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Importing Industrial Minerals — Something to Think About

Posted By admin On December 1, 2013 @ 6:00 am In Articles,Carved In Stone,Operations and Management | No Comments

In the import-export equation, the U.S. economy is losing on the potential value of industrial minerals production.

 

By Bill Langer

 

My last few articles have talked about some of the many rocks and minerals referred to as industrial minerals.* These minerals lack the glamour of the metallic minerals like gold and silver, but as last month’s article pointed out, they are used in practically every consumer product.

There is another important aspect of industrial minerals. The production of industrial minerals generates jobs and income that creates wealth and boosts our economy. The industrial minerals industry annually employs between 70,000 to 80,000 workers, with a combined salary of about $3.0 billion to $3.5 billion. An additional 750,000 to 800,000 other workers are employed in downstream industrial mineral-based industries.

Developing industrial minerals impacts the entire national service and supply chain. Almost 450 economic sectors contribute to the mining of industrial minerals. For example, the industrial minerals sector purchases mining equipment from machinery manufacturing which, in turn, purchases materials from the iron and steel mills sector. Iron and steel mills purchase materials from the iron ore mining, coal mining, and rail transportation sectors. All these sectors purchase fuel and electricity, buy or rent buildings, make loans with banks, pay insurance, hire accountants, and on and on. The sum of all of these transactions is the total economic effect. For every $1,000 spent on mining industrial minerals, another $920 of demand in other sectors of the economy is generated, for a total economic input of $1,920; nearly double the original value of the mined non-metallic minerals.

For the last few months, this column has pointed out that the amount of industrial minerals we are importing is increasing. Some industrial minerals are imported even though we have plenty of them right here in the United States. They are imported simply because it is cheaper or easier than mining the ones we have here.

You might wonder how much imports have changed over the years. During 1950, for every dollar of industrial minerals produced in the United States, we imported 15 cents worth of industrial minerals. Today, we use about $25 billion of industrial minerals, of which we produce about $16 billion. This means we import more than 55 cents of industrial minerals for every dollar we produce. If we were to reduce our rate of imports to the 1950 level, we would produce about $21 billion, about $5 billion more industrial minerals than at present.

Furthermore, we import finished consumer products that were made using industrial minerals, so we do not mine those minerals here to feed our own manufacturing industries. Consider that, in 1950, the United States exported $10.1 billion of merchandise, and imported $9.1 billion for a positive balance of $1.0 billion. Today, we export about $1,278 billion of merchandise and import about $1,913 billion of merchandise, for a negative balance of $700 billion. Using proxy data, I calculated that, in 2010, importing merchandise precluded the U.S. production of $2.5 billion of industrial minerals.

In summary, a total of about $7.5 billion of industrial minerals are not produced in the United States because of imports, if compared with the import situation in 1950. And every $1 spent on importing industrial minerals in the United States results in $1.90 less money being floated through our economy. The total impact: $14 billion.

Now that’s something to think about.

* In this article, industrial minerals do not include aggregate.

Bill Langer is a consulting research geologist who spent 41 years with the U.S. Geological Survey before starting his own business.

He can be reached at

Bill_Langer@hotmail.com [1]

 


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