A Disappointing Year for Industrial Minerals Production

A glance at the accompanying table reveals that for the first time in many years the industrial minerals field did not post significant gains in production. Gypsum, cement, sand and gravel, and crushed stone production-which are very sensitive to construction industry performance-barely managed to stay even, or in fact, declined slightly. Even barite production, in spite of increased oil and gas drilling, was off 5% in 1979 from 1978. Domestic fluorspar production continued to decline while imports, primarily from Mexico, South Africa, and Spain, rose 11%. Worldwide production of iodine (which is used primarily as a catalyst, animal feed additive, and in ink and colorants, stabilizers, pharmaceuticals, photographic film, and disinfectants) grew about 9% on a worldwide basis-from 10.75 Tg to 11.16 Tg. This does not include US production. The two US producers increased demand as apparent domestic production increased about 5%. Increasing energy costs and the transportation situation have had a prohibitive effect on the industrial minerals field. The critical shortage of railroad cars, according to consultant Neil Johnson, is due to several factors: • High capital investment rind interest rates needed to build new equipment, • Accidents, obsolescence, and failure to repair equipment reduced car availability, •Reduction in some train schedules due to fuel economy, and •Increased turnaround time as a result of new safety regulations. Railroad rates have increased an average of 7% per year for the past 10 years. Last year's increases were about 11.1% due to fuel costs and surcharges. Truck shipments have increased their penetration in certain areas of the southeast because of the shortage of box cars and the producers' demand for quick shipment. Some producers report a 15-20% increase in truck use. In the feldspar-mica area, which formerly made most shipments by rail, trucks are now used for about half the shipments. Marketing prices, as expected, increased due to higher costs for energy, power, labor, and supplies used in production. Estimated average price increases were about 10% which, in many cases, did not cover increased production costs. These factors-rising energy costs and the critical transportation situation-resulted in an unsatisfactory year for industrial minerals. Stanley J. Lefond Cnntrihuting Editor