Teaching and Learning Forum 2000 [ Proceedings Contents ] Providing instructional leadership in postgraduate coursework mineral education: Mineral Economics at the WA School of Mines Philip Maxwell Mineral Economics Program Western Australian School of Mines Curtin University of Technology

1. Preamble

In 1950 we were "riding on the sheep's back" as part of the British empire. Agriculture played a key role in our economic fortunes. The minerals and energy sector was in the doldrums, responsible for about one per cent of Gross Domestic Product and perhaps the same amount of export income. Fifty years later our farmers still do a great job but over the past two generations their relative importance has declined. Minerals have risen again, though their fortunes are cyclical. They now account for about eight per cent of GDP and more than a third of exports. Manufacturing has grown and climbed faultingly out from behind high tariff walls. And the services sector has increased in size and importance, as it has in most other countries. With considerable structural adjustment taking place, Australia seemed at last to emerge in the 1990s as a strongly performing and diverse economy. The university sector has played a positive role providing graduates to facilitate this process. It must continue to do so in highly competitive world economic environment.

In 1950 there were eight universities in Australia. They were small, traditional and elite. Their students typically came from the top one or two per cent of the relevant cohort. Fees were subsidised and scholarships were common. The vast majority of students were undergraduates. There are now 39 universities. They have much larger student bodies. Students now come from perhaps the top half of the eligible population.

Particularly during the past decade, there has been a growing expectation by government that universities should generate much greater percentages of their operating budgets than previously. This trend has changed the face of universities which now, it seems, more than ever before are driven by the often conflicting goals of maximising knowledge production and maintaining financial viability. One of the thrusts in this challenging new world has been the requirement for universities to charge "full" fees to Australian students in the growing graduate coursework area.

The move towards the present situation began in about 1992 with University Councils beginning to approve new graduate level courses without allocating quota places to them. In the emerging environment, Master of Business Administration (MBA) programs in particular began charging tuition fees above and beyond a double HECS charge. By 1998, almost all MBA courses were fee paying. At that time there were almost seventy such programs offered in Australia. Most had healthy enrolments and had been surviving and prospering in what might be described as an "uneven playing field" as far as tuition fees were concerned.

Apart from the successful MBA experiment, most other postgraduate coursework programs received some quota support until 1998. This situation changed dramatically in 1999. At the turn of the new century just about all postgraduate coursework is fee paying. Providers of these programs face a challenging environment. To prosper providers must serve their student bodies well. For the first time they must effectively generate fully the incomes of the faculty members and support staff who offer these courses[1]. The market is competitive and the chance of failure is considerable unless sufficient student enrolments can be generated. One reflection of the competitive situation can be obtained simply by observing the range of coursework Master's programs currently available. At Curtin University, which is probably representative of a large metropolitan university, there are 119 such courses listed for offering in 2000.

This paper tells a story about a non-MBA fee paying course operating since 1993. The course in question is the Master's program in Mineral Economics at the WA School of Mines. My account focuses particularly on the need to teach creatively and effectively in a competitive market place. It also considers briefly the requirement of identifying, developing and maintaining a market. We have developed this program during a period in which university level minerals education in Australia has been struggling to maintain high standards while the national industry has been taking a leadership role on the world stage.

The fortunes and future development of minerals education has recently been the subject of a major study entitled Back from the Brink (Minerals Council of Australia 1998). The authors suggested, among other things, the establishment a national school for postgraduate minerals education coursework. One of its roles would be to "broker coursework programs, from universities and other bodies ..... to provide ..... masters degrees by coursework in advanced specialist fields." (p7). They went on to remark that "These courses must be readily accessible to industry through... innovative coursework design and delivery."(p8). Despite these recommendations, implementing new program proposals requires innovative and creative delivery, a sustained commitment to course development, and willingness to take risks. Refusing to change may lead to the slow demise of established programs and departments in a tough competitive environment.

After introducing the field of mineral economics, the second section reflects briefly on the development of programs in the area and discusses the short history of the WASM/Curtin Master's program in more detail. It highlights its design and considers the market in which the course operates. The discussion in the third section is concerned with how our teaching package has evolved and must continue to change to meet the needs of our market. The concluding section considers future challenges. It is clear that we must continue to evolve and change if we are to retain a competitive edge.

