Gypsum Mining, Gypsum Powder and Gypsum Board Production in Nigeria; The Feasibility Report.

Gypsum is a hydrated sulphate of calcium, found usually in clays and limestone, sometimes associated with sulphur. It is the principal commercial form of hydrated calcium sulphate (CaSO42H2O). It is usually formed by either the evaporation of salt in shallow inland seas or by the decomposition of pyrite (FeS) in the presence of calcium carbonate.

More than 90% of gypsum are used in the building and construction industry while the remaining are used in the agriculture and health sectors. Gypsum deposit also play important role as a pathfinder in the petroleum industry by virtue of the fact that the organic material commonly associated with its formation is considered as source of hydrocarbon generation and its deposits act as seal for petroleum reservoirs.

Gypsum is an important raw material in the production of Portland Cement, Plaster of Paris, School chalk, Wall board etc. Gypsum is also used extensively as a soil conditioner.

The gypsum grades from the various deposits in the country satisfy the specifications required by the cement industry. Most of the gypsum deposits have not been quantified. There is need for detailed mapping, extensive drilling, reserve evaluation, sample collection and laboratory analysis for all the gypsum deposits in the country. It has become imperative that the large deposits of gypsum in the country should be beneficiated and processed to meet the requirements in the production of crayon, chalk, Plaster of Paris, etc.

The existence of gypsum in Nigeria has been reported since 1921. Gypsum deposits are found in the sedimentary basins of the country. Identified deposits are found in Adamawa, Taraba, Yobe, Borno, Bauchi, Benue, Ogun, Sokoto, Edo, Kogi, Abia, etc

About one billion tons of gypsum deposits are spread over many sites in Nigeria. Plaster of Paris which is calcium sulphate with half molecule of water of crystallization (CaSo4. ½ H2 o) and hygroscopic characteristics obtained by duly calcined the raw material i.e. Gypsum (CaSo42H2o). It possesses outstanding property of setting and subsequent hardening when mixed with water.

Plaster of Paris is extensively used in ceramic industry for preparation models and moulds. It is also used as main raw material in the manufacture of toys & statues, chalk crayons, gypsum plaster boards, and decorative picture frames besides wide range of applications in the interior decoration of buildings and other establishments.

Nigeria currently imports POP from China, Turkey and Morocco with Morocco being the closest supplier of the product to the entire West African region. Despite its abundance in about 13 states in the country, Nigeria spent about N20 billion of its foreign exchange to import gypsum in three years. In 2009, 2010, and 2011 the country spent N1.3bn, N2.2bn and N3.2bn on the importation of gypsum anhydrite and N7.1bn; N2.7bn and N3.1bn on Plasters respectively.

The growth and demand for Plaster of Paris in this sector has been further strengthened by the boom in the Nigerian real estate sector, which is growing faster than the average GDP at a rate of 8.7 percent (GDP growth at 7.4 percent). The growth in the hospitality industry and the advent of new malls, commercial complexes and multiplexes also lend support to the growth prospects of this industry.

Rising disposable incomes of the growing middle class and sixteen million (16,000,000) units of housing shortage, however, hold out a reassuring potential for the industry.

Gypsum boards are light weight construction materials that are widely being used as walls, ceilings and for partitions in interiors or exteriors of residential or non-residential structures.

They are often called drywall, wallboard or plasterboard and can be directly attached to wood and metal framing or existing surfaces using screws, nails or adhesives. Gypsum boards provide sound control, versatility, quality, convenience and their non-combustible core makes them different from plywood, hardboard and fiberboard. Thus, they have become prevalent and are serving as a speedier alternative to traditional lath and plaster.

This report seeks to confirm the financial viability or otherwise of establishing a gypsum mining, gypsum powder (plaster of paris) and board production plant in Nigeria.

The production capacity of the gypsum powder plant is seventy-five (75) tons per hour of gypsum powder (plaster of paris) working triple (3) shifts of eight (8) hours each at seventy-five percent (75%) of the installed capacity in the first, second, third, fourth and fifth year of operations. Half of the output – gypsum powder (plaster of paris) would be sold while the remaining half would be used for the production of gypsum board.

The production capacity of gypsum board plant is six thousand (6,000) sqm per day of gypsum board based on 1200mm*3000mm*12m dimension working triple (3) shifts of eight (8) hours each at seventy-five percent (75%) of the installed capacity in the first, second, third, fourth and fifth year of operations respectively.

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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