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2011‐2012
SME/NSSGA Student Design Competition
PHASE ONE
Treeline Construction Materials
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Table of Contents
1
General Background
Information
.........................................................................................................
3
1.1 Problem Statement ..................................................................................................................... 3
1.2 Project Requirements .................................................................................................................. 4
2 Site Location and Layout ...................................................................................................................... 5
2.1 Site Weather ................................................................................................................................ 5
2.2 General Site Layout ..................................................................................................................... 6
3 Geologic Information ........................................................................................................................... 8
3.1 Site Geology ................................................................................................................................. 8
3.2 Drilling Logs ................................................................................................................................. 8
3.3
Water Table
.................................................................................................................................
8
4 Permit Constraints ................................................................................................................................ 9
4.1 Heber Quarry ............................................................................................................................... 9
4.2 Charthouse Quarry ...................................................................................................................... 9
5 Processing Plant ................................................................................................................................. 10
6 Market Summary ................................................................................................................................ 11
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1 General Background Information
This problem
is
intended
to
highlight
the
challenges
associated
with
evaluating
the
operation
of
multiple
aggregate operations in the same market area. Your job as engineers is to determine the most profitable
and feasible operating solution for this market area.
This problem will use data from an actual aggregate mining company in the United States. This is real
data and therefore will represent the type of information you will have as a mining engineer of the
future. The company that donated the information to create this problem has hundreds of thousands of
dollars invested in the data you will be using and is proprietary to that company. Therefore, the data
should be
respected,
not
reproduced
for
any
other
use,
and
if
the
location
is
accidentally
disclosed,
the
information should be kept to yourselves. This is a wonderful opportunity for you as a student, so treat
the information given in this problem appropriately.
1.1 Problem Statement
The 2011/2012 Student Design Competition Problem will be centered on two quarries located in the
eastern U.S.:
Heber
Quarry
and
Charthouse
Quarry.
Both
quarries
are
owned
by
Treeline
Construction
Materials (TCM) and service the same market area.
Heber Quarry is located east of the market and has been operating off ‐and‐on for 20 years. The
material resource at this site consists of a granitic deposit with a significant amount of overburden.
Currently, the site operates an aggregate processing plant, and a portion of the property has been
leased to an outside company to produce asphalt. The agreement between TCM and the asphalt
producer states that TCM will be the sole supplier of raw aggregate material for the asphalt.
Historically, 50%
of
the
asphalt
aggregates
sold
at
Heber
Quarry
go
to
the
on
‐site
asphalt
plant.
Charthouse Quarry is located west of the market and has been operating off ‐and‐on for 15 years. The
material resource at this site consists of granitic deposit with a moderate amount of overburden.
Processing facilities onsite consist solely of an aggregate plant.
In the past, both quarries were able to operate simultaneously and profitably. Due to a drop off of the
in local market demand, both operations have been struggling to make it on their own. Your team has
been
hired
to
put
together
an
operational
assessment
and
technical
design
to
determine
the
most profitable solution for TCM’s operations in this market area. Your design, assessment, and ultimate
operational recommendation will be reviewed by the Board of Directors.
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1.2 Project Requirements
Your project team has been asked to specifically address the following in regards to the Treeline
Construction Materials operations.
• Reserve Estimation:
o Geologic model
o Total mineable material
Total saleable material
Total waste material
• Mine Design:
o Overall quarry design
o Phasing of reserves
o Phasing and location of waste stockpiles
• Operating Plan:
o Which site(s) will be operated
o Processing equipment needed
o Mobile equipment needed
o Personnel requirements
o
Hours required to satisfy demand
• Economic Analysis of Project:
o Estimated operating costs for your plan
It has been requested that your team put annual operating costs in TCM’s
current cost structure; cost codes and descriptions are included in Appendix F.
o Justification of the site(s) your team chose to operate
o In order
for
this
to
be
an
attractive
investment
for
the
company,
an
IRR
of
17.5%
needs
to be achieved. The company traditionally uses a Cost of Capital of 8% and the
corporate tax rate is 34%. A table for wage and benefits values can be seen in Appendix
C.
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2 Site Location and Layout
Treeline Construction
Materials
(TCM)
is
located
in
a relatively
rural
area
of
the
eastern
United
States,
with the nearest large cities of Woodville, located 111 miles to the east with a population of 83,000; and
Luminville, located 112 miles to the north with a population of 174,000.
The center of the market is Parkersburg, a small town with a population of 1,700. According to recent
studies, the annual population growth for the area is expected to be 1%. There are many national parks
and forests in the area which bring a recreational crowd in the warmer months for camping, hiking and
whitewater rafting. Charthouse Quarry has a 15 mile haul to the center of the market area, and Heber
Quarry has
a 20
mile
haul.
