Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.

AN OVERVIEW OF BARITE EXPLOITATION OPPORTUNITIES AND COST IMPLICATIONS OF

ESTABLISHING A MEDIUM-SCALE BARITE PROCESSING PLANT IN NIGERIA
1
K.K. Nwozor and 2E.M. Chukwunenye
1
Department of Geology, Anambra State University, Uli,.
E-mail: kknwozor@yahoo.com
2
Nigerian Geological Survey Agency, Abuja, Nigeria.

Abstract
Opportunities abound in Nigeria for medium and large-scale investments in barite mining, processing and
marketing. The known reserves are in Cross River, Nassarawa, Plateau, Taraba, Benue, Gombe, Zamfara, Ebonyi
and Adamawa States. They occur as vein infilling materials associated with Lead-Zinc mineralization in both
Precambrian Basement and Cretaceous sedimentary rocks of the Lower and Middle Benue valley and generally have
specific gravities in the range of 3.5 - 4.4. Estimated demand for barite in Nigeria is in excess of 255,000 metric
tonnes per annum while the foreign market accounts for over 650,000 metric tonnes. The major consumers in
Nigeria are the multinationals in the upstream oil sector and chemical products companies. The few processing
plants in the country produce a little above 40,000 metric tonnes per annum creating a wide supply gap currently
bridged by massive importation of this very essential commodity. The viability and profitability of a medium scale
barite processing plant in Nigeria is not in any doubt. With a crusher of 75 metric tonnes per hour capacity, a
market price of N40,000 per tonne of processed barite; the plant evaluated in this study at an annual capacity of
142,000 metric tonnes can generate a profit of about N3.6 billion at 60% capacity utilization representing the
commissioning year. This figure will increase to N4.2, N4.8, N5.4 and N6.0 billion at 70%, 80%, 90% and 100%
capacity utilization representing the second, third, fourth and fifth years of operation respectively. Although the
initial working capital is high, the plant has the advantage of quick returns on investment. The huge capital outlay
for the acquisition of necessary equipment and vehicles is attenuated by the high demand of processed barite and
the price disparity between the raw mineral and the finished product.

