Gypsum Project Final
Gypsum Project Final
Gypsum Project Final
PROMOTER-
October, 2024
Gypsum quarrying
Contents
EXCUTIVE SUMMARY................................................................................................................4
1. INTRODUCTION......................................................................................................................5
1.1 promoter profile....................................................................................................................5
1.2 project justification................................................................................................................5
1.3 Objective of the project.........................................................................................................6
1.4 The socio-economic significance of the project...................................................................6
1.5. Locations, Infrastructure and Land........................................................................................8
2. MARKET STUDY AND PLANT CAPACITY........................................................................10
2.1. MARKET STUDY....................................................................................................................10
2.1.1. Demand factors for the Gypsum products.....................................................................10
2.1.2 Past Supply and Present Demand for Cement................................................................12
2.1.3 Projected Demand..........................................................................................................13
2.1.4 Market Demand and Supply for Gypsum Board............................................................14
2.1.5 Project Prospects..........................................................................................................16
2.1.6 Marketing Channel......................................................................................................16
2.2. PROJECT CAPACITY, PROJECT LIFE AND PRODUCTION PROGRAM..................17
2.2.1 Assumptions...................................................................................................................17
2.2.2 Reserves Estimate for the preliminary..........................................................................17
2.2.3 Reserve extraction capacity.........................................................................................18
2.2.4 Program & Project life.................................................................................................18
2.3 PRICING............................................................................................................................19
3. TECHNICAL DESCRIPTION OF THE PROJECT.................................................................20
3.1 Project/Products Description...............................................................................................20
3.2 Raw Materials and inputs....................................................................................................20
3.3 Quarry Operation..................................................................................................................20
3.4 Production Process and Technology.....................................................................................21
3.5 Machinery and Equipment Requirement..............................................................................23
3.6 Project Design and Engineering............................................................................................23
3.7 Utilities............................................................................................................................24
3.8 Project implementation plan............................................................................................24
EXCUTIVE SUMMARY
1 Project Name Gypsum quarrying extraction and processing plant
2 Project Owner
3 Nationality Ethiopian
7 Total Initial Capital Birr 50Million from this amount 25% (Birr million15) and
75% (35,000,000) from Bank loan
9 Market Share 70% for domestic and 30% for foreign Market or export
10 Benefit of the project Values add in mining sector supply of gypsum stone/rock
for the region/ source of revenue, employment opportunity, benefit for the
Country local community and stimulate the local economy.
1. INTRODUCTION
Ethiopia is a vast country with a total area of about 11.6 million hectares and with a total
population of about 120 million. The current dynamic socioeconomic environment, like the one
currently exist in Ethiopia the development of mining and construction sector has a great role to
make the overall economic growth to be persistent.
The government of Ethiopia has a conductive investment polices and guideline that promote the
private sector investment in the economic development through the various investment and
business endeavors. In this regarded the owner of the envisioned gypsum quarrying and
extraction project planned to invest in Diredawa and carried out this pre-project study to
check the market technical and financial feasibility of these project. The result of the study is
very sound and promising for the owner to start the project in this area.
The promoter is very determined to commence the project hence they expect to get the required
support from the regional mines bureau and local government to make the project operational.
The booming advancement in the construction (infrastructure) sector necessitate the comparable
speedy increase in complementary sector for raw materials, inputs, accessories of these sector
that finally results the establishment of consistent and strong economic of the nation. As an input
of the sector, Gypsum has widely applicable in cement, construction, and building.
The gypsum industry covers the activities ranging from mining the mineral gypsum to the
production of (end-use) products. Products of the gypsum industry are plaster, plasterboards
(which includes a wide range of standard and specialty products). Gypsum fiberboard and
gypsum blocks which are all used in the building sector (Euro gypsum, 2007 ) gypsum is also an
essential ingredient in cement production, where it is used as a retarding agent. Outside the
construction industry , dried and grinded raw gypsum is used in the making of ceramic molds ,
plaster cove and cornice, surgical and dental casts as a water conditioner for beer-brewing and
sugar- refining as ingredient in flour , bread , ice- cream and pet food , and as an agent in
pharmaceutical products.
The government of Ethiopia has developed a conductive investment policy packages and other
sectorial reforms at federal and regional level to attract a huge private investment for the
wellbeing of the nation and its citizen as a whole. Moreover, it is also implementing the five year
growth and transformation plan II (2015/16-2019/20) That gave a space for infrastructural
development and industrialization.
In line with the above objective, the project has the following specific objectives:
a) Value add
In the extraction of gypsum stone and process gypsum powder from the quarry the project will
add value in mining sector.
By producing and gypsum stone powder the project will satisfy the demand for different for
construction sector through this it will contribute for nation development.
c) Source of revenue
As public policy of any nation the government collects different forms of taxes from different
business income taxes, payroll tax and vat are collected from undertaking business activity,
therefore, the project will serve as source of revenue for both region and nation as whole.
The nation can generate foreign currency when the factory starts export gypsum powder to
neighboring nations in the future.
e) Employment Opportunity
One of the problems that our country faced is unemployment. Therefore, the current objective of
the government is working on tackling the problem of unemployment and fostering the
development process either through creating self-employment or employment in other
organization. Hence this project will hire 150 citizens.
As a corporate responsibility the company will engage in different development activities on the
surrounding areas in Diredawa. This will better worse the community and contribute for the
development of the nation.
This factory has positive externality in the zone that will encourage the economic movement of
local economy. There will be economic relationship and transactions among different economic
actors.
The project site will be locate in Diredaw. It Project proposal for gypsum quarrying extraction
Because of the enforced waiting time there are several restaurants and hotel catering to waiting
travelers Djibouti and Ethiopia .
Near to the promoter side factory (gypsum processing factory in Dejen town)
Project proposal for gypsum quarrying extraction and processing project plan
The project required a total of 5 hectares’ areas of land. This land is planned to use as follow
indicated in table below.
2.1. MARKETSTUDY
The are many factors that determine the market demand for the construction inputs including
Gypsum in Ethiopia, the majored factors are economic growth of the nation that reflect in
booming in the construction sector and infrastructure development of the government, population
growth are increasing the market demand and supply for those construction material particularly
gypsum. These factors are explained as follows
The Ethiopian economy has been experiencing dynamic and double digit growth that
experienced annual average growth of 11.4 % in past 8 years. According to ministry of finance
and economic development (MOFED), the forecasted economic growth (GDP at constant basic
price) for 2011/2012 is estimated to be 10.4 As per the estimates, annual growth rate of the major
sectors, i.e. agriculture, industry and service were 7.6 % 10.6% and 13.0% respectively and their
shares out of the total GDP were 42%, 13% and 45%, respectively. This continuous high growth
would place Ethiopia among the fast growing countries in the world.
As sectors of the economy, the agriculture and construction sector also grows with double digit
with the average annual growth 10.31% and 12% respectively in the past years. As shown in the
table below the growth of the sectors directly related with the economy as parts of the economy.
This fast growth of these sectors resulted from different bodies like government, non
governmental and private activities in Ethiopia growing in the fastest rate moreover the current
agriculture, infrastructure, residential (condominium) and building in paramount level.
In economics, there exist direct relationship between sectorial development and complementary
equipment and martial. As economic since proved the demand for complementary goods (goods
that will consume together like fuel and car) have positive relationship. This means when the
demand for one good increase the corresponding complementary good demand also increase
automatically with different rate depending on the nature of good.
The fasts growth of construction sector created the fast and bulk demand for construction
(building) martial, since Gypsum is among the main complementary inputs for this sector
particularly, the corresponding demands for these products are also increase. Therefore, those
have the highest-rated demand.
The rate growth of the urban population increase from year to year. The latest report of united
fund for Population Agency revealed that Ethiopians population has reached 105 million in July
2020, which puts Ethiopia as the second most populous country in Africa. According to the
central statics Authority (CSA), current population growth is estimated to be 2% for the next 20
year. Rural population is growing at about 3.0% while the urban population is growing at about
4.3%. Total population is projected to reach 129 million by 2030. In Ethiopia of the total
population, about 16.0% is estimated to reside in the urban areas. The trend suggests that the size
of urban population likely to continue to grow at a high speed in the future. The share of urban
population will rise from 16.1% in 2020 to about 23% by 2030. Nearly 30 million of the total
129 million will live in cities and towns by 2030. As a result from big population growth and
urbanization demand for construction inputs will be increase.