There
are
three
other
aggregate
companies
within
the
market.
The
average
cost of trucking in the area is $85/hr (25 ton trucks), which will vary with fuel price. See Appendix A for
a market map.
2.1 Site Weather
The weather at the quarry is moderate with an annual high temperature of 86ºF and an annual low
temperature of 26ºF (see Figure 1). The site experiences an annual rainfall of approximately 55 inches
(see Figure 2).
Figure 1: Average Temperatures
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
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3 Geologic Information
3.1 Site Geology
The subject properties lie within the Blue Ridge physiographic province. The Blue Ridge physiographic
province is a mountainous belt extending northeastward from northern Georgia to southern
Pennsylvania. The province was formed by tectonic compression resulting in the uplift of resistant
crystalline bedrock into narrow bands of medium to high grade metamorphic, somewhat parallel
mountain ranges. There are two distinct areas within this province. The northern section consists of an
irregular mountain
range,
containing
anywhere
from
one
single
ridge
to
a group
of
closely
spaced
ridges
with a width of 12‐14 miles. The southern half of the Section is broader, higher, and more mountainous.
It is nearly 70 miles wide and contains mountains of greater elevations. There are 46 mountain peaks in
the southern section that have elevations above 6,000 feet. Though high, the mountains are rounded
and generally lack prominent angularity. The whole Section is bounded on the eastern and western
margins by southwest to northeast trending thrust faults, between more faults and tight folds.
Bedrock is composed primarily of Proterozoic metasediments (quartzite, schist, and gneiss) and meta‐
igneous rocks
(granite,
amphibolites,
basalt,
and
gabbro).
Smaller
areas
underlain
by
Paleozoic
granite
occur along the eastern and southern edge of the Section, with lower Cambrian sandstone, shale and
dolomite, and broad zones of intensely sheared and altered rock.
The two quarries owned by Treeline Construction Materials are mining granitic rock overlain with
significant thickness of decomposed (weathered) granite. The weathering is joint controlled and as a
result can vary in thickness.
3.2 Drilling Logs
Due to tightened exploration budgets, the drilling plan for Heber and Charthouse quarries had to be
scaled back. Your team has been advised that additional drilling may be done at a later date, but that it
would require cost justification. Drill logs are located in Appendix E.
3.3 Water Table
The following are the estimated water table elevations for both quarries; as determined by drilling logs
as well
as
other
nearby
wells.
Heber Quarry: 2000 feet above mean sea level
Charthouse Quarry: 2050 feet above mean sea level
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4 Permit Constraints
The following
conditions
are
part
of
the
current
mining
permits
for
the
two
quarries
4.1 Heber Quarry
Offsets:
• See Permit Boundary in AutoCAD file
• No mining may occur within 100ft of permit boundary, however other activities, such as
stockpiling or road construction, are allowed.
Slopes/Depth:
• Final slopes are not to exceed:
o Soil/Overburden: 2:1
o Weathered Rock: 1.5:1
o Fresh/Competent Rock: 0.5:1
• Maximum bench height: 50 ft
• Minimum catch bench width: 10 ft
• Maximum mining depth: May not mine below water table
Hours of Operation:
Excavation, processing, and load‐out activities are allowed to take place 24 hours a day, 7 days a
week.
Tonnage:
Maximum yearly tonnage allowed: NO LIMIT
4.2 Charthouse Quarry
Offsets:
• No mining or any other activity may occur within 50 feet of property boundary
Slopes/Depth:
• Final slopes are not to exceed:
o Soil/Overburden: 2:1
o Weathered Rock:
1.5:1
o Fresh/Competent Rock: 0.5:1
• Maximum bench height: 50 ft
• Minimum catch bench width: 10 ft
• Maximum mining depth: May not mine below water table
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5 Processing Plant
Due to
the
low
annual
tonnage
of
both
operations,
each
site
has
a relatively
simple
plant
configuration.
At both Heber and Charthouse Quarries, mining is done with a CAT 988 loader and 2 50‐ton haul trucks.
A list of the equipment at each site is included in Appendix D. The plant flow diagrams can be seen in
Appendix G.
At Heber Quarry, the two haul trucks dump the blasted material into a Telsmith 3648 jaw crusher for
primary crushing. Once the material passes through the crusher, it is conveyed to the primary surge
pile. The material is then conveyed to a secondary circuit which begins with a double deck vibrating
screen.
