New Mexico Geological Society Annual Spring Meeting — Abstracts

Transport is one of the most important cost factors in producing industrial minerals and rocks. When the location of supply differs from that of demand, as is usually the case in New Mexico, transport is needed. Transportation is a cost that adds no value to the mineral product so it must be both inexpensive and reliable to lessen its impact on profits. High-bulk low-value industrial minerals are more sensitive to transport cost, although the large quantities involved can partly offset this; low-bulk high-value industrial minerals are less sensitive. The cost to get industrial materials to market from New Mexico is a significant part of their cost and may exceed mining and processing costs in some cases.

The importance of transport costs has led to the concept of the "place value" of industrial minerals because distant markets increase cost to the end user and encourage competitors who are better placed. The transport cost that a material can sustain is a complex interaction between price (supply and demand), geology, mining, processing, and factors affecting the multi-segmented industrial mineral transport system.

The main segments of the world transport market are rail, truck, barge, and ship. Less common segments of world industrial mineral transport are slurry pipeline, tramway, ropeway, conveyor, wagons, and pack animals. Price changes in one transport segment do not result necessarily in corresponding cost changes in other segments. Industrial mineral bulk transport is subordinate to transport of grain, iron ore, and coal. Increased demand for these commodities tightens bulk transport availability raising transport costs to bulk industrial mineral producers. New Mexico industrial minerals travel by truck or rail except for short conveyors or pipelines.

Transporting industrial minerals is often complex. Some considerations are industrial mineral and volume mined; wet or dry, bulk or bagged packaging; method of transport to ports and to end users; transport equipment type(s), scheduling, transit times, reliability and flexibility; customs and port of export and import; handling and docking; trans-shipment, warehousing, and sampling; regulation and environment; insurance; competition and economic conditions. Industrial minerals mined in New Mexico will usually be used out of state so extrinsic transportation factors are dominant. But even in-state, the rural network of unpaved roads hinders utilization of New Mexico's industrial mineral resources. The transport segment(s) used vary widely between industrial minerals commodities, but their costs are always an important, if not controlling, factor of profitability.