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How Product Demand Impacts Mineral Sand Output



China and India’s burgeoning middle class has changed the way the two nations consume goods. With 1.3 billion people in China alone even a small change in purchase decisions can impact the demand and prices of mineral sands output needed to manufacture these goods.

One change in consumer demand was for more Western-style porcelain toilets five years ago. The quantity of toilets required saw the demand for the whitening agent zircon increase to the point that a previously closed Australian zircon mine swung into production.

The prime locations for zircon include the Murray basin which extends from the Mount Lofty Ranges in South Australia to Mildura in Victoria. South Australian miner Murray Zircon reopened its mine at Mindarie, about 150 kilometres east of Adelaide. Mindarie is a joint venture with a Chinese company that requires a quantity of zircon for use in China and for selling off to overseas markets.

Often demand causes a spike in mineral prices for a short time then falls making mining untenable. In the case of Mindarie, the mine’s camp was built in 2013, but just two years later redundancies were announced and the mine closed operations.

At the height of the boom, mineral resources made up 37% of South Australia’s merchandise trade, an increase of 13% in seven years.

Impact of Exchange Rates

It is not just the market price of the output that places pressure on mineral sands mining. Currency exchange rates play a big part in the viability of mineral sands operations. The price of mineral sands products is usually sold under contracts in $US. However, the cost of producing the sands is in local dollars, ie $AUS, so the forecasts for exchange rates are carefully studied before deciding to proceed with a mine’s production.

Gross Domestic Product (GDP)

An increased GDP can mean a similar increase for some products. Demand for paint products usually follows GDP while demand for other products such as plastics and decorative laminates can run faster than GDP.

Mineral processing and material handling: 

Balancing product demand and supply can be a bit daunting. Speaking to experts or an agency for more information on mineral processing and material handling in the mining industry would be beneficial for your business. 
Location: Perth WA, Australia

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