2. Mineral Economics and Mineral Economics programs

(a) The Mineral Economics discipline

While a primary emphasis has typically been on the

• financial evaluation of new and established mineral industry projects

• the economics of mineral markets;
• the surrounding economic policy environment;
• the relationship between mineral development and economic development;
• natural resource and environmental economics;
• general management principles; and
• the legal and regulatory environment.

Undergraduates completing engineering programs typically take some courses in the business and management area. It has become clear that any expanded formal appreciation of mineral economics requires further study. MBA programs have grown up all over the world to provide further management training. A parallel response within mining schools has been the development of Master's programs in Mineral Economics.

Graduate coursework programs in Mineral Economics have been much rarer than MBAs. This is hardly surprising. The minerals sector employs perhaps only one per cent of the world's workforce. Assuming 2000 MBA programs around the world there would seem potentially room for only 20 Master's programs in Mineral Economics. Because aspiring managers in the mining and energy sectors may prefer to take a good MBA rather than a Master's degree in Mineral Economics, this potential is probably considerably less.

There now appear to be four viable programs. They are at the Colorado School of Mines, the University of the Witwatersrand, the University of Dundee[2] and Curtin University of Technology (the WA School of Mines). Some other universities have had sucessful programs in the past but have been moving out of the field. They include Pennsylvania State University, Macquarie University and the University of Arizona. Others such as McGill, Queen's and Michigan Tech - have programs available which produce small and intermittent flows of graduates. There are also a group of universities which may move into the field. The offering of a course in South America in the near future seems likely.

(b) The Master's program at the WA School of Mines

Available to graduates holding a four year degree (or its equivalent), the course required students to complete successfully thirteen modular courses in a block release format and two individual case study research projects. It is designed particularly to accommodate the needs of mining professionals who otherwise are unable to attend courses which offer face to face instruction. Each modular course can be completed in six days of intensive study. Each typically involves twenty hours of formal classroom instruction, and about double that time outside of class working individually or in small groups. These units run between Monday and Saturday, with an examination often scheduled on Saturday morning. Each research project runs for an academic year. This initial model has continued between 1993 and 2000. A simple view of the way a student who completes the program within the "minimum" time appears in Table 1.

Table 1: The current course structure of the Master's program
in Mineral Economics at the WA School of Mines

Time	Place	Courses taken	Credits
Year 1
January/February	Kalgoorlie	Three one week modules	3 x 15 = 45
Normal First Semester	On the job	First Research Project	25
June/July	Perth	Three one week modules	3 x 15 = 45
Normal Second Semester	On the job	First Research Project (cont)	-
Year 1 total credits			115
Year 2
January/February	Kalgoorlie	Three one week modules	3 x 15 = 45
Normal First Semester	On the job	Second Research Project	25
June/July	Perth	Three one week modules	3 x 15 = 45
Normal Second Semester	On the job	Second Research Project (cont)	-
November	Kalgoorlie	Integrated Class Project	20
Year 2 total credits			135
Total course credits			250

It is not necessary to finish a full three week intensive session to obtain course credit. Students may complete single one week modules if they wish.

We launched the course in Kalgoorlie in January, 1993 with fourteen students in attendance. The program has grown steadily since that time. In 2000 more about 90 students are enrolled. The current class also includes students taking the Graduate Certificate in Mineral Economics, which requires a subset of units from the Master's program.[4]

The course has been financially viable in since 1998. The information in Figure 1, which plots the fee per credit for Australian postgraduate students against the number of students enrolled[5], gives one view of the market position of the program. Speculative demand curves for 1994 and 2000 also appear on the diagram. These illustrate the extent to which demand has grown for the course as it has become more established and developed its reputation.

Figure 1: The demand and supply for Mineral Economics
coursework graduate training in WA 1993-2000

(c) The marketing challenge

"product, price, place and promotion"

Describing the product has been the focus earlier in this section. Price and place require a further attention. When considering price it is natural to reflect immediately on the tuition fees for a course. But there are other costs as well to students. The explicit costs include textbooks, travel, accommodation and food. Less apparent are the opportunity costs of taking the program. These final costs can be large and it is essential to keep them to a minimum.

In developing our course we took the view that it was a good strategy to set tuition fees for the course at relatively low levels in the early years, as we developed our reputation and competed with more established MBA programs. We have increased these fees at around five per cent per annum since 1993. Our total course fees of $11,250 for Australian students still stand slightly below average in comparison with the sixty or so MBA programs currently on offer[6].

