# From ground to market: Key terms, quiz and sources

Source page: https://www.materialinsights.org/learn/commodities/from-ground-to-market/review/

[Understanding Commodities](https://www.materialinsights.org/learn/commodities/) / [Module 2: From ground to market](https://www.materialinsights.org/learn/commodities/from-ground-to-market/) Wrap-up

## From ground to market: review

### Key terms

**Ore grade**
: The concentration of the wanted metal in mined ore, such as per cent copper or grams of gold per tonne.

**Strip ratio**
: Tonnes of barren rock that must be removed for each tonne of ore mined, which rises as open pits deepen.

**Porphyry copper deposit**
: A very large, low-grade copper body formed above cooling magma, often carrying molybdenum and gold; the main source of world copper.

**Laterite**
: A deposit formed by tropical weathering that concentrates nickel or aluminium near the surface; it cannot be concentrated by flotation.

**Banded iron formation**
: Ancient layered seabed sediment of silica and iron oxide, hundreds of metres thick, that supplies most iron ore.

**Placer deposit**
: Loose sediment in which water has concentrated heavy, durable minerals such as gold, tin, titanium minerals or zircon.

**By-product (companion) metal**
: A metal recovered from another metal's ore whose own price does not decide how much ore is processed, making its supply price-inelastic.

**Reserves**
: The part of identified resources that is known and economic to extract with current prices and technology; it changes with price and innovation.

**Block caving**
: An underground method in which a large ore body is undercut so it collapses under its own weight into tunnels below.

**Froth flotation**
: A process in which reagents make valuable mineral grains repel water so air bubbles lift them away from the waste rock.

**Concentrate**
: The upgraded product of a mill, such as copper concentrate at 25 to 35 per cent copper, sold to smelters.

**SX-EW**
: Solvent extraction and electrowinning: leaching copper from oxide ore and plating cathode directly, without a smelter.

**Treatment and refining charge (TC/RC)**
: The discount a custom smelter takes from the value of metal in concentrate to pay for smelting and refining it.

**Electric arc furnace**
: A furnace that melts scrap or direct-reduced iron with electricity, using a fraction of the energy of the blast furnace route.

**Hall-Héroult process**
: Electrolysis of alumina dissolved in a molten salt bath to make aluminium, consuming large amounts of electricity and carbon anodes.

**Crack spread**
: The value of the products a refinery makes from a barrel of crude minus the cost of that crude; the refiner's gross margin.

**Stocks-to-use ratio**
: Ending stocks of a crop divided by its annual use; a low ratio signals a tight market prone to price spikes.

**Feed conversion**
: The amount of feed needed per unit of animal weight gain, about 7 pounds of grain per pound for beef against 2 for chicken in Morgan's figures.

**Tariff escalation**
: Higher import tariffs on processed goods than on raw materials, which protects processing in importing countries.

**Social licence to operate**
: The ongoing acceptance of a mine by local communities and society, beyond its legal permits, without which it may be forced to close.

### Try it in the table

- Open the [Copper](https://www.materialinsights.org/commodities/copper/) tile. Compare the production lens (Chile about 24 per cent, DR Congo about 14) with the trade lens for copper ore and concentrate (China about 63 per cent of imports). Using USGS figures of 1.84 million tonnes mined and 12.4 million refined in China in 2024, estimate how much of China's refined copper must come from imported concentrate or scrap.
- Open the [Aluminium](https://www.materialinsights.org/commodities/aluminum/) tile and look at both production series. Guinea leads bauxite with about a third of output, yet China makes about 60 per cent of the metal and buys most traded bauxite. Using the 4:2:1 rule for bauxite, alumina and metal, work out roughly how much bauxite China's 2024 output of 44 million tonnes required, and ask which stage needs the cheap power.
- Open the [Nickel](https://www.materialinsights.org/commodities/nickel/) tile and read the chain. Which steps belong to the laterite route, and which to sulphides? Then look at Indonesia's share of production and the HHI, and connect them to the 2014 ore export ban and the Chinese nickel pig iron story in Part 1.
- Open the [Lithium](https://www.materialinsights.org/commodities/lithium/) tile. Compare producers (Australia about 38 per cent, Chile about 20) with the trade lens: Chile dominates exports of lithium carbonate, while China dominates exports of lithium hydroxide. Which deposit type feeds which product, and where does the conversion step sit?
- Open the [Soybeans](https://www.materialinsights.org/commodities/soybeans/) and [Maize](https://www.materialinsights.org/commodities/maize/) tiles. Note who produces in each hemisphere and who imports. Then apply Morgan's feed conversion figures: if a country's diet shifts from [pork](https://www.materialinsights.org/commodities/pork/) toward [beef](https://www.materialinsights.org/commodities/beef/), how much more grain per kilogram of meat must it import or grow?
- Open the [Potash](https://www.materialinsights.org/commodities/potash/) and Nitrogen ([ammonia](https://www.materialinsights.org/chemicals/ammonia/)) tiles. For potash, add up the production shares of Russia and Belarus and compare the price now with five years ago. For ammonia, look at which countries export it and ask why fertiliser exports follow [natural gas](https://www.materialinsights.org/energy/natural_gas/).

### Final quiz

Skinner's 'mineralogical barrier' explains a possible future jump in metal costs. What is it?
 Tilton reports Skinner's view that below roughly 0.1 to 0.01 per cent, metals are locked in ordinary minerals, so energy-intensive chemistry would have to treat all the rock, raising energy needs 10 to 100 times.

