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Our reference: PreFeasibility Study Establish Solid Waste Recycling Plant.DOC


25 Septemmber 1995

PRIVATE & CONFIDENTIAL

FINAL REPORT
PRE-FEASIBILITY STUDY FOR THE
ESTABLISHMENT OF A
RECYCLING PLANT
PETEMIC TECHNOLOGY PTY LTD
1
"PETEMIC TECHNOLOGY PTY LTD "

PREFACE

This Pre-feasibility Study Final Report sets out, inter alia, an assessment of
the proposed establishment of a recycling plant ("the Project") to be carried
out in the vicinity of Caboolture Shire, south-east Queensland, under the
auspices of Petemic Technology Pty Ltd ("the Company"2) - an
organisation incorporated in the State of Queensland.

This Project, initiated by Mr Michael Walsh, General Manager of Petemic


Technology Pty Ltd ("the Client") has been carried out utilising the services
of Gary O Garner & Associates ("the Consultant")3 as a Regional
Economic Development ("RED") Program Feasibility Study, as arranged
through the Sunshine Coast (Mooloolabah) Regional Office of the
Department of Business, Industry and Regional Development ("DBIRD").

1 A.C.N. 064 320 314


2 The term "Company" as used throughout this document is a generic term used to describe the
organisation "Petemic Technology Pty Ltd"
3 Gary O Garner & Associates are the lead consultants for the Project. Input has also been provided
by Mr John Mackenzie of Sloane, Cook & King Pty Ltd (market analysis and environmental
considerations); Mr Peter Stone of Chemquip Pty Ltd (various input in relation to technical
engineering matters);
Ms Helen Gibson (various sections of this Report, and assistance with specific matters relating to local
Council requirements, raw materials, site assessment, and strategic planning); and Coller, Shannon,
Rill & Scott (licensing requirements).

Corporate member: Australian Institute of Agricultural Science Registered Valuer Member: Australian Association of
Agricultural Consultants
- AGRIBUSINESS & MANAGEMENT CONSULTANTS & VALUERS -
PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT
PRE-FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A RECYCLING PLANT Page 2
Section TABLE OF CONTENTS

TABLE OF CONTENTS

PREFACE............................................................................................................................1

TABLE OF CONTENTS .........................................................................................................2

EXECUTIVE SUMMARY & RECOMMENDATIONS ................................................................8

MARKET ANALYSIS .......................................................................................... 8


Recommendation ..................................................................................................... 9
PRODUCTION, EXAMINATION OF ENVIRONMENTAL ISSUES, & SITE
ASSESSMENT .......................................................................................... 9
Production, Labour Skills and Other Resources ...................................................... 9
Site Assessment .................................................................................................... 12
Environmental Issues ............................................................................................. 13
COMMERCIAL VIABILITY ............................................................................... 14
Recommendation ................................................................................................... 16
LICENSING OF THE TECHNOLOGY............................................................... 16
Protecting The Petemic Technology ...................................................................... 16
Recommendation ................................................................................................... 17

INSTRUCTIONS/TERMS OF REFERENCE ...........................................................................18

TERMS OF REFERENCE................................................................................. 18
Introduction to Consultancy Requirements ............................................................ 18
Study Objectives .................................................................................................... 18
CONSULTANTS RESPONSE TO THE T.O.R. & GENERAL PROJECT
OVERVIEW ............................................................................................. 20
Introduction............................................................................................................. 20
FURTHER BACKGROUND & FEASIBILITY STUDY CONSIDERATIONS ...... 21
PROPOSED ACTIVITIES ................................................................................. 22
Required Evaluation (Brief) .................................................................................... 22
PURPOSE OF CONSULTANCY....................................................................... 23
OBJECTIVES ................................................................................................... 23

PROJECT SUMMARY........................................................................................................25

S.W.O.T. ANALYSIS #1.....................................................................................................26

STRENGTHS .................................................................................................... 26
WEAKNESSES................................................................................................. 26
OPPORTUNITIES............................................................................................. 27
THREATS ......................................................................................................... 27

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S.W.O.T. ANALYSIS #2.....................................................................................................29

STRENGTHS .................................................................................................... 29
WEAKNESSES................................................................................................. 30
OPPORTUNITIES............................................................................................. 31
THREATS ......................................................................................................... 32

STRATEGIC MANAGEMENT PLAN ....................................................................................33

STRATEGIC OBJECTIVES .............................................................................. 33


MISSION STATEMENT .................................................................................... 34
ACTION PLANS ............................................................................................... 34

MARKET PROSPECTS FOR THE PETEMIC SOLID WASTE RECOVERY PROCESS ...............38

THE MARKET SURVEY - COMMENTARY....................................................... 38


INTRODUCTION & OVERVIEW ....................................................................... 38
BACKGROUND ................................................................................................ 43
POTENTIAL FUTURE WASTE PRODUCTION ................................................ 44
WASTE DISPOSAL COST ISSUES ................................................................. 46
STRATEGIC OPTIONS IN RELATION TO RAW MATERIAL AND
MARKETS ............................................................................................... 50
SUPPLY AND PRICE OF CONSTRUCTION MATERIALS IN THE SHIRE
OF CABOOLTURE.................................................................................. 54
SUPPLY AND PRICE OF AGGREGATE AND CONSTRUCTION
MATERIALS IN SOUTH-EAST QUEENSLAND ...................................... 57
Regional Supply & Demand ................................................................................... 57
Value of the Industry .............................................................................................. 58
Alternative Sources ................................................................................................ 59
USE OF THE PETEMIC PRODUCT, AND COMPETITIVE ADVANTAGE ........ 60
The Price of the Product or Service ....................................................................... 61
The Quality of the Product or Service .................................................................... 62
The Availability of the Product or Service............................................................... 62
Exclusive Rights or Concessions Which Might Limit the Competitors Rights to
Obtain a Raw Material, or Supply a Product or Service to the
Marketplace ................................................................................................. 63
CONCLUSIONS................................................................................................ 63
Sales Potential ....................................................................................................... 66

SITE ANALYSIS ................................................................................................................68

PROSPECTIVE SITES ..................................................................................... 68


SITE LOCATION CRITERIA ............................................................................. 68
THE NARANGBA INDUSTRIAL ESTATE......................................................... 69
Alternatives to the Narangba Industrial Estate. ...................................................... 72

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The Noxious, Offensive or Hazardous Industry Zone ............................................ 73

LABOUR SKILLS AND ORGANISATIONAL STRUCTURE......................................................76

KEY MANAGEMENT ........................................................................................ 76


Delegation of Authority and Succession Planning.................................................. 77
The Petemic Board of Directors ............................................................................. 77
Professional Support Services ............................................................................... 78
Sub-Contracted Services ....................................................................................... 79
ORGANISATIONAL STRUCTURE ................................................................... 81
ORGANISATIONAL CHARTS .......................................................................... 81
One Shift ................................................................................................................ 82
Two Shifts............................................................................................................... 83
Three Shifts ............................................................................................................ 84
POSITION JOB DESCRIPTIONS ..................................................................... 84
Use of Contract Labour and Enterprise Bargaining ............................................... 85
SKILLS AUDIT ................................................................................................. 85
GENERAL MANAGER ........................................................................................... 86
ADMINISTRATION MANAGER ............................................................................. 87
SECRETARY ......................................................................................................... 88
PRODUCTION MANAGER.................................................................................... 89
WEIGH BRIDGE OPERATOR & SECURITY ........................................................ 90
LOADER OPERATOR ........................................................................................... 91
LOADER, PULVERSIER & EXTRUDER OPERATOR .......................................... 92
LOADER & FORKLIFT OPERATOR, BRICK STACKER ...................................... 93
GENERAL HAND ................................................................................................... 94
TRUCK DRIVER (if required)................................................................................. 95
QUALITY ASSURANCE (QA) & TOTAL QUALITY MANAGEMENT (TQM)..... 95

PRODUCTION & PROCESSING OPERATIONS....................................................................98

CAPACITY ........................................................................................................ 98
WASTE RECEIVING AREA.............................................................................. 98

ENVIRONMENTAL GUIDELINES / ISSUES .......................................................................101

INTRODUCTION............................................................................................. 101
OVERVIEW..................................................................................................... 101
GUIDELINES BACKGROUND ....................................................................... 103
Air and Emission Quality ...................................................................................... 103
Water Quality ....................................................................................................... 104
Guidelines for Noise ............................................................................................. 104
REFERENCES (Environmental Issues)........................................................ 105
Schedules to Environmental Guidelines & Issues ..................................... 107

BUSINESS PREMISES & INFRASTRUCTURE SUPPORT ..................................................114

INFRASTRUCTURE REQUIREMENTS .......................................................... 114


Land Requirements .............................................................................................. 114
Services................................................................................................................ 114

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Section TABLE OF CONTENTS

General Infrastructure .......................................................................................... 115


BULDING (PREMISES) .................................................................................. 116
SUNDRY PLANT & EQUIPMENT................................................................... 118

COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING & ANALYSIS...................119

INTRODUCTION............................................................................................. 119
Status of Development Work ............................................................................... 119
TIMING ........................................................................................................... 120
SUPPORTING DATA FOR ESTABLISHING COMMERCIAL VIABILITY
(FINANCIAL PROJECTIONS AND ASSUMPTIONS) ............................ 121
FINANCIAL PLANNING & ANALYSIS ........................................................... 122
Objectives............................................................................................................. 122
Commercial Viability - Overview of Results.......................................................... 122
Sales Estimates - Major Assumptions ................................................................. 123
Notes on Primary Operating Costs ...................................................................... 124
Capital Investment Requirements ........................................................................ 125
Equity & Debt Ratio .............................................................................................. 126
Profit & Loss / Cash Flow Statements.................................................................. 126
Balance Sheet Analysis........................................................................................ 126
Break Even Analysis ............................................................................................ 126
SENSITIVITY ANALYSIS................................................................................ 126
TRADE TARIFFS, CUSTOMS & EXCISE....................................................... 134
Tariffs Applying to Building Aggregate ................................................................. 134
Customs & Excise ................................................................................................ 135
PATENTS, COPYRIGHT AND INDUSTRIAL DESIGNS................................. 135
TRADE MARK REGISTRATION..................................................................... 136
ASSISTANCE MEASURES FOR MANUAFCTURING, EXPORTING &
RESEARCH & DEVELOPMENT APPLICABLE TO THE PROJECT..... 137
The Industry Research & Development Board..................................................... 137
Department of Trade Industry & Regional Development (DITRD - formerly
DITAC) ....................................................................................................... 138
Federal Department of Industry, Science & Technology...................................... 139
TAXATION IMPLICATIONS FOR RESEARCH & DEVELOPMENT ............... 140
SALE OF THE NEUTRALYSIS WASTE PROCESSING PLANT .................... 142

LICENSING OF THE TECHNOLOGY...................................................................................144

Introduction ................................................................................................... 144


Prospects for Licensing: .............................................................................. 144
Protecting The Petemic Technology............................................................ 144
Licensing - Evaluation Against Alternatives: .............................................. 145

DISCLAIMER & QUALIFICATION BY CONSULTANT .........................................................146

APPENDICES..................................................................................................................147

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Appendix A - Job Descriptions.................................................................. 147


Appendix B - The Petemic Waste Recycling Process (Block Diagram
for Provisional Patent Application)..................................................... 160
Appendix C - The Petemic Waste Recycling Process (Block Diagram
for Petty Patent) ................................................................................... 161
Appendix D - Panoramic View of the Narangba Industrial Estate .......... 162
Appendix E - Newspaper Clipping #1: Waste Management ....................... 163
Appendix F - Newspaper Clipping #2: Waste Composition ................... 164
Appendix G - Acknowledgments.................................................................. 165
Appendix H - References and Further Reading .......................................... 166

ATTACHMENTS...............................................................................................................169

Attachment 1 - Organisation Chart (Three Shifts Basis) ......................... 169


Attachment 2 - Project Implementation & Action Plan ............................ 170
Attachment 3 - Strategic Management & Action Plan.............................. 171
Attachment 4 - Plant Construction & Capital Development Program..... 172
Attachment 5 - Commercial Viability Supporting Schedules .................. 173
Schedule 1 - Primary Base Assumptions............................................................. 173
Schedule 2 - Major & Secondary Inputs & Outputs (Material Balance)................ 173
Schedule 3 - Infrastructure & Costs ..................................................................... 173
Schedule 4 - Building (Premises) ......................................................................... 173
Schedule 5 - Sundry Plant & Equipment .............................................................. 173
Schedule 6 - Plant Operating Equipment ............................................................. 173
Schedule 7 - Depreciation Schedule .................................................................... 173
Schedule 8 - Primary Operating Costs / Quantities ............................................. 173
Schedule 9 - Schedule of Salaries, Wages, & Sub-Contractors .......................... 173
Schedule 10 - Cash Flow Assumptions (Sundry)................................................. 173
Schedule 11 - Loans, Leasing & Hire Purchase Schedule .................................. 173
Attachment 6 - Cash Flow Budgets........................................................... 174
Cash Flow Budget - Year 1 .................................................................................. 174
Cash Flow Budget - Year 2 .................................................................................. 174
Cash Flow Budget - Year 3 .................................................................................. 174
Cash Flow Budgets - Years 1, 2, 3, and Y.I.Y.O. ................................................. 174
Attachment 7 - Profit & Loss Summary (Years 1, 2, 3, and Year-In-
Year-Out). 175
Attachment 8 - Balance Sheet Analysis (Years 0, 1, 2, and 3)................. 176
Attachment 9 - Break Even Analysis (Profit & Loss Summary) .............. 177
Attachment 10 - Locality Map - Narangba Industrial Estate .................... 178
Attachment 11 - Petemic Technology - A Technology Review
(Engineers Report - Chemquip Pty Ltd, June 1995). ........................ 179
Attachment 12 - Mass & Energy (Heat & Material) Balances
(Engineers Report - Chemquip Pty Ltd, 20 July, 1995)..................... 180

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Attachment 13 - Heres the Plan (Brisbane City Councils Waste


Reduction Program)............................................................................. 181
Attachment 14 - Provisional Specification for Patent Application - "A
Waste Recycling Process and Apparatus" (Intellpro) ....................... 182
Attachment 15 - Scale Drawings of Primary Apparatus .......................... 183
Attachment 16 - Licensing (Report prepared by Attorneys-at-Law:
Collier, Shannon, Rill & Scott, September, 1995). ............................. 184

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Section EXECUTIVE SUMMARY & RECOMMENDATIONS

EXECUTIVE SUMMARY & RECOMMENDATIONS

MARKET ANALYSIS
The study confirms that massive quantities of waste would be available to the
Project. However, it should be noted that whilst the study concentrates on
Eastern Australian Metropolitan areas, some data for the USA is also included.