The consumption and growth of cement (both domestic production and import) in Ethiopia are
dynamic in nature. The following time series data for 13th year show as the follows.
Since gypsum is one of the required input for cement industry the demined and supply for cement
show as a direct demanded and supply for gypsum.
Table 3; Cement Consumption in Ethiopia (million tons) Source: - Access capital Research
Estimate based on public and import data
The apparent consumption data of cement, comprising of domestic production and imports
(2004-2005 E.C).
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Consumption 0.67 0.77 0.75 0.74 0.82 0.82 0.97 1.04 1.17 1.81 2.00 2.50 3.2
estimate
Growth rate ... 14.9 -2.6 1.3 10.8 0.0 18.3 7.2 12.5 54.7 10.5 25.0 27.0
(%)
Based on the table above, Over the 6 years’ period covered by the data set 2000-2006), local
production was growing at an annual average growth rate of 17.25% following increase
construction activities all over the country demanded for cement is currently soaring at an
increasing rate. It is also easy to infer from the data in table that the factories are currently
working in their capacity. Hence, unless new capacity is created in time a sever shortage, all of
supply is going to metalize particular and the country development in general.
The overall economic development level and growth trend of the country.
Government policies and regulation that have impact on the future level and
trend of construction activities, and
Considering d the growth trend in supply observed from the historical data, future demand is
forecasted to grow at a rate of 20%, annually. Accordingly, projected demand for cement ranges
is as follows.
The local demand gypsum board was met only through import in the past however, recently a
gypsum board manufacturing plant named Gh industrial Pic has become operational. However
there is no available data which indicates the production level unsatisfied demand i.e the demand
which is met through import is considered. Accordingly, the quantity of gypsum board imported
during the period 2002-2011 E.C is given in table below.
As we have been observed from Table 6, import of gypsum board exhibits a substantial growth
especially during the recent six years I.e. 2006-2011. The average annual import, which was
30,105 M2 during the period 2002-2005, has increased by more than seven fold to an average of
220,438 M2 during the period 2006-20011.
For estimating the present unsatisfied demand for gypsum board, a growth rate 13% which is
equivalent to growth rate contribution of a construction sector to GDP during the period 2001-
2010 is considered.
Accordingly, taking the 2011 level of import as a base applying a growth rate 13% the present
(2012) unsatisfied demand for gypsum board is estimate at 429,765m2.
Demand Projection
The demand for gypsum board is directly related with the growth in the construction sector in
general and the housing construction sub sector in particular which in turn depends on the overall
economic development of the country.
The growth of the construction sector to the GDP during the period 2001-2010 have been
growing at annual average growth rate of 13 percent which is above the average annual growth
rate of real GDP during the period under consideration (11.4), indicating a rise in the share of the
construction sector within the overall economy.
According to the GTP, during the period 2010/11-2014/15 the real GDP of the country ( at a base
case scenario) is expected to grow at an average annual growth rate of 11.2% Moreover, during
the same period the annual average planned targets of growth for the construction sector is 20%.
By considering the above factors, the demand for gypsum board is conservatively assumed to
grow at a rate of 10%. Consequently, unsatisfied projected demand is presented in the table
below.
Update information on civil and construction work initiated by local, provincial and
central government.
Establish contacts with local civil engineering firms, individual and professionals.
2.2.1 Assumptions
Total working day/hour =8hr
The total area of the deposit under discussion is about 7.12 hectares (which is equivalent to
71,200 m2)
The project is expected to carry out its activities for about 8 years approximately. Out of the total
production 65% (101,400.00 tone) for gypsum stone to be and 35% (54,600.00 tons) for
processing gypsum power. The first three years it is estimated to produce at 60% 80% and 100%.
The quarrying project will be reached full capacity at the third year of operation. Hence the
annual production and program for the table below;
Description Year
1 2 3.10
Capacity utilization (%) 60 80 100
Gypsum stone in ton 81,840,00 81,120.00 101,400.00
Gypsum powder in ton 32,760,00 43,680,00 54,600.00
Total 93,600.00 124,800.00 156,000.00
2.3 PRICING
It would be important to examine the possible level of price based on the competitor's action. In
this connection, the existing average prices of similar company were assessed for the benefit of
comparison.