In the thirteen weeks they spend at intensive sessions, room costs range from zero for local residents to $120 per week at Agricola College and somewhat higher levels in Perth. Travel costs range from zero for students living in the community where intensive sessions are held to several thousand dollars per session for students flying from Africa. Food costs may be as low as $20 per day.

If students leave their jobs to take part in a full time program for, say, one and a half years, there is a foregone income of perhaps as much as $100,000 but probably $80,000 on average for a one and a quarter year full time equivalent program.. The opportunity cost for students leaving their jobs for thirteen weeks to attend our intensive coursework sessions is perhaps $20,000 in a typical case. It may fall to zero for students who use their weeks off in a two week on, one week off roster to attend our courses. Some comparable estimates appear in Table 2. There are major cost savings for students using an "executive style" study model. Such savings may make the difference between whether investment in a program such as the Master's in Mineral Economics yields a positive rather than a negative return.[7]

Table 2: Hypothetical student costs in different forms of master's by coursework models

	Master's in Mineral Economics Typical student		Full time equivalent program Typical student
	($)	Per cent	($)	Per cent
Tuition fees*	6000	19	6000	7
Textbooks*	1100	4	1100	1
Accommodation/food*	800	3	800	1
Travel*	3000	9	3000	3
Foregone income	20000	65	80000	88
Total	30900	100	90900	100
* allowing for likely tax deduction

Western Australia seems a natural place to offer a graduate coursework program in Mineral Economics. Following the gold rushes of the 1890s and the resources boom of the 1960, the state has been recognised as a world class minerals province. During the past decade, the minerals and energy sector has consistently generated around fifteen per cent of Gross State Product. The Department of Minerals and Energy Western Australia (2000), estimates the value of mineral output in the state in 1998-99 was $16.7 billion. Minerals and energy have been responsible for about seventy per cent of the state's exports. There are considerable levels of basic metal processing and, with the rush of Australian mining companies overseas in the past decade, the mining services sector is strong and internationally competitive. Maxwell (1999a) reports that Western Australia was responsible for about sixty per cent of Australia's exports of around $1 billion in this area in 1996-97.

Yet as a capital intensive industry, direct employment levels in the minerals and energy and basic metals processing sector accounted for only about six per cent of the state's total employment in 1998-99. (Department of Minerals and Energy Western Australia, 2000).

As the centre of a traditional mining region with operating mines, Kalgoorlie is an excellent location in which to conduct much of the course. While the facilities on the Bentley campus are of suitable quality, those in Kalgoorlie are tailored to intensive learning in a most effective way.

3. The instructional approach

In his recent paper, Clotfelter (1999, p5) considers the nature of the production function for university degrees. He argues broadly that:

Quality of educational output

= f (

Teaching quality,

Faculty research,

Student individual effort,

Quality of fellow students)

Quality of educational output	= f (	Teaching quality,	Program design,	Faculty research,	Customer service,
		Campus quality	Student individual effort,	Quality of fellow students)

One of the important issues, which we faced in launching the course was that of ensuring a high quality of teaching. This involves both identifying people with suitable training in mineral economics and related areas, and ensuring that they use an appropriate instructional style in the specialised "block release" teaching model - a feature of our program design. Given the strong background of our entering class, it is important to recognise the potential contribution which students can make to the learning environment. In some areas, select students will possess more knowledge about a field than the lecturers. Recognising this and playing a facilitation, as well as lecturing, role in such circumstances is essential. Well designed individual and group overnight assignments, which then require class participation and, can make a strong contribution in this regard. An important issue relating to teaching quality in an intensive coursework session format relates to the amount of time which lecturers and students spend in class. Our experience is that such activities should typically be for four hours each morning[8]. Faculty members require the rest of each day to recover and to prepare for the coming morning. In each unit formal classes run for five days in a row - from Monday to Friday. Students sit for an examination on Saturday morning.

Four hours of formal lecture and presentation contact per day seems also to be optimal for students. Trying to fit any more than this each day in a six day session quickly leads to diminishing returns. It is also important that students have a one and a half day break at the end of each modular course. After working for about sixty hours in a week (four hours each day in class and eight outside class), all parties involved need a short break. Lecturers may typically be involved in a seventy or eighty hour block or work in delivering their course. This involves perhaps two full days of preparation before a course begins (in addition to the earlier work setting up the unit), five twelve hour days in lecturing and continuous assessment, and a full day of examination marking. Lecturers often need three or four days to recover from this experience. This is an important point issue, which anyone considering this instructional mode should recognise.

