• Wednesday, February 21, 2024
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How to invest in kaolin production for local, export markets

How to invest in kaolin production for local, export markets

Nigeria is blessed with a lot of solid mineral resources that are of considerable economic importance.

A report of the Nigerian Mineral Appraisal and Monetisation Programme (NIMAMO) confirmed about 450 industrial minerals whose deposits have been found in commercial quantities.

These include limestone, clay, feldspar, barites, gypsum, salt, tak1, kaolin, phosphate, silica sand, magnesite, trona, asbestos, gold, and graphite.

Large kaolinitic clay deposits with a capacity of up to 93 million tonnes have been identified all over the country, particularly in states such as Oyo, Kaduna, Sokoto, Ogun, Plateau, Borno, Ekiti, and Katsina states.

The vast deposits are in Plateau, Bauchi, Niger, Kwara, Enugu, and Benue. Among all the states, Katsina provides the best quality Nigerian kaolin.

Mining experts said it is one of the purest kaolinitic minerals that are great for pharmaceutical industries.

Kaolin is a hard solid and versatile industrial mineral product with wide applications in industries, and agriculture among others.

Specifically, kaolin is widely used in many industries including; soap, detergent, rubber, cosmetics, paints (as fillers), plastics, chalk, fertilisers, pharmaceuticals, toothpaste, ceramic, insecticide, pulp and paper, agro allied industry, and iron and steel.

Initially, kaolin was essentially imported into Nigeria. For instance, according to the National Bureau of Statistics (NBS), kaolin importation in 1996 was 11,400 tonnes, but this figure increased to 12,540 tonnes in 1997.

However, the Federal Government has since imposed a ban on the importation of kaolin.

Pricing

Processed kaolin comes out in different grades depending on the quality of raw materials used and the quality of processing.

The specific grades in turn determine the pricing of kaolin, which ranges from N45,000/tonne for Grade 1090 to N50,000/tonne for Grade 1290.

Production process

In terms of the production process, the crude kaolin is crushed with a hammer mill to reduce the size of big lumps before being lifted by the bucket elevator to the blunger.

The Blunger blunges the kaolin and the output is collected in a concrete bump from where it is lifted by a pump to the screens. The screens will remove the coarse sand and grit and the slurry is collected in a second lump.

This process goes on from a second lump to a cyclone to septic tanks and the slurry from the septic tank is discharged into propylene (synthetic) bags. It is from these synthetic bags that water is squeezed out from the slurry. This final process gives the kaolin cake.

The kaolin cake is shredded or cut manually into small pieces to provide a greater surface area for fast drying.

The Kaolin cake is then put in trays and fed into a chamber dryer which is heated by hot air at about 2500C.

The dried cake is fed into a hammer mill or pulverizer, which grinds the kaolin into the kaolin powder, which is then bagged and weighed in 50kg synthetic bags with polythene inner linings to keep off moisture.

Financial projection

Taking a hypothetical case of a plant that produces 1,000 tonnes of 1090 grade and 2,000 tonnes of 1290 grade at prices of N45,000 and N50,000 per tonne respectively, it has been estimated that a revenue of N145.00 million is realizable per year.

All things being equal, annual profit is estimated at about 58 million during the first year.

Details of the production process, technology for kaolin production, markets and trade links and other information will be embodied in a bankable feasibility report for interested investors.