At this stage, the Consultants have little information on costs for the Petemic
process4, but the basic product (aggregate pellets) should have a ready market
at prices competitive with quarried materials. The price of such competitive
materials will be very site specific.

The most attractive location for a Petemic type plant will be just inside the fringe
of large metropolitan areas where:

There will be plenty of waste, including hard-fill from building sites.

Landfill sites will be scarce and dumping will be under pressure from urban
residents.

Waste disposal costs (including landfill lining and waste handling including
compaction and transport) will be high.

There will be a local demand for the product particularly added value
variants such as bricks and tiles.

There is a ready availability of clay

This report will be augmented by some discussion in relation to the above


matters, with Petemic Management.

Discussions held with Company management assume that the following premises
are to be used in regard to broad detail on expected plant size, capital cost and
per tonne operating cost:

1. Capacity: 500 tonne per day

2. Capital Costs: $20 to $25m5 ($A)

3. Costs per tonne for refuse disposal: $40 to $45 per tonne

Examination of the specifications put forward by Petemic Technology suggests


that the Petemic product in basic form should command a premium over
crushed and screened builders rubble. (Dumping charges for commercial refuse
at municipal landfill sites in Eastern Australia may also vary up to about $50 per
tonne, but can be expected to increase rapidly as new government
environmental and "user pays" policies are progressively introduced).

4 However, management advise that indicative costs would be in the order of $40.00 per tonne
5 During the early stages of the pre-feasibility study, this amount was revised to $20m to $50m

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Moreover the Petemic process has the potential to utilise a greater proportion of
the waste handled in municipal disposal than simply hard-fill waste amenable to
crushing and screening.

This analysis suggests that the break even point for the basic Petemic process
might be about $50 per tonne of refuse input. This might be allocated as to $40
per tonne in landfill utilisation cost avoided, and $10 per tonne in base product
value (on site).

The available data suggests that sufficient waste is available in the main
metropolitan and urban areas to provide a consistent supply of input raw
material, and that a regular demand for the basic output would be available at a
price that would be competitive with quarried materials.

The indicative Petemic plant capacity to treat all the present Shire refuse would
be about 280 tonnes per day (assuming a 5 day week), expanding to about 600
tonnes per day by the year 2006. We are advised that the optimum sized plant
for the Petemic technology is about 500 tonne per day with an indicated capital
cost6 of $20 to $25 million7.

Importantly, it can therefore be concluded that the physical input and output
parameters for an optimum sized Petemic plant in the Shire of Caboolture would
not be mismatched with the supply of refuse, and the expected Shire demand for
aggregate. For example, the output from the Petemic facility would provide less
than 10% of the expected demand for sand and aggregate in the Shire.

Recommendation

In view of the above findings, the Consultant recommended that the Project now
proceed to the next phase of the Project, i.e. Production, examination of
environmental issues, and site assessment.

This was subsequently agreed to by the client, and DBIRD.

PRODUCTION, EXAMINATION OF ENVIRONMENTAL ISSUES, & SITE


ASSESSMENT
Production, Labour Skills and Other Resources

The key production issues as required under the Study objectives (assessment and
quantification of availability of raw materials necessary to produce the
aggregate) has been covered in the previous section of this Report.

6 As noted previously, during the early stages of the pre-feasibility study, this amount was revised to
$20m to $50m
7 It should be noted that similar characteristics to the Shire of Caboolture are also present in adjoining
Shires, particularly Pine Rivers and Redcliffe, and it is possible that a strategically located facility
could also attract refuse from those Shires.

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In relation to labour skills, Key Management will consist of three personnel (plus
professional support services) in the General Manager, Administration Manager,
and Production Manager.

All three positions are critical to the effectiveness of the Project, with quite distinct
responsibilities.

The General Manager is responsible to the Petemic Board of Directors, and will
not only implement policy and be responsible for the ultimate performance of
the Company, but will also play a large part in the marketing of the Company
and its products.

The Administration Manager, with a primary responsibility for providing financial


management information, will act essentially as the Companys bookkeeper and
paymaster. He will be integrally involved in nearly all transactional processing
activities.

The Production Manager is totally responsible for the production and processing
operations, in addition to being the designated Quality Control Officer. This
position also carries the ultimate responsibility for the production of the Petemic
end-product to the specifications and standards established as Company policy.
The Production Managers other critical area of responsibility is the day to day
management of most Company staff. It can be expected that this person will
have a key role in the hiring and firing of production and processing personnel.

Because of the possibility of key management being absent from the premises for
extended periods, management will need to carefully consider the development
of succession planning. Various programs, such as ATFIC (Assistance to Firms
Implementing Change) may be suitable for assisting the Company in achieving
such objectives, along with the possibilities of striking an Enterprise Bargaining
agreement with all staff.

In the short to medium term, the Consultant recommends that the existing Board
should look for at least two other, independent, non-executive Board members
with expertise in the areas of:

Financial Management
Engineering Technology (preferably with specific skills in the area of waste
management)

The following Professional Support Personnel will also be required, in addition to


full time personnel:

1) Industrial Chemist (required for the formal testing of product quality and
composition. Some stress-testing of product may also be required to meet
the potential requirements of local Councils and other clients of Petemic

2) Consultant(s) are required in the following areas:

General Consultancy (allocation should be made for assistance with


the financial management functions).

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Engineering (implementation of Plant design, and ongoing


calculations for product / process specifications. Plant modification
on the fly).

3) Other Professional Support (Ongoing). This includes the appointment of an


Accountant, Auditor and Solicitor

The following services will need to be retailed for the provision of various sub-
contracted services:

Maintenance Crew

The maintenance crew (comprising skill areas of fitter, turner, and boilermaker)
will be charged with the responsibility of maintaining the Petemic plant. A
reduced requirement is indicated in the early stages of plant operation.

The purpose of the Maintenance Crew is to MAINTAIN PRODUCTION AND QUALITY


by ensuring operation of machinery and mechanical equipment.

Security Guard

The Security Guard will be charged with the responsibility of ensuring the entry of
only those persons authorised to do so, or otherwise legally required, outside of
Plant operation. A secondary role will be the securing of the Companys assets. A
reduced requirement would be indicated should the Company proceed to two
shifts, with a nil requirement where three shifts are in operation.

Electronic and Engineering Contractor

The Electrical and Engineering Contractor will be charged with the responsibility
of maintaining the electronics and controls relating to the Petemic Plant. The
Maintenance Crew will be directed by the Production Manager, but with the
input from the Engineering Consultant engaged by Petemic.

The organisational structure of Petemic Technology Pty should be relatively flat,


allowing for smooth communications between factory workers, and
management. Whilst the Consultants have prepared structures for one, two and
three shifts, in order to produce the intended product output (i.e. 500t per day
plant), indications are that a total of three shifts per day will be required.

Preliminary indications, subject to further audit by Consulting Engineer8, are that


total staff numbers of at least 28 personnel will be required.

Positions have been identified as follows:

Management (as above)

General Manager
Administration Manager
Production Manager

8 This matter is currently being investigated by Consulting Engineer Mr Peter Stone.

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Administration

Secretary
Administration Assistant

Operations and Production

Sub-Foreman (Assistant Production Manager)


Weighbridge Operator & Security
Loader Operator
Loader, Pulveriser & Extruder Operator
Forklift Operator, Brick Stacker, and Loader Operator
General hand(s)

Suggested Position Results (Job) Descriptions for all personnel are appended to
this Report, together with an audit of skills.

Finally, management must recognise the need for proceeding with the
implementation of a formal Quality Assurance program9. This will be sufficient to
meet the expectations and demand of clients (both domestic, and potentially
international clients), and the industry in general. Local Councils are becoming
more insistent that service providers (and Petemic is potentially one of these) be
Quality Assured. Progression to TQM is an option further on, however will capitalise
and strengthen a formal commitment to QA principles.

Site Assessment

The Consultants have followed the Clients directive in endeavoring to establish


prospects for a suitable site or sites within the context of Queensland, and
preferably South-east Queensland. From this point, the viability model for the
establishment of a suitable Petemic plant can be adapted according to site
variables and infrastructure requirements applying to any particular location.

An indicative location for such a pilot plant is the Shire of Caboolture. There are
several prospective sites in the Caboolture Shire that may be suitable candidates
for the setting up of a pilot plant. The preferred site selected is the Narangba
Industrial Estate, based on the following factors:

Able to support the identified infrastructure requirements (e.g. availability -


or reasonable availability - of power, telephone, water, gas / furnace oil /
diesel, etc.).

Rapidly growing local population, and the implied availability of waste.

Site is appropriately zoned Special Industry (Noxious, Offensive or


Hazardous ) zone.

Environmental restrictions, particularly that relating to noise, do not, prima


facie, prohibit the planned development.

9 The Company should proceed to full implementation a formal program of Quality Assurance, in line
with a Quality System fulfilling the requirements of Australian Standards AS3901 or AS3902 as may be
applicable - the AS3900 Series Standards required by the Clever Country Policy of the Federal
Government and the State Government Purchasing Policy 1991.

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Section EXECUTIVE SUMMARY & RECOMMENDATIONS

Preliminary discussions with Caboolture Shire Council indicate that it is a


likely possibility that it could be acceptable, prima facie, to the local
Council.

Low or nil level of objection likely posed by local / regional communities,


due to its distant proximity to residential areas and placement within an
identified noxious, offensive, or hazardous locality.

Required land area - minimum of 10 to 15 acres (4 to 6 hectares) - is


available.

Excellent road access for heavy vehicles. Easy access to the Bruce
Highway.

Bitumen road access available to the Estate.

Narangba Industrial Estate enjoys a significant Buffer zone which should


serve to minimise or eliminate any undesirable effect on residential areas.

Viewing from major arterial roads or highways is highly restricted. This will
assist in minimising, or eliminating, any visual intrusiveness.

Close proximity to a number of existing landfill dump sites, including those in


several adjacent shires.

Environmental Issues

The primary legislation governing environmental issues in the context of the


operation of a Petemic Plant are addressed in the Environmental Protection
(Interim) Regulations 1995 (SL No. 46 of 1995). This is subordinate legislation to the
Environmental Protection Act 1994. The primary areas of responsibility are: Ozone
depleting substances10; Licensing11; Assessment criteria for air quality12;
Assessment of water quality uses13; and finally, Noise level parameters14.

There are 10 schedules to the Regulations defining activities, licensing fees,


controlled substances and compliance limits.

The compliance requirements are presently in a state of flux, as new and uniform
guidelines are developed for all Australian States following the passage of the
National Environmental Protection Council Act 1994 (Commonwealth), and the
complementary legislation; the National Environmental Council (Queensland)
Act 1994. In some instances new standards are in force and replace former

10 Regulations set out parameters for installation and control and release of controlled substances
11 Conditions for licensing are set out, including monitoring of operations. An Environmental
Management Program will be required.
12 National Guidelines for air quality and control of emissions follow standards adopted by ANZECC &
NH & MRC (1985)
13 Australian Water Quality Guidelines for fresh and marine waters (ANZECC). Sampling follows water
quality sampling manual. (2nd Ed. 1995)
14 In general the acceptable limit will be 8-10 dB above the background noise level.

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guidelines established under a range of earlier Queensland legislation. In other


instances, earlier guidelines will remain in force until new guidelines are
developed. Moreover, it is likely that Environmental Auditing under ISO 14000 will
be implemented in early 1996. Standards Australia through its QRII Committee,
may issue the latest draft of ISO 14000 as an interim standard for Australia.

For the Petemic process, an EIS (Environmental Impact Statement) will almost
certainly be required containing very specific data. An environment
management plan will also be required.

Licensing will be dependent on satisfying both the Council and the State
Government. In practice the administration and enforcement of the Act is
devolved to Local Government, but the Consultants believe that the Caboolture
Council is reluctant to specify any clear guidelines in advance of a detailed plan.

Special Note: Development of an Environmental Management Plan, and


possibly an Environmental Impact Statement (if required), should be completed
post the pre-feasibility stage of the Project, when more specific data becomes
available following further research and development of the process including
operating data derived from the operation of major plant items using the input
feedstock likely to be used in the process.

COMMERCIAL VIABILITY
The Financial Projections contained in this Report demonstrate that the Project is
marginally viable, with a Year-In-Year-Out Net Profit After Tax of approximately
$0.5m.

The primary base assumptions used in calculating this amount are that of 503
tonnes of Municipal Solid Waste (MSW) Garbage is received daily at a price
$40.00 per tonne, with an output of 500 cubic metres of aggregate (350 tonnes)15
sold at $14.00 per tonne.

The above primary assumptions are critical in the calculation of net profit, i.e. the
Project is very sensitive to changes in MSW Garbage or Aggregate receipts / sale
prices. For example, the level of Net Profit After tax approximately doubles where
the price received for MSW Garbage is $45.00 per tonne.

The capital required to fund the Project is $20m, with the base model assuming
that 80% ($16m) is derived from investors, and the balance ($4m) obtained
through debt funding. This will support capital works in the order of $18m, and a
further $2m working capital.

The Break-Even point16 is reached where the amount received for MSW
Garbage is $34.60 per tonne (assuming 100% equity / investor) funding.

The Project will take approximately four years (from the commencement of the
commercialisation stage) to achieve annual profitability, although this could be

15 Based on 0.7 bulk density


16 The Break-Even point is defined as being Net Profit After Tax equalling $zero Year-In-Year-Out.

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Section EXECUTIVE SUMMARY & RECOMMENDATIONS

achieved up to 12 months earlier should the required Capital funding be wholly


obtained from investors rather than partially obtained with debt.

Development of the technology is recommended to proceed in four stages


which are summarised below:

STAGE 1 - CONCEPTUAL

At this initial stage the basic process parameters and testing requirements should
be defined. Any restraints imposed by potential problems such as patent
infringement should be built in to the project.

STAGE 2 - BENCH SCALE TESTING

The stage determines the feasibility of operating at the selected conditions,


which are checked using bench scale equipment. Small batches of product
should be produced to provide samples for initial testing for key properties.

Operations at this stage are essentially on a batch basis.

STAGE 3 - PILOT SCALE STAGE

The pilot stage is used to validate the process, assess continuous operation,
provide the basis for scale-up to the semi-commercial or commercial design,
produce sufficient product for large scale testing and trials, develop quality
control procedures for the inputs, outputs and process, and enable
development of confidence amongst plant designers and equipment suppliers
so that a process guarantee can be obtained for the plant performance. (During
this stage a generic engineering design is often carried out to assist in market
development and to define capital costs more closely).

