Who can argue with the fact that sand is the most popular material in the construction industry, which itself never slows down, only grows and expands? Even with the constant emergence of new, fundamentally different ways of constructing buildings, radically different materials and methods in construction, sand was, is and will always be a commodity in demand. Moreover, both in the construction business and in the economic part.
But the extraction of sand in itself on a truly industrial scale (and, by the way, other entrepreneurs should not be interested in if he plans to make money) is not at all an easy matter. Mainly for two reasons.
The first is the need for knowledge of the technology for proper sand extraction and the characteristics of the sand itself. Here, of course, you can get by with a hired professional if you are too lazy to acquire knowledge yourself (we emphasize - necessary!).
The second is financial influences. In order to put sand production into production sufficient to make a good profit and break even, considerable initial investments are needed.
But besides these two issues, there are many more things that can and should be spent on the development of both effort and money - future sales channels, pricing policy, quality, logistics, advertising - and all this in a densely competitive environment. After all, let us remind you that the demand for sand is an almost constant thing.
Registration of business rights for sand extraction
Sand mining, like any other business that you choose as a business that brings you income, is subject to state registration and documentation. For this type of activity, the best option would be to register a limited liability company (LLC).
By the way, if you have the time (and sometimes the nerves), then without major problems you will be able to complete all the paperwork that the tax and other authorities will require yourself.
However, future entrepreneurs often turn to professionals, including companies specializing in paper preparation. It will cost a certain amount of money. But in return you get a quick process, and what’s more, they will do almost everything for you, and you won’t have to waste any time or nerves.
In addition, you will need to decide which form of taxation will be most suitable in your case. We recommend choosing a simplified system. But if possible, still consult with a professional about the current state of affairs in the field of registration of rights.
Further, in order to develop a particular sand quarry, registration of the right to use it will be required. And along with this, you will need to obtain a special license for the quarry. By the way, such a license is not given for more than a period of five years. But in the future there are ways to extend it.
Also, when registering a business, you will need to select the appropriate OKVED codes. It is better to familiarize yourself with the list in advance and select all the necessary ones so that in the future there will be no difficulties with completing the work. Here are the most necessary ones:
- 14.21 Development of sand and gravel quarries
- 14.22 Extraction of kaolin and clay
In order for quarry mining to proceed completely legally, one should not forget about state standards numbered 8736-93 “Construction sand. TU" and 4417-75 "Quartz sand for welding works".
Sand mining technology
Naturally, there are many different methods and methods for extracting sand. First of all, the method will depend on the origin of the resource that you plan to extract. It can be quarry sand, sea sand or river sand. And the methods themselves are divided into open and closed.
Open sand mining method
The most common method of sand extraction is open-pit. The technology for developing a quarry using this mining method includes the use of scrapers, special overhead ropeways, excavator equipment and dump trucks, as well as other various construction and mining equipment.
First, so-called stripping operations are carried out using bulldozers and scrapers. They are needed to prevent unnecessary impurities from getting into the sand. (Helpful: “stripping ratio” is the ratio of rock volume to total mineral volume).
Next comes the process of laying trenches for special working benches and other transport routes. It is useful to know that the height of the ledge will be determined based on those. characteristics of your equipment, in particular an excavator (therefore, you should take care of the availability of the necessary equipment in advance).
And although the open sand mining method is the most popular, this does not mean that you will get the best material using it. With this approach, the extracted sand is usually yellow-orange in color, which indicates its not the best properties.
That is why the work carried out is followed by the stage of sand cleaning. And only after this the material is used in such construction operations as the preparation of plaster and masonry mortars, as well as in the production of certain types of bricks.
Closed sand mining method
This method is also called hydromechanized. It is used primarily when it comes to extracting sand from the bottom of reservoirs. In order to successfully develop deposits under water, floating systems or dredgers are installed.
The whole point of such floating pantons, which are used for fixing cables and anchors, is the work of an extremely powerful dredger coupled with a mechanized ripper. All this sinks to the bottom of the reservoir and is used together so that the hydraulic mixture is sucked through a pipe and a floating slurry pipeline made of special links, pipes and floats.
As a result, the pulp - the same hydraulic mixture of sand and water - reaches the hydraulic dumps, where the water can flow back to the source. In parallel with this, the sand is washed away from other impurities, such as clay deposits and dusty impurities.
Receiving a document
Only a legal entity or a legal entity can obtain a license, therefore the first step towards legalizing a business is registering an enterprise. After this, you need to rent or buy a plot, and then win the auction (tender for subsoil development).