Introduction
Barite is the natural form of the sulphate of barium
(BaSO4). It is a fairly dense industrial mineral
used in oil drilling operation. It is also a major raw
material in paints, paper, rubber, plastics, glass,
match, leather processing, tobacco, fertilizer,
radiological and pharmaceutical industries
depending on the specific gravity and the
percentage of other constituents or inherent
impurities. Generally, barites occur as
hydrothermal veins and sub-aqueous exhalative
Hibbard, (2002). In some cases, marine phosphatic
concretions are often biogenetically converted in a
non marine environment to barite Medrano and
Piper, (1997). Like most hydrothermal deposits,
inclusions are common in barite Roeder, (1984).
An Overview of Barite Exploitation Opportunities and Cost Implications of Establishing a
Medium-Scale Barite Processing Plant in Nigeria
The specific gravity of barite ranges from 3.0 - 4.4.
The higher the specific gravity, the wider its
application especially in the oil drilling industry
where the required API gravity is 4.2. It gives pale
green flame colour under propane flame test and green
or yellow when tested with ultraviolet light, Hibbard,
(2002). Barites from different sources in Nigeria vary
in their specific gravities. Even samples from the same
mine have yielded different weights but these
disparities in specific gravity are harmonized by
blending barites of very high specific gravity with
those of relatively lower specific gravity to meet the
API gravity requirement of 4.2.
Occurrence and Reserve Estimation
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Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.
Large deposits of barite have been discovered in
different parts of Nigeria MMSD, (2008). These
include Biase, Ikom, Obubra, Yala in Cross River
State; Azara, Keana and Wuse in Nasarawa State;
Langtang South, Wase and Shendam in Plateau
State. Others are in Ibi, Aloshi, Wukari and Kumar
in Taraba State; Ador, Buruku, Gboko, Gurna,
Makurdi, Ushongo in Benue State. Appreciable
deposits also occur in parts of Adamawa, Gombe
Estimated Total National Demand
The major consumers in Nigeria are multinationals
in the upstream oil sector. The mineral is a major
component needed critically in deep water
drilling. The total national demand of Barite in
Nigeria is about 255,000 metric tones
Chukwunenye, (2006). The few processing plants
in the country produce a little above 40,00 metric
tones per annum creating a wide supply gap
An Overview of Barite Exploitation Opportunities and Cost Implications of Establishing a
Medium-Scale Barite Processing Plant in Nigeria
and Zamfara States while recent reports also suggest
some deposits in Ebonyi State. In Azara alone,
eighteen barite-bearing veins have been investigated
with five of these veins containing reserves of about
730,000 metric tonnes with specific gravity of 3.8 -
4.5. The deposits in Cross River State are estimated
to be about 2.0 million metric tonnes while that of
Ibi and Aloshi is in excess of 750,000 metric tonnes.
currently bridged by massive importation of this
very essential commodity.
Method of Study
The study involved literature review of barite
occurrences in Nigeria and industrial applications
of the mineral. Insights were obtained from the
experiences of workers in some of the existing
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Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.
companies in the country currently involved in the
mining, processing and distribution of the
commodity. The cost analysis involved key
assumptions based on economic realities of the
industry. For instance, a barite/impurity ratio of
3:1 with 5% production loss at a cost of N20,000
per ton of raw barite and market price of N40,00
per ton of processed barite is the prevailing
industry guide for premium grades,
Chukwunenye, (2006). Cheaper variants equally
exist. For the take-off working capital, it is
assumed that should be regular supply of raw
barite for at least one month, enough funds to pay
utility bills, supplies, administrative overheads and
plant maintenance costs for the first two months
and workers salaries for the first three months.
The computations were done and tabulated using
process and standard costing principles.
Factory Location/Infrastructural
Consideration
Since the know deposits are in Cross River and
Middle Belt regions of Nigeria; Calabar or any of
the relatively developed middle belt settlements
can conveniently host the plant. Germane to this is
the need for road networks, communication
facilities, banking services, power supply, water
availability and security. Any choice location
ought to be a nexus between the geologic deposits
and the finished products market. Calabar has the
advantage of access to the Atlantic Ocean and
enjoys proximity to the hub of upstream activities
in the Niger Delta. The processing plant can
An Overview of Barite Exploitation Opportunities and Cost Implications of Establishing a
Medium-Scale Barite Processing Plant in Nigeria
occupy a total land area of 30,000 square meters
consisting of a mineral dump yard, Mineral
Processing Hall, Engineering Workshops,
Administrative Block, Fuel Dump and a
Warehouse. Other structures include Generator
House, Water boreholes, security post, staff
quarters, canteen and perimeter fencing.
Process Flowchart and Machinery
The process flowchart for barite production starts
with the mining of barite and possibly the
transpiration of raw barite from other mines to the
factory site to supplement local production. This is
followed by physical removal of impurities,
primary crushing, secondary crushing, jigging,
blending/milling and bagging. The process model
incorporates scrappers, primary crushers to reduce
the big boulders to pebble size. The secondary
crusher reduces the minerals to smaller sizes
before the gravitational separation at the jig. The
jig comprises a mesh of known sizes which is
vibrated at regular intervals by a system of electric
motors and transported to the sieve by conveyor
belts. The jigging separates the less dense
materials (impurities) from the denser barites. The
jigged barite is sent to the mill. The mill
pulverizes the mineral into powdery form. The
specific gravity of the mineral is upgraded during
milling to meet the API gravity requirement of
4,2. This is called blending. The product is
conveyed to the bagging, packaging and or
branding machines. The required machinery
includes:
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Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.

