New Mexico Geological Society Annual Spring Meeting — Abstracts

Marketing is the linchpin of the industrial minerals industry. Without markets for industrial mineral products, all I other associated mining activities are superfluous. The simple existence of an industrial mineral deposit does not mean that it can be exploited at a profit. A precise interaction between geology, mining, processing, transport, and marketing with end users is required to generate profits. Many producers of industrial minerals have failed because of inadequate marketing skill, information, and practice.

Marketing tends towards a broad overview that includes market development and long-range planning activities while sales is more focused on day-to-day customer interactions. Each will help the other when properly done. Industrial minerals are best served by an industrial marketing approach rather than a consumer approach. The broad categories of mineral marketing organizations are in-house, distributors, agents, merchants, and traders.

Geology is often less emphasized than marketing for industrial minerals. Numerous deposits exist for most industrial minerals. Geology dictates the existence of a deposit but markets dictate its development. This is true to such an extent that marketing is often called the exploration phase of industrial minerals. The geologist should be associated with marketing either by helping to prepare a marketing study or by acting on the results of one. Marketing has many other facets that can be helped by geologists but they must be aware of what marketing is attempting to do in order to help.

To be effective in marketing, a geologist needs to understand many aspects of industrial minerals: location (deposits, plants, customers), processing (specifications), transportation (truck, rail, barge, ship), competition (local, regional, national, international), substitutes, and new developments and market forces of all kinds. Some of the needed skills are not formally taught to geologists, so well rounded self-education and on-the-job training are the way one normally enters into industrial mineral marketing.

Marketing studies are used in several situations: basic exploration, external acquisition (non-producing or operating property), and captive expansion (existing property or new product). Making a market study is a two-part process. The first part is relatively simple but requires a time-consuming collation of data and basic financial analysis into a commodity survey (past and present oriented). The harder, much more important, second part entails expanding the commodity survey into a market evaluation (future oriented) that emphasizes forecasting, timing, location, and specific products. The evaluation must prove that market potential exists and suggest a plan of action. Effective marketing is an ongoing process with the initial plan modified over time based on wide and continuous input. A marketing evaluation boils down to formulating the right questions to ask of the right persons.

Industrial minerals markets are based either on commodity (low value) minerals or specialty (value added) minerals. Marketing methods are either product driven (commodity minerals) or market driven (specialty minerals) but these are neither mutually exclusive nor is one better than the other. Three market-position strategies apply to both types: low cost, differentiation, and focus. Markets may also be segmented for selective pricing and other marketing variations. Typical characteristics (exceptions always exist) are tabulated below. Focusing too much on specialty minerals can lead to problems. A blend of commodity products with specialty products often lowers risk and enhances long-term profits. The highest profits occur in the specialty minerals at the cost of higher risk and complexity requiring intelligent marketing, versatile technical services, and creative R&D.