Commercial and Marketing Aspects of Running a Mine

mrigos

Newbie
Apr 12, 2021
1
0
Primary Interest:
All Treasure Hunting
Hi,

I am a "fresh" member of your super interesting forum - I am from EU and my background is in commerce (I am not an engineer or geologist)

TL ; DR - How mines organizine their marketing/selling operations and how do they sell ore (wheter it is gold, silver, nickel,...) ? Please explain

I am asking all mining specialists, consultants, mine operators or commodity traders to help me understand the selling side or better to say the marketing side of mining operations because I can't figure it out how does the selling process, sourcing process and buying process work.

After a brief research I found out that big trading houses like Trafigura, Glencore, etc. have their own origination teams (probably part of their trading desks) who source suppliers through tight relationships with major miners. I assume mining companies also have their own commercial departments which members organize tenders, organize sale auctions, form contracts, accept requests for quote documents, etc.

Here comes the first question; Do trading house origination teams contact miners first or is it vice-versa and mining companies contact trading houses and offer them ore for sale?

Next question is how trading houses purchase the ore? Do they offer miners some sort of future contracts or financing tools and then traders receive their payment in ore i.e. streaming agreements? I assume you can't buy ore under spot contract terms, am I right?

I am surprised how hard is to find those information.


Thank you
 
Last edited:

BlasterJ

Full Member
Apr 2, 2020
200
322
Southern California
Primary Interest:
Prospecting
Gold is easy to sell anywhere, as it can be used more or less like money. I've heard of investors simply taking their profits in Gold dore's instead of asking for a check at the end.

Specimens and nuggets can be marketed directly to jewelers or sold at places like the Tucson Gem show. The people I know who sell other commodities usually have a customer lined up before they go too far down the line. So if you mine Zinc, you might be talking to Sherwin-Williams or a fertilizer company. Kennemetal tools buys tungsten cons for making carbide tooling. The refiners who process different commodities are usually set up near transportation hubs and a customer base and also know where to market their products. Depending on the end use, the exact product output may be very important (i.e. must meet FDA standards for food use) or may matter very little.
 

EvanMac

Banned
Nov 29, 2020
6
3
Primary Interest:
All Treasure Hunting
I think the general rules of marketing work regardless of the industry. You just need to satisfy the customer's needs and know the market well. Mining companies widely use PR teams to communicate with the target audiences (especially with stakeholders).
 

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