STAGE 4 - SEMI-COMMERCIAL/COMMERCIAL

This stage is usually a scale up from the Pilot Scale Stage and follows the
completion of a major feasibility study which would include a detailed
engineering study. Usually fine tuning and development of the process would be
expected to continue at this stage, leading to a modified and improved design
for the second plant.

The stage incorporates detailed process and engineering design, procurement,


construction and commissioning.

The estimated duration of the above stages is within the following ranges:

Stage 1 6 - 9 months
Stage 2 12-18 months
Stage 3 24-30 months
Stage 4 24-36 months

The estimated total duration from the commencement of concept planning to


completion of the commissioning of a commercial or semi-commercial plant is
therefore between 5 and 7.5 years. However, the financial projections in this
Report assume the following milestones:

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Section EXECUTIVE SUMMARY & RECOMMENDATIONS

Stage Project Stage Description Commencement Duration

1 Conceptual 15-Dec-94 9 months


2 Bench Scale Testing 14-Sep-95 12 months
3 Pilot Scale Stage 13-Sep-96 24 months
4 Date to Commence Commercialisation 13-Sep-98
Plant Construction 13-Sep-98 14 months
Plant Construction Completed 13-Nov-99
Commercial Product / Equipment Testing 13-Nov-99 4 months
Commercial Production / Sales Commences 14-Mar-2000 6 months
Project Completion
(Commercial Plant Built & In Full Operation) 12-Sep-2000

Recommendation

In view of the above findings, the Consultant recommended that the Project now
proceed to the next and final phase of the Project, i.e. Liscencing & Final
Reviews.

This was subsequently agreed to by the client, and DBIRD.

LICENSING OF THE TECHNOLOGY


On the assumption that Petemic will obtain patent protection in connection with
its Technology, it is concluded that the Petemic Technology embodies suitable
intellectual property rights which can be the subject of a technology transfer
license.

Based on contacts (various clients and others in the environmental engineering


industry) it appears that the Petemic Technology is potentially licensable,
provided it can satisfy the relevant regulatory requirements and become a viable
alternative to competing processes and end products.

However, the recycling process developed by Petemic would have to compete


with the alternative of relatively inexpensive landfill disposal and strong existing
markets for recyclable products. As such, several contacts concluded that the
demand for the Petemic Technology is uncertain.

Protecting The Petemic Technology

The need to protect the Petemic Technology through a carefully negotiated and
properly drafted license agreement is emphasised.

Methods for formulating a commercially viable royalty rate and a brief analysis of
Petemics potential areas of exposure is provided in the Collier, Shannon, Rill &
Scott Report17, together with an analysis of the potential advantages and
disadvantages of licensing the Petemic Technology18

17 Refer Attachment 16
18 This is particularly as compared with the pros and cons of Petemic establishing a recycling facility,
either on its own, or as part of a joint venture.

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Section EXECUTIVE SUMMARY & RECOMMENDATIONS

Recommendation

Subject to the qualifications mentioned previously, it is concluded that licensing


presents a viable lower risk option when compared with the establishment of a
recycling facility either independently or as part of a joint venture arrangement.
It is suggested that a carefully devised licensing strategy is worthy of further
consideration.

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Section INSTRUCTIONS/TERMS OF REFERENCE

INSTRUCTIONS/TERMS OF REFERENCE

TERMS OF REFERENCE
The terms of reference for this Consultancy results from discussions held with
Company name principals, and liaison with DBIRD's Sunshine Coast Regional
Office staff (Ms Del Woodcock), and as contained in the Consultant's proposal
dated 23 January 1994 and agreement dated 9 September 1994.

Formal written guidelines (Terms of Reference19) for the Consultancy were


received 19 September 1994 as follows:

Introduction to Consultancy Requirements

Petemic Technology Pty Ltd is considering undertaking a Feasibility Study into the
Commercial viability of establishing a recycling plant to produce aggregate and
the potential for licensing the technology / product nationally and
internationally.

Study Objectives

Stage (i) Identify domestic and international market possibilities for the
aggregate produced from the recycling process.

Stage (ii) Assess and quantify availability of raw materials necessary to


produce the aggregate.

Assess specialist labour skills necessary for the project.

Identify any environmental issues which may be relevant to


the Project.

Identify appropriate establishment sites in South East


Queensland.

Stage (iii) Determine establishment and operating costs for a


manufacturing plant to produce the aggregate and include
a three year cash flow analysis.

Stage (iv) Assess the potential for licensing the technology and product
domestically and internationally.

Expanding on these objectives the consultant should consider the following


points:

Market Assessment

Identify potential domestic and international markets for the aggregate.

19 Document entitled "Terms of Reference: Feasibility Study - Consultancy Submission - Recycling


Project".

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Section INSTRUCTIONS/TERMS OF REFERENCE

Evaluate competitive advantage.

Identify market competitors.

Evaluate competitive re-action / retaliation (if any).

Raw Materials

Identify sources of raw materials within Australia and overseas.

Assess growth levels for raw materials for the Project.

Identify availability of raw materials for the Project.

Labour Skills

Assess specific labour skills necessary (if any) for the Production of the
aggregate.

Establishment Sites / Environmental Issues

Identify suitable establishment site/sites for the recycling plant presenting


each on its own merits in relation to freight in and out, production costs,
administration costs, etc.

Investigate sites in relation to Local Authorities, community support and


possible further expansion.

Investigate all environmental issues relating to such establishment.

Commercial Viability

Determine transport options and preferences.

Investigate any potential tariff protection opportunities.

Evaluate expected output in relation to supply and demand.

Estimate establishment costs to meet identified market demand.

Provide an estimate of running costs for a three year period based upon
the markets identified in Stage (I).

Licensing

Assess the potential for licensing of the technology

Evaluate licensing against establishment and production.

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Section INSTRUCTIONS/TERMS OF REFERENCE

CONSULTANTS RESPONSE TO THE T.O.R. & GENERAL PROJECT


OVERVIEW
The following information was provided in the introduction by the Consultant for
the Project, and provides a comparative overview of the Company before
commencement of the Consultancy:

The above formal Terms of Reference (TOR) for the Consultancy have been
further discussed with the Project's proponents. The activity list and processes
described below build upon the original TOR, and are a result of joint discussions
held with Company Management (Mr Michael Walsh), DBIRD (Ms Del
Woodcock), other interested parties present at meeting 23 September 1994, and
further liaison with the technical consultants and ensuing discussions between all
parties.

The Consultant has endeavoured to closely follow the above-mentioned TOR,


and, as instructed, has addressed the proposed Feasibility Study in the same
format as the TOR with Section 3 of this Report in particular addressing the key
assessment issues.

Introduction

Petemic Technology Pty Ltd is a newly established company created essentially


for the purpose of commercialising apparently new, unique technology related
to the recycling of waste material such as building rubble, household garbage,
and non-radioactive waste.

The Consultants understand that this technology is commercially sensitive, and


accordingly will be required to sign an appropriate confidentiality agreement.
The Consultants (agreeable to this requirement), have therefore prepared this
proposal without full knowledge of the specific technology and its full
implications. Nonetheless, we believe that our approach is relatively simple and
robust and may be applied against the Project given its rigorous coverage.

The Company currently consists of several Directors whom have managed to


capitalise the business to initiate commencement of the feasibility and other first
stages. They have already identified a number of critical success factors which
include:

the need to establish and quantify sources of material for establishing the
enterprise;

the need to examine town planning and other issues, including


environmental issues, likely to affect the site location of the proposed
operations;

the need to assess the market demand for final aggregate product as a
prelude to financial planning;

the need to establish viability of the enterprise;

the need to examine the best ways to protect the technology by way of
licensing or other means;

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the need to develop documentation likely to attract suitable investors,


including private investors and / or bankers (in short, a "bankable
document"); and

the need, not only to identify capital funding and other financial
requirements, but to establish management and all other resources
required for the Project to succeed to Pilot Plant stage.

This Consultancy Assignment has been designed to address these, and other
issues.

FURTHER BACKGROUND & FEASIBILITY STUDY CONSIDERATIONS


It is logical that the first step in proceeding with the proposed development is to
establish firstly, the market demand for enterprise's products, and, if apparent
demand is demonstrated, then proceed to conduct a feasibility study into the
Project's viability. This step will be based on, inter alia, the availability of raw
materials, required resources, and finally, proven financial soundness based on
cash flow and other related analysis.

In this way the consultancy assignment can be designed to examine firstly the
market and its constraints, and secondly (and most importantly), financial viability
taking account of environmental, labour, plant, equipment, and other related
issues. Having examined the first set of issues, the project is proposed to reach a
major "GO/NO GO" stage, at which point if viability is demonstrated, the
assignment could proceed to assisting the company with addressing the second
set of issues, i.e. establishing viability to the point where investor support can be
anticipated. That is to say, the Company will be in a position of achieving a
commercial outcome.

The Consultant anticipates that a close working relationship will need to be


developed with Company executives - and possibly Mr Michael Walsh in
particular. This is not only to ensure that there is no duplication of effort, but to
also ensure that the Company is fully involved in each stage of the consultancy
whereby the process is interactive. The cost effectiveness of this approach has
been factored into the quotation as detailed below.

Strategic Direction

Petemic Technology intend to set in place a strategic direction which will involve
them in the recycling industry.

Accordingly, a component of the Consultancy will involve a degree of market


research in order to establish the size, nature and scope in these markets. This will
ensure that the Company's entry has the best chances for success. Whilst the
proposed initial investment is probably (in relative terms) modest, the venture as
proposed does represent a significant challenge in terms of management, future
direction, technology protection, and funding.

General Comments

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In addition to factors mentioned above, there are a number of reasons why the
establishment of a technologically advanced recycling plant in Australia is prima
facie, a commercial proposition. These could include:

An increase in world-wide effluent / waste disposal costs and more stringent


environmental controls - especially in Europe.

Potentially low and continually falling labour intensity in processing /


recycling operations - primarily through technological developments.

Access to suitable raw material (waste).

A general awareness of the need to promote environmentally friendly


waste disposal methods.

In addition to proving the financial soundness of the Project, and the need to
protect its technology, the challenge for Petemic Technology is probably one
primarily of its ability to promote sales of recycled aggregate product. Whilst
there is little evidence (other than anecdotal) supporting the Company's ability or
effectiveness in this regard, the Consultants have numerous contacts in the
political, bureaucratic and financial sectors which, at the direction of Company
management, may be the subject of further action as the Project progresses.

PROPOSED ACTIVITIES
Required Evaluation (Brief)

Market Analysis - Market demand for the aggregate produced (current and
future), both domestic and international - Country x Country.

Sources of Raw Material Supply - Location and numbers.

Processed Recycled and Other Product Competition - Australia and international


- Profile each company.

Site Analysis - Sewerage or waste treatment - water supply - environmental


requirements - freight - local Government planning and requirements - power -
roads and other infrastructure.

Capital Items - land - buildings - equipment - working capital.

Financials - Revenue and expenditure budgets and analysis - return on assets -


break even points - cash flows etc.

Timing - strategic importance of completion dates etc.

Technology Protection - Licensing of the technology - domestically and


internationally.

Financial Assistance - apply for NIES, REDP or other Government assistance to


support this project.

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Section INSTRUCTIONS/TERMS OF REFERENCE

Recommendations

PURPOSE OF CONSULTANCY
The proposed consultancy is designed to cover the major elements of markets,
management, structure, supply, technology protection, and funding. This is
fundamental in the evaluation process in order to establish the viability of a
recycling plant which is capable of producing aggregate which attracts an
adequate market demand.

OBJECTIVES
In line with the Terms of Reference, the primary objectives of the Consultancy are
to:

In overall terms, to ensure the key issues associated with the development
of a waste recycling plant are addressed. As mentioned previously, it is
believed that our approach is simple and robust.

Provide a detailed marketing plan which defines the current and future
prospects for the domestic and international markets, and establishes the
availability of raw materials necessary to produce the aggregate.

Prepare cash flow / profit and loss projections for the full planning period
(three year cash flow analysis) specifying likely returns and expenditures,
complete with sensitivity and break even analysis. The projections will
provide a basis for developing organisational performance measures, and
provide detail as to capital expenditure and working capital requirements.

Provide an in depth site analysis which examines, inter alia, infrastructure


requirements, inputs (such as water supply, power supply, transport, etc.),
effluent control and statutory requirements, and outputs including
sewerage and waste treatment.

Ensure the feasibility study (incorporating marketing, financial and


organisational plans) is sufficiently detailed to provide the Company's
Board with a clear direction in terms of the management and
implementation of the Strategy. This will include a mass and energy
balance, and additionally the assessment of specialist labour skills and
other resource requirements.

Recommend the appropriate corporate mechanism for delivery of the


Strategy.

Provide a detailed Implementation (Action) Plan identifying the key tasks


and allocation of resources.

Assuming to this point that the proposed venture offers good prospects for
viability and success ...

Assist with the practical aspects of

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Section INSTRUCTIONS/TERMS OF REFERENCE

assessing the potential for licensing the technology and product


(both domestically and internationally), and

ensuring that the information produced is in sufficient detail and


coverage, and in an appropriate format, for the purpose of providing
investor documentation

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Section PROJECT SUMMARY

PROJECT SUMMARY

The following information was provided by the Consultants for the purpose of
providing a brief Project description for public circulation as may be required
throughout the duration of the assignment.

Petemic Solid Waste Recovery

The disposal of domestic waste has become an increasing world-wide problem. It will be
essential to develop new systems for processing and reusing much of the waste that would
otherwise be disposed of by expensive and environmentally hazardous landfill.

Petemic Technology is a Queensland owned company that is developing new technology in


waste recycling to produce useful products from domestic garbage.

Petemic has lodged a patent application for a recycling process that treats domestic garbage,
and solid building and demolition waste; to produce a commercially usable building material.

The development phase of this technology is being supported by a grant from the Queensland
Department of Business, Industry, and Regional Development (DBIRD).

The Petemic process involves reduction of selected waste to a mass of finely divided particles
of predetermined character; and compacting and processing the material to produce a relatively
dense particulate product suitable for use as a building material, road base or moulding material
for the production of bricks and tiles.

The plastic intermediate material can be extruded into pipes, bricks or tiles that can be dried or
baked into a range of attractive building products.

Smaller pellets can also be produced that can be incorporated into other rigid structural
materials such as concrete.

