2011-2012 Phase 1 Student Design Competition

8/12/2019 2011-2012 Phase 1 Student Design Competition

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2011‐2012

SME/NSSGA Student Design Competition

PHASE ONE

Treeline Construction Materials



2011- 2012 SME/NSSGA Student Design Competition

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




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.




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.




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








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




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




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.




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 ‐‐‐




Appendix A

Market Map






Appendix B

Product Gradations

(by percent passing)




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




Appendix C

Wages and Benefits




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




Appendix D

Plant Equipment




Heber Quarry




Charthouse Quarry




Appendix E

Drill Logs




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 30 67 DG


HQ11‐3 0 1 SOIL


HQ11‐3 35 60 DG


HQ11‐4 0 2 SOIL


HQ11‐4 40 70 DG






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


CHQ11‐3 0 1 SOIL

CHQ11‐3 1 57 DG


CHQ11‐4 0 2 SOIL

CHQ11‐4 2 59 DG


CHQ11‐5 0 2 SOIL

CHQ11‐5 2 55 DG

CHQ11‐

5 55

200

GRANITE





Appendix F

Cost Codes




[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




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




2500 Equipment Rental

2501 Rental - Long Term

2502 Rental - Short Term2600 Travel & Entertainment

2601 Travel

2602 Meals

2603 Entertainment




Appendix G

Plant Flow




Heber Quarry

Plant Flow




Charthouse Quarry

Plant Flow

Documents

2011-2012 Phase 1 Student Design Competition