Based on the existing average price for gypsum stone in the market, Table 9, Price of Project
The envisioned project will quarry and extract Gypsum rock/stone and process gypsum powder
for different propose.
Gypsum is mostly formed by the hydration of Anhydrite. The depth of hydration can range from
the surface of the deposit down to three hundred meters.
Depending on temperature and pressure, topography and the structure of the deposit Anhydrite is
often mined in conjunction with gypsum, but is comparatively limited in its technical
applications. The content of calcium sulphate in a sedimentary rock varies from 70% to 100%,
the rest being clay and limestone
Gypsum is extracted from open-cast mines or underground mines using room and pillars mining
methods.
The quarry process begins by first removing the earth over the deposit. Then gypsum ore is
drilled and blasted loose to be carried to the processing plant.
Upon removal, Truck transport gypsum to the processing plant. The plant produces unformed
gypsum material for product manufactures or produces the end -product on-site .Trucks dump
load of raw gypsum rock at the plant in piles until the plant is ready for them.
In the main frame, a 1000-1500 kg high pressure spring is fixed to the roller suspender. After the
grinder is put into effect, the roller will go around the main shaft, and rolls closely against the
grinding ring accompanied by high pressure.
When the gypsum is loaded into the grinding cavity, it is shoveled in to the space between the
roller and the ring fir grinding. The grinded powder goes in to classifier along with the
circulation wind of the blower and the standard fineness powder is guided to the cyclone
collector as finished and larger size stuff falls back to the grinder for regrinding. The circulation
wind returns to the blower to repeat the above process and after wind enters in to bag dust
cleaner for purification. When there is abrasion between roller and ring, it is recommended to
adjust the length of the spring to maintain the constant pressure between the roller and the ring
hence to be able to get a stable output and fineness. The principle unit operation-taking place in a
gypsum production is calculations, which is carried out in kilns of appropriate design depending
upon the raw materials characteristic. To-data two types of kils are known. These are vertical
shift kilns and horizontal rotary kins. For the envisaged plant a vertical rotary kilns. For the
envisaged plant a vertical rotary kilns are found to be appropriate for the calcinations process for
reason of efficient land away from the present plant site) is first crushed and screened to produce
the decomposition reaction takes place at a high temperature. The gypsum thus formed is cooled
in drum cooler and then packed for storage or delivery. Gypsum powder which is commercially
used in the construction industry and for other purpose is CaS0 4 and is manufacture by crushing
and removing the moisture from the Gypsum stone CaS04-2(H20 ).
Wheel Loader 35 tons (with operational & maintenance manuals and part books) 350-400
Hp
Excavator 350 Hp (with operational & maintenance manuals and part books) 350-400 Hp
Stitch drills with one Jacks hammer designed for 20 feet's drilling equipped with 3 meters
long guide bar
Minibus
Toyota pick-up
Office equipment's
3.7 Utilities
A number of utilities would be put in order to ensure smooth functioning of the project. These
utilities include:
A. Water supply
D. Drainage Facility
SN Activities Date
1 Land Approval . October , 2024
2 Bank loan processing Jan- May, 2025
3 Site Development June- Sep, 2025
4 Building and construction work Sep,2024- Oct,2026
5 Purchasing of machines and equipments Nov- Dec 2025
Employees under each unit will be supervised by the department head that is accountable for the
general manager. General Manager appointed by the owners.
Owner
Quarry, Extraction & processing Admin & Finance Department Marketing Department
Hence the following section deals with the duties and responsibility of some departments
a) General Manager
She/he will plan organize, direct and control the overall activities of the project
She/he will devise policies and strategies that will enable the plant to be profitable.
She/he will incorporate modern technological innovation that will facilitate the service
delivery of the project center and increase customer satisfaction.
He/he will plan, organize, direct and control the human and non-human resource of the
project so as to achieve the short and long run objectives of the organization.
It is the core department of the project centre and has the following responsibility
Use modern manufacture , processing and technology that will enhance the quality of the
Gypsum stone/rock
Extraction quality of the Gypsum rock/ stone that will enable the centre component both
in the domestic and international market.
Control on the quarry nature quality of the gypsum stone/rock and also the overall
extraction process.