To deliver a quality program using a resident staff would have required three of preferably four specialist lecturers. In the early stages, and even now, this was simply not a budgetary possibility. Our supporting funds would have been depleted in two years and student numbers would not have grown enough to support such a lecturing team from the third year onward. We operated in a de facto way with one resident staff member for seven years and have only recently appointed a second full time academic staff member.

We hire visiting specialist faculty from within Curtin and from other universities to deliver courses. Their areas of specialty range across areas such as mineral industry finance, mineral commodity analysis, international trade in minerals and socioeconomic impact analysis. This is a cost effective strategy, which ensures that we obtain high quality specialist lecturers.

In 2000 we have four overseas lecturers working with us (from the Colorado School of Mines, Queen's University, the University of Arizona and the Memorial University of Newfoundland). We have one Sydney based lecturer, two lecturers from other WA universities (Murdoch and UWA), one industry based lecturer (BHP Iron Ore) and two colleagues from the Curtin Business School and several lecturers from within the WA School of Mines. In total they are delivering 9 of 17 courses on offer at a cost of approximately $55,000.

While the program design already described fits well with the needs and availability of our student body, an associated aspect of our delivery approach has been to keep abreast of current modes of material presentation. While students typically use the latest versions of computer hardware and software in their workplaces, universities have not always kept abreast of these technologies. Yet for a competitive program it is necessary to do this. By way of example we now must utilise software packages such as PowerPoint and Excel to present our lecture materials in most classes. Similarly we expect students to make course presentations using the same software.

Because we operate from such a small resident base, it has been a major challenge to generate a significant faculty research base. We have made some progress in this area with a small program Discussion Paper series, several PhD students and a modest though active research and publication output. Because of our staffing strategy we are of course claim association with the research conducted by our visiting faculty.

Customer service is an extremely important area. Our strategy is to respond as quickly and personally as we can to all reasonable requests. Some of the things we do in this regard are:

• distribute all unit outlines for coming intensive sessions a month before the session begins;

• our course coordinator answers personally all calls about the program if he is available;

• we process applications to join the program within twenty four hours of receiving them;

• we process email communications within a minimum time;

• we try to take a personal interest in all of our students. We take photographs of every student in the course and they are displayed in our central office area. It reminds us continually, and also our visitors, about the size and importance of our program. It also challenges us to serve our customers.

When we launched the Master's program it became obvious very quickly to us that students expected to work hard. They were paying for our course and wanted to get as much from it as possible. Student individual effort is a significant area. It was important to set challenging tasks throughout each week and not to give students an "easy ride". We impress on our lecturers that they should expect students to put in sixty hours of work during the week they spend with them. A good way to encourage this effort in a balanced way is by using a continuous assessment mode. If students have to work every night to complete assessment the following morning, they seem to perform more evenly and be more satisfied with their educational experience. Equally of course it is necessary for some social interaction to occur. We often organise formal social events in the day and a half period between each module. In Kalgoorlie mine site visits have been a successful part of this program. Informal class dinners also play a positive role.

The quality of the student body is also a key factor. Our aim has been to attract a balanced group of senior executives, rising middle managers and bright and ambitious younger mining professionals. With a group of this type, there are likely to be a better general set of learning outcomes generated. This is because we are able to blend experience, technical knowledge and idealism together in an environment, which is generally free of hierarchical barriers. We can facilitate these outcomes by ensuring that syndicate groups, which work on key group projects, are made up of a combination of students from different backgrounds. Organising these syndicate groups takes considerable planning.

The professional backgrounds of students entering our program varies depending on the stage of the mining cycle but in 2000 it is mining engineers (27 per cent), geologists (37 per cent), metallurgists (15 per cent), and commerce and other graduates (21 per cent). A good syndicate size is either three or four people. We seek typically to place one engineer, one geologist and one commerce (non-technical) graduate in each syndicate. We include metallurgists as a fourth member where possible. We like also to blend experience in syndicates with at least one senior person in each team. With visiting professors we often make suggestions of suitable syndicate groupings prior to the commencement of their respective courses.