The
undersize
is
screened
off
as
ABC
stone
and
the
oversize
is
crushed
with
a
Telsmith
SBS
52
C/C cone crusher. The material which is not screened off as ABC stone can be stock piled as 3’s or
conveyed to the tertiary circuit. The tertiary circuit consists of two triple deck vibrating screens and two
side‐by‐side Nordberg Symons 4 ¼ ft S/M cone crushers. This circuit is designed to produce 78’s and
57’s. In addition, an Eagle Sand Screw is used to make sand from the undersize
At the Charthouse Quarry, the two haul trucks dump the blasted material into a Telsmith 3648 jaw
crusher for primary crushing. Once the material falls goes through the crusher, it is conveyed to a
double
deck
vibrating
screen.
The
undersize
is
screened
off
as
ABC
stone
and
the
oversize
is
crushed
with a Telsmith SBS 52 C/C cone crusher. The material which is not screened off as ABC stone can be
stock piled as 3’s or conveyed to the secondary surge pile. The tertiary circuit begins with two side‐by‐
side Nordberg Symons 4 ¼ ft S/M cone crushers. The tertiary crushers feed two triple deck vibrating
screens. This circuit is designed to produce 78’s and 57’s. In addition, an Eagle Sand Screw is used to
make sand from the undersize.
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6 Market Summary
The economy
surrounding
the
TCM
operations
is
at
a stand
‐still.
The
economic
outlook
suggests
that
the aggregates market will remain flat for the next three years and then increase at a rate of 2%
annually. Tables 2 and 3 contain the projected tons and price for each product at the Heber and
Charthouse Quarries, respectively, for years 2012–2014. The table for Heber quarry includes the
demand from the on‐site asphalt plant.
The market growth data was taken from a market study done by Treeline Construction Materials; be
aware that sales forecasts are subject to change with macro‐economic conditions and local market
variables.
A
copy
of
the
current
gradation
targets/specifications
for
these
products
can
be
found
in
Appendix B.
Table 2: Heber Quarry Annual Sales Projections, 2012‐2014
Product Sales Projection
(tons)
Average
Sales Price
($)
#57 15,000 $14.50
#78
12,000
$13.75
Base (ABC) 60,000 $10.50
Class 1 Rip Rap 7,000 $16.00
#3 2,000 $14.75
Manufactured Sand 4,000 $14.50
TOTAL 100,000 ‐‐‐
Table 3: Charthouse Quarry Annual Sales Projections, 2012‐2014
Product Sales Projection
(tons)
Average
Sales Price
($)
#57 20,000 $16.00
#78M 19,000 $19.00
Base (ABC) 30,000 $9.50
#3
4,000
$14.50
Class 1 Rip Rap 2,000 $17.00
Manufactured Sand 19,000 $14.00
TOTAL 94,000 ‐‐‐
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Appendix A
Market Map
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Appendix B
Product Gradations
(by percent passing)
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Class 1 Rip Rap:
Minimum Stone Size – 5”
Midrange Stone
Size
–
10”
Maximum Stone Size – 17”
ASTM SPECIFICATIONS
PRODUCT: #57 #3 Base (ABC) #67 #78 #89 Manufac. Sand
% Passing: Min Max Min Max Min Max Min Max Min Max Min Max Min Max
2" 80 100 100 1001 1/2" 100 100 35 70
1" 90 100 0 15 94 100 100 100
3/4" 90 100 100 100
1/2" 26 60 0 5 90 100 100 100
3/8" 63 72 20 55 90 100 100 100
#4 0 7 0 10 5 25 20 55 94 100
#8 0 3 0 5 0 10 5 30
#10 32 41#16 0 5 0 10
#40 14 24
#50 0 5
#100 6 12 0 10
#200 0 5
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Appendix C
Wages and Benefits
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Wages and Benefits
Classification
Wage &
Benefits
Mine Foreman 29.00 $/hr
Blast Overseer/Driller Overseer 25.00 $/hr
Driller 20.00 $/hr
Haul Truck Operator 18.00 $/hr
Over Road Driver 15.00 $/hr
Loader Operator 22.00 $/hr
Plant Operator
20.00
$/hr
Plant Laborer 15.00 $/hr
Plant Mechanic 21.00 $/hr
Mechanic 20.10 $/hr
Electrician 25.00 $/hr
Scale operator 14.00 $/hr
Engineer 85,000 $/year
Site Manager
120,000
$/year
Quality Engineer 75,000 $/year
