Your negotiation team, consisting of members of the top management group of the Twin Lakes Mining Company, has the autho
Posted: Tue Apr 26, 2022 12:32 pm
Your negotiation team, consisting of members of the top
management group of the Twin Lakes Mining Company, has the
authority to enter into any agreement that it deems to be in the
best interest of the company. Twin Lakes has several mines in
northern Minnesota and Canada; the Tamarack operation is second in
both "productivity" and contribution to corporate profit. Your
negotiating team includes the top person from the Tamarack
operation, along with others from corporate headquarters in Duluth,
Minnesota
Most of the problems that were described in the "Background
Information" have existed for a long time. Officials of the company
have met with city officials several times to discuss these
problems. Although you agree with community concerns, you frankly
think that the city has overstated the problems in order to get you
to pay for public improvements. Hence you have agreed to remedy
several of the most obvious concerns in the past, but have not had
to incur major costs up to this point. Now that the state and
federal agencies have mandated a cleanup, things have changed
considerably. Some major improvements will have to be made in order
to keep the Tamarack operations running.
You are committed to keep the Tamarack mine and plant open
if possible, but not at all costs. You do not want to spend large
sums of money to keep this operation running. Some of the newer
mining operations in other areas have revealed rich deposits, but
will require large investments to gain access. If the costs of
continuing the Tamarack operations are too high, you could close
this mine and plant and invest in other operations. You want the
city to help with the improvements, especially because they will
benefit the city as well as the company. In addition, everyone
involved knows that keeping the Tamarack area operations running is
very important for the Tamarack economy. Naturally, you would like
to settle as cheaply as possible.
Several options for each of the issues have been discussed in
the last few meetings between the city of Tamarack and the Twin
Lakes Mining Company. Both parties have agreed on which options for
each issue are the most feasible. A detailed explanation of each
issue, including the available options, is provided in this
confidential memorandum. In addition, a point system has been
devised so that all of the issues can be rated on a common metric,
to assist you in negotiating. The point system allows you to
combine several interests - minimizing expenses and maximizing
current and future revenues, while incorporating opportunity costs
and legal considerations - into a single "currency." Each option
has been assigned a point value to indicate the quality of that
option to you. Within each issue, an option with a high point value
is a better outcome for you than options with lower point values.
Across the five issues, more important issues are assigned a higher
maximum level of points than less important issues. The more total
points you gain, the better the outcome is for you. Your
task is to try to earn as many points as possible in this
negotiation.
Restoration of Consumed Mines. Your company has met its legal
obligation by filling the consumed mines and putting enough
rejected ore or rock in place to decrease the likelihood of
erosion. There are two further levels of restoration above the
current level ("legal restoration") that are typically discussed.
Partial restoration refers to planting enough vegetation to further
reduce the risk of erosion and to make the land blend in more
naturally with the rest of the surrounding country. In the mining
industry, this is sometimes referred to as “descarring" the land.
Full restoration, as the name implies, refers to planting enough
vegetation to bring the land back to very near its pre-mining
state. There are several consumed mines in question, some of which
run along main roads, while others are further back in the country.
You realize that the consumed mines are not as attractive as the
surrounding area, and that this may have some indirect effect on
tourism. You are trying to run a profitable business, however, and
feel that meeting the requirements of the law should be sufficient.
Although the city may realize increased revenues because of the
prettier landscape, the only benefit accruing to the company from
further restoration would be heightened goodwill in the eyes of the
city, making it at best an uncertain investment. The options for
restoration by the company and the associated point values are
given below:
• No further restoration by company of consumed mines 20
• Company partially restores mines near tourist roads 16
• Company partially restores all mines 12
• Company fully restores mines near tourist roads / restores
other mines partially 6
• Company fully restores all consumed mines 0
Your company wants to maintain its operations in the Tamarack
area. However, you do not -4- want to incur high costs in meeting
the environmental cleanup demands required for continued operation.
You have mining operations in other locations that are competing
with the Tamarack site for company resources. There are high
opportunity costs associated with money spent on the Tamarack
operations. You want to reach the highest quality outcome possible.
Your objective for this negotiation is to try to earn as many
points as you can.