Plant/machinery Quantity
Scrappers 1
Crushers 2
Heavy Duty Generator 1
Gravitational Jigs 2
Milling/Bagging Machine 1
Water/Gravel Pumps and Hoses 3
Bucket loader 1
Dump Trucks 4
Trucks/Trailers 6
Water Reservoir 2
Underground Fuel Tank 2
Weigh Bridge 1
Water tanker 1
Staff bus 1
Service Cars 4

Cost Analysis
The broad objective of a process costing system is the ascertainment of cost of a product for the purpose of
stock valuation and profit measurement ACA, (2003). The project cost and fiscal analysis are broadly
domiciled in the estimated Capital and Recurrent Expenditures.
Capital Expenditure
The table shown the costs of fixed assets such as land acquisition,
Royalties, plant and machinery and other immovable assets.
Asset Quantity Cost (N’000)
Land Acquisition/Royalties 30,000 m2 7,000
Buildings 64,000
Engineering Installations 3,000
Fixtures/Fittings 200
Capitalization 30,000
Crushers 2 30,000
Generator 1 5,000
Milling Machine 1 8,000
The Gravitational Jig 1 5,000
Excavator/Bucket loader 23,000
Dump Trucks 4 20,000
Trucks and Trailers 6 36,000
Weight bridge 1 200
An Overview of Barite Exploitation Opportunities and Cost Implications of Establishing a 4
Medium-Scale Barite Processing Plant in Nigeria
Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.

Water Borehole 1 2,500

Fuel Dump 1 1,800
Fuel Tanker 2 3,000
Staff bus 1 3,000
Service Cars 1 4,400
Contingencies 4 5,000

Recurrent Expenditure
Factored into recurrent expenditures of the barite plant are personnel costs, equipment maintenance, fuelling,
cost of haulage from mines to factory, medicals, utility bills and other contingencies.

Wage Bill
With an initial monthly wage bill of N500,000 and a projected annual increase of 5%, a five year personnel
cost is as shown:
Capacity Utilization 60% 70% 80% 90% 100%
st nd rd th
1 YR 2 Yr 3 YR 4 YR 5th YR
Labour (N’000) 6,000 6,300 6,615 6,945.75 7,293.04

Estimated Power Demand

Equipment Qty Unit (Hp) capacity Demand (Hp)
Electric Motors for Hopper Conveyor Belt 2 50 100
Electric Motors for the Primary Crushers 4 80 320
Electric Motors for Secondary Crushers 4 80 320
Electric Motors for the Jig 2 20 40
Electric Motors for the Jig Conveyor Belt 2 20 40
Electric Motors for the Milling Conveyor Belt 1 20 20
Giant Electric Motor for the Milling Machine 1 100 100
Total 940 (705Kw)

The estimated power rating of the equipment at site is put at 940 Hp (705 kW). Assuming a N5.00 per hour
cost for 1.0 kilowatt, the sum of N3525.00 will be needed to keep the plant running for an hour. For a daily
shift of 8 hours for a year and two respectively, utility cost is computed as follows:
Capacity Utilization 60% 70% 80% 90% 100%
Utility/Annum (‘000) 5076 5922 6768 7614 8460
Utility/2yr (N’000) 16920

Cost of Mining Raw Barite

The cost of producing and hauling one tones of raw barite from the mines to the plant is put at N20,000,00.
Annual cost at stratified plant capacities are computed as:
Capacity Utilization 60% 70% 80% 90% 100%
Raw Barite (tones) 120,000 140,000 160,000 180,000 200,000
Cost (N’000) 2,400,000 2,800,000 3,200,000 3,600,000 4,000,000

An Overview of Barite Exploitation Opportunities and Cost Implications of Establishing a 5

Medium-Scale Barite Processing Plant in Nigeria
Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.

Cost of In-Plant Processing

The barite-impurity ratio is 3:1 with estimated production loss of 5% the process cost will be evaluated as:
Capacity Utilization 60% 70% 80% 90% 100%
Input (tones) 120,000 140,000 160,000 180,000 200,000
Output (tones) 85,500 99,750 114,000 127,500 142,500

Cost of Supplies
Estimated cost of empty polypropylene bags is N25.00 each with a litre of fuel at N8.00. Since each bag is
for 50 kg of barite, 1000 kg or 1 ton will therefore require 20 bags such that cost of supplies will be
computed as shown in the follow up table:
Capacity Utilization 60% 70% 80% 90% 100%
No.(‘000 litres) 1714 1995 2280 2556 2850
Fuel (‘000 litres) 18 21 42 27 30
Cost of bags (N’000) 42,750 49,875 5700 63,900 71,250
Cost of fuel (N’0000) 1440 1680 1920 2160 2400
Total Supply Cost (N’000) 44,190 51,555 58,920 66,060 73,650

