Grinding media (GM) is required for mineral processing operations using horizontal and vertical media mills. Different types of mills require customized grinding media with respect to chemical compatibility, size, viscosity, etc. Due to the complexities of this process, there is a certain amount of risk involved when it comes to sourcing grinding media from low cost countries like China, which is why the low cost sourcing of grinding media will only reach a peak in the coming years.

Chinese exports of grinding media have displayed remarkable growth in the last decade, with CAGR of 17.8% between 1998 and 2007. This is mainly due to the increasing international competitiveness of the Chinese grinding media industry, which is derived from a combination of low labour costs, increasing technological progress and rising quality standards. Consequently, China has become the world’s second-largest producer of GM with Japan and South Africa being the most significant export destinations of cast balls and forge balls, respectively. Other significant export destinations include Australia, Chile, Pakistan and Thailand.

Despite the potential cost savings in low cost sourcing from China, many users of grinding media are still hesitant due to inherent transactional risks and a lack of local and cultural knowledge. In order to overcome these obstacles, companies tend to hire procurement intermediaries, a process which inevitably leads to transactional opacity and the eroding of savings. Moreover, companies with no or little low cost sourcing experience tend to underestimate the importance of local knowledge and networks. Yet by undertaking a holistic and systematic approach with a partner who possesses adequate China knowledge, these mistakes can be avoided.

First of all, it is advisable to do in-depth market due diligence and to create a list of potential suppliers, and then whittle down the list according to relatively crude criteria such as location, infrastructure, and cohesive local supply chains. For the grinding media industry in China, the City of Ningguo in Anhui Province is a perfect example of a region which has a high level of agglomeration, specialization and easy access to well-trained labour and raw materials.

Having arrived at a manageable shortlist of suppliers, a detailed assessment of the shortlisted suppliers should provide a clear picture of the preferred supplier and its ability to meet the objectives of a company’s sourcing needs. Conducting business successfully in China is about building strong relationships, both with suppliers and in many instances with local government officials in order to gain a superior bargaining position for negotiations concerning price, payment terms, shipment terms and legal jurisdiction. This is where many foreign companies fail to utilize the full potential of low cost sourcing. A lack of the above-mentioned factors (local knowledge, weak relationship management, market due diligence) can easily lead to failure or dilution of savings over time, which in turn negatively impacts overall financial performance.