Situation Factors: Inputs

Location factors relating to the transportation of materials into and from a factory are known as situation factors. A firm seeks a location that minimizes the cost of transporting inputs to the factory and finished goods to consumers.

Manufacturers buy from suppliers of inputs, such as minerals, materials, energy, machinery, and supporting services. They sell to companies and individuals who purchase the products. The farther something is transported, the higher the cost, so a manufacturer tries to locate its factory as close as possible to its inputs and markets:

• Proximity to inputs. The optimal plant location is as close as possible to inputs if the cost of transporting raw materials to the factory is greater than the cost of transporting the product to consumers.

• Proximity to markets. The optimal plant location is as close as possible to the customer if the cost of transporting raw materials to the factory is less than the cost of transporting the product to consumers.

Bulk-reducing Industry: Copper

An industry in which the inputs weigh more than the final products is a bulk-reducing industry. To minimize transport costs, a bulk-reducing industry locates near its sources of inputs. Most of the steps in the production of copper illustrate the location decisions of a bulk-reducing industry.

Copper production involves several steps:

1. Mining. Mining in general is bulk reducing because the heavy, bulky ore extracted from mines is mostly waste, known as gangue (Figure 11-13).

2. Concentration. The ore is crushed and ground into fine particles, mixed with water and chemicals, filtered, and dried. Concentration mills are near copper mines because concentration transforms the heavy, bulky copper ore into a product of much higher value per weight.

3. Smelting. The concentrated copper becomes the input for smelters, which remove more impurities. Because smelting is a bulk-reducing industry, smelters are built near their main inputs—the concentration mills—again to minimize transportation costs.

4. Refining. The purified copper produced by smelters is treated at refineries to produce copper cathodes, about 99.99 percent pure copper. Most refineries are located near smelters.

5. Manufacturing. Copper that is ready for use in other products is produced in foundries.

Copper Mine Morenci, Arizona.

This shows the distribution of the U.S. copper industry. Mining, concentration, smelting, and refining are bulk-reducing industries; because two-thirds of U.S. copper is mined in Arizona, the state also has most of the concentration mills, smelters, and refineries. The first four steps are good examples of bulk-reducing activities that need to be located near their sources of inputs. The fifth step—manufacturing—is not bulk reducing, so foundries are located near markets on the East and West coasts rather than near inputs.

Distribution of Copper Production

As a bulk-reducing industry, U.S. copper production is clustered in the southwest near the mines.

Pause & Reflect 11.1.4

What is an example of a product purchased by consumers that is made of copper?

Mineral Resources

Minerals are especially important inputs for many industries. Earth has 92 natural elements, but about 99 percent of the crust is composed of eight of them. The eight most common elements combine with less abundant elements to form approximately 3,000 different minerals, all with their own properties of hardness, color, and density as well as spatial distribution. Many of these minerals have important industrial uses.

Elements in Earth’s Crust

Minerals are either nonmetallic or metallic:

• Nonmetallic minerals. By weight, more than 90 percent of the minerals that humans use are nonmetallic. Important nonmetallic minerals include building stones, gemstones such as diamonds, and minerals used in the manufacture of fertilizers such as nitrogen, phosphorus, potassium, calcium, and sulfur.

• Metallic minerals. Metallic minerals have properties that are especially valuable for fashioning machinery, vehicles, and other essential elements of contemporary society. They are to varying degrees malleable (able to be hammered into thin plates) and ductile (able to be drawn into fine wire) and are good conductors of heat and electricity.

Many metals are capable of combining with other metals to form alloys with distinctive properties that are important for industry. Alloys are known as ferrous or nonferrous. A ferrous alloy contains iron, and a nonferrous one does not:

• Ferrous alloys. The word ferrous comes from the Latin for “iron.” Iron is extracted from iron ore, by far the world’s most widely used ore. Humans began fashioning tools and weapons from iron 4,000 years ago. Important metals used to make ferrous alloys include chromium, manganese, molybdenum, nickel, tin, titanium, and tungsten.

• Nonferrous alloys. Important metals utilized to manufacture products that don’t contain iron and steel include aluminum, copper, lead, lithium, magnesium, zinc, precious metals (silver, gold, and the platinum group), and rare earth metals.

Mineral resources are not distributed uniformly across Earth. Countries with important mineral resources are shown in orange in. Few important minerals are found in Europe, Central Asia, and Southwest Asia & North Africa.

Distribution of Minerals

Australia and China are especially well endowed with minerals that are important for industry.