The process is being developed to service areas of expanding population where the composition
of the urban waste contains both household refuse and building scrap.

The processing plant will be sited close to existing landfill installations and will significantly
increase the useful life of each site.

The process has been designed to meet all current environmental standards.

Additional details of the process may be obtained from:

Mr Michael Walsh
PETEMIC TECHNOLOGY PTY. LTD.
A.C.N. 064 320 314

P O Box 435 Phone/Fax (07) 408 3844


Bribie Island Qld 4507 Mobile (015) 588 337

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Section S.W.O.T. ANALYSIS #1

S.W.O.T. ANALYSIS #1

Workshop held by the client in conjunction with Ms Helen Gibson has resulted in
the identification of the Company's perceived "Strengths, Weaknesses,
Opportunities and Threats" (SWOT) as follows:

STRENGTHS
Expanding road construction programs

Expanding hydroponic farming

Reduce the need to provide recycling and landfill sites, with the resultant
reduction in costs to Local Authorities and the consumers.

Use of timber mill waste products as fuel and raw material.

Employment opportunities...technical, trade and clerical, as well as multi


skilling.

Flexibility of energy source, and therefore of running costs.

Co-operation between Local Authorities in joint management of


equipment and resources.

Flexibility of raw material for production.

No wastage of water due to in built recycling and reuse within the plant.

WEAKNESSES
Failure of the Neutralysis program.

The availability of suitably zoned land.

The location of a suitable water supply and its proximity.

Environmental constraints re. the emission of gases, etc. during the


production process.

Prolonged period of wet weather and the impact of same on the supply of
raw materials.

Negativity and/or resistance to a new product by consumers.

Any interruption to the present level of the building industry.

Storage on site of the required materials and any resultant potential


environmental (including health) problems.

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Section S.W.O.T. ANALYSIS #1

No long term engineering or scientific data available concerning the


durability, etc. of the final products.

OPPORTUNITIES
Reduction of environmental problems with the reduced need for waste
disposal sites, landfill, sites etc.

Development of new building designs, engineering practices, etc. using the


new light weight products.

Ability to build up an experienced consultancy group to provide ongoing


expertise to purchasers.

Potential for export of technology and the final products both interstate
and overseas.

To maintain costs at a reasonable level for construction products by an


efficient use of recycled products.

The use of this technology will extend the life of natural resources with
which its products may be substituted.

Enable the joint involvement of Local Authorities with private enterprise in


the process, and the opportunity for a local Authority to be self sufficient in
some forms of road making materials (see new Local Government Act).

THREATS
Objection by waste management companies presently operating landfill
programs for local authorities.

Objection by producers and suppliers of extractive resources for road


making purposes, etc.

Government (all three levels) support not forthcoming for the project.

Potential for industrial sabotage by opponents.

The possibility of the introduction of Government imposed taxes (Federal,


State or local) on recycled products (e.g. as is on recycled paper).

The reappearance of the Neutralysis process.

As an outcome of the above SWOT, the Consultant intends to set in place a


strategic planning workshop during the next phase of the Project, which will
identify:

1. Priority Issues for Action planning

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Section S.W.O.T. ANALYSIS #1

2. Business Objectives

3. Company Mission Statement

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Section S.W.O.T. ANALYSIS #2

S.W.O.T. ANALYSIS #2

A further workshop held was led by the Consultant on 25 March, 1995, resulted in
the identification re-definition and amendment of the Company's perceived
"Strengths, Weaknesses, Opportunities and Threats" (SWOT) as follows:

(note: SWOT's have been prioritised in preparation for the development of


Strategic Objectives. In addition, numbering has been "doubled up" where the
issues were considered to be of equal importance, or where they were
considered to be essentially the same issue.)

STRENGTHS
1. Reduce the need to provide recycling and land fill sites

1. Environmental Planning legislation

2. Co-operation of local authorities with Petemic Technology

3. Use of timber mill waste products, mine sites, and others

4. Transportable plant with some limits e.g. foundation

Expanding road construction programs

Expanding hydroponic farming

Employment Opportunities

Flexibility of Energy source (site specific)

Flexibility wider range of raw material for production

Water recycling (no wastage)

Freight advantages of "light weight" Petemic product.

Development of a light weight building block/brick

More competitive than Neutralysis.

Ability to site technology/plant world-wide provided constraints are met


(environmental)

Majority of plant and equipment available "off the shelf"

Potential market - huge

Ready market for aggregate in some countries that lack appropriate


natural resources.

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Section S.W.O.T. ANALYSIS #2

WEAKNESSES

1. No long term scientific data available on Petemic products

2. Lack of substantial capital required to commercialise the process.

3. Confidentiality of Project

4. Apparent failure of Neutralysis program

Availability of suitably zoned land in some areas (site specific)

Location/proximity of water supply

Environment constraints (process)

Impact of weather on raw materials

Consumer reaction to new product

Viability of process connected to viability of building industry

Storage problems: raw material supply (especially domestic refuse)

Petemic product is untested - may fail to meet engineering standards. e.g.


stress tests etc.

Product variations according to raw material supply

Lack of specific knowledge on end product

Lack of some inputs for some sites e.g. building rubble in non-urban areas

Unknown availability of appropriate furnace equipment

Durability of plant - unknown

Business systems not formalised

Personnel - no technical expertise available "in house"

Market size unknown

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Section S.W.O.T. ANALYSIS #2

OPPORTUNITIES

1. Reduction of environmental problems (landfill)

1. Assisting State and Federal Governments in meeting their waste reduction


objectives by year 2000 - 2006, especially landfill. (Uniquest reckons
reduce waste by 80%) Un-substantiated

1. Environmental planning legislation.

2. Potential for licensing technology - $ sales (license of plant) number is high.

2. Plant construction by contract $ sales attached to # above.

2. Potential for consultancy to purchasers of plant, technology and aggregate


(intellectual property, computer packages, etc.)

3. Potential for extending life of extractive natural resources e.g. clay,


hardrock, sand.

New products/designs available through Petemic light weight aggregate.


Development of new building products.

Export of above.

Efficient use of recycled material (both in and out?)

Joint involvement with local authorities

Self sufficiency for road-making materials for local authorities (customers at


"both ends")

Saleability of the process on the basis of potential "green tax" levy.

Possibility for availability of vast raw material supply resulting from natural or
other disaster(s).

More efficient use of rail system - back-loading of Petemic product to more


remote areas.

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Section S.W.O.T. ANALYSIS #2

THREATS

1. Objections by existing waste management companies

1. Government support for project - unknown quantity (all 3 levels)

1. Existing contracts with existing waste management companies who have


long term contracts

2. Re-appearance of the Neutralysis process and appearance of other


processes. (technology risk)

3. Objections by existing suppliers of extractive resources.

Potential for industrial sabotage

Possibility of government taxes on recycled products

Neutralysis Waste Processing Plant - located at Rocklea (Brisbane, Queensland).


This plant has since been sold to an (undisclosed) overseas buyer, and reportedly
re-commissioned overseas. The technology has reputedly been retained or sold
separately. The process has apparently proven non-viable, however is identified
as a threat because of its possible re-appearance. The Petemic process,
however, needs to be differentiated to ensure support by potential clients.

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Section STRATEGIC MANAGEMENT PLAN

STRATEGIC MANAGEMENT PLAN

STRATEGIC OBJECTIVES
A result of the Company having conducted a SWOT analysis process, the
following Strategic Objectives have been developed:

1. To promote the Petemic process as a means of reducing the need for land
fill sites in compliance with State/Federal Government objectives and
environmental planning legislation.

2. To gain the co-operation of local authorities and other regulators in regard


to:

Site identification
Use of collected non-toxic, non-radioactive refuse
Participation in Project and use of local resources
Existing waste management contract obligations

3. To utilise the Petemic process as a means of recycling "non-recyclable"


problem waste products such as industrial, timber, mining, building and
other waste

4. To ensure the research and development of the technology enables the


Petemic process to handle variable volumes of raw material, with
maximum mobility.

5. To obtain independently verified scientific data/analysis on the Petemic


products and processes.

6. To identify capital requirements up to commercialisation stage.

7. To maintain the confidentiality of the Petemic process.

8. To promote the distinctiveness of the Petemic process as compared to


other waste management processes, especially Neutralysis.

9. To develop viable products resulting from the proving of the Petemic


process, including:

intellectual property
technology licenses
end-product(s) - aggregate etc.
construction contracts
etc.

10. To promote the Petemic process as a means of extending the life of existing
and potential extractive resources, including sand, hardrock, and
aggregate.

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11. To closely monitor alternative waste management processes and


practices.

12. To promote the Petemic process as being an environmentally friendly


alternative to the use of extractive resources, e.g. hardrock, clay, sand,
aggregate.

MISSION STATEMENT
The following Mission Statement has been adopted20:

Solving Today's Waste With


Tomorrow's Technology
ACTION PLANS
As a result of the formulation of Strategic Objectives, the following Action Plans
have been developed by the Consultant for adoption:

Appendix D provides full details of the Strategic Management Action Plan, which
is summarised below. It provides, inter-alia, the following information:

1. Action detail (what the Action is)

2. Action Duration (the estimated time required to complete the Action).

3. Action Scheduled Start (when the Action should, or is due to, commence).

4. Action Scheduled Finish (when the Action is due for completion).

5. Action Predecessors (what other actions need to be undertaken before the


Action in question - if any).

6. Action Resources (who / what resource is allocated to undertake or support


the Action).

7. Critical Path (the development of a "Pert Chart" or similar which allows an


overview of those Actions which are critical to the implementation of the
Project, and / or those Actions most likely to cause a delay in implementing
the Project).

8. A monthly summary of Actions required to be undertaken to assist in


Managing the Project. This will ensure that the Project is kept "on-track".

20 The Mission Statement has been designed for incorporation on marketing material, and other
publicly distributed information

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1. TO PROMOTE THE PETEMIC PROCESS AS A MEANS OF REDUCING THE NEED


FOR LAND FILL SITES IN COMPLIANCE WITH STATE / FEDERAL GOVERNMENT
OBJECTIVES AND ENVIRONMENTAL PLANNING LEGISLATION

1. Prepare Project Summary document suitable for public circulation

2. Circulate Project Summary document to interested parties including


Council, Government, etc.

3. Lobby Council and others as appropriate, appraising them of the Petemic


process advantages

2. TO GAIN THE CO-OPERATION OF LOCAL AUTHORITIES AND OTHER


REGULATORS IN REGARD TO:

* SITE IDENTIFICATION
* USE OF COLLECTED NON-TOXIC, NON-RADIOACTIVE WASTE
* PARTICIPATION IN PROJECT AND USE OF LOCAL RESOURCES
* EXISTING WASTE MANAGEMENT OBLIGATIONS

4. Negotiate suitable site for the Petemic Plant with Council

5. Discuss the impacts of the Petemic Process with Council, especially with
regard to waste reduction, utilisation of Council resources, possible
aggregate sources, etc.

6. Determine existing waste management obligations of the Caboolture Shire


Council

3. TO UTILISE THE PETEMIC PROCESS AS A MEANS OF RECYCLING "NON-


RECYCLABLE" PROBLEM WASTE PRODUCTS SUCH AS INDUSTRIAL, TIMBER,
MINING, BUILDING, AND OTHER WASTE

7. Commence process of obtaining investor support for Commercialisation of


the Project

8. Commence set-up of Pilot Plant to demonstrate the effectiveness and


viability of the Petemic Process

9. Continue with research and development activities to prove the Petemic


Process prior to Commercialisation and Pilot Plant set-up, especially having
regard to the viability of utilising a wide range of waste inputs

10. Commence testing of various waste inputs to prove the Petemic process

4. TO ENSURE THE RESEARCH & DEVELOPMENT OF THE TECHNOLOGY ENABLES


THE PETEMIC PROCESS TO HANDLE VARIABLE VOLUMES OF RAW MATERIAL,
WITH MAXIMUM MOBILITY

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11. Commence testing of variable volumes of various waste inputs to prove the
Petemic process

12. Conduct test experimentation of various waste product inputs to assist in


the proving of the Petemic process

5. TO OBTAIN INDEPENDENTLY VERIFIED SCIENTIFIC DATA/ANALYSIS ON THE


PETEMIC PRODUCTS AND PROCESSES.

13. Commence the obtaining of scientific analysis of Petemic product from


accredited laboratory (once product available)

14. Determine scientific test requirements for Petemic products and processes

6. TO IDENTIFY CAPITAL REQUIREMENTS UP TO COMMERCIALISATION STAGE

15. Determine Capital requirements up to Commercialisation stage

7. TO MAINTAIN THE CONFIDENTIALITY OF THE PETEMIC PROCESS

16. Documentation to be secured at all sites

17. Obtain Sign-off for all external discussions (with third parties) with Petemic
management and lead Consultant prior to progressing

8. TO PROMOTE THE DISTINCTIVENESS OF THE PETEMIC PROCESS AS


COMPARED TO OTHER WASTE MANAGEMENT PROCESSES, ESPECIALLY
NEUTRALYSIS.

18. Ensure the distinctiveness of the Petemic Process is included in Project


Summary Document

19. Ensure the distinctiveness of the Petemic Process is included in all major
documentation, especially that provided for public release

9. TO DEVELOP VIABLE PRODUCTS RESULTING FROM THE PROVING OF THE


PETEMIC PROCESS, INCLUDING

* INTELLECTUAL PROPERTY;
* TECHNOLOGY LICENSES;
* END PRODUCT(S) - AGGREGATE, ETC.;
* CONSTRUCTION CONTRACTS; * ETC.

20. Prove the viability (Feasibility Study) of the Petemic process

21. Feasibility Study (and Financial viability of the Petemic Process) completed

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22. Commence continuation of Research and Development of Petemic end-


Products, including the development of both "physical" end products, and
the sale of intellectual and other property

23. Ensure the Feasibility Study for the Petemic Process includes information on
potential end products, other than aggregate, e.g. intellectual property,
contracts for constructing other plants, etc.

10. TO PROMOTE THE PETEMIC PROCESS AS A MEANS OF EXTENDING THE LIFE


OF EXISTING AND POTENTIAL EXTRACTIVE RESOURCES, INCLUDING SAND,
HARDROCK, CLAY AND AGGREGATE.

24. Ensure the Project Summary Document outlines the potential for extending
the life of extractive resources

25. Lobby Council with details of extending-life capability of the Petemic


process in relation to extractive and other resources

11. TO CLOSELY MONITOR ALTERNATIVE WASTE MANAGEMENT PROCESSES


AND PRACTICES

26. Petemic Management to join Waste Management peak body / industry


organisation

27. Petemic Management to enquire re subscribing to appropriate


organisations for the regular review of relevant literature on the subject of
waste management and recycling

28. Consultants to monitor other / alternate waste management processes


that may impact upon viability of the Petemic process

12. TO PROMOTE THE PETEMIC PROCESS AS BEING AN ENVIRONMENTALLY


FRIENDLY ALTERNATIVE TO THE USE OF EXTRACTIVE RESOURCES, E.G.
HARDROCK, CLAY, SAND, AGGREGATE.

29. Lobby Council (and other appropriate organisations, including


"Greenpeace" and others) on the environmental friendliness of the Petemic
Process

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MARKET PROSPECTS FOR THE PETEMIC SOLID WASTE RECOVERY


PROCESS

THE MARKET SURVEY - COMMENTARY


This report assumes that anyone who uses extractive products are potential
clients for the Petemic product. There is no other basis on which a survey can be
conducted, viz:

1. There is no product to present to anyone

2. No specifications of any product are available

3. No price of any product has been suggested

4. No details of the process can be revealed (a condition of the consultancy).

Moreover, the Consultants have been requested not to approach or discuss the
marketing of the product with the major potential competitors who are also the
major users of aggregate materials. Discussions have been held with the
Caboolture Shire Council, who would be a major potential customer.

In the absence of any information at all on the product, its specification or price,
a survey of potential customers would not prove to be a useful exercise, and may
even be counterproductive to the project.

The only proof that will ever exist in relation to the Petemic process will be survival
in the marketplace.

As to the surveys and product demand, a very extensive literature search has
been conducted of local and overseas material to provide background material
to assist Petemic in their planning.

The Consultants point out that additional work (other than that undertaken) will
be of no benefit in the absence of better information on the process, and until a
product with defined specifications is available for presentation to the market.

INTRODUCTION & OVERVIEW


The disposal of domestic waste has become a major world-wide problem. The
environmental aspects of landfill waste disposal, and rising disposal costs have
directed ever increasing attention towards recycling.

In Australia and the USA, about one tonne of waste is produced per person every
year. In Europe, per capita waste production is somewhat lower, often only
about half the Australian level, but population density is higher, and disposal
problems more severe.

Although recycling technology has been developed for the more valuable
components of domestic and industrial waste, the cost of recovery and

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processing for the lower value components has invariably exceeded the
commercial value of these materials.

The quantity of waste material potentially available for treatment is immense. In


1971, the US Environmental Protection Agency (EPA) estimated that municipal
solid waste (MSW) generation in the USA amounted to 125 million tonnes annually
or 3.22 lb. per person per day excluding industrial waste. By 1993 the quantity of
MSW had risen to 207 million tons, or 4.4 pounds per person per day. After
materials recovery for recycling and composting, discards were 3.4 pounds per
person per day. Virtually all of these discards were combusted or sent to
landfills21.

EPA now projects that the per capita generation rate will decrease by the year
2000 to 4.3 pounds per person per day. These projections are based in part on
source reduction efforts, especially actions to divert yard trimmings from the solid
waste management system through backyard composting and leaving grass
clippings on lawns. States that include more than half of the U.S. population
already have regulations leading to these actions. Other source reduction
activities, e.g., reduced packaging, are also contributing to this decrease.

Even with significant source reduction efforts, generation of MSW is projected to


increase to 218 million tons in 2000. However, discards to combustion facilities or
landfills are projected to decline from 162 million tons in 1993 to 152 million tons in
2000 assuming a 30 percent recovery rate for recycling and composting is
achieved.

Recovery of materials for recycling and composting was estimated to be 22


percent of MSW generated in 1993, up from 17 percent in 1990. Combustion
facilities managed 16 percent of total generation, and the remaining 62 percent
of the municipal solid waste stream was sent to landfills or otherwise disposed.

Between 1990 and 1993, recovery of materials for recycling and composting
increased from 38 million tons to 45 million tons, an increase of 18 percent.
Recovery of paper and paperboard accounted for over half of this increased
tonnage. Yard trimmings for composting contributed the next largest increase in
tonnage recovered.

The percentage of MSW discards continues to decline due to increased levels of


recovery for recycling and composting. In 1985, 83 percent of MSW was
landfilled compared to 62 percent landfilled in 1993. Even with this reduction,
land filling continues to be the single most predominant waste management
method into the year 2000.22

Recent evaluations in Australia confirm that the quantities are of similar or greater
magnitude. In Sydney alone, up to 3.4 million tonnes of solid waste has been
produced each year23, and until recently, the quantity has been increasing at a
rate faster than population growth.

21 Environmental Protection Agency. USA (1994), "Characterisation of Municipal Solid Waste in the
United States. Executive Summary" EPA Publication No EPA530-S-94-042
22 Environmental Protection Agency. USA (1994), "Characterisation of Municipal Solid Waste in the
United States. Executive Summary" EPA Publication No EPA530-S-94-042
23 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste

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A goal for Australia has now been established under the National Strategy for
Ecologically Sustainable Development, to significantly reduce landfill disposal of
waste.

The New South Wales Government plans to reduce by half the amount of solid
waste directed to landfill by the year 2000. NSW believes that this goal can be
achieved by a mix of waste avoidance, recycling, and resource recovery
initiatives. The Government also anticipates that the average increase in the
cost of waste management will be about 5% per year between now and the
year 200024.

In Victoria, the Recycling and Resource Recovery Council (established under


1992 legislation) has also adopted a target of reducing the total waste going to
landfill by 50% by the year 200025.

Tasmania has also identified an increasing problem in waste disposal. In 1994,


the Tasmanian Government released it's draft policy to deal with the problem,
and proposes to replace existing license fees with new fees based on the volume
of waste. Tasmania has set a target of reducing the volume of waste dumped at
municipal tips by 25% by the end of 1995, and by 50% by the year 200026.

The ACT legislature has also adopted a target of reducing landfill by 50% by the
year 200027.

Solid waste diversion objectives in overseas countries (Europe and North


America) now vary between 8% and 60%, with target dates ranging up to the
year 200028.

The following summary graph, and following table shows the solid waste diversion
objectives for some specific locations.

Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
24 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
25 Victorian Government (1994), "The Resource and Recovery Council; Grant Programs 1993-94.
"Reported at the Local Government Conference - Waste.
26 Skinner, J.H. (1975), "Demonstration of Systems for the Recovery of Materials and from Solid Wastes"
Resource Recovery and Utilisation, ASTM STP 592, American Society for Testing and Materials. 53-63
27 Graham, R.A., Sharpley, G.E., & Thorpe, J.L. (1994), "Environmental Audits and Management Planning
for Canberra's Landfills" in Achievements and Challenges; Proceedings of the 2nd National Hazardous
& Solid Waste Convention, Melbourne, Australian Water & Wastewater Association and Waste
Management Association of Australia; Artarmon NSW. 149-156.
28 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.

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Solid Waste Diversion Objectives


Selected World-wide Jurisdictions

100%
2030
Sourc e: Sinc la ir Knight, Wa ste Ma na gem ent Stra tegic Pla n for Ca b oolture Shire

80%

2000 (varies)
Objective

60% 2000
2000 2000 2000

"next few years" 1995


40%

20% "near future"

2000

0%
Great Britain Switzerland (Zurich) Ontario Canada United States
Switzerland Germany (Hanover) Denmark Netherlands Toronto (metro)
Jurisdiction

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Solid Waste Diversion Objectives29

Jurisdiction Objective Target Date

Netherlands 54% 2000


Great Britain 8% 2000
Denmark 50% 2000
Switzerland 16% "near future"
Zurich, Switzerland 40% "next few years"
Hannover, Germany 40% 1995
Canada 25% 1992
50% 2000
Ontario 25% 1992
50% 2000
Metro Toronto 30% 1992
45% 1995
60% 2000
70% 2010
90% 2030
United States 25% 1992
25% likely to be 1995
extended 50% possible 2000
US States 15% to 60% 2000 (varies)
US Cities
Berkeley, California 44% 1995
62% 2000
Newark, New Jersey 60% 1995
Seattle, Washington 60% 1998
Philadelphia, 50% 1997
Pennsylvania
Chicago, Illinois 39% 1995
San Diego County, 30% 1992
California
Los Angeles, California 25% 1995
50% 2000
Notes: (1) As a percentage of the total Waste Stream by weight

In May 1994, the Queensland Government Department of Environment and


Heritage published a Draft Waste Management Strategy for Queensland. The
Queensland strategy also encompasses the National Strategy for Ecologically
Sustainable Development, and covers three basic issues described as being
essential to effective waste management30;

1. Waste Minimisation which seeks to reduce by prevention and recycling


options, the volume of wastes which ultimately must be destroyed or
disposed of.

29 Source: Sinclair Knight, Waste Management Strategic Plan for Caboolture Shire
30 Queensland Department of Environment and Heritage (1994), "Draft Waste Management Strategy for
Queensland"

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2. Waste Containment which seeks to handle, treat, and finally dispose of


wastes without adversely affecting the environment or public health.

3. Pricing Equity which seeks to allocate waste disposal costs, so that those
benefiting from activities which lead to waste generation will be expected
to pay all the costs associated with disposal of the wastes.

The adoption of "user pays" principles in refuse disposal is also NSW Government
policy, and appropriate charges are to be progressively introduced following
updating of the Local Government Act in 1993.

It is now clear that State and Federal Government environmental and pricing
policies can be expected to cause a steep rise in the cost of conventional waste
disposal practices including landfill. Although specific details have not been
collected for overseas countries, it is likely that similar policies and outcomes will
apply in most of the developed countries.

It is in this context that Petemic Technology Pty Ltd is developing a strategy to


satisfy the environmental goal of reducing landfill disposal, whilst at the same
time producing a commercial raw material for the construction industry that can
compete with landfill disposal for the lower value components of municipal
waste.

The initial step in the Petemic strategy will be to test the cost/benefit of the
Company's technology for solid waste recovery using a commercial scale plant,
located in the Shire of Caboolture.

The Petemic plant will use domestic garbage and builders rubble to produce a
mass of finely divided particles of predetermined character. This feedstock will
then be compacted and processed to produce a relatively dense particulate
product suitable for use as a building material, road base, or as a moulding
material for the production of bricks and tiles. One particular advantage of the
Petemic strategy is that the product will have a range of local uses, and will not
require extended transport to it's market.

BACKGROUND
A number of studies have been carried out on Australian solid waste, and how it
might be recycled to avoid landfill disposal. Work by van den Broek and Hutton
(1992) set out the nature of the Sydney solid waste stream and presented an
analysis of the materials that could be most readily diverted from landfill into
beneficial use. This work provided for the first time in NSW a theoretical basis for
development of a plan to achieve the Government's ambitious waste diversion
target. In parallel to this work, Cook (1992) examined waste disposal pricing as a
means to effect better waste management, including both economic incentives
and disincentives31.

Prior to these initiatives, a process known as "Neutralysis" had been developed in


Australia during the early 1980's to convert municipal, commercial and Industrial

31 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.

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solid wastes, into an inert lightweight building aggregate suitable for the
production of structural concrete, masonry blocks, and other building products.
A nominal 25 tonne per day pilot plant was built in Brisbane to provide
information for the development of a commercial scale facility. At that time, the
capital cost of a commercial scale Neutralysis plant was estimated to be up to
$A100 million with an annual operating cost of about $A8 million. The developers
of the process estimated that revenues derived from waste disposal gate
charges, the sale of aggregate, and power generation from surplus heat, would
more than offset capital service charges and operating costs for the process32.

However, the pilot plant did not achieve the cost/benefit targets set by the
Brisbane City Council, and further development did not proceed at that time33.

The Neutralysis project appears to have come before it's time. Perhaps the
capital and operating costs were too high to encourage commercial investment.
Moreover, public attention to environmental issues was less intense in the 1980's
than it is today. Although refuse disposal costs in Queensland were rising at that
time, landfill was ultimately chosen as the cheapest and most appropriate option
by the Brisbane City Council.

The present Petemic strategy is to produce a similar lightweight aggregate to


that produced by the Neutralysis method, but with a relatively simple process
requiring a lower level of capital investment and operating cost. At the present
stage of development, the Petemic process does not incorporate surplus heat
recovery (also known as refuse derived fuel (RDF), or power generation.

POTENTIAL FUTURE WASTE PRODUCTION


Modern recycling policies have tended to reduce the quantity of waste being
directed to landfill in Australia. However, these policies alone are unlikely to meet
Government waste disposal targets. A recent paper by Cook and van den Broek
delivered to the 2nd National Hazardous & Solid Waste Convention held in
Melbourne in 1994, describes the situation in the Sydney metropolitan area34.

In 1990 a total of 3.4 million tonnes of solid waste was reported as having been
generated in the Sydney metropolitan area. Since 1990 there has been a
reduction in the quantities of waste recorded as received at disposal sites, to
about 2.8 million tonnes per year. This reduction has been attributed to NSW
Government waste minimisation initiatives introduced over recent years,
including recycling and other resource recovery initiatives. The construction of
the new runway at Sydney airport also provided a destination for a large
proportion of the available solid fill and builders rubble. The effects of the

32 Stone, P. Neutralysis - A Use for Municipal Waste Proceedings of the International Conference of
Solid and Hazardous Waste Management (Enviroworld), Singapore, June 1991.
33 The Consultant has advised the Project proponents that the Neutralysis plant and equipment was
shortly coming up for auction. As at date of writing, the Auction did not proceed, and the
Consultants understand that the whole of the Neutralysis Plant was sold privately to an overseas
interest.
34 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.

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recession may have also influenced the growth rate of waste disposal during this
period35.

A comparison of the estimated waste generation rates for some municipal areas
in Australia is contained in Table 1.

Table 1. Waste Generation for Selected Australian Municipalities36


Kilograms per person per year.

Caboolture Brisbane Perth Sydney Port


Stephens37
Domestic waste 387 555 480
Industrial/Builders 481 460 500
Total 868 1015 798 980 711

Figures cover various periods between 1989 and 1993.

Waste Generation for Selected Australian Municipalities


Kilograms per person per year.
1,200

1,000

800

600

400

200

0
Caboolture Brisbane Perth Sydney Port Stephens

Domestic waste Industrial/Builders Domestic or Industrial

Source: Sinclair Knight, Waste Management Strategic Plan for Caboolture Shire

Within the present waste management systems in Australia, large quantities of


materials are now being recovered for re-use and recycling. While complete
statistics are not available, the amount of recovery in Sydney is believed to be of

35 Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic & Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148.
36 Source: Sinclair Knight, Waste Management Strategic Plan for Caboolture Shire
37 Port Stephens Shire is approximately 180 km from Sydney, and is in an area of similar urban and
commercial / industrial characteristics to Caboolture Shire, but with a reduced annual growth rate.

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the order of one million tonnes per annum. This level of recovery is being
achieved mainly from commercial and industrial sources, and includes materials
such as scrap metal, plastic, and paper products, whose inherent value makes
their recovery for recycling commercially attractive.

In addition, education of the commercial sector on waste minimisation,


combined with Waste Service pricing policies which discourage mixing
recyclable materials with waste, is now having the effect of encouraging source
separation in commerce and industry for materials whose recovery may not have
been commercially attractive in the past. Furthermore, there has been a
growing rate of recovery from the domestic waste stream as a result of councils
providing better recycling services, and with the assistance of policies such as the
Council Recycling Rebate Scheme.

While levels of waste minimisation and recycling may still increase somewhat
under present policies, new initiatives will be required to remove an additional
one million tonnes from the Sydney solid waste stream to meet the NSW
Government's 50% waste diversion target by the year 2000.

Cook and van den Broek38 have predicted that the key tools available to meet
the 50% diversion target for Sydney will be additional waste avoidance
(particularly in the commercial and industrial sectors), recycling, green waste
removal and processing; and new processing technologies such as Neutralysis,
advanced composting, and refuse derived fuels (RDF).

WASTE DISPOSAL COST ISSUES


The weighted average disposal cost for solid waste in Sydney was about $29.50
per tonne in 1993. It is generally conceded that most of the new recycling and
processing technologies have hitherto exceeded this cost. However, available
landfill capacity in the Sydney region is limited, and as this capacity is exhausted,
alternative disposal options have been estimated at about double the present
cost. In addition, avoided environmental impact and disamenity costs, although
difficult to quantify, will also favour increased diversion. Table 2 summarises the
estimated cost of these technologies for the Sydney metropolitan area.

Table 2. Likely Disposal Charges for New Technologies39


Green waste processing $40 per tonne
Neutralysis $70 per tonne
Composting $60 per tonne
RDF $70 per tonne

Based on these costs, and assuming that funding support of $20 per tonne will be
required to remove additional tonnes of waste by avoidance and recycling, the

38 Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.
39 Source: Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.

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estimated weighted average cost for waste disposal in Sydney expressed in 1993
dollars would increase as shown in Table 3.

Table 3. Estimated Average Sydney Waste Disposal Costs40


Weighted Average Cost
1993 29.50
1994 30.70
1995 33.00
1996 35.00
1997 37.10
1998 38.35
1999 39.70
2000 41.40

The above information and trend is more clearly demonstrated in the graph
below:

Estimated Average Sydney Waste Disposal Costs

Dollars per tonne

$45
$40
$35
$30
$25
$20
$15
$10
$5
$0

1993
1994
1995
1996
1997
1998
1999 Weighted Average Cost
2000

In the United States of America, disposal costs may be considerably higher.


Thomas Duston (in Recycling Solid Waste; 1993) reports that the 1991 tipping fees
for residential trash at five modern disposal sites in New Hampshire, USA ranged

40 Source: Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in Sydney". in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 39-42.

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from $US40 to $US110 (trash to energy plants or lined landfill). This cost is
equivalent to $A55 to $A150 at the 1995 exchange rate. Costs in other US States
were said to be similar41.

In 1993, Sinclair Knight and Partners prepared a Waste Management Strategic


Plan for the Caboolture Shire Council, and reviewed the options for disposal
methods up to the year 2022. Sinclair Knight estimated the cost of simple land
filling in the Caboolture Shire at $10 to $15 per tonne. Land filling after pre-
treatment was expected to be double this cost, and advanced technologies
such as incineration, pryrolysis, and Neutralysis were all expected to cost more
than $50 per tonne, with capital costs exceeding $30 million for each of the
advanced options42.

The Industry Commission recently conducted an inquiry into waste recycling and
noted that:

"Many Councils and Waste Management Authorities may not be charging


enough to cover the real costs to the community and provide for site
replacement and environmental costs.

The Commission went on to state:

''that while Councils and Waste Management Authorities persist in charging


unrealistically low disposal rates, the public will continue to discard rather than
recycle. The public is, generally speaking, quite willing to participate in recycling
programs on environmental grounds, confident that recycling is conserving
material resources."

In it's Waste Management Strategic Plan for the Caboolture Shire Council, Sinclair
Knight and Partners made the following comments on recycling options43:

"It is likely that in the short term, recycling will provide the bulk of waste diversion
schemes being employed by local authorities. The viability of any recycling
scheme is dependent on many factors including the cost of collection, the
market value of the material less the cost of transport to the market, and the
volume of material collected which is dependent on community participation
rates. The viability of recycling schemes are particularly affected by remoteness
of markets for recyclable materials, and transport costs are a major constraint.

On a commercial basis, recycling schemes are viable if the cost of the recycling
is less than the value of the recycled material. However, this does not account for
the cost savings in waste disposal. To this extent, Councils should subsidise or
otherwise provide assistance to recycling."

The present recycling initiatives have been largely directed at higher value
materials that can be easily separated. These include metal scrap, glass, plastics
and paper. Most of the potential for the recovery of these materials may have
been already exploited.

41 Duston, Thomas E. (1993) "Recycling Solid Waste" Quorum Books, Connecticut, ISBN: 0-89930-754-X
42 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
43 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.

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Other municipal waste of lower value including undifferentiated domestic waste


and builders rubble, may not be so easily amenable to recovery by separation.

However, concrete and masonry products can be used as construction site fill or
crushed and screened to produce both drainage and road base materials. The
recent construction of the third airport runway into Botany Bay used a significant
proportion of treated demolition material. The Industry Commission in 1991
estimated that 80% of Sydney's demolition rubble was being recycled at that
time44. However, the long term opportunities for the economic construction site
disposal of untreated hard fill may not match the recent Sydney performance.

One of the existing landfill sites in the Caboolture Shire - located at Boundary
Road, Narangba.

Sinclair Knight & Partners report that trials undertaken in Brisbane suggest that
crushed and screened masonry rubble can be produced for about $7.50 per
tonne45. At this price the product is a competitive substitute for quarried
materials. Estimates by Brookes et al for the Shire of Hornsby north of Sydney
(1994), suggest that the reuse of crushed aggregate from clean and hard fill
could save the Hornsby Council up to $14 per tonne for materials otherwise
purchased46.

44 Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic & Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148.
45 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
46 Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic & Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in

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Moreover, the charges levied for the private dumping of industrial waste at
council landfills has been increasing sharply. Dumping charges for commercial
and industrial wastes at Brisbane and adjacent council landfills now range up to
about $50 per tonne.

STRATEGIC OPTIONS IN RELATION TO RAW MATERIAL AND MARKETS


The optimum siting of a refuse recovery and recycling plant will be very site
specific, and will depend on an adequate supply of raw material at an attractive
price, together with an adequate demand for the output product at a price that
will be competitive with alternative materials. These considerations suggest that
the most attractive location for a Petemic type plant will be towards the fringe of
a large and expanding metropolitan area where:

There will be plenty of waste, including an adequate proportion of hard-fill


from building sites.

Landfill sites will be scarce and dumping will be under pressure from urban
residents.

Waste disposal costs (including landfill lining and waste handling including
compaction and transport) will be high.

There will be a local demand for the product fuelled by a high level of
building activity, particularly for added value variants such as bricks and
tiles.

An indicative location for such a pilot plant is the Shire of Caboolture. The Shire is
growing rapidly, indicating an increasing supply of refuse, together with an
expanding demand for building materials. One of the characteristics of an
expanding urban area is a relatively high proportion of hard-fill in the refuse,
compared with areas of stable population where soft domestic waste is the
major component of garbage. This characteristic will provide the best feedstock
for the Petemic process.

Since 1971, the population of the Shire of Caboolture has increased at growth
rates in excess of 10% per annum, and growth is expected to continue at up to
8% per annum in the period to 200647. This high growth rate is being maintained
by urban expansion and inward migration of people.

The population of the Shire is now expected to more than double to 160,000
people by the year 2006. If the present housing occupancy rate remains at the
current level of about 3.0 people per household, then the number of residences
will also need to double from the current number of about 25,000, to about
53,000 houses by the same date48 49.

Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148
47 Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"
48 Source: Australian Bureau of Statistics (various publications including 1991 Census of Population &
Housing, and Planning) Collaborative in Conjunction with Caboolture Shire Council

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If occupancy remains at around the current 2.65 people per household, then the
number of dwellings could exceed 60,000 as per the table below:

Popula tion & Growth Ra tes - Ca boolture Shire


Source: Australian Bureau of Statistics
Additional Source: Strategic Land Use Plan (1993) - Caboolture Shire Council
Planning Collaborative in Conjunction with Caboolture Shire Council

Year Population Dwellings (Total) Occupancy Rate

1971 12,207 5,088 2.40


1976 20,060 7,588 2.64
1981 32,380 11,645 2.78
1986 48,602 17,386 2.80
1991 70,093 26,068 2.69
1996 96,390 36,374 2.65
2001 127,479 48,105 2.65
2006 159,349 60,132 2.65

Shaded area: Consultants estimates

The above information may be more readily absorbed by viewing the Graph
below:

49 Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"

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Population & Growth Rates - Caboolture Shire


200 80

Dwe lli n gs (To t al)


150 60
Po pu lat i o n
Thousa nd s

Thousa nd s
100 40

50 20

0 0
1971 1976 1981 1986 1991 1996 2001 2006
Ye ar

Pop ula t ion Dw ellings (Tot a l)

Source: Australian Bureau of Statistics


Additional Source: Strategic Land Use Plan (1993) - Caboolture Shire Council

Between 1985 and 1993 the number of building approvals in the Shire increased
by 99.7%. Projections by the Department of Housing and Local Government
show that construction in the Shire of Caboolture will increase to the year 2006,
while Brisbane City will decline. Within the Strategic Land Use Plan there are
large tracts of land allocated for sub-divisional development coupled with
relatively short processing times for applications. According to the Department
of Housing and Local Government, sub-divisional approvals in the Shire take
approximately four weeks compared to approximately eight to nine weeks in
Brisbane50.

50 Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"

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Projected New Dwelling Requirements 1986 - 2006

25
No . o f n e w Dwe lli n gs

20
Thousa nd s

Brisb a ne C it y
15 C a b oolt ure

10

5
1986-1991 1991-1996 1996-2001 2001-2006
Ye ar
Source: Medium Series Dara
Dept. Housing, Local Government & Palnning for the Social Justice Startegy, 1990/91 Caboolture

The present production of refuse (excluding private landfill) in the Shire of


Caboolture is about 900kg per person per annum, or a total refuse production
(1993 basis) of about 70,000 tonnes per annum for the Shire. This quantity is
expected to grow to about 150,000 tonnes by the year 200651.

Most of the refuse in the Shire is currently sent to the main Caboolture landfill site.
It is estimated that this site has about 20 years of remaining life at the present
dumping rate of about 44,700 tonnes per annum.

The establishment of a waste recycling plant would significantly extend the life of
this facility, and would eliminate the need to transfer operations to a new site by
2014. Most of the other existing landfill sites in the Shire have similar or earlier
expiry dates.

The indicative Petemic plant capacity to treat all the present Shire refuse would
be about 280 tonnes per day (assuming a 5 day week), expanding to about 600
tonnes per day by the year 2006.

We are advised that the optimum sized plant for the Petemic technology is about
500 tonne per day with an indicated capital cost of $20 to $50 million52.

51 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
52 Initial indications at the commencement of the study was $20 to $25m - Petemic management later
revised this to the amount shown.

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It should be noted that similar characteristics to the Shire of Caboolture are also
present in adjoining Shires, particularly Pine Rivers and Redcliffe, and it is possible
that a strategically located facility could also attract refuse from those Shires.

Accordingly, it is noted that the present and projected production of refuse in the
Shire is reasonably well matched to the optimum estimated Petemic plant size,
particularly having regard to the fact that it is likely to be several years before a
commercial scale plant could be commissioned.

However, it should also be noted that long term refuse disposal contracts have
been negotiated for most urban and per-urban municipalities close to Brisbane,
and equity issues will need to be addressed prior to establishment of any
treatment facility.

SUPPLY AND PRICE OF CONSTRUCTION MATERIALS IN THE SHIRE OF


CABOOLTURE
In 1986, Mr M O'Flynn prepared a report on the quality and viability of extractive
resources within the Shire of Caboolture53. He identified a number of deposits
including a regionally significant deposit of hornfels, greenstone and granite rock
in the upper reaches of Burpengary Creek. However the potential to develop
these resources has been limited by the encroachment of rural residential
development into the area.

Privately owned quarries at Narangba, Moodlu and Bracalba now supply the
hard rock requirements in the Shire. Caboolture Shire Council has just approved
an additional quarry at Bracalba, and a reliable source of hard rock will be
available well into the next century. But the haulage distance from Bracalba to
the main areas of population growth in the eastern part of the Shire may allow
some advantage to a centrally located source of substitute aggregate. The
Council also operate quarries at Round Mountain near Elimbah and Wamuran to
provide aggregate for its own use.

Regionally significant deposits of fine to medium grained sand are located within
the Shire along Six Mile Creek, Lagoon Creek, Lower Burpengary Creek, and at
West Beachmere and West Torbul. Sand from these deposits is of excellent
quality and is available (at source) for a price of less than $10 per tonne. It is
unlikely that a "fine" Petemic product would be able to compete with local sand
in the short term. However, in the long term, extraction may face some
environmental restrictions and, some market potential might develop.

Extensive resources of ceramic clay occur in the lateritised and weathered


sediments in the Landsborough Sandstone, mainly in the eastern half of the Shire.
These deposits were identified in the OFlynn Report. However, extensive rural
residential development in this area has reduced the areas available for future
extraction. Ceramic clay also occurs in the west of the Shire, but these deposits
appear to have limited application for the building industry.

53 O'Flynn, M. (1986), "Revision of Rock and Mineral Resources in Caboolture Shire" reported in
Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"

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The declining resource base for extractive materials is discussed in the Caboolture
Shire Council's Strategic Plan (1993)54. The Plan stresses that the availability of
economic deposits of rocks and minerals for construction purposes is essential for
the expansion and maintenance of urban services in the Shire. As urban or rural
residential development eliminates viable extractive resources, the cost of urban
infrastructure increases as materials need to be introduced from more remote
locations. This increased cost is eventually borne by the entire community.

The O'Flynn report55 as quoted in the Strategic Land Use Plan identified a number
of innovations that might have been expected to mitigate the loss of extractive
resources, these include:-

The use of improved explosives, better blasting technique and more


sophisticated pattern design and monitoring which together with other
practices might enable the impact of operations in proximity to urban
development to be better managed.

An awareness that nuisance factors such as dust and noise must be


monitored and mitigated. To do this, new techniques and processes have
been introduced. Also important is the visual amenity of the operations,
together with the future use of sites and the rehabilitation techniques
required.

Since the O'Flynn report was prepared, extensive urban development in the Shire
has resulted in the further loss of significant extractive resources.

At the same time, the rapid spread of rural residential development is greatly
increasing the demand for low quality road base and fill. The Council has now
reached the conclusion that strategically located deposits of these materials
must be preserved where possible for the developing sections of the Shire.

The development of a centrally located recycling facility might be expected to


relieve some of the pressure on the existing reserves of hard rock, especially those
located within reasonable distance of developing urban areas.

Resources of creek sand along Six Mile and Lagoon Creeks are more widespread
than previously estimated by O'Flynn in 1986. The material is generally better
graded than the beach-ridge sands in near coastal areas and more suitable for
blending with concrete and bituminous aggregate. Because of the lack of
similar well graded, fine to coarse-grained sand on the north side of Brisbane, the
deposits will be increasingly significant as the alternative sources on the south
side of Brisbane are depleted.

The beach ridge deposits near the mouth of Burpengary Creek have been
worked for nearly 20 years and the remaining resources are thought to be limited.
Workable deposits of beach ridge sands are still likely in the Godwin
Beach/Beachmere area.

In the Wamuran, Moodlu area and along the Lagoon Creek area, deposits are
available in the vicinity of the existing workings. The area is largely rural and the

54 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council.
55 O'Flynn, M. (1986), "Revision of Rock and Mineral Resources in Caboolture Shire" reported in
Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"

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Council believes that future rural residential development should be excluded to


maintain the availability of these deposits.

The current demand for hard rock and sand in the Shire is at least one order of
magnitude greater than the projected output of a Petemic plant that would
treat all the Caboolture Shire refuse.

The demand for hard rock and sand has increased substantially in recent years,
although over the period 1993 to 1994 the situation has stabilised somewhat.
Production for the Shire of Caboolture is demonstrated in the graph below:

QUARRY PRODUCTS DEMAND - CABOOLTURE SHIRE


Amount of Material Extracted - January to December, 1993 and 1994

Cubic Metres Extracted


450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0

Sand
1994
Deco

Hardrock 1993
Source: Caboolture Shire Council, Town Planning Department (March, 1995)

From the table above, it may be seen that extraction of hardrock in the Shire of
Caboolture for the year to December 1994 amounted to 323,000 cubic metres.
Deco production was 256,000 cubic metres and sand 353,000 cubic metres in the
same year. It should be noted that aggregate and other construction materials
also enter and leave the Shire.

Accordingly it can be concluded that the physical input and output parameters
for an optimum sized Petemic plant in the Shire of Caboolture would not be
mismatched with the supply of refuse, and the expected Shire demand for
aggregate. The output from the Petemic facility would provide less than 10% of
the expected demand for sand and aggregate in the Shire.

It should be noted that aggregate also enters the Shire from adjacent sources.

However, most of the deposits of hard rock and sand in the Shire have now been
acquired by large competitive companies operating Australia wide. The most
important operators in this field are Pioneer International, Boral and CSR. These
Companies are vertically integrated and also produce pre-mixed concrete,

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bricks, tiles, and a range of more specialised building products. These companies
also operate in the contract supply of materials and services in road building.

The position in the sand and rock market has similar characteristics to the
handling of domestic and commercial refuse. Large companies and long term
arrangements dominate in the market place. It will be necessary to negotiate
satisfactory arrangements with present concession holders to ensure access to
the marketplace. Although this may present some problems, the community and
government pressure to reduce landfill disposal will act as a powerful incentive in
the establishment of competitive recycling facilities. However these facilities will
need to be fully cost effective to succeed.

The price and quality of the recycled product will need to compete with locally
quarried materials. Enquiries made with a long-standing independent supplier of
aggregate at the retail level, who is also a substantial supplier of sand from his
own deposits in the Caboolture Shire56 indicates that the wholesale pricing of
aggregate and sand (ex quarry) in the Shire is as follows:

$ per tonne
Road base Medium quality at pit 9.00
Crushed aggregate 12.00
Graded aggregate (best quality) 18.00
Sand (lowest quality) 8.00

These prices are consistent with reports from other urban areas, and coincide
with estimates of the cost of crushing and grading demolition rubble.

Accordingly, it is concluded that market parameters for the Caboolture Shire are
favourable, and may be reasonably typical of similar locations elsewhere in
Australia. The Shire of Caboolture thus presents the optimum opportunity and
location for testing the Petemic technology on a commercial scale.

SUPPLY AND PRICE OF AGGREGATE AND CONSTRUCTION MATERIALS


IN SOUTH-EAST QUEENSLAND57
Regional Supply & Demand

The demand for aggregate (including sand and gravel) is dependent on the
state of the construction industry. In turn, construction activity is a function of the
population trend and the economic climate.

Local aggregate demand in South-east Queensland will probably increase


proportionally, but will continue to be dominated by large public works such as
the water and highway projects mentioned above. Local per capita base-
consumption within this largely rural area is unlikely to exceed 0.5 m3/a.

56 Source: confidential
57 Material in this section has been largely sourced from: Department of Primary Industries Qld, Sand
and Gravel Resources of the Upper Brisbane and Lockyer Valleys: A Technical Information Paper, DPI,
Queensland, 1995.

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However, much of the material that is extracted from the region is exported to
the conurbations of Brisbane, the Gold and Sunshine Coasts, and Toowoomba.
The region, therefore, has a potential market of nearly 2 million people, growing
at 2.5% annually (ABS, 1993).

The volumes of aggregate being produced in the region (and consumed in the
region - negligible quantities are being exported or imported) are considerable.
In 1990, the last year in which statistics are available, 17.6 Mt of aggregates,
including 6.6 Mt of sand and gravel, were produced in the Brisbane and Moreton
Statistical Divisions (which incorporate the Cities of Brisbane, Caloundra, Gold
Coast, Logan, Ipswich and Redcliffe, and the Shires of Albert, Beaudesert,
Caboolture, Esk, Gatton, Kilcoy, Laidley, Maroochy, Moreton, Noosa, Pine Rivers
and Redland).

Queenslands per capita consumption of aggregate is remarkable high


(compared with consumption in New South Wales, for example). This mainly
reflects the escalating rate of quarry rock production. The trend of per capita
sand and gravel consumption is slightly negative in Queensland, and the
situation is mirrored in the southeast of the State. Nevertheless, it appears that
Southeast Queenslands demand for sand and gravel will remain above 6 Mt/a is
the foreseeable future.

Coarse sand and gravel is currently being won from a number of sources, mainly
from the Brisbane River estuary (0.8 Mm3/a), the Brisbane River between Ipswich
and Fernvale (0.3Mm3/a), the North and South Pine Rivers (1.0 Mm3/a), Coomera
River (.0.9 Mm3/a0 and the Mary River tot he north of the region (0.2 Mm3/a).
Fine-medium sand is mainly won from the Oxlet/Blunder Creek system (0.8
Mm3/a) and the Logan River system(0.3 Mm3/a) , as well as a variety of other
sources such as fossil beachridges near Toorbul and marine sand from Moreton
Bay (OFlynn, 1992).

Obviously, reserves from these sources are finite, and new sources will inevitably
be required. Large resources of fine-medium sand of marine origin exist in the
region but these are of lower quality than river sand and their availability is far
from certain. Reserves of coarse sand and gravel are mainly confined to a few of
the rivers in the region. Reserves in these traditional sources of supply
(particularly in the Coomera River and the Brisbane River estuary upstream of the
Story Bridge) are approaching exhaustion , while other resources (such as the
Brisbane River estuary downstream of the Story Bridge) are presently unavailable
because of opposition from sectors of the community.

Accordingly, the industry is beginning to relocate further afield into areas such as
the upper Brisbane River and Buarabe Creek. It is clear that the demand for sand
and gravel form the study area is likely to increase markedly over the next few
years. It is also clear that deposits in the region will be unable to maintain supply
beyond the short-term. Possible substitutes for such materials (i.e. long-term
sources) include the Petemic aggregate.

Value of the Industry

Sand and gravel is valued at $5-10/m3 on bank (i.e. stockpiled at the site) and
$20-25/m3 delivered to the coastal markets (landscaping and concrete blends
retail in Brisbane at $40-45/m3.). The Moreton region consumes about 3.5 Mm3/a

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of sand and gravel, or about $70M annually. In 1994, operations in watercourses


from within the region supplied only about 5% of this figure.

Most of this sand and gravel is used in concrete and concrete products. 2.5-3
Mm3 of concrete is produced in the region annually. At an average production
cost of $110/m3 delivered, the region uses about $300M of concrete annually.
Industry sources have advised the Qld Dept. Primary Industry that this represents
over 10% of the regions building and construction costs.

Alternative Sources

Fuvially derived sands and gravels are usually ideal concrete aggregates
because they have been naturally beneficiated and they usually possess a
desirable grading. However, suitable and accessible reserves of alluvial sand and
gravel are finite, and alternative sources need to be identified. Three products
need to be considered. In industry parlance, these are coarse aggregate (-
5mm), coarse sand (coarse sand/fine gravel; 1-5 mm) and fine sand (fine-
medium sand; 0.1-1 mm).

For many years, hard rock quarries have provided the bulk of Brisbanes coarse
aggregate, and the trend will undoubtedly increase as gravels become
increasingly scarce or unavailable. Rounded river gravel is preferred over crushed
rock for certain applications, such as exposed aggregate and pumped
concrete, although the main reasons for its use at present are cost
competitiveness and consistent product quality.

An example of such a quarry in the Brisbane Valley is Kansas Properties Pty Ltd
operate the Ravensbourne Sand Pit. A large face is cut into weathered, friable,
mainly medium-grained, quartose Helidon Sandstone. The clay matrix has been
partly removed as a result of groundwater leaching. The pit supplies sand for
various concrete products, plaster sand and bedding sand for the Toowoomba
market. The production level is unknown. Large reserves remain. A Mining Lease is
also held over the area for silica sand and kaolin (OFlynn, 1992).

Crusher dust from hard-rock quarries can substitute for coarse a\sand in concrete
but it is generally only used when there is a supply shortfall because its shape is
greatly inferior to that of sand. Its sharp, tabular nature decreases workability and
pumpability, necessitates a higher cement content and allows increased
shrinkage. This problem can be ameliorated to some extent by the use of impact
rather than jaw crushers, and the used of certain admixtures (chemicals which
modify concrete properties such as setting-time or viscosity).

Crusher dust production is presently incidental to coarse aggregate production.


At present, almost all crusher dust produced in the region is used in roadworks. It is
inevitable, however, that the use of this material in concrete will increase. If and
when this occurs, new hard-rock quarries will need to be opened. Suitable hard-
rock quarry sites are not ubiquitous because of land use and geotechnical
limitations. In addition to the impacts generally associated with hard rock
quarries, such as noise, vibration and dust from blasting, and acid drainage from
the oxidation of pyrite, there are added environmental costs associated with
crusher dust production. Large quantities of water and energy are used, and high
volumes of waste slimes are produced.

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Gap-graded concrete mixes (deficient in coarse sand) are possible but are
generally undesirable because of the need to increase the contents of fine sand
and cement to fill the interstices. More water is required in the mix to maintain
workability and the strength of the concrete decreases. The higher cement
content increases the cost of concrete and places additional pressure on
calcium carbonate deposits, which are often environmentally sensitive areas
(e.g. coral in Moreton Bay, limestone at Mt Etna).

The DPI suggest that, where possible, alluvial sand resources should be conserved
for the more valued end uses. For example, lower grade materials could be used
in lieu of river sand for general fill or bedding material. This is, of course, much
easier said than done, because river alluvium is often more readily available and
less expensive to supply, and the higher quality product will be assured of
meeting quality specifications. If follows that for substitution will not occur unless
river sand commands a higher price.

Materials technology may conserve resources in various ways. For example, the
use of silica fume in structural concrete increases strength, and therefore less
concrete is required overall. Of course, silica fume is expensive, making it
unsuitable for more general applications. The use of flowable fill rather than
conventional concrete is increasing; this material uses a high proportion of fly-ash
and much less aggregate. Flowable fill is being used as a bedding material along
part of the Wivenhoe-Tarong Pipeline route.

Fly-ash (pozzolanic waste material from coal-fired power stations) is used in


concrete to partially replace the cement, in order to reduce cost and potential
reactivity. The coarsest fly-ash particles (unsuitable for cement replacement) can
also be used to substitute for sine silty sand.

Concrete is being recycled in many parts of the world, generally for use in roads
and as bedding material, and in some cases for reuse as concrete aggregate.
Recycling is being trialled by the Brisbane City Council for use in suburban roads.
There are, however, a number of problems associated with concrete recycling,
such as quality control. Nevertheless, in future, waste concrete is likely to become
an important source of constructional material. Other recycled and artificial
aggregates (e.g. tyre rubber) have limited applicability and are of marginal
interest.

USE OF THE PETEMIC PRODUCT, AND COMPETITIVE ADVANTAGE


Competitive or comparative advantage for an organisation or product is a
marketplace concept. It refers to the ability to capture or expand market share
relative to other competitors offering the same (or an equivalent) product or
service. Comparative advantage arises from a number of parameters;

1. The price of the product or service

2. The quality of the product or service

3. The availability of the product or service

4. Any exclusive right or concession which might limit the competitors rights to
obtain a raw material, or supply a product or service to the marketplace.

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A number of secondary issues will also have a bearing on comparative


advantage including;

The source availability and cost of raw material

Manufacturing and overhead costs

Manufacturing ability including product range

Ability to comply with regulatory requirements

Degree of vertical integration of source materials, processing, and final


market.

In practice, it will be extremely difficult to establish whether a product or service


can gain a comparative advantage (i.e. can compete in the marketplace)
without actually entering the marketplace.

Unless precise detail about the above mentioned parameters is available, then it
will be impossible to derive the competitive boundaries for each of the relevant
parameters for which advantage might arise. Moreover, the market response to
a new competitor for the existing potential operators will be very difficult to
predict. It is suffice to say that the Australian market for aggregate and
construction materials is dominated by several large vertically integrated
national companies.

The market survey revealed that the potential production from a Petemic plant
based in the Caboolture Shire would have an output less than one tenth of the
total production of generic extractive aggregate in the Shire.

It should also be noted that the market survey is presented as a pre-feasibility


study. As such, information from this Report will be used to establish the economic
boundaries within which Petemic would need to operate to be competitive. It is
the responsibility of Petemic Management to demonstrate that it can meet those
requirements.

The Price of the Product or Service

No information was available on Petemic product price at the time the survey
was conducted.

At the bottom end of the aggregate market, the product can be regarded as
generic, and competition will be based on price, provided that the product
reaches the specifications required in the marketplace.

A major customer group is public sector instrumentalities (Road Departments and


Local Government) who purchase on tender with specified standards. Otherwise
the market is diverse and competitive.

It will be difficult to establish product differentiation in this market unless the


product has particular attributes not available in competing products. We have
no specifications for the Petemic product. Consequently we are unable to
comment on this aspect.

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We have obtained prices for generic products that we would expect to


compete with Petemic products from local sources and from literature review,
and these are included in the market survey.

The likely market competitors vary from place to place. It can be expected that
the main competition will be the major Australian building products companies.
These companies include CSR Ltd, Boral Ltd, and Pioneer International Ltd. These
companies all quarry rock and sand at a large number of locations, and produce
bricks and other derived products. They also offer a large range of contracting
services (such as road building) that utilise the source building materials. Privately
owned independent suppliers also operate at many locations especially where
they have secured exclusive rights to raw material deposits.

Some Local Government Authorities (including Caboolture Council) maintain


their own quarries for use in road building.

The market situation in the Caboolture Shire is typical of Australian urban


locations, and the three national firms operate as well as a number of
independents.

Petemic will have to demonstrate that it can supply products of defined


specifications to compete on price with the range of products available from the
existing extractive sources in the Shire.

We have no information at this stage to demonstrate that Petemic can deliver a


competitive product in the marketplace.

The Quality of the Product or Service

No product has been produced from the Petemic process at the time the market
survey was prepared, and no specifications had been provided that would have
enabled the writer to seek comment from potential purchasers. The market
survey was conducted on the assumption that the product(s) would be of
equivalent quality to materials obtained from extractive deposits.

It is therefore concluded that, as at date of writing, no comparative advantage


in respect of quality has been demonstrated for the Petemic product.

The Availability of the Product or Service

In some circumstances availability and timing are important attributes of


comparative advantage. Reliability and timeliness in respect of product delivery
and quality may provide a considerable comparative advantage. At the time
the market survey was conducted, no information was available on this aspect,
and the Consultants are not aware of any additional information to hand as at
the date of writing this Report.

Consequently it is concluded that, as at the date of writing, no comparative


advantage in respect of availability or supply has been demonstrated for the
Petemic product.

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Exclusive Rights or Concessions Which Might Limit the Competitors Rights to


Obtain a Raw Material, or Supply a Product or Service to the Marketplace

The extractive industries and infrastructure construction projects are often subject
to exclusive arrangements that limit the entry of competitors.

Exclusive assess to extractive resources is the general rule, and the large national
companies have secured deposits at strategic locations. This fact may enable
some operators to price products above a competitive market price, and enable
them to maintain a comparative advantage over new entrants.

This may have some impact on a potential entrant (such as Petemic) where the
existing operator has an excessive margin that will enable price reduction in the
face of competition.

This survey was directed at establishing competitive prices that Petemic would be
likely to face. As far as the Consultants can judge, Petemic has no advantage
arising from an exclusive access to material not available to others.

Indeed, Petemic is yet to secure guaranteed access to the raw material sources
(garbage and builders rubble). At present, this raw material source is the subject
of an exclusive right held by Hunter Brothers. If the Petemic process is to source
input material from the Caboolture Shire it will need to negotiate with Hunter
Brothers. The cost of any arrangement negotiated will be relevant in establishing
comparative advantage for the Petemic process.

As to the secondary issues mentioned above, the source and availability of raw
materials will need to be secured in advance of any plant establishment. At the
time of conduction of the market survey, no information on manufacturing costs
or overheads were available, nonetheless Petemic management have advised
that costs will be low enough for Petemic to compete. The issues of marketing
ability and product range cannot be addressed until some product is actually
processed. The compliance requirements have been set out in the environmental
section of this Report, and will need to be factored into the manufacturing
process and costs.

The final issues of access and vertical integration require some comment.
Petemic is a small company with no national scope. Moreover it does not provide
immediate prospects for vertical integration unless it forms an alliance with
another group to assist with product demand.

Petemic will need to address some of these issues prior to establishing their Pilot.

CONCLUSIONS
The disposal of municipal waste has become a significant problem for local
government authorities throughout the developed world. Earlier levels of waste
generation at about one tonne per person per year have declined somewhat in
the mid 1990's because of recycling and other government initiatives. However,
the economic separation and recovery of the higher value items in municipal
waste may now be reaching a practical limit.

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Waste commonly directed to landfill in the higher population municipalities of


Eastern Australia now contains 30% to 60% hard-fill and the balance in
undifferentiated domestic garbage. The prospects for economic recycling for
these materials is relatively limited58 59.

Environmental restraints imposed by government, rapidly declining capacity in


existing landfill sites, and the shortage of new areas suitable for landfill disposal
near to the main areas of population, can be expected to cause sharply rising
costs in landfill refuse disposal. New initiatives will be needed to counteract these
costs, and to comply with national targets of a 50% reduction in waste directed
to landfill by the year 2000.

58 Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic & Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148.
59 Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair Knight Consulting
Engineers for Caboolture Shire Council

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Various commentators have suggested that


the real cost of landfill disposal is higher than
the charges now being levied by municipal
authorities on the producers of refuse. It is
now government policy at the state and
federal level that users should pay the whole
cost of refuse disposal. The future cost to
dumpers is now likely to include forward
planning and environmental costs.

The direct cost to local government


authorities of landfill disposal in metropolitan
and urban Australia currently varies between
$10 and $50 per tonne, with the higher figure
applicable to areas of higher population
density. Similar costs in the USA may be up to
three times greater.

Dumping charges for commercial refuse at


municipal landfill sites in Eastern Australia may
also vary up to about $50 per tonne, but can
be expected to increase rapidly as new
government environmental and "user pays"
policies are progressively introduced.

Recent interest has been generated in some


municipalities towards the recovery and
treatment of builders rubble to produce
roadbase and drainage aggregate. The cost
of this treatment has been estimated at
about $7.50 per tonne with the value of the
product (on site) being up to $14 per tonne
depending on the quality of the product, and
the availability of competitive materials at
the particular site. There will also be an
additional benefit in this option in the cost of
dumping avoided60.

Examination of the specifications put forward


by Petemic Technology suggests that the
Petemic product in basic form should
command a premium over crushed and
screened builders rubble. Moreover the
process has the potential to utilise a greater
proportion of the waste handled in municipal
disposal than simply hard-fill waste amenable
to crushing and screening.

Clipping 1 - The Courier Mail, 25


60 March,
Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic 1995
& Operations
Feasibility Study for Major Recycling Initiatives and a Council Operated Transfer Station" in
Achievements and Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW. 141-148.

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Section MARKET PROSPECTS FOR THE PETEMIC SOLID WASTE RECOVERY PROCESS

This analysis suggests that the break even point for the basic Petemic process
might be about $50 per tonne of refuse input. This might be allocated as to $40
per tonne in landfill utilisation cost avoided, and $10 per tonne in base product
value (on site).61

The available data suggests that sufficient waste is available in the main
metropolitan and urban areas to provide a consistent supply of input raw
material, and that a regular demand for the basic output would be available at
a price that would be competitive with quarried materials.

Further, it is apparent that the physical input and output parameters for an
optimum sized Petemic plant in the Shire of Caboolture would not be mismatched
with the supply of refuse, and the expected Shire demand for aggregate. The
output from the Petemic facility would provide less than 10% of the expected
demand for sand and aggregate in the Shire.

However, it should be noted that no attention has been given in this analysis to
the ownership of municipal waste, or to any contractual arrangements that local
government bodies may have made with waste disposal contractors.

Aggregate from the Petemic process is anticipated to be similar in some ways to


the aggregate produced by Neutralysis as shown in the photograph above, i.e. a
lightweight, pelletised aggregate.

Sales Potential

Based on the foregoing data, calculations for annual sales potential are
provided as follows:

Low Estimate Mid-Estimate High Estimate


@ $8 / tonne @ $14 / tonne @$20 / tonne
$ $ $
7,200,000 12,600,000 18,000,000
12,960,000 22,680,000 32,400,000

61 As noted previously, this compares to the direct cost to local government authorities of landfill
disposal in metropolitan and urban Australia which currently varies up to $50 per tonne in areas of
higher population density.

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The above estimates assume production in the order of 0.9m to 1.6m cubic
metres of aggregate. This compares to the current Shire demand as follows:

Quarry Products Demand


Amount of Material Extracted - January to December, 1993 and 1994
Caboolture Shire

Material Cubic Metres Extracted Cubic Metres Extracted


1993 1994
Sand 361,646 323,203
Deco 217,008 255,955
Hardrock 419,849 352,655
Total 998,503 931,813

The following graph of the above sales estimates is provided for analysis and
comparison:

Indicative Sales Values for the Petemic Process - Caboolture Shire

40 Values based on current (93/94) demand


Gross Sales ($) per annum

Low Estimate @ $8
30
Mid-Estimate @ $14
Millions

High Estimate @$20

20

10

0
900 980 1,060 1,140 1,220 1,300 1,380 1,460 1,540 1,620
940 1,020 1,100 1,180 1,260 1,340 1,420 1,500 1,580
Expected demand for Sand & Aggregate in the Caboolture Shire (cubic metres)

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Section SITE ANALYSIS

SITE ANALYSIS

PROSPECTIVE SITES
The Consultants have followed the Clients directive in endeavouring to establish
prospects for a suitable site or sites within the context of Queensland, and
preferably South-east Queensland. From this point, the viability model for the
establishment of a suitable Petemic plant can be adapted according to site
variables and infrastructure requirements applying to any particular location.

An indicative location for such a pilot plant is the Shire of Caboolture. The
rationale here is that the Shire is growing rapidly, indicating an increasing supply
of refuse, together with an expanding demand for building materials.

There are several prospective sites in the Caboolture Shire that may be suitable
candidates for the setting up of a pilot plant. These have been visited by
Company management and the Consultants.

SITE LOCATION CRITERIA


Site selection criteria has been based on the following factors62:

1. In general terms, the site must be able to support the identified


infrastructure requirements (refer previous section of this Report). This would
include the availability - or reasonable availability - of power, telephone,
water, fuel (e.g. gas, diesel, furnace oil, etc.), etc. Limited water supply must
be available (Petemic management advise a requirement of no more than
several hundred litres per day63). Treated sewerage water would be
acceptable64.

2. Adequate supply65 of refuse.

3. Site must be appropriately zoned, or likely able to be rezoned to suitable


definition, e.g. Noxious, Offensive or Hazardous.

4. Environmental restrictions, particularly that relating to noise, must not, prima


facie, prohibit the planned development (refer Section of this Report
Environmental Considerations).

5. Should most likely to be acceptable, prima facie, to the local Council (and
meeting likely requirements imposed by the Town Planning department in
particular).

62 Some changes to the criteria listed below may be possible if plant design is modified
63 To be confirmed by Engineer
64 According to advice received by Petemic management
65 That is, supply of refuse must be sourced in sufficient quantities to support the ongoing viability of the
Petemic processes raw material requirements. In the case of the Caboolture Shire, the rapidly
growing local population indicates, primae facie, an increasing or at least maintained supply of
refuse.

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6. Low or nil level of objection likely posed by local / regional communities.

7. Minimum available land area of between 10 to 15 acres (4 to 6 hectares)66.

8. Excellent road access for heavy vehicles.

9. Preferably bitumen road access (or minimal requirement for bitumenisation


of access).

10. Presence of buffer zone to minimise or eliminate any undesirable effect on


nearby residential areas.

11. Restricted viewing from major arterial roads or highways to minimise or


eliminate any visual intrusiveness.

12. Close or immediate proximity to existing landfill dump sites.

THE NARANGBA INDUSTRIAL ESTATE


One of the sites visited (refer photograph below) is the Narangba Industrial
Estate, which is in part owned by the Department of Business, Industry & Regional
Development (the consultants understand that land in this estate is available for
freehold - if project eligible).

One of the possible sites - located at Narangba Industrial Estate. An ideal location
because of the appropriate land zoning.

66 Indicative for a 500t output per day Plant

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With the exception of a 35 hectare parcel of land which is undeveloped, the


majority of the Special Industry zoned land has been utilised for noxious and
hazardous industries. Indeed, latest advice from Council (as at date of writing) is
that the Narangba Industrial Estate itself is in major part zoned a Noxious,
Offensive or Hazardous Industry zone.

(Special Note: The Caboolture Shire Council Town Planning maps67 indicate
that the Estate is zoned Special Industry and in other parts Special Purpose.
The Department of Business, Industry & Regional Developments Locality map has
categorised the Estate as being either Special Industry and / or General
Industry. Council advice received indicates a Noxious, Offensive or Hazardous
Industry zoning).

The use of the Estate as an area containing noxious, offensive or hazardous


industries, which established by right previously, now require Town Planning
Consent in the Special Industry zone, thus affording greater control over the
development. The Special Industry zoned land, which has been developed for
the major part, is surrounded by an undeveloped tract of land.68 A future Stage
(No. 5A2) is planned.

A panoramic view of the Narangba Industrial Estate is appended to this report,


as taken from the current (physical) end of Potassium Street (refer to Locality Map
of the Estate, also appended to this Report.

Whilst advice to hand is that the existing Industrial Estate lots have all been taken
up for development, expansion of this estate is imminent.

Site selection criteria is addressed as follows:

1. Able to support the identified infrastructure requirements (refer previous


section of this Report). This includes the availability - or reasonable
availability - of power, telephone, water, gas / furnace oil / diesel, etc.
Town water supply (including fire hydrants) is available.

2. Rapidly growing local population (refer data presented in previous sections


of this Report). Caboolture Shire (together with the Sunshine Coast) is one of
the most rapidly growing - if not the most rapidly growing - populations in
Queensland69.

3. Site is appropriately zoned Special Industry (Noxious, Offensive or


Hazