PRPOPSED STONE CRUSHING PLANT

INTRODUCTION: A stone crushing plant with a nominal capacity of 150 tonnes per hour is proposed. The nameplate capacity of the plant is 300 tonnes per hour, but allowances have been made for stoppages to break large rocks. At a production rate of 150 tonnes per hour, the cost of producing a tonne of crushed stone is $5.96, while the selling price is $10.00 per tonne. It is proposed to work 12 hour shifts, 5.5 days per week. Four hours operation will be followed by 2 hours maintenance and plant checks. So two continuous periods of crushing will be carried out in the course of a day. If demand for the product warrants it, a part-time relief crew will be brought in to work Saturday afternoons and Sundays. This has not been considered in the financial model. Front end loader (FEL) and truck needed for the operation will be hired. The provider of such equipment will be responsible for providing fuel and carrying out maintenance. Since the operation has not started, we are unable to predict the breakage characteristics of the rock. We assume that equal portions of coarse and fine rock will be produced. This is highly unlikely, as a particular rock tends to break in a certain way, by which a larger proportion of coarse, or fines, is produced. Finer material commands a higher price, in our financial model; we assume that all sizes will fetch the same price. Plant clean up will be carried by contract labour. The contractor will be responsible for providing personal protective equipment (PPE) for his workers. All equipment needed for the project will be bought second hand. If they are sourced from the same supplier, a discount of up to 10% can be negotiated. This has not been factored into the capital expenditure. An environmental impact assessment will have to be conducted before a permit is granted, this could take up to 6 months to prepare and obtain. The project is extremely lucrative and an initial capital investment of $1.8 million is required. This caters for 3 months operating cost as the plant is commissioned, production is ramped up and customers are found for the product. Value adding activities such as block making could enhance profitability; this has not been considered in the financial model. The worst case scenario shows a payback period of 16 months, say 2 years maximum. No society can develop without crushed stone. As Fiji develops, the demand for the product will escalate, as a result, the longevity of the project is assured. 1

PLANT DESCRIPTION: Broken rock will be fed through a sloping grizzley (made of railway lines) into a 5 foot Symons (Nordberg) standard crusher using a front end loader (Figure 3). This crusher will be set to crush the rock to 22mm in size. Such crusher is capable of accepting a feed size of 150mm, so the grizzley bars will be made with 150mm spacing. The crushed product will be conveyed up to a triple deck vibrating screen. This screen will have the capability of producing four different products, ranging from +22mm to -8mm. The four products will have their individual stockpiles. Oversize material scalped off the grizzley will be broken with a sledge hammer and recycled to the crusher. The dust collected will be mixed with the -8mm product. This material is ideal for making concrete blocks, thus adding value. This has not been factored into the financial model. STAFFING: Staffing level will be kept to a minimum commensurate with a safe and humane operation. A total full time staff of 16 is proposed, as shown below. A plethora of such skilled staff is available within the country.

Figure 1: Proposed manning structure FINANCIALS: The proposed project is extremely lucrative. Each tonne of crushed stone produced yields $4.04 of profit. The base case shows that the plant is capable of producing 1,200 tonnes of crushed stone per day, thus yielding a profit of $4,848 per day. This assumes that the entire product will sell for $10 per tonne. Finer sizes, command a premium price. A good plant manager will be able to adjust the gap of the crusher so that a greater proportion of the finer fraction is produced. The technical jargon for this is to choke feed the crusher so that rock on rock, or attrition, breakage is achieved. It is assumed that 12kWht-1 of power will be needed to crush the rock. 2

Table 1 summarises the anticipated monthly cash flow.

Table 1: Monthly expenses and income summary. Base case is shown in yellow. Scenario 2, assumes a 33% increase in production, shown in blue.
ITEM COST ($) BASE
44,000 14,000 50,000 28,600 10,725 5,000 10,000 8,115 170,440

PROD 1 28,600t
44,000 14,000 50,000 28,600 10,725 5,000 10,000 8,100 $170,440

SALES 1 $286,000

PROD 2 38,100 (+33%)

44,000 21,000 75,000 42,900 16,090 5,000 10,000 10,700 $224,690

SALES 2 $381,000

PROFIT 1

PROFIT 2

PAY BK 1 mos
16

PAY BK 2 mos
12

LABOUR ELECTRICITY SPARES LOADER TRUCK SAFETY WEAR PLNT CLN UP CONTINCIES

TOTAL

$286,000

$381,000

$115,560

$156,310

16

12

EQUIPMENT: All equipment bought, will be second hand and it is assumed that motors and associated switch gears will be supplied with the equipment. It is assumed that the crusher will be supplied with oil pump and oil heat exchanger. The list of major equipment for the stone crushing plant is shown in Table 2, please refer to Figure 3. Table 2: Major capital equipment for the stone crushing plant ITEM DESCRIPTION 5 foot Symons standard crusher Vibrex triple deck screen Crushed product conveyor +22mm product conveyor -22mm+16mm product conveyor -16mm+8mm product conveyor -8mm product conveyor Dust extraction system Plant Managers vehicle Plant Engineers vehicle Staff bus TOTAL COST ($US) 250,000 80,000 100,000 40,000 40,000 40,000 40,000 80,000 17,000 12,000 25,000 724,000

PRODUCTION INCENTIVES: Each hour the plant runs translates to $606 of profit. To get this concept across to the entire workforce, the following is proposed. WHATEVER PROFIT IS MADE IN EXCESS OF SCENARIO2, OF TABLE 1, SHOULD BE SHARED WITH THE ENTIRE WORKFORCE. It is proposed that the company keeps 50% and 50% be shared with the workers, on a quarterly basis. This event will be held at a suitable hotel where the workers and their spouses will attend a dinner and receive their bonus cheques. The amount of bonus paid to a worker will be proportional to his/her salary. The board of directors will be present. Such a profit sharing scheme will have the following effects: 1. It will encourage everybody to produce the finer sizes of rock (the higher priced product). 2. It will assist in minimizing downtime. 3. Maintenance will be carried out in the shortest possible time so that rock can be crushed. 4. Spillage will be minimised so that as much saleable product as possible is produced. 5. The sales staff will ensure that the best price is obtained for the products. 6. Wastage of consumables will be curtailed. 7. In time, the extra profit made can be used modernize the plant to the one shown in Figure 2.

Figure 2: Modern stone crushing plant, note stockpiles for various size products