Diatomite Mining In Nigeria, The Pre-Feasibility Report

The Nigeria nation is blessed with abundant mineral resources; fossil fuels and solid minerals. The most popular being the fossil fuels since these constitute the nation’s greatest foreign exchange earner. They have, therefore, tended to overshadow the solid mineral sector of mining industry.

It is reassuring to note that the government has progressively in recent past years shown great interest in the exploitation of Nigeria’s solid minerals as a means of diversifying our economic base, putting in place the NATIONAL POLICY ON MINERALS METAL IN NIGERIA and other such policy documents in order to drive investment in the sector.

Solid minerals are many types occurring in many diverse environments in response to many diverse geology and geologic events. The resources can nonetheless be discussed under five (5) groups thus:

1. Iron and Iron-alloy metals
2. Non-ferrous Industrial metals
3. Precious metals
4. Metal fuel
5. Industrial minerals

Exploitation of the Non-metallic Minerals has not attained the desired level, mainly because of the various constraints associated with their exploitation, development and processing for utilization. Many of the non-metallic minerals, which are vital to the industrial take off of the country, have been found in commercial quantities within the country.

They include limestone, dolomite, marble, kaolin, barite, diatomite, feldspar, quartz and silica sands, gypsum, talc, silimanite, kyanite, phosphate, salt and bentonite.

Diatomite is the naturally occurring fossilized remains of diatoms. Diatomite is a sedimentary deposit which entirely consists of silica. Countries such as China, U.S., Denmark, Japan, Mexico and CIS were the major producers of diatomite in past few years.

The properties such as high surface area, low density, abrasiveness, high porosity, inertness, insulating properties, high silica content, absorptive capacity and brightness makes diatomite a valuable material in the market. The mining and extraction process of diatomite is complicated.

Diatomite mining and processing requires heavy earthmoving equipments and huge processing facilities. To get the desired grade of diatomite is highly energy intensive process. Diatomite can absorb liquid three times the weight of its own.

World diatomite (also called diatomaceous earth) output decreased during recession years, but now the market shows stable growth. Today the USA is world’s largest diatomaceous earth producer, accounting for about 36% of global total. Other major producers include China, Japan, Denmark, Mexico and Peru.
Main diatomite end use sectors include filter aids and fillers – together they account for 85% of total product demand. Other applications include production of absorbents and specialized pharmaceutical / biomedical uses.

It is expected that in near future existing deposits will cover global demand for the product; however, new high-purity diatomite deposits are needed to be identified.

The market for diatomite was driven by vanity of end-user industries such as water treatment, crop protection chemicals and absorbent among others. Huge demand for diatomite from filtration mediums has been the major factor for the growth of diatomite in past few years. In industrial applications, diatomite is used for transportation of nitroglycerin. In filtration, diatomite is used in filtering medium in swimming pools.

In chemistry, diatomite is used as filtration aid for the filtration of fine particles in the solutions. In abrasive industry, diatomite is used as a mild abrasive in toothpaste, facial scrubs and metal polishes. In crop protection chemicals, diatomite is used in fungicides, insecticides and rodenticide among others. Diatomite is used as absorbent in various applications such as excess oil spills, ethylene gas and other toxic liquid spills.

Diatomite is also used in classical thermal cookers due to its excellent thermal properties. In medical & healthcare applications, diatomite is used in DNA purification, absorbent and filtration of liquids. Moreover, diatomite is also used in agricultural applications such as hydroponics, nutrient marker in livestock and other specialty applications. However, health regulations associated with diatomite are anticipated to slower the growth of the market in next few years.

China had the highest demand for diatomite in Asia Pacific region. However, other Asian countries such as India, Korea, Japan and Australia are likely to provide better opportunity for diatomite market in next few years. Europe had the third-largest demand for diatomite.

Countries such as Spain, Germany, and the UK had the highest demand for diatomite due to huge demand from crop protection, water treatment and absorbent applications. Rest of the World market is anticipated to show positive outlook for the diatomite market in near future. Middle East is anticipated to be the fastest growing market in this region.

Table of Contents

EXECUTIVE SUMMARY 1. Business Overview 1.1 Description of the Business 1.2 Incentives / Government Policy 1.3 How to Obtain a Mining Lease in Nigeria 1.4 Occurrence and Distribution of the mineral in Nigeria 1.4 Critical Success Factor of the Business 1.5 Description of the Business Industry 1.6 Contribution to Local and National Economy 2. Marketing Plan 2.1 Description of product 2.2 Location 2.3 The Opportunity 2.4 Pricing Strategy 2.5 Target Market 2.6 Distribution and Delivery Strategy 2.7 Promotional Strategy 2.8 Competition 3. Technical Analysis 3.1 Description of the Location 3.2 Raw Materials 3.3 Production Technology / Equipment 3.4 Production Process 3.5 Production Cost 3.6 Stock Control Process 3.7 Pre-Operating activities and expenses 3.7.1 Operating Activities and Expenses 3.8 Project Implentation Schedule 4.0 Organizational and Management Plan 4.1 Ownership of the business 4.2 Profile of the promoters 4.3 Key Management Staff 4.3.1 Strategic Business Units 4.3.2 Management Support Units 4.4 Details of salary schedule 5. Financial Plan 5.1 Financial Assumption 5.2 Start up Capital Estimation 5.3 Source of Capital 5.4 Security of Loan 5.5 Loan Repayment Plan 5.6 Profit and Loss Analysis 5.7 Cashflow Analysis 5.8 Viability Analysis 6.0 Business Risk and Mitigation Factor 6.1 Business Risks 6.2 SWOT Analysis

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