4. Lessons and future challenges

An important lesson is that it has taken considerable investment of human resources and instructional design to make the program successful in both an academic and financial way. The exercise has involved taking risks in an uncertain environment and the support of a considerable subsidy (probably about $300,000) in the early years has been essential to maintaining financial viability. To maintain a competitive edge, continuing investment in our product is a necessity. Our experience shares certain common ground with the well known "product cycle" theory proposed by Vernon (1966).

Our experience offers some guidance for senior colleagues, whose role it is to provide academic leadership in supporting the development of fee paying postgraduate coursework programs. With rare exceptions these courses must be subsidised in their early years. Such subsidies might come from far sighted industry gifts (as in our case) or from implicit subsidies from other programs within the sponsoring school. The latter source seems the most likely in most cases. It is important that academic leaders recognise this point clearly. If they do not, and this sometimes happens, programs will fail. Shortsighted policies have been responsible for the failure of many apparently successful programs in the past.

Successful fee paying graduate coursework programs have considerable potential to lift the reputation of an institution among rising industry decision makers. They can achieve this potential quite quickly. Failed programs have the opposite effect. It is important therefore to nurture and encourage the development of such programs. Equally it is essential not to provide excessive long term subsidies to struggling programs whose principals use the "infant industry" range of arguments to seek assistance.

Our future challenges will be to keep our program academically sound, financially viable and abreast with the latest teaching and learning technologies. This requires continuing attention to the needs of our students, effective marketing and recognition of changing market forces. Since our program began, Australian mining companies have begun to operate all over the world. They presently have operations in about 75 countries. When our program started it had a distinctly Western Australian focus.

The students attending our first intensive coursework session this year in Kalgoorlie have come from every Australian state and the Northern Territory. We also have students from eight other countries. In this environment our syllabus and focus has undergone change. Any future growth is likely to come from outside of Western Australia. These changes are providing us considerable challenges in containing delivery costs and maintaining program quality.

Endnotes

1. This need not entirely be the case. Providing departments may choose to allow undergraduate revenue subsidise postgraduate courses.

2. This program emphasises petroleum law and economics and differs therefore to some extent from the other three programs.

3. The prominent role of the School's Director, Professor Odwyn Jones, and the Chairman of the Board of Management, Sir Laurence Brodie-Hall, should be acknowledged particularly in this regard.

4. Entry to the Graduate Certificate is available to three year graduates. Some four year graduates also find the Graduate Certificate attractive because it provides an overview of the Mineral Economics discipline for them.

5. It must be acknowledged that it is probably more appropriate to plot equivalent full time student units of the horizontal axis. It should also be noted that international student enrolments (a small group in the class) are overlooked in this diagram.

6. International fees of $16,500 are similarly priced.

7. Suppose hypothetically that completion of the Master's program involves outlays over two years of $20,000 per annum for a working student and $50,000 per annum for a full time student. The human capital derived from the program then generates additional income flows of $10,000 per annum for the next six years in both cases. For a part time working student the internal rate of return on the program is 11 per cent. There is a negative internal rate of return of 12 per cent for the full time student.

8. Where units have a computer laboratory component, this period sometimes extends to five or six hours. The final two hours require active class participation on an individual basis.

References

Department of Minerals and Energy Western Australia, 2000, Statistics Digest: Mineral and Petroleum Production 1998-99, Perth.

Kotler, Philip and Armstrong, Gary, 1990, Marketing: An Introduction, Second Edition, Englewood Cliffs: Prentice Hall.

Mackenzie, Brian, 1987, Mineral Economics: Decision-Making Methods and the Mineral Industry, Adelaide: Australian Mineral Foundation.

Maxwell, Philip, 1999a, The Importance of Mining Services to the Western Australian Economy, December, Committee for Economic Development of Australia Information Paper No. 65, Perth.

Maxwell, Philip, 1999b, "Creative teaching and marketing of fee-paying postgraduate coursework programs: The case of mineral economics at the W.A. School of Mines", Centre for Educational Advancement Seminar Presentation, Curtin University, July.

Minerals Council of Australia, 1998, Back from the Brink: Reshaping Minerals Tertiary Education, February: Canberra.

Vernon, Raymond, 1966, International investment and international trade in the product cycle", Quarterly Journal of Economics, 80, 190-207.