Producing Competitive Industrial MineralsMon, 10/21/2013 - 14:21
Q: INDEMEX has been a key player in the industrial minerals market since 1945. What is your perspective on current trends in the industry, and INDEMEX’s role within it?
A: There are two factors affecting the industrial minerals market; the first is return on investment, which ranges from 90 to 120 days to recover operational and processing costs; the second is low margins compared with precious metals. Our company has continued producing and commercializing such minerals, thanks to our significant experience.
Q: As an industry pioneer with extensive experience in this market, what would you consider today to be INDEMEX’s biggest competitive advantage?
A: INDEMEX has three mines, which is our biggest competitive advantage compared with other companies that only process or commercialize material. We also control our production costs and offer more competitive prices. Throughout the years we have optimized our resources and have selected the most experienced and productive people for our team. Our accumulated experience and knowledge, from extraction to grinding, makes us a high quality mineral supplier. Our vertical integration, from our three mineral assets to our mill, makes us a more stable company compared with those that depend on third parties to buy minerals. In the 1980s we purchased a Raymond Mill, which allowed us to significantly increase our production and installed capacity, while also lowering our cost per tonne. Today’s processing capacity is 2,500 tonnes per month, or four tonnes per hour, when previously it was eight tonnes per shift. INDEMEX also offers a commercial milling service to mineral producers, which today accounts for 10% of our milling operations.
Q: What is the current rate of production at INDEMEX’s three assets?
A: On its three assets INDEMEX is currently exploiting talc, calcium carbonate and kaolin. The underground talc mine is producing 400 tonnes per month, whereas the open pit calcium carbonate mine is producing 1,500 tonnes per month. The kaolin mine has a production potential of 800 tonnes per month but is currently undergoing safety inspections, given the problems of insecurity in the state of Durango. In the meantime, we are in a three month cleaning process on that property, using a bulldozer, and that will allow us to exploit the mine once the state’s issues are solved.
Q: How have changes in the market in recent years shaped INDEMEX’s portfolio and business offering?
A: We provide talc for human consumption to the alimentary industry, to the fertilizer industry and for hermetic solutions, but it is the fertilizer market that has the strongest growth rate. The company has lived through several changes in market. In the 1950s 80% of our sales came from talc and the rest was kaolin. In the past talc was used in large quantities to fertilize cotton fields in Tamaulipas and the northeastern region of Mexico, however with the introduction of synthetic fibers for textiles, the demand for cotton diminished and so did the demand for talc. At that time we entered the paint industry, which also required talc, but they found synthetic substitutes for it. The company readapted commercially one more time, and in our search for diversification the calcium mine was acquired. This expansion and increased market share was possible thanks to the Government Trust for Mining Development (FIFOMI), which provided the financing for the mine and the processing plant. To accompany this diversification the company also changed its name in 2002 to Industrias Extractivas de Mexico (INDEMEX), in order to reflect its integrated structure and strengthen its global corporate image, in line with the company’s growth objectives. With these changes we achieved a more mining-focused image, leaving behind the specific talc image that for many years we had been known for.
Q: What are INDEMEX’s ambitions for the coming years?
A: INDEMEX is looking to move its integration strategy forwards and strengthen its share of the market, providing finished and processed products. This is something that we did previously with aromatic talc, and currently we are analyzing which product we should focus on in order to add value. Our talc mine has historically proved to have high quality resources, and we are looking into applying new technology that has not been used in the past, with the aim of deepening the mine in search of mineral. We know that 100m below our current production level there is a large talc vein, and that is what we are aiming for.