Marketing is a black box for most technical people as I suppose the design is to most marketers. But it is important in the feasibility study to prove that someone is willing to buy the stuff being produced. If there are no buyers then you have a technical success and a commercial failure and that is never much fun. Remember there are two aspects to feasibility; technical and commercial. This is the commercial part.

If you are producing a product which is a commodity (copper, gold, silver etc.) then marketing is not too much of an issue. It is sold at a world price to a broker who knows what to do with it. If you are producing a concentrate that will become a commodity at someone else’s plant then there is some work to do in finding the special someone else. They will look at the specifications of the concentrate and decide that it contains too much of the bad stuff and not enough of the good stuff but, ok, we’ll take it but can’t give you much money for it. There is some negotiation required here. Of course, at times when the smelters need concentrates then nothing is too good for their producers. It’s a funny life that way. And sometimes it is necessary to travel the world and sell the production one tonne at a time. Iron ore producers, coal producers, sand and gravel producers all have to work very hard to find their markets. These guys earn their pay by spending most of their lives on airplanes. Finally there are some items (diamonds, gemstones) in which the market needs to be not just found but created. That is why there are polar bear diamonds in Canada and Yugo sapphires in Montana. The producers had to create their own markets and that is a very tough business.

Most marketing agreements have common characteristics. The product is bought at the mine site based on its quality and purity then there is a cost for additional smelting or refining plus the cost of transportation and finally any costs associated with shipping across political boundaries. This is often referred to as a net smelter return even though many products don’t ever see the inside of a smelter. It’s a naming thing and there is no sense messing with it.

For the purposes of the feasibility study it must be demonstrated that someone, somewhere is dying to buy the product and if they are willing to sign a non-binding letter of intent that covers the elements of the net smelter return then the marketing part of the feasibility study is over. 

Now we have to talk about two issues that 30 years ago didn’t enter into the picture at all but now are perhaps more important than all the technical work - environmental sustainability and social development.