Because there are opportunity costs associated with the money
that may be allocated by your company in this negotiation, and
because the city has been reluctant to help the company in the
past, you have decided that you need to reach an agreement that
yields at least 132 points, or you will break off negotiations and
invest in other operations. An outcome of less than 132 points
would indicate a poor overall investment, and the company could
achieve higher returns from other investments. Of course, this
number represents a minimum for you, and you certainly hope to
surpass this number. You have to gain 132 points or more from the
final agreement or you will not settle with the city. The final
settlement must include an agreement on one option for each of the
five issues. If this does not occur, your company will shut down
its Tamarack operations.
management group of the Twin Lakes Mining Company, has the
authority to enter into any agreement that it deems to be in the
best interest of the company. Twin Lakes has several mines in
northern Minnesota and Canada; the Tamarack operation is second in
both "productivity" and contribution to corporate profit. Your
negotiating team includes the top person from the Tamarack
operation, along with others from corporate headquarters in Duluth,
Minnesota
Most of the problems that were described in the "Background
Information" have existed for a long time. Officials of the company
have met with city officials several times to discuss these
problems. Although you agree with community concerns, you frankly
think that the city has overstated the problems in order to get you
to pay for public improvements. Hence you have agreed to remedy
several of the most obvious concerns in the past, but have not had
to incur major costs up to this point. Now that the state and
federal agencies have mandated a cleanup, things have changed
considerably. Some major improvements will have to be made in order
to keep the Tamarack operations running.
You are committed to keep the Tamarack mine and plant open
if possible, but not at all costs. You do not want to spend large
sums of money to keep this operation running. Some of the newer
mining operations in other areas have revealed rich deposits, but
will require large investments to gain access. If the costs of
continuing the Tamarack operations are too high, you could close
this mine and plant and invest in other operations. You want the
city to help with the improvements, especially because they will
benefit the city as well as the company. In addition, everyone
involved knows that keeping the Tamarack area operations running is
very important for the Tamarack economy. Naturally, you would like
to settle as cheaply as possible.
Several options for each of the issues have been discussed in
the last few meetings between the city of Tamarack and the Twin
Lakes Mining Company. Both parties have agreed on which options for
each issue are the most feasible. A detailed explanation of each
issue, including the available options, is provided in this
confidential memorandum. In addition, a point system has been
devised so that all of the issues can be rated on a common metric,
to assist you in negotiating. The point system allows you to
combine several interests - minimizing expenses and maximizing
current and future revenues, while incorporating opportunity costs
and legal considerations - into a single "currency." Each option
has been assigned a point value to indicate the quality of that
option to you. Within each issue, an option with a high point value
is a better outcome for you than options with lower point values.
Across the five issues, more important issues are assigned a higher
maximum level of points than less important issues. The more total
points you gain, the better the outcome is for you. Your
task is to try to earn as many points as possible in this
negotiation.
Restoration of Consumed Mines. Your company has met its legal
obligation by filling the consumed mines and putting enough
rejected ore or rock in place to decrease the likelihood of
erosion. There are two further levels of restoration above the
current level ("legal restoration") that are typically discussed.
Partial restoration refers to planting enough vegetation to further
reduce the risk of erosion and to make the land blend in more
naturally with the rest of the surrounding country. In the mining
industry, this is sometimes referred to as “descarring" the land.
Full restoration, as the name implies, refers to planting enough
vegetation to bring the land back to very near its pre-mining
state. There are several consumed mines in question, some of which
run along main roads, while others are further back in the country.
You realize that the consumed mines are not as attractive as the
surrounding area, and that this may have some indirect effect on
tourism. You are trying to run a profitable business, however, and
feel that meeting the requirements of the law should be sufficient.
Although the city may realize increased revenues because of the
prettier landscape, the only benefit accruing to the company from
further restoration would be heightened goodwill in the eyes of the
city, making it at best an uncertain investment. The options for
restoration by the company and the associated point values are
given below:
• No further restoration by company of consumed mines 20
• Company partially restores mines near tourist roads 16
• Company partially restores all mines 12
• Company fully restores mines near tourist roads / restores
other mines partially 6
• Company fully restores all consumed mines 0
Your company wants to maintain its operations in the Tamarack
area. However, you do not -4- want to incur high costs in meeting
the environmental cleanup demands required for continued operation.
You have mining operations in other locations that are competing
with the Tamarack site for company resources. There are high
opportunity costs associated with money spent on the Tamarack
operations. You want to reach the highest quality outcome possible.
Your objective for this negotiation is to try to earn as many
points as you can.
Because there are opportunity costs associated with the money
that may be allocated by your company in this negotiation, and
because the city has been reluctant to help the company in the
past, you have decided that you need to reach an agreement that
yields at least 132 points, or you will break off negotiations and
invest in other operations. An outcome of less than 132 points
would indicate a poor overall investment, and the company could
achieve higher returns from other investments. Of course, this
number represents a minimum for you, and you certainly hope to
surpass this number. You have to gain 132 points or more from the
final agreement or you will not settle with the city. The final
settlement must include an agreement on one option for each of the
five issues. If this does not occur, your company will shut down
its Tamarack operations.