Some Guidelines A) Process Economics - Plant Cost Estimation ) B) Process Control Methods 4th Year Design August 2011

Basic Process Economics projections spreadsheet

Capital Investment Outlay Income - from sales, annual/monthly Expenses

fixed (incl. cost o Cap ta ) ed ( c . of Capital) variable (per unit sold)

Depreciation reduction in plant value (10(10 30 years for process equipment) Profit/Loss (P&L) chart of accounts, a li P fi /L h f list
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Chart of Accounts Example every business has this

Account
7-0415 New Site Preparations 7-04151 Site- Concrete Pad & Prep 7-04152 Site- Temp Services & Connect 7-04153 Site - Utilities (Electricity) 7-04154 Site - Utilities (Natural Gas) 7-04155 Site - Utilities (Water) 7-04156 Site - Fence Install & hire 7-04157 Site - Miscellaneous & Advert. 7-04158 Site Office Set Up & Rental 7-04159 7 04159 All Shelter & Containers 7-04160 Innova Labour & Proj. Mgmt 7-0415 New Site Preparations - Other Total 7-0415 New Site Preparations 7-0420 Springvale Lab Treatability St 7-0421 Springvale Soil Analysis 7-0420 Springvale Lab Treatability St - Other Total 7-0420 Springvale Lab Treatability St 7-0430 Mobilise, Transport & Set Up 7-04301 Break Up Electrical Contractor 17,707.53 45,000.00 -27292.47 9,425.85 0.00 9,425.85 20,000.00 20,000.00 -20000.00 -10574.15 105,971.50 372.90 71,737.88 42,577.27 5,537.92 0.00 4,269.11 17,947.38 56,045.18 56 045 18 0.00 0.00 304,459.14 159,820.00 14,200.00 150,000.00 90,000.00 12,000.00 29,010.00 5,000.00 48,350.00 45,000.00 45 000 00 14,278.85 44,169.00 611,827.85 -53848.50 -13827.10 -78262.12 -47422.73 -6462.08 -29010.00 -730.89 -30402.62 11045.18 11045 18 -14278.85 -44169.00 -307368.71

to 31 Aug

Budget

variance

Basic Process Economics projections spreadsheet

Measures of a business:
Earnings before Interest and Taxation (EBIT) Earnings before Interest, Taxation, Depreciation and Interest Taxation Amortisation (EBITDA) Net Profit after Taxation (NPAT). ( )

Balance Sheet:
Assets Liabilities Depreciation Net Tangible Assets (NTA).Fire sale

J Lucas 2008

PROJECTIONS SUMMARY TABLE from P&L and BS

PROJECTIONS SUMMARY Y/E 30/6/08 - 30/6/12 Year End Tonnes % of Capacity Sales ($'000) EBIT ($'000) EBITDA ($'000) NPAT ($'000) Issued Shares (number) EPS (cents) NTA's ($'000) (including MTS J/V) NTA's/Share (cents) NET DEBT ($'000) NET DEBT/NTA'S ENTERPRISE VALUE ($'000) (Based on 8 x Earnings Multiple) ENTERPRISE VALUE/SHARE ($) $1.23 $1.83 $3.05 22.8 1,935 0.54 21.7 1,861 0.36 42.5 4,992 0.50 29,120 62.1 1,271 0.09 43,432 96.9 -2,389 N/A 72,368 30/06/2008 10500 6% 4,471 -179 15 -125 15,707,255 -0.8 3,583 30/06/2009 33000 19% 7,616 -636 -150 -445 23,707,255 -1.9 5,137 30/06/2010 110000 31% 25,445 5,200 6,135 3,640 23,707,255 15.4 10,078 30/06/2011 135000 39% 32,825 7,755 8,851 5,429 23,707,255 22.9 14,719 30/06/2012 155000 44% 38,875 12,922 14,032 9,046 23,707,255 38.2 22,979

ENTERPRISE VALUE CALCULATION

ENTERPRISE VALUE CALCULATION 07/08 NPAT ($'000) EARNINGS A GS MULTIPLE 6 7 8 9 10 21,840
$0.92/share

08/09 -445

09/10 3,640

10/11 5,429

11/12 9,046

-125

32,574
$1.37/share

54,276
$2.29/share

25,480
$1.07/share

38,003
$1.60/share

63,322
$2.67/share

29,120 29 120
$1.23/share

43,432 43 432
$1.83/share

72,368 72 368
$3.05/share

32,760
$1.38/share $1 38/share

48,861
$2.06/share $2 06/share

81,414
$3.43/share $3 43/share

36,400
$1.54/share

54,290
$2.29/share

90,460
$3.82/share

Economic Feasibility

Capital Investment Outlay Investment/Purchase on NTAs Investment/Purchase on Earnings Multiples y p Payback Period time for investment paid back ROI a percentage - >10% NPV net present value (purchase value) IRR internal rate of return on investment
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Cost Estimating

Peters and Timmerhaus Perry Other Sources Direct Quotation (requires someone's time, rarely donated for a non-paying project challenge for p y gp j g student projects) 2nd Hand Equipment Sales Personal Experience Consultation with the experienced Estimation methods rules of thumb six tenths rule scaling: C2 = C1*(Q2/Q1)**0.6
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Cost Estimating Rules of Thumb key preliminaries