Safety Professional 70,000 $/year
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Appendix D
Plant Equipment
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Heber Quarry
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Charthouse Quarry
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Appendix E
Drill Logs
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Heber Quarry
(all measurements in feet)
COLLAR
HOLEID X COORD Y COORD Z COORD
HQ11‐1 547931 490433 2425
HQ11‐2 550585 489089 2895
HQ11‐3 550468 490021 2560
HQ11‐4 548567 487992 2150
HQ11‐5
549991
489050
2450
LITHOLOGY
HOLEID FROM TO LITHOLOGY
HQ11‐1 0 2 SOIL
HQ11‐1 2 33 CLAYEY SAND
HQ11‐1 33 72 DG
HQ11‐1 72 150 GRANITE
HQ11‐2 0 1 SOIL
HQ11‐2 1 30 CLAYEY SAND
HQ11‐2 30 67 DG
HQ11‐2 67 200 GRANITE
HQ11‐3 0 1 SOIL
HQ11‐3 1 35 CLAYEY SAND
HQ11‐3 35 60 DG
HQ11‐3 60 150 GRANITE
HQ11‐4 0 2 SOIL
HQ11‐4 2 40 CLAYEY SAND
HQ11‐4 40 70 DG
HQ11‐4 70 150 GRANITE
HQ11‐5 0 300 GRANITE
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Charthouse Quarry (all measurements in feet)
COLLAR
HOLEID X COORD Y COORD Z COORD
CHQ11‐1 436099 498404 2680
CHQ11‐2 434614 499930 2360
CHQ11‐3 436586 501285 2025
CHQ11‐4 434796 497850 2120
CHQ11‐5 435503 496909 2230
CHQ11‐6 435497 499523 2411
LITHOLOGY
HOLEID FROM TO LITHOLOGY
CHQ11‐1 0 2 SOIL
CHQ11‐1 2
65
DG
CHQ11‐1 65 200 GRANITE
CHQ11‐2 0 1 SOIL
CHQ11‐2 1 62 DG
CHQ11‐2 62 150 GRANITE
CHQ11‐3 0 1 SOIL
CHQ11‐3 1 57 DG
CHQ11‐3 57 65 GRANITE
CHQ11‐4 0 2 SOIL
CHQ11‐4 2 59 DG
CHQ11‐4 59 150 GRANITE
CHQ11‐5 0 2 SOIL
CHQ11‐5 2 55 DG
CHQ11‐
5 55
200
GRANITE
CHQ11‐6 0 300 GRANITE
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Appendix F
Cost Codes
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[Note: all cost codes may not apply to the quarries outlined in this problem]
Cost Code Description1101 Personnel - Labor
1102 Labor - Hourly
1103 Labor - Hourly Overtime
1104 Labor - Salary
1105 Labor - Salary Overtime
1106 Labor - Vacation
1107 Labor - Holiday
1108 Labor - Sick1200 Personnel - Safety
1201 Safety Training
1203 Health and Safety Equipment
1204 MSHA Fines
1205 Medical Injury Cost
1300 Personnel - Employ Related
1301 Drug Screening
1302 Employee Physical
1306 Employee Training
1307 Tuition Reimbursement
1308 Relocation Expense
1400 Energy
1401 Electric
1402 Gasoline
1403 Diesel
1500 Supplies1501 Hydraulic Hammer Parts
1502 Explosives
1503 Drill Steel
1504 Tires & Tubes
1505 Welding & Cutting
1506 Oil & Lubricant
1507 Manganese
1508 Conveyor Belts
1509 Screen Cloth
1510 Filters
1511 Wire Rope
1512 Ground Engaging Tools
1513 Other
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1608 Loader
1609 Conveyor
1610 Drill
1611 Shove/Crane/Excavator
1612 Truck
1613 Crusher
1614 Screen
1615 Electric
1616 Truck Scale
1617 Other
1700 Contract Services
1701 Contract Svcs - Crushing
1702 Contract Svcs - Grading
1703 Contract Svcs - Drilling
1704 Contract Svcs - Blasting
1705 Contract Svcs - Towing
1706 Contract Svcs - Materials Handling
1707 Contract Svcs - Crane
1800 Depr, Depletion & Amor t
1801 Depreciation
1802 Depletion
1803 Amort - Goodwill
1900 Property Related
1901 Heat & Water
1902 Janitorial
1903 Security
1904 Landscaping
1905 Maintenance
1906 Other
2000 Office Expense
2101 Telephone
2102 Internet Access
2103 Computer Software
2104 Computer Hardware
2105 Office Supplies
2106 Membership & Subscriptions
2107 Other
2200 Professional Services
2201 Engineering
2202 Legal
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2500 Equipment Rental
2501 Rental - Long Term
2502 Rental - Short Term2600 Travel & Entertainment
2601 Travel
2602 Meals
2603 Entertainment
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Appendix G
Plant Flow
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Heber Quarry
Plant Flow
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Charthouse Quarry
Plant Flow
Top Related