Produce products in least cost so that the profitability of the center is guaranteed
Will plan, organize direct and control the financial transaction of the plant by using the
entire necessary document.
Will develop sound financial control system by developing modern financial control
systems.
Will prepare the annual financial statements and prepare condescend reports for the
general manager, owner and other concerned government body.
Will control the human and non human resource of the plant, which include: effective
handing of the different inventories of the machinery , equipment raw martial, finshined
products, and devise strategies of controlling against fraud and devise strategies of
controlling against fraud and damage.
Manage and execute the company national and international procurement produce
Manage the public relation of the quarry project with external parties/stakeholders
d) Commercial
responsibilities: -
will handle the overall marketing activities of the organization which include planning,
organizing, directing and controlling
will develop the marketing strategies for future project center development
conduct both foreign and domestic market research for expanding the sales of the
company
8 Fence 2,985,000.00
9 Electric line installation 1,691,500.00
10 Water line installation 681,177.00
11 Supervision 597,000.00
12 Land acquisition 2,786,000.00
Total 15,938,308.00
5 Stitch drill with one jack hammer 1 12,935,000.00 12,935,000.00 Duty Free
design for 20 feet drilling equipment
6 Manual Hammer 25 248,750.00 Duty Free
Full line gypsum powder processing 1 9,950.00 16,517,000.00 Duty Free
C. vehicles
Total - - - 427,850.00
Construction period 12
months
Royalty payment 2%
Operational costs increase by 3% after year 1 Sale revenue increase by 5 after year 1 Salary and
wages increase by 2 % after year 1
B. Depreciation
Building 5%
Machinery 10%
5.3.9 . Profitability
According to project income statement the project will start generation profit in the l sf year-
operation important ratios such as profit to total sales net profit to equity.' (Return on equality)
and net profit plus interest on total investment (return on total investment) show an increasing
trend during the lifetime of the project the income statements and other indicator of profitability
show that project is viable.
6. FUTURE DEVELOPMENT
Every business undertaking is it large or small should have future development plan. It is a plain
fact that business activities are undertook in dynamic business nature and different environment.
Therefore the factory will have an expansion phases depending on the condition of the industry
character particular in producing the profile itself by installing the plant. In this regarded, the
project will expand its capacity and product diversification in the future.
The extraction process implies an unavoidable impact on the landscape and natural environment,
however, human activities does not necessary mean loss of biodiversity and danger for eco-
systems.
land degradation
land Degradation
Land degradation is one of the significant impact arising out of mining and quarrying activities
which is mainly in the form of alteration of land structure due to excavation stacking of top soil
and loss of land due to dumping mine waste and overburden soil, stone and quarrying cause
damage to property depletion of ground water , loss of fertile top soil, degradation of forest land
adverse effect on the aquatic biodiversity's and public health haphazard quarrying of sand from
the damage to infrastructure like bridges and roads.
The estimated extent of land degradation due to mining and storage wastes like over burden soil
and mine tailings is not available. Under these circumstances, only indirect methods like remote
sensing aerial photography coupled with ground trotting can be used to arrive at realistic estimate
of the extent of land degradation in any particular region. Mining activities & environmental
impacts.
Mining activities has led to fragmentation of forest land, diminished green cover, posing a threat
to conservation of species. The deforestation in the forecast area coupled with the high rainfall in
the project area has also led to soil erosion.
Degradation of forest and decrease in biodiversity mining and quarrying, either open cast or
underground, destroy landscape and forest ecosystem. The waste martial that remain after the
extraction of usable ores are dumped on the surrounding land thus causing loss to soil nutrients
and supportive micro flora and vegetation
Air pollution is a common environmental problem in all mines and quarries, especially opencast
operations. Air pollution spread beyond mine sites, thus affecting the buffer zone to a large
extent.
Blazing, drilling, underground mining equipment and ventilation fans are the source of noise and
vibration underground. Heavy earth moving machinery, drills dumpers and martial handling,
crushing and cleaning equipment are prominent source above ground. In beneficiation plants
noise and vibration are the primary occupational health problems. Ground vibration, caroused by
blasting damage structure and also cause annoyance to human beings.