Only after winning the auction and registering the relevant person can apply for a license. To do this, you need to use the services of the regional office of the Ministry dealing with natural resources.
What requirements must the enterprise meet?
The only requirement that is put forward to the license applicant is the form of its registration. A legal entity or an individual entrepreneur can receive the document. Such papers are not issued to ordinary citizens. All other requirements relate to the development plan, and from there they are transferred to the company itself.
An enterprise intending to obtain a license must:
- Prepare the site for the start of work.
- Have the ability to fully organize the order of these works (up to the possibility of involving third-party companies).
- Provide workers with well-established infrastructure.
- Be able to transport mined material and store it.
- Properly close the quarry and eliminate all consequences of mining after its cessation.
The company must have the personnel, equipment, and financial ability to complete all of these activities. Otherwise, it will be impossible to obtain a license, since the enterprise will not be allowed to participate in the auction.
Documentation
To obtain a license, an enterprise will have to collect a certain package of documents. In addition to the application to participate in the auction and obtain a license (two documents must be prepared), you will also need the following papers:
- Constituent documents.
- Papers for the plot (ownership, topographic plan, etc.).
- Extract from the Unified State Register of Legal Entities.
- Papers that indicate that the company has sufficient finances to carry out all work (for example, a balance sheet).
- Certificate of registration with the Federal Tax Service.
- List of equipment and employees on staff.
- Program of activities (mentioned above).
- Agreements with companies that will carry out additional work (for example, geological exploration).
If documents are submitted by the applicant, he must have a power of attorney. When using loan funds, you must submit documents related to the loan. You will also need a receipt for payment of state duty. Its size is 7,500 rubles.
You should remember the tax, which is 10% of potential profit (calculated based on geological exploration data of the area).
Development of a sand quarry. Main goals
The goal of any such project is sand extraction and its subsequent implementation. It has already been said that the demand for such material as sand is practically inexhaustible due to constantly ongoing construction work. Accordingly, in order to successfully organize a business, a businessman will need, even at the stage of business planning and preparation of all documentation, to already decide on both the method and place of production, as well as the distribution channels for his future product, find buyers and determine the initial sales volumes.
There are unlikely to be any problems with sales, because there can be several channels - from small wholesale stores to large construction companies.
But this fact should not be misleading about the ease of accessibility of all processes. After all, you will need to decide on the starting price, as well as wholesale supplies. To do this, at a minimum, you need to be aware of the average market prices for goods in your region. After all, sales need to start as close to the place of production as possible. This is what will allow you to save on such a factor as logistics.
At the same time, you need to remember that you won’t be able to put a large markup on your product. It is easier for a company that has been engaged in the quarry development niche for a long time to set a certain price, since it does not need to think about the already past stage of reaching a net profit. And as you remember, the initial investment is by no means small.
Sales
There is a constant demand for sand in the construction industry, so even in conditions of great competition, it will not be difficult to organize sales. You can sell wholesale, retail, to the public and organizations. Main consumers of sand:
- Large and small specialized stores.
- Construction companies.
- Concrete plants.
Sand is imported for the construction of beaches, playgrounds, and is used as a filter material in water treatment and other engineering structures.
The search for customers is carried out through advertising or through direct negotiations with the purchasing service in construction companies and stores. In order for the price to compare favorably with competitors, it is necessary to first study the market, the cost of materials and delivery. Large buyers will require documents confirming the origin and quality of the sand. The materials are provided with a certificate and a valid license.
Video: quarry - loading sand.
Financial costs for organizing the sand extraction process
The following figures will be given that are averages and cannot accurately reflect the real situation, especially since it will vary from region to region. And in an unstable economy, average price data often changes. But they can show the approximate amount of investment and effort that will be needed when planning a business.
- The first thing that any sand mining activity cannot do without is an excavator. If you are starting from scratch, then you also need to take care of purchasing an excavator in advance. There are also a lot of companies selling special equipment on the market, so you will need to spend some time in order to obtain all the necessary information. As an entrepreneur, you need to understand what characteristics your machine should have and what brands of manufacturers are suitable for your business. Well, then the matter remains small. Analyze the prices of suppliers of foreign cars and choose the best offer.
As an option, we can recommend an excavator from the Korean manufacturer Hyndai, namely the R220LC-9S model. The bucket volume of this machine is 1.43 m3, the digging depth is 6.440 mm.
Buying an excavator will cost from 1.5 million rubles.
- Next in importance is the front loader. Just as in the case of an excavator, it is worth adequately assessing your needs and offers on the market. But you will have to pledge no less than the first point. The cost of a new loader with sufficient characteristics starts at around one and a half million rubles.
