by Dennis Strassburg

I recently attended a four day course put on by the American Society of Appraisers (ASA) on mining techniques and the appraisal of mining equipment. The course was held in Duluth and had fifteen participants, with backgrounds ranging from machinery appraisers to bank finance specialists and tax consultants. The two instructors, Alan Iannacito and Allan Bowles have a lifetime of experience in the mining industry. Another attendee, Bill Ruth, is the current instructor for the ASA’s advanced mining course, currently taught in Australia. The wealth of knowledge between the instructors and other attendees made for an informative exposure to the mining industry and equipment.

The first day of the course was spent touring Cliff’s Hibbing Taconite mine near Hibbing, Minnesota. The mine tour personnel gave an incredibly in-depth tour of the operations. The tour started with the pit operation with the shovels loading the huge Komatsu dump trucks and blast hole drill rigs. Next, we toured the concentrator, where the ore is  crushed, magnetically separated, and put through mills to turn into taconite pellets for shipping. We also toured the maintenance shop, where mechanics work on the large mining equipment such as wheel loaders, dozers, and dump trucks.

The next three days were spent back in class in Duluth. Here, different mining operations, equipment, and techniques were discussed in depth. This included mining for iron, copper, gold, rare earth metals, coal, and other minerals. It was fascinating to see how the technology in the mining industry has changed through the years, while the techniques remain relatively the same.

On the third day, the class took a break from the classroom in the afternoon and took a boat tour of the Duluth/Superior harbor. We got to see up-close and personal the taconite loading docks where rail cars, all the way from the Hibbing facility we toured (and other mines), unload and transfer the taconite pellets to ore ships bound for destinations around the world.

On the final day of class, we were given examples of mining equipment with sales comparables, costs, condition, and other factors relating to value. We broke into small groups and discussed how we would approach valuing the equipment, and came up with opinions of value. It was interesting to see how other appraisers approached valuation; sometimes we were all in consensus, and other times had widely varying opinions. The exercises were a great help in bringing together what we had learned in the class. We also discussed different resources such as books, websites, and dealers that can be utilized to define the equipment and formulate values.

Overall the class was a lot of fun. Attendees came from three provinces in Canada, and from Alabama, Maryland, Colorado, and other states. The diverse group made for good discussion. Although an appraiser could specialize in nothing but mining equipment, the course laid a solid foundation in the identification and valuation of mining equipment - from drill rigs, shovels, and draglines and mills, to crushers, conveyors, and filters.