Marketing Of Mineral Products

MARKETING OF MINERAL PRODUCTS

WHAT ARE MINERAL PRODUCTS?

To meet the definition of “mineral” a substance must meet five requirements:

•    naturally occurring

•    inorganic

•     solid

•     definite chemical composition

•     ordered internal structure

“Naturally occurring” means that people did not make it. Steel is not a mineral because it is an alloy produced by people.

“Inorganic” means that the substance is not made by an organism. Wood is made by organisms and thus are not minerals.

“Solid” means that it is not a liquid or a gas at standard temperature and pressure.

“Definite chemical composition” means that all occurrences of that mineral have a chemical composition that varies within a specific limited range. For example: the mineral halite (known as “rock salt” when it is mined) has a chemical composition of sodium chloride (NaCl). It is made up of an equal number of atoms of sodium and chlorine.

“Ordered internal structure” means that the atoms in a mineral are arranged in a systematic and repeating pattern. Halite is composed of an equal ratio of sodium and chlorine atoms arranged in a cubic pattern

The word “mineral” is used in many different ways. The definition given above is a formal definition preferred by geologists.

The word also has a nutritional meaning. It is used in reference to the many inorganic chemicals that organisms need to grow, repair tissue, metabolize and carry out other body processes. Mineral nutrients for the human body include: iron, calcium, copper, sulfur, phosphorus, magnesium and many others.

In mining, anything obtained from the ground and used by man is considered to be a “mineral commodity” or a “mineral material”. These include: crushed stone, which is a manufactured product made from crushed rocks; lime, which is a manufactured product made from limestone or marble (both composed of the mineral calcite; coal which is organic; oil and gas which are organic fluids; rocks such as granite that are mixtures of minerals; and, rocks such as obsidian which do not have a definite composition and ordered internal structure.

The construction industry is the largest consumer of mineral commodities. Crushed stone is used for foundations, road base, concrete, and drainage. Sand and gravel are used in concrete and foundations. Clays are used to make cement, bricks and tile. Iron ore is used to make reinforcing rods, steel beams, nails and wire. Gypsum is used to make drywall. Dimension stone is used for facing, curbing, flooring, stair treads, and other architectural work. These are just a few of the many uses for these commodities in construction.

In agriculture, phosphate rock and potash are used to make fertilizer. Lime is used as an acid-neutralizing soil treatment. Mineral nutrients are added to animal feed.

The chemical industry uses large amounts of salt, lime and soda ash. Large amounts of metals, clay and mineral fillers/extenders are used in manufacturing.

OIL AND NON – OIL PRODUCTS

Oil (Petroleum) Products

Petroleum products are useful materials derived from crude oil (petroleum) as it is processed in oil refineries. Unlike petrochemicals, which are a collection of well-defined usually pure chemical compounds, petroleum products are complex mixtures. The majority of petroleum is converted to petroleum products, which includes several classes of fuels.

According to the composition of the crude oil and depending on the demands of the market, refineries can produce different shares of petroleum products. The largest share of oil products is used as “energy carriers”, i.e. various grades of fuel oil and gasoline. These fuels include or can be blended to give gasoline, jet fuel, diesel fuel, heating oil, and heavier fuel oils. Heavier (less volatile) fractions can also be used to produce asphalt, tar, paraffin wax, lubricating and other heavy oils. Refineries also produce other chemicals, some of which are used in chemical processes to produce plastics and other useful materials. Since petroleum often contains a few percent sulfur-containing molecules, elemental sulfur is also often produced as a petroleum product. Carbon, in the form of petroleum coke, and hydrogen may also be produced as petroleum products. The hydrogen produced is often used as an intermediate product for other oil refinery processes such as hydro cracking and hydro desulfurization.

Non – Oil Products

Some of the most important non – oil export products in Nigeria are:

Cassava flour, Cotton, Snail, Ginger, Leather and Footwear, Palm Kernel Oil, Palm Kernel Cake, Yam flour, Textiles and Garments, Cocoa butter, Gum Arabic, etc.

PETROLEUM MARKETING IN NIGERIA

Marketing of petroleum products in Nigeria according to Nathaniel Udoh (2013), could be traced to 1907 when kerosene was first imported into the country through an agency agreement with Socony Vacuum Oil Company (now Mobil). Thus, Kerosene was the first petroleum product marked in Nigeria, and Mobil had the privilege of being the pioneer in this business.

The business of petroleum products distribution/marketing as at today is commited by six major marketers: Total Nigeria pic, Oando, AP (now Forte Oil), Mobil, Conoil, and Texaco now (MRS). These six majors form about 70% of the distributive trade while independent marketers take care of the rest. Of these six, Oando, Total, AP now (Forth Oil), Mobil, Conoil, are very significant in the selling of refined petroleum products and in the lubricants segment, offering products like Engine Oil, Motorcycle Oil, Grease, Generator Oil, and Cooking Gas etc.

Market Improvement Strategies

Following the partial deregulation of the downstream sector of the petroleum industry by the Federal Government in 2012, petroleum marketing among major players has witnessed serious competition such that to stay in business will require some strategic moves which may include:

Aggressive media publicity/campaign
Price review of products
Improvement in outlets
Quality of products especially in lubricants section to give the best to consumers
Robust customer care centre etc

METHODS OF MARKETING MINERAL PRODUCTS

There are many methods or channels of marketing mineral products. In this section, we shall concentrate on importation and exportation.

Importation is the process of bringing in goods and services, especially across a national border, from an external source. The party bringing in the good is called an importer. An import in the receiving country is an export from the sending country. Importation and exportation are the defining financial transactions of international trade.

In international trade, the importation and exportation of goods are limited by import quotas and mandates from the customs authority. The importing and exporting jurisdictions may impose a tariff (tax) on the goods. In addition, the importation and exportation of goods are subject to trade agreements between the importing and exporting jurisdictions.

Nigeria imports petroleum products, textile materials, furniture, books, foot wears, food, and so many other things from other countries. We also export crude oil, and most of the items already mentioned in section 17.2.

SUMMARY

In geology, a substance must meet the under listed five requirements before it can be classified as mineral

•     naturally occurring

•     inorganic

•     solid

•     definite chemical composition

•     ordered internal structure

Minerals are classified into two: Oil and Non – Oil. The main methods or channels of marketing mineral products are through imports and exports.

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