmCo) and neodymium iron boron (NeFeB) permanent, rare earth magnets. In the United States, Molycorp, a Mountain Pass, CA mining company, recently announced the purchase of Neo Material Technologies. Neo Material Technologies makes specialty materials from rare earths at factories based in China and Thailand. Molycorp also announced the start of its new heavy rare earth production facilities, Project Phoenix, which will process rare earth oxides from ore mined from the Mountain Pass facilities.

In 2010, a series of events and press reports highlighted what some referred to as the rare earth “crisis.” Some policymakers were concerned that China had cut its rare earth exports and appeared to be restricting the world’s access to rare earths, with a nearly total U.S. dependence on China for rare earth elements, including oxides, phosphors, metals, alloys, and magnets. Additionally, some policymakers had expressed grow ing concern that the United States had lost its domestic capacity to produce strategic and critical materials, and its implications for U.S. national security.

Pursuant to Section 843, the Ike Skelton National Defense Authorization Act for FY2011 (P.L. 111-383) and S.Rept. 111-201 (accompanying S. 3454), Congress had mandated that the Secretary of Defense conduct an assessment of rare earth supply chain issues and develop a plan to address any vulnerabilities. DOD was required to assess which rare earths met the following criteria: (1) the rare earth material was critical to the production, sustainment, or operation of significant U.S. military equipment; and (2) the rare earth material was subject to interruption of supply, based on actions or events outside the control of the U.S. government. The seven-page report was issued in March 2012.

On March 13, 2012, President Obama announced that the United States had joined with Japan and the European Union to bring a World Trade Organization (WTO) joint dispute resolution case against China because of China’s restrictive policies on rare earths and other minerals. The three parties later asked the WTO to set up a panel after direct talks with China failed to resolve the issue. The dispute resolution panel was set up and panelists were appointed. The WTO has announced its dispute resolution panel will release a ruling on a case in November 2013.

Given DOD’s assessment of the supply and demand for rare earths for defense purposes, coupled with the recent announcement of Molycorp’s proposed acquisition of Neo Material Technologies, Congress may choose to use its oversight role to seek more complete answers to the following important questions:

  • Given Molycorp’s purchase of Neo Material Technologies and the potential for the possible migration of domestic rare earth minerals to Molycorp’s processing facilities in China, how may this move affect the domestic supply of rare earth minerals for the production of U.S. defense weapon systems?
  • Given that DOD’s assessment of future supply and demand was based on previous estimates using 2010 data, could there be new concern for a possible rare earth material supply shortage or vulnerability that could affect national security?
  • Are there substitutes for rare earth materials that are economic, efficient, and available?
  • Does dependence on foreign sources alone for rare earths pose a national security threat?

Congress may encourage DOD to develop a collaborative, long-term strategy designed to identify any material weaknesses and vulnerabilities associated with rare earths and to protect long-term U.S. national security interests.

Resource Dependence and Fiscal Effort in Sub-Saharan Africa

August 29, 2013 Comments off

Resource Dependence and Fiscal Effort in Sub-Saharan Africa
Source: International Monetary Fund

High natural resource prices in recent years have resulted in sizeable increases in fiscal revenue for many resource-exporting countries in sub-Saharan Africa. However, this revenue source is volatile, and arguably these countries should also rely on other forms of taxation to help fund public expenditure. This paper asks whether the availability of higher resource revenue in these countries has led to lower taxation effort of other revenue categories. The question is analyzed both in terms of the relationship between non-resource tax revenue and resource revenue, and between non-resource tax revenue and statutory tax rates. The paper finds evidence suggesting that nonresource revenue is negatively influenced by a higher resource revenue-to-GDP ratio. The lower take up of nonresource taxes in resource-rich countries is correlated with higher levels of corruption in these countries, suggesting weaker institutions affect nonresource revenue through incentives for tax evasion and/or large tax exemptions as argued in the literature.

New From the GAO

July 18, 2013 Comments off

New GAO Reports
Source: Government Accountability Office

1. Medicaid Demonstration Waivers: Approval Process Raises Cost Concerns and Lacks Transparency. GAO-13-384, June 25.
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2. Securities and Exchange Commission: Improving Personnel Management Is Critical for Agency’s Effectiveness. GAO-13-621, July 18.
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3. Financial Company Bankruptcies: Need to Further Consider Proposals’ Impact on Systemic Risk. GAO-13-622, July 18.
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4. Securities and Exchange Commission: Alternative Criteria for Qualifying As An Accredited Investor Should Be Considered. GAO-13-640, July 18.
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5. Foreign Affairs Management: State Department Has Strengthened Foreign Service Promotion Process Internal Controls, but Documentation Gaps Remain.
GAO-13-654, July 18.
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6. SEC Conflict Minerals Rule: Information on Responsible Sourcing and Companies Affected. GAO-13-689, July 18.
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Improving Self-Escape from Underground Coal Mines

March 20, 2013 Comments off

Improving Self-Escape from Underground Coal Mines

Source: National Research Council

Coal mine disasters in the United States are relatively rare events; many of the roughly 50,000 miners underground will never have to evacuate a mine in an emergency during their careers. However, for those that do, the consequences have the potential to be devastating. U.S. mine safety practices have received increased attention in recent years because of the highly publicized coal mine disasters in 2006 and 2010. Investigations have centered on understanding both how to prevent or mitigate emergencies and what capabilities are needed by miners to self-escape to a place of safety successfully. This report focuses on the latter – the preparations for self-escape.

In the wake of 2006 disasters, the U.S. Congress passed the Mine Improvement

and New Emergency Response Act of 2006 (MINER Act), which was designed to strengthen existing mine safety regulations and set forth new measures aimed at improving accident preparedness and emergency response in underground coal mines. Since that time, the efforts of the National Institute of Occupational Safety and Health (NIOSH) and the Mine Safety and Health Administration (MSHA) have contributed to safety improvements in the mining industry. However, the Upper Big Branch mine explosion in 2010 served as a reminder to remain ever vigilant on improving the prevention of mine disasters and preparations to help miners survive in the event of emergencies.

This study was set in the context of human-systems integration (HSI), a systems approach that examines the interaction of people, tasks, and equipment and technology in the pursuit of a goal. It recognizes this interaction occurs within, and is influenced by, the broader environmental context. A key premise of human-systems integration is that much important information is lost when the various tasks within a system are considered individually or in isolation rather than in interaction with the whole system. Improving Self-Escape from Underground Coal Mines, the task of self-escape is part of the mine safety system.


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