Opportunities And Pitfalls In Industrial Minerals Acquisitions And Divestitures

In the past thirty years, there have been a large number of ownership changes in the industrial minerals arena and many medium to large companies have made industrial mineral acquisitions. Industrial minerals are exceedingly important to the achievement and maintenance of a high standard of living in the United States and in other developed countries. In the developed countries of the world the value of industrial minerals exceeds the values of the metallic minerals. In the U.S., the value of our industrial minerals is some 2 112 times that of the value of our metallic minerals. Almost every single thing we use or touch in our daily lives can be related to an industrial mineral. Examples are the construction industry, agriculture, ceramics, paper, paint, plastics, electronics, glass, petroleum, and many more in which an industrial mineral or minerals playa functional role. Industrial minerals are exceedingly diverse in their values, properties, and applications. Sand and gravel is an example of an essential industrial mineral commodity which has a low price but moves in very high volumes. Geographic location of this commodity is critical because of transportation costs. High calcium limestone or marble has a moderately high price particularly if it is white enough for use as a pigment or extender. This moves in moderately high tonnages and location is not as critical be-cause it can be shipped for considerable distances and still be competitive. Some specialty industrial minerals such as a white tale or white bentonite sells at a high price at low volumes and geographic location is not a major factor in marketing. Prices of industrial minerals do not tend to be cyclic and generally keep up with inflationary increases. Because of the diversity of industrial minerals very careful analyses of acquisitions or divestitures must be undertaken by buyers and/or sellers in order to prevent serious mistakes.