Transportation Issues in Mining

One of the most serious considerations in mining or collection of raw materials is the transporting of these resources to processing or market. Same for oil, natural gas or mining materials; costs of transportation are important in mining. Most mines still in business today are in very close proximity to major rail lines, even with all the regulations and rules that exist some mining still exists in the United States. An example is the Borax Mine near Dagget, CA. The Borax mine was moved from the Harmony Borax Works mine in Death Valley, the second hottest place on Earth with temps up to 134 degrees, In the 1880's, the famous 20 mule team borax trains hauled their loads a grueling 165 miles to the railroad in Mojave. This is an illustration of why the transportation factor is critical in the efficiency of mining to keep costs down for the factories, which use the raw material or natural resources.

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If you look at the above ground mines in North America, those with rail service right to the site can compete if the economies of scale and market prices remain stable. Having raw materials in the middle of nowhere often makes such findings of little value until the infrastructure is in place to remove the material and transport it for processing. Think about it.

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There are many other factors to consider also, for instance if your other countries do not have the same rules for environmental controls they can often sell those raw materials to other countries who in turn can sell their finished products, such a specialty alloys, steel, etc. at lower prices than your companies can produce them. Which would appear to be dumping; selling their products for less it costs them to produce them. Many countries prop up such industries with huge tax incentives or subsidizing those industries and/or companies. There are many reasons for this, sometimes it is merely to insure that those companies are in business to sell products to the Countries government agencies for infrastructure projects. Other times it is to appease labor and provide jobs. Sometimes it is in retaliation for a perceived or actual trade war from another trading partner country, which is propping up one of it