Water pollution is a major concern in mining operation where ore being processed in flurry from
to enrich the low quality ore or extract metal like gold. Spill over/leakage of effluents containing
toxic chemicals (e.g cyanide, used in gold processing) or discharge of leachate from mine waste
surface runoff from overburden dumps during rains, result in degradation of water heavy
metals/toxic chemical or siltation. In the areas where sulphides (pyrites) are present in the ore,
water interacts and forms acid mine drainage which has low PH and contain high levels of
sulphides, iron, and total dissolved solids. These deplete oxygen level in water, increase toxicity
toxicity by rendering heavy metals, sulphides and fluoride soluble and create corrosion problems.
The quality and quantity of ground water may get effected through various factors like surface
hydrology, soil texture and terrestrial vegetation, through the quantity of water may be benefited
by ground water recharge in open cast mines, in place where mining is below the water table
ground water is usually intercepted and pumped out or lost by evaporation thereby lowering the
water table.
This could result in loss of head or dewatering of wells within a radius of few kilometers of the
mine. Similarity even after mining and reclamation processes are over, groped water quantity can
still be affected adversely. If the mine is located in groundwater recharge area, the recharge
characteristic may get affected by the backfill martial which may differ from the original
characteristic of top soil and overburden of leased area. The quality of ground water can get
affected depending on the quality of leachates generated from the overburden martial whether
acidic in nature or rich in mineral content, thereby warranting adoption of appropriate control
measures.
Abandoned/closed mines
Close/abandoned mines may case in degradation of land due to removal of top soil, health
hazards due to stagnated water in the pits, threat to human and animal life, contamination of land
and water bodies due to surface run off from mine waste dumps during monsoon period and air
pollution due to spread of dust particle from waste dumps. The small mines after becoming non-
functional create serious environmental and socio-economic impacts.
Health impact
The health impacts of mining and quarrying are very server. Studies have shown that
stone/Gypsum quarrying and crushing cause silicosis, exposure to iron ore dust may cause
pneumoniosis and respiratory problem among worker of lime stone quarries.
The major adverse impacts of mining are land deformation and deforestation. By proper back
filling, dozing, top soil spreading and soil amelioration, the land can be prepared for biological
reclamation. As far as possible back filling and land reclamation work should be carried on
concurrently with mining. The vacant land in the main leasehold should be utilized for tree
plantation. The green belt created around the mine workings would be aesthetically pleasant and
act as dust and noise filters.
The top-soil extracted should be used immediately for plantation work and where it can't be used
immediately, should be stacked separately, to be used later for rehabilitant mined out area and
dumps. The overburden dumps should not be created in layers of moderate thickness of say 8 to
10 m and each upper layer should be formed leaving a terrace at the outer edge of the lower
layer.
The individual layer may have slopes at angle of response of the dump martial but the overall
angle of slope by this method of formation in layer would come down to around 28 degrees ,
making it easier for erosion control and relegation of the dumps. Construction of check dams in
gullies and rivulets will help in checking erosion and down wash of silt. If overburden dumps
slopes cannot be avoided application of geo-textiles would help the revegetation-process.
If the mining project involves involuntary displacement of persons, suitable scheme for
compensating the families for their land homestead should be made and proper resettlement and
rehabilitation scheme prepared after due consultation with the persons being displaced.
Rehabilitation scheme for other project affected person should also be prepared.
The monitoring program for the present project will be undertaken to meet the following
objectives:
To provide information on the actual nature and extent of key impacts and the
effectiveness of mitigation and benefit enhancement measure which through a
feedback mechanism, can improve the planning and execution of future , similar
projects.
1) Compliance monitoring which checks whether prescribed action have been carried out,
usually by means of inspection or enquires.
2) Effects monitoring, this records the consequence of activities on one or more environmental
components, and usually involves physical measurement of selected parameter or the execution
of surveys to establish the nature and extent of induced changes. Responsibility for the
implementation of environmental mitigation measure belongs to national authorities, institution
and partners.
Due to the insignificance or low negative environmental impact during construction no specific
monitoring action are necessary other than the usual ones taken by the environmental authorities.
The project will have annual budget estimated to be Br 150,000 for environmental project.
In conclusion, regard the project will undertake a separate and detail Environmental impact
Assessment based on requirement of EPA's environmental impact assessment guideline.