Why did the move from nickel sulphides to laterites not cause a sharp jump in nickel costs, according to Tilton?
 Tilton names nickel, with lithium and barium, as metals where grades overlap across deposit types, so the industry could cross from one type to the other without a discontinuity.

Humphreys finds that a copper price upturn in 1987 showed up as faster mine output only in 1995. Which feature of mining best explains the lag?
 Radetzki and Wårell put exploration-to-production at 5 to 10 years, Scheyder notes decade-long US permits, and Humphreys shows capex peaking a year after prices.

Which processing route produces copper with no sulphur dioxide emissions?
 SX-EW treats oxide ore by leaching and electrolysis and skips the smelter, which Tilton notes generates no sulphur dioxide.

Smil puts aluminium at about 175 GJ per tonne, copper about 45 and steel under 20. Which consequence follows most directly?
 Electricity dominates aluminium's costs. Tilton and Guzmán describe Japan dismantling smelting after the 1970s oil shocks, and Humphreys credits subsidised or stranded power for China's rise.

A custom smelter's TC/RC is best understood as:
 Humphreys shows the charge averaging 23 per cent of the copper price over 1980-2005 and falling to 5 per cent in 2007 when Chinese smelters competed for scarce concentrate.

Why do US refiners import heavy crude even though the United States produces more oil than it consumes?
 Conway explains that refineries are configured for particular crudes. Light shale crude suits other refineries, so the United States exports it and imports heavier grades.

Morgan reports about 7 pounds of grain per pound of beef gained, against 2 for chicken. What does this imply as incomes rise?
 Feeding grain through animals multiplies it. Morgan shows US corn feeding steak eaters and the Soviet livestock drive of the 1960s pulling the USSR into grain imports.

[Next module: Supply, demand and the cost curve →](https://www.materialinsights.org/learn/commodities/supply-demand-costs/)

### Sources for this module

- Tilton, J.E. & Guzmán, J.I. (2016). Mineral Economics and Policy. RFF Press / Routledge. · pdf pp. 66-69, 73-74, 159-163
- Tilton, J.E. (2003). On Borrowed Time? Assessing the Threat of Mineral Depletion. Resources for the Future. · pdf pp. 78-81, 99-104
- Humphreys, D. (2015). The Remaking of the Mining Industry. Palgrave Macmillan. · pdf pp. 44-48, 74-100, 108-111, 141-148, 186-194, 228-238
- Conway, E. (2023). Material World: A Substantial Story of Our Past and Future. W.H. Allen. · pdf pp. 55-56, 134-140, 203-221, 238-252, 283-302
- Smil, V. (2016). Still the Iron Age: Iron and Steel in the Modern World. Butterworth-Heinemann. · pdf pp. 93-96, 101-102, 109, 122-128, 145-156
- Radetzki, M. & Wårell, L. (2021). A Handbook of Primary Commodities in the Global Economy, 3rd ed. Cambridge University Press. · pdf pp. 20-21, 40-43, 79-81, 94-96, 102-108, 178-191
- Scheyder, E. (2024). The War Below: Lithium, Copper, and the Global Battle to Power Our Lives. Atria. · pdf pp. 19-20, 26-28, 35-37, 44-46, 61-62
- Pitron, G. (2020). The Rare Metals War: The Dark Side of Clean Energy and Digital Technologies. Scribe. · pdf pp. 11, 26-28, 54-55
- Nassar, N.T., Graedel, T.E. & Harper, E.M. (2015). By-product metals are technologically essential but have problematic supply. Science Advances 1(3), e1400180. [web ↗](https://doi.org/10.1126/sciadv.1400180) · pdf pp. 1-3
- Yergin, D. (1991). The Prize: The Epic Quest for Oil, Money, and Power. Simon & Schuster. · pdf pp. 171-172, 361-362, 650-651
- Geman, H. (2005). Commodities and Commodity Derivatives: Modeling and Pricing for Agriculturals, Metals and Energy. Wiley. · pdf pp. 154-155, 164, 173, 225-228
- Morgan, D. (1979). Merchants of Grain. Viking Press. · pdf pp. 146-148, 202-204, 330-334
- Pirrong, C. (2014). The Economics of Commodity Trading Firms. Trafigura / University of Houston. · pdf pp. 6-8, 23
- U.S. Geological Survey (2026). Mineral Commodity Summaries 2026: chapters on Aluminum, Bauxite and Alumina, Copper, Gold, Lithium, Nickel, Potash, Rare Earths, Titanium Mineral Concentrates. [web ↗](https://pubs.usgs.gov/publication/mcs2026) · production tables, World Resources, Events, Trends, and Issues
- U.S. Department of Agriculture (2026). World Agricultural Supply and Demand Estimates, WASDE-676, October 2026. [web ↗](https://www.usda.gov/oce/commodity/wasde) · U.S. Feed Grain and Corn Supply and Use, p. 12

## Other sections

- [Module overview](https://www.materialinsights.org/learn/commodities/from-ground-to-market/index.md)
- [What the ground offers: deposits, grades and waste](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p1/index.md)
- [From discovery to closure: the mine life cycle and how ore is extracted](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p2/index.md)
- [Turning rock into metal: concentration, smelting and refining](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p3/index.md)
- [Hydrocarbons and harvests: the other extraction chains](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p4/index.md)
- [Where value sits, and the licence to keep digging](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p5/index.md)