Effect of Capital and Operating Cost on the Aggregate Production in Some Selected Quarries in North-Central Nigeria

Abstract

Aims: The study examines the effect of capital cost and operating cost on some selected quarries within North Central Nigeria. Study Design:  Survey design was used in designing the questionnaire used for collecting data from the selected quarries. Study Area and Methodology: Twenty four quarries were selected in North- Central Nigeria for this study. Sixteen of these quarries were for commercial purposes while eight were for construction purposes. A total number of one hundred and fifty-five questionnaires were randomly distributed to the workers and managements of the various quarries to collect data on the quantity of granite rock blasted per month, cost of drilling accessories used, cost of explosives used, cost of maintenance of plant/equipment and cost of manpower. Net Present Value (NPV) and Internal Rate of Returns (IRR) were the two economic evaluation data analyses used for the study because they rely on the time value of money. Results: The result shows that Majok quarry, Cafon quarry, Rock bridge quarry, Academ quarry, Trans Engineering and Sinac granite quarry are not doing well as their internal rate of returns falls short of the annual internal rate of returns of 20%. This indicates that the companies could not break even as they failed to cover the average operating cost. Conclusion: The study noted that it is not only huge capital cost that determine the production cost of aggregates, rather, such measures as the size of the jaw of the crushing plant, appropriate spacing and burden drilling plan are very important to guide against the extra operating cost of secondary blasting.