Granite Minning Project

Stone Type: Granite, Jet Black

Location: Phulra to Darband Road

Distance from Pakhwal Chowk, Mansehra: 33 Km

Leased Area: 995 Acres. In this lease several sites could be worked out. We are proposing
here one of the best possible site in this total area. Other locations where this stone is
available are there but the slab size is small.

Current Status: Leased in Dec 2008 for 2 years on prospecting licence. When developed,
the lease will be extended as per government policy.

Access road to be developed: 1 km for Dumpers

Planned excavation per day: 50 Tones

Approximate dimension per slab: 1x1x3 meter ( approx 9 - 11 tones)

Density of Granite: 2600 – 2700 kg per cubic meter approximately 3 Tonne per cubic meter

Average Chemical
Composition of Granite
(from Handbook of Physical
Constants)

Oxide Weight %
SiO2 70.18
TiO2 0.39
Al2O3 14.47
Fe2O3 1.57
FeO 1.78
MnO 0.12
MgO 0.88
CaO 1.99
Na2O 3.48
K2O 4.11
H2O+ 0.84
H2O- 0.03
P2O5 0.19

Process of excavation:
Surface clearing, with compressors, blasting, removal of over burden, drilling etc. The slab
is pulled with pulley/chain or winch and loaded on the dumper.

Current status: The shape of the ridge is as under: The area marked as deposit is visible
solid slab out of mountain. Over this area is over burden and under this area also, which has
to be removed. But this visible area is around 30 – 40 ft in width and on vertical axis and
around 70 80 ft of horizontal axis. This is visible. And at a gradually increasing hight from
the NSL.

Deposit

Minimum Requirement of equipment

Compressors 2 Tools Various

Drilling Machines 5 Field Stone Cutter 1
Tripod Pulley 2 Excavator on rent 1
when required
Winch machine 1 Blasting material
Jeep 4 x 4 1 Camping gear etc
Dumper on rent 2 Hammer of
various sizes,
Chiesels
Generator 50 KVA 1
Spare Parts various
Tents 5

Estimated expenses of machinery and Eqpt: Rs 2 . 0 million

Labour

1Miner @ Rs 20,000 per month

Description Nos Rate Total

Miner 1 20,000 PM
Labour 10 400 / day
Driver 1 6000/ PM
Mechanic 1 7000/ PM

Security Deposit with the lease owner

(refundable / adjustable against excavation of stone) Rs 1.0 million

Royalty per tone: Rs 2000/ per tone or per cubic ft which will be adjusted from the advance
paid to the leaser

Rs 1000 per truck load, notwithstanding with the load or weight to the land owner.

Market Survey
Sample Exploration and Marketing Survey:

It is not easy to bring sample of at least 1 sft from the deposit. The sample from top surface
will not provide correct information. Top and exposed layer has to be removed at least 4 –
5 ft before getting sample. A limited controlled blasting etc will be required.

Sample material from 2, 3 points is required to be excavated after removal of top layers of
either side at least of 4 – 5 ft in order to have actual stone from the deposit, cut to size,
polished and checked for quality, price, quantity at Abbottabad, Rawalpindi, Lahore,
Karachi.

An estimated expenditure of Rs 100,000/- is required as Sunk cost to assess the feasibility

of the project before committing resources. This will be non recoverable and recommended
to be incurred before launching the whole project, to be spent in order to excavate samples
from inner layer. In case of good quality stone, the price will be more.

Ist Phase: Dressed Block of proposed size or 1 cubic meter is excavated and sold in Local
Market, Rawalpindi, Lahore, Karachi as a raw material.

2nd Phase: Export of raw material to Europe, Spain, UK, USA, Germany for statue or
other purpose or finished & polished product in shape of tiles or slabs ( Required to be
assessed the feasibility of cutting and polishing on payment in local market)

3rd Phase: Establishment of Granite cutting and polishing factory at Mansehra (Rs 35 M) if
required in a later stage

Company Status: A Private limited company will be established, to be registered with

company registrar. Legal expenses will be required. Name of the company to be decided.

Operations: Joint Account Operation by 2 persons. All business will be done in the name of
the company
Marketing: Initially efforts will be made by ourselves, then a person will be hired for
marketing and sales in national market. Placement of product information on internet,
Arrangement of Cargo shipping agent, transportation, packaging etc.

An Investor is required, who is willing to invest initially Rs 100,000 in order to asses

complete feasibility as discussed earlier and he will be partner in the proposed company.

Share holding and profit distribution after all expenses

Investor (A) 50% Will provide finances

Partner (B) 15 – 16% Company management, Operations management,

Partner (C) 15 – 16% Liasion, Marketing, Distribution, other affairs

Lease Partner (D) 18 – 20 % Site management, excavation, site operation, initiator

Social Responsibility

10 % of overall savings/ profit will be directed for social welfare scheme and balance will
be distributed in proposed share.

Future Investment

Should any other partner decide to invest in the expansion phase of the project, he may do
so and will be eligible to receive according to his share of investment in the 50% proceeds
allocated for investor.

Partner (D) will manage site, supervise excavation.

Partner B&C, supervise management, expenses, accounts, receipts, marketing, reporting
etc.

Sale is generally on 3/4 week credit.

Basis of Estimates: 50 Tone excavation per day

Estimate of Costs (Rs)

Fixed Cost
Sunk Cost 100,000
Access Road 500,000 Track for dumpers
Machinery 2,000,000
Spare Parts 50,000
Advance/ Security 1,000,000
Sub Total (A) 3,650,000 Approx Rs 3.65 million
 Operating Cost
Labour cost per day (Rs)
Supervisor 700
Labour 4000
Driver 200
Mechanic 200
Site Expenses per day 1500 Food, tea etc
Sub Total(B) 6,600 per day
Diesel, oil, R&M etc 1 compressors operating 8-
Sub Total (C) 3000 per day 10 hrs daily and 1
compressors are stand by

Payment to lease owner 100,000 per day 50 tone per day

Total daily expenses 109,600 Say Rs 115,000 ( Maxm)

daily
Expenses per tone 115000 / 50 = 2300 per tone For 50 tonne

Note: This estimate is based for very initial operation. More machinery will be required
later

Working Capital requirement for 20 days: 115000 x 20 = Rs 2,300,000

Sale Price Analysis

Estimation is based on 50 tone daily production i.e. 50 cubic meter

(A conservative estimate is made. To have a fair estimate of stone price, initial exploration
and investment of Rs 100,000 has been proposed.)

@ 50 tone per day and price at site without transportation charges

@ Rs 6000 per tone @Rs 7000 per tone @Rs 8000 per tone

Sale 300,000 350,000 400,000

Cost 115,000 115,000 115,000
Daily Earning 185,000 235,000 285,000

20 working days per month are planned taking into account week days, rain,
contingencies
Earning per month 3,700,000 4,700,000 5,700,000

3.7 M 4.7 M 5.7 M

Payback period 2 months 1.5 months 1.2.months

Total Fund Requirement inclusive of Fixed cost and working capital

Rs 5.95 million (66875 US $)

Note: Even if only 25 tones block is produced on daily basis and 20 days a month, the
project is feasible.

2. We are looking for investors for this project to fund Rs 5 million

3. Also looking for buyers for this product in the market

4. Generally in your area, what is the price of black granite as raw material or per cft or per
cubic meter for high, medium and low quality granite to asses the market. The product will
have its price accordingly based on its quality.

Blocks will be excavated in following shapes