Depreciation Value
Considered to depreciate as production and time progress are land and building, plant and equipment as well
as office furniture. Assuming a depreciation value of 10%, 20% and 15% for these assets respectively,
depreciation can be computed as shown:
Capacity Utilization 60% 70% 80% 90% 100%
Building (N’000) 8100 7290 6561 59,04.9 53,14.4
Plant/Equipment (N’000) 50,740 40,592 32,473.6 25,978.88 20,783.10
Furniture (N’000) 450 382.5 325.13 276.35 234.9
Total (N’000) 59,290 48,264.5 39,359.73 32,160.13 26,332.40

Cost of Production
When all inputs and factors are summed, the cost of producing a unit (1ton) of processed barite is computed
as in the follow up table:
Capacity Utilization 60% 70% 80% 90% 100%
Raw Material (N’000.000) 2400 2800 3200 3600 4000
Labour (N’000) 6000 6300 6615 6945.75 7293.04
Utility (N’000) 1566 1827 2088 2349 2610
Maintenance (N’000) 600 600 600 600 600

An Overview of Barite Exploitation Opportunities and Cost Implications of Establishing a 6

Medium-Scale Barite Processing Plant in Nigeria
Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.

Supply (N’000) 44190 51555 58920 66060 7,3650

Factory Overhead 2,452,356 2,860,282 3,268,223 3,675,954.75 408,153.4
Admin (N’000) 600 600 600 600 600
Operations (N’000) 2,452,956 2,860,882 3,268,823 3,676,554.75 4,084,153.04
Depreciation (N’000) 59290 482,64.5 39,359.73 32,160.13 26,332.40
Total cost (N’000) 2,512,246 2,909,146.5 3,308,182.73 32,160.88 4,111,085.44
Unit cost 29.4 29.1 29.01 29.0 28.8
production staff factored in the entire work force
of the plant. The processed barite produced is
evaluated at a selling price of N50,000.00 per
tone. Both output of finished product and expected
Productivity and Projected Earnings revenue to be generated by the plant over a five-
The cost of raw materials, utility, supplies and year stratified production capacity of one and two
maintenance will double for a two-shift production shifts uninterrupted daily work schedule are as
schedule while the wage bill is estimated to tabulated:
increase by 6% representing the percentage of

Capacity utilization 60% 70% 80% 90% 100%

One shift production 8550 99,750 114,000 127,800 142,500
Two shifts production 171,000 19,9500 228,000 25,5600 285,000
One shift revenue (‘000.000) 4275 4,987.5 5700 6390 7125
Two shifts revenue (N’000 000) 8550 9975 11,400 12,780 14,250

Estimated Income Statement for one Shift Schedule

Capacity utilization 60% 70% 80% 90% 100%
Revenue (N’000) 4,27,5000 4,987,500 5,700,000 6,390,000 7,125,000
Production cost 2,512,246 2,909,146.5 3,308,182.73 3,708,714.88 4,111,085.44
Profit/loss 1,762,754 2,078,353.5 2,391,817.27 2,681,285.12 3,013,914.56

Estimated Income Statement for Two-Shift Schedule

Capacity utilization 60% 70% 80% 90% 100%
Revenue (N’000) 8,550,000 9,975,000 11,400,000 12,780,000 14,250,000
Production cost (N’000) 4,875,060 5,758,963.5 6,565,483.23 7,373,251.01 8,183,298.92
Profit/loss (N’000) 3,674,940 4,216,036.5 4,834,516.77 5,406,748.99 6,066,701.08

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Medium-Scale Barite Processing Plant in Nigeria
Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.

Discussion
As shown in the tables, the viability and profitability of a barite processing plant in Nigeria is not
in any doubt. With a crusher of 75 metric tones per hour capacity, the plant can generate a profit
of about N3.6 billion at 60% capacity utilization representing the commissioning year. This
figure increases to N4.2, N4.8, N5.4 and N6.0 billion at 70%, 80%, 90% and 100% capacity
utilization representing the second, third, fourth and fifth years of operation respectively.
Although the initial working capital is high, the plant has the advantage of quick returns on
investment. The huge capital outlay for the acquisition of necessary equipment and vehicles is
compensated by the high demand of processed barite and the price disparity between the raw
mineral and the finished product. The cost of production of the mineral will decrease with the
procurement of haulage vehicles for easy transportation. Since the cost of haulage for 3 tones
raw barite is put at N100,000, when trailers are purchased, this amount will significantly reduce
to just the cost of fuelling and maintenance of the vehicles and will bring down the working
capital. The cost of the raw material varies according to the grade or percentage composition of
barium sulphate or in specific gravity. In the context of this analysis, the price of N20,000 is used
for the premium grade. Other lower grades can be purchased at much lower prices and blended
with the premium grade to increase profitability. To ensure regular supply of raw barite, the
investor can commission small-scale and artisanal mining operation in different locations. By
funding the mining operations to some extent, the raw material can be procured at a mutually
advantageous cost not necessarily dictated by the usually overbearing market forces. Since
production and earnings are directly proportional to working hours, steady source of raw material
has to be guaranteed. Further to this, joint venture agreements can be entered into with large-
scale producers of raw barite for maximum supply.

Summary and Conclusion

Barite resources and reserves of Nigeria provide vast opportunities for both medium and long-
term investments. With a stable democratized polity, enabling economic environment and readily
available market, investments in this sector are guaranteed of geometric returns in profits. The
known reserves are in Cross River, Nassarawa, Plateau, Taraba, Benue, Gombe, Zamfara,
Ebonyi and Adamawa States. They occur as vein infilling materials associated with Lead-Zinc
mineralization in both precambrian basement and cretaceous sedimentary rocks of the Lower and
Middle Benue valley and generally have specific gravities in the range of 3.5-4.4.
At a market price of N40,000 per tone of processed barite, the plant evaluated in this
study has commissioning year potential for a profit of N3.6 billion at an annual capacity of 142
metric tones and may reach up to N6.0 billion at full capacity utilization. It is worthy of note that
even if the price of processed barite fluctuates due to market forces, the viability and
profitability of this venture is guaranteed. A barite processing plant can also be adapted in
processing talc and kaolin, two important industrial minerals that equally abound in Nigeria in
close proximity with the barite deposits. Moreover, the cost of setting up a barite processing
plant can be much lower than the values projected here depending on the capacities of the
machines, size of factory, manpower requirement, number of vehicles and other considerations
that may not be necessary for a medium scale enterprise.

An Overview of Barite Exploitation Opportunities and Cost Implications of Establishing a 8

Medium-Scale Barite Processing Plant in Nigeria
Natural and Applied Sciences Journal, Vol. 9 No. 1 2008 Available online at www.naasjournal-ng.org.

Finally, the policy thrust of the Nigerian government is geared towards a private sector
driven economy with supportive framework for small and medium scale enterprises. The barite
processing plant is sure to create wealth, provide employment and reduce poverty while
guaranteeing returns to investors and shareholders.

References
ACA Practice Kit, (2003). Cost Accounting
Intermediate Paper 8. Wyse Publishing, Lagos. Pp. 144-337
Chukwunenye, M.E., (2006). Design and
Cost Estimates of a Prototype Small-Scale Barite Processing Plant. Barites Consulting
Nigeria, Unpublished Memoirs: 26P.
Hibbard, M.J., (2002).Mineralogy: A
Geologists Point of View. McGraw –Hill Inc, New York. Pp. 41-515.
Medrano, M.D and Piper, D.Z., (1997). Fe-
Ca Phosphate, Fe-Silicate and Mn-Oxide Minerals in Concretions from the Monterey
Formation, Chemical Geology 138: 9-23.
Microsoft, (2005). Encarta Encyclopaedia.

MMSD Nigeria, (2008). Barites

Exploration Opportunities in Nigeria. Ministry of Mines and Steel Development, Abuja.
Pp 1-7.
Roedder, E., (1984). Fluid Inclusions.
Reviews in Mineralogy, Vol 12. Washington D.C: Mineralogical Society of America.

An Overview of Barite Exploitation Opportunities and Cost Implications of Establishing a 9

Medium-Scale Barite Processing Plant in Nigeria