- Machine with dump truck function. (As an option, you can consider the KrAZ 6510 model with a lifting capacity of up to eighteen tons and the required platform volume). Prices for dump trucks start from 2.3 million rubles.
- Insulated cabin trailer. From 350,000 rubles.
Next come small household expenses (compared to the previous points):
- Communication means for workers (walkie-talkies) 30 – 50 thousand rubles
- Fire shield. 10 thousand rubles
- Fuel tanks. The volume should be 200 liters. From 25 thousand rubles.
- Oil tank. 200 liters. From 8 thousand rubles.
- Heater. From 3 thousand rubles.
- Gas stove. From 7 thousand rubles.
- Gas cylinder for refilling. From 3 thousand rubles.
- Drinking tank. From 5 thousand rubles.
- Electricity generator for a diesel trailer. From 350 thousand rubles.
- Inventory for a change room (tables, chairs, refrigerator) – from 12 thousand rubles.
The total capital costs for the purchase of everything necessary to start work amount to about 10 million rubles.
Staff
But besides this, there are other expenses that should also be taken into account at the enterprise planning stage. Among them is the salary fund, from which the wages of your employees employed in the quarry will be calculated. Again, depending on the region and the current economic situation, the average salary in the specialty may differ.
Here are the averages:
- Foreman 1 person. Salary for one month – from 30 thousand rubles. Salary per year – from 360 thousand rubles.
- Excavator driver. 2 people. Monthly salary – from 80 thousand rubles. Year – from 960 thousand rubles.
- Loader driver. 1 person. Monthly salary – from 30 thousand rubles. For a year - from 360 thousand rubles.
- Accountant. 1 person. From 20 thousand rubles. For a year - from 240 thousand rubles.
- Watchman Monthly salary – from 20 thousand rubles. Per year – from 240 thousand rubles.
- Cook (required in case of a remote quarry). For a month – from 20 thousand rubles. For a year - from 240 thousand rubles.
In total, at least 2.2 million rubles will be spent on the salary fund.
Geological exploration
When an official permit for subsoil use has been received, they begin to draw up and approve a geological exploration project. The purpose of the work is to record the estimated volume of mineral deposits. The document is drawn up within the period prescribed by the licensing conditions and sent for examination to the Ministry of Natural Resources.
Based on the approved document, they begin the site development project. Further work will be carried out in strict accordance with this project, which is being approved by Gosgortekhnadzor. The slightest violation threatens the company with loss of license.
The following stages prior to the start of production:
- Mine surveying.
- Work development plan for the year.
- Land reclamation plan.
To update annual development plans, topographic surveys are carried out in the quarry once every 3 months. When the entire volume of deposits is depleted, the subsoil user carries out reclamation measures to restore the land. If production ceases before reserves are exhausted, then the remaining balances are written off based on expert assessment.
Other costs
In addition to the above, there are a number of cost items that must be taken into account in planning your business under any circumstances.
This includes:
- The costs of setting up the quarry (helmets for workers, fire safety equipment, available working tools, etc.) are about 100 thousand rubles.
- Food for workers. Per year - about 200 thousand rubles.
- Advertising costs – from 50 thousand rubles.
- Indirect and unaccounted expenses are about 150 thousand rubles.
A separate column should indicate the costs of tax deductions for sand extraction. In 2016, the sand mining rate was 5.5 percent. That is, from 70 million cubic meters of extracted sand you will pay the state about 3.85 million rubles in tax.
Revenue
The average sand production of an enterprise developing a quarry is:
- Fine sand – 60 thousand cubic meters
- Medium grain – 70 thousand cubic meters
- Coarse sand – 80 thousand cubic meters
- Coarse sand – 45 thousand cubic meters
Taking into account market prices for sand during such extraction, subject to the sale of the extracted material, the average revenue will be more than 77 million rubles per year.
And the net profit will be about 14 million rubles per year. With such volumes, the payback period of the project will not exceed one calendar year, which is a very good indicator for a business with large investments.
Conclusion
Mining crushed stone is a very profitable business, but it requires large investments, enormous effort, endless attention and patience. But it will all pay for itself.
for 550 rubles, from our partners, with a quality guarantee. It is not publicly available on the Internet. Contents of the business plan: 1. Confidentiality 2. Summary 3. Stages of project implementation 4. Characteristics of the object 5. Marketing plan 6. Technical and economic data of the equipment 7. Financial plan 8. Risk assessment 9. Financial and economic justification of investments 10. Conclusions
On video: Mining crushed stone