Industrial Land
Purchase - $100-$300 /m2 20 year lease - $8-$20/m2/annum

S Statutory Approvals and Licences y pp

$60-150K for variation/6-12 months $400-$1M for new/12-36 months

Basic Site Establishment

$30 /m2 for raw/Brownfield site $5 /m2 for previously occupied site

Buildings - $800-$1200 /m2 g $ $ Services

Power - $150K per 1000 Amps Gas $100K p 40 GJ/hr $ per Water $50K Other $20K

Cost Estimating Rules of Thumb Plant Fabrications (C Tait)

Materials
Mild Steel - $2000 per tonne Stainless Steel - $10,000 per tonne Fiberglass ?? Exotics $15,000 E ti - $15 000 per tonne t

Key Information

Fabrication Consumables
Mild steel minimal $20 per day SS
1 kg wire per hour 3 m weld per hour $45 per kg wire

Labour Time
Basic: 40-50 hours per tonne Intricate: 80-90 hours per tonne Highly complex/specialist: 100-120 hours per tonne

Labour Rates: $60 - $80 per hour

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Cost Estimating Other Considerations

Working Drawings 5% Pumps Motors and Drives - $10K per unit Hardware: I t H d Instrumentation and Sensors - $5K per t ti dS unit Electrical I t ll ti El t i l Installation = Cost of Hardware C t fH d Control Systems = 50% Cost of Hardware Installation Commissioning ..etc..
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Plant Costing Spreadsheet

Sort key (hide column) Task Sub Task Sub Task Sub Task Sub Task Task Sub Task Sub Task S bT k Sub Task Task Sub Task Sub Task Sub Task Sub Task Sub Task Task Sub Task Sub Task Sub Task Sub Task Sub Task

1 1.1 1.2 1.3 1.4 2 2.1 2.2 22 2.3 3 3.1 3.2 3.3 3.4 3.5 4 4.1 4.2 4.3 4.4 4.5

MODIFICATIONS / CHANGES / ADDITIONS Replacement of Twin Screw Auger with Single Shaft Pugmill Pug mill - single shaft, p g g paddle mixer arms Electrical design/control mods Electrical installation Water cooled refractory lined transition screw for converter dust transfer Replacement of tipper valve with Double Dump Valve Double dump valve Electrical design/control mods El t i l d i / t l d Electrical installation Replacement of feed screw with Slinger Belt Feeder Slinger Belt Electrical design/control mods Electrical installation Dogbox modifications (steel work) Dogbox modifications (refractory) Drier skid / Lifter modifications for Items 1-3 (HEIGHT INCREASE 1.8m) Electrical works allowing removal of skid Electrical modifications (new junction box/cable extensions) Modification of skid Transportation and cranage Extension of electrical cables

Supplier ASTEC _ USA CI BBE MCM Filtaire - Melbourne CI BBE ASTEC _ USA CI BBE MCM TBA BBE BBE MCM TBA BBE

CURRENT COST ESTIMATE $132,000 $105,000 $1,000 $1,000 $25,000 $10,500 $7,500 $1,000 $1 000 $2,000 $32,000 $20,000 $1,000 $1,000 $10,000 $5,000 $57,000 $3,000 $5,000 $10,000 $4,000 $3,000

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Other Miscellaneous Considerations - Operations

TransportTransport $50 per tonne Cranes - $320 per hour Insurances - $100 $200K pa I $100-$200K Land Rates Workers Comp 9% Legal Fees - $10K per transaction Company Overheads 20-30 % $ p p p Maintenance - $3 per tonne produced/processed Labour Rates Professionals - APESMA
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Additional Advice

Bag House $480K $130K Install 2008 J Lucas

Acid Scrubber $500K $250K Install

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Simple Process Control Practicalities - 1

Start with the Process Flow Diagram. Diagram Hand Sketch parameters you think should be measured. Develop a hierarchy, eg
Critical redundancy Interlocks Alarms Monitor Visual

Formulate Loops Think about benefit of Cascade Control Feed Forward or other advanced (Add limit switches, motion detectors advanced)

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Simple Process Control Practicalities - 2

Basic Principle is Measure, Control, Monitor Alarm Action Measure Control Monitor, Alarm,
Set alarms Set Interlocks Specify F il fe S e if Failsafes E-Stops

Work out Operating Procedures

Start-up Standard Operation Shutdown Emergency Shutdown

All the above are related to the Control Strategy For Noting:
Commissioning Plan is quite Separate Change Management Plan - advanced
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Developing the Control Strategy

C Control needs to be communicated at several levels:
Overview strategy and principles - PPT Specific examples - PPT Detail P&ID report/appendix

Start with a good ( g (readable) legend ( ) g (courtesy Boyle et al) y y )

- Annotate PFD - Develop Control Loopsetc

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Control Loops
Show V Sh Very Si l E Simple Examples l Breakdown into sections

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Control Loops
Show Very Simple Examples Breakdown into sections

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P&IDs
The D il Th Details are i this R in hi Report (B kd (Breakdown i into S i Sections) )

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Advanced Control, Monitoring Alarms Control

80 Measurement points 300 Alarms Interlocks/Backup

Extract Slide - example

Citect Heat Exchanger & Baghouse Page

Extract Slide - example