We explain what raw material is, how it is classified and why it is so important. In addition, the countries that export it and examples.
What is the raw material?
Raw material is understood to be all those elements extracted directly from nature, in its pure or relatively pure state, and which can later be transformed, through industrial processing, into final goods for consumption, energy or semi-finished goods that in turn feed other secondary industrial circuits. They are the basic input of the industrial chain, and are due to the primary sector of the production chain.
There are numerous types and forms of raw material, as many as manufacturing processes. Its obtaining mechanisms are also diverse, since some raw materials are directly within our reach and others must be sought in the depths of the earth’s crust (mining), at the bottom of the seas or must even be derived or synthesized from other raw materials.
The demand for raw materials in industrial society is constant and abundant, not only for the production of consumer goods, but also to feed energy production processes, through the burning of fossil fuels or the atomic processing of minerals such as uranium. Paradoxically, the countries that produce this raw material are mostly from the third world, that is, of the least developed, since they must consume at a higher cost the products made by developed countries with their own raw material.
Types of raw material
Raw material can be classified in different ways, starting with its availability on our planet. Thus, one can speak of:
- Non-renewable raw material. That which exists as a product of long geological or historical processes on our planet, and whose reserves run the risk of running out if the rate of consumption does not follow rational patterns. For example: oil or fossil coal.
- Renewable or superabundant raw material. That which is either in constant and rapid reproduction, or in levels so abundant that it is virtually impossible to exhaust them, at least in the short and medium term. For example: hydrogen gas or solar energy.
On the other hand, the raw material can also be classified based on its origin:
- Vegetable origin. It comes from trees, plants, seeds, fruits and natural derivatives, such as wood, rubber, cork, etc.
- Animal origin. They form or were part of the life of an animal, that is, of their bodies (wool, leather, skins, etc.) or their vital processes (milk, pearls, silk, etc.).
- Mineral origin. Matter from terrestrial deposits, or from amalgams and mixtures of metals and other elements, such as iron, copper, gold, silver, etc.
- Fossil origin. It is organic waste subjected to millenary sedimentation and fossilization processes, resulting in hydrocarbons of high chemical and energy value.
- Universal origin. Elements created together with the planet, present in ordinary liquid or gaseous substances, such as water or air.
- Synthetic origin. Materials that do not exist in nature and must be created by humans, such as certain isotopes of Uranium.
Importance of raw material
Raw material is considered the basis of the human industrial process, that is, the starting point of any production or manufacturing chain. Without it, there would be no elements to transform and combine through various processes, in order to obtain more elaborate and value-added ones. For this reason, the price of the raw material affects the final prices of the manufactured products, and operational factors such as their abundance, their difficulty of extraction or their difficulty of transformation intervene.
Raw material exporting countries
The large countries producing raw materials in the world of the 21st century are, generally, countries of the so-called Third World, especially from Asia, Africa and South America, where there are abundant mineral and biological resources to export. This is what happens with mining and oil and hydrocarbon exporting countries, abundant in the Middle East and the American continent (Saudi Arabia, United Arab Emirates, Mexico, Venezuela, Bolivia).
The great economic paradox of these countries is that they export raw material to industrialized countries, with which they manufacture consumer objects, and then they consume the manufactured goods back and at a higher price per unit, thus cultivating an importing and dependent economy. On the other hand, the decline in certain resources or the growing ecological damage that the extraction of raw materials entails, makes the prices of raw materials become more expensive and therefore markets experience instabilities that, in turn, affect relations policies between raw material exporting countries and highly industrialized countries.
Raw material in accounting
In accounting science, raw material is called any type of indispensable input to start a production or manufacturing chain. In this sense, the accounting administration is concerned with various aspects:
- Purchase prices. Since they are the base payment so that the industrial or productive process can be perpetuated over time. Without the purchase of raw materials, there is no business future.
- Inventories. That is, the raw material saved or stored to face cases of delay, shortage, etc. and the costs that such storage comprises.
- The quality. Since better quality raw material guarantees final products of a similar quality, and therefore a higher price in the market.
Pollution
One of the great disadvantages of hoarding raw materials has to do with pollution and ecological damage, which appear to be inevitable consequences from activities such as mining, logging, fishing or oil exploitation. This sustained damage to the ecosystem, added to that produced by secondary activities of industrial transformation, have left their mark on the world in the form of destruction of ecosystems, impoverishment of biological diversity and deterioration of human health.
Examples of raw materials
Some common examples of raw materials are:
- Wood, cork, rubber and cellulose to make paper.
- Oil, coal, natural gas and other fossil fuels.
- Gold, silver, diamonds, and other precious metals.
- Uranium, Bauxite and other heavy metals.
- Ivory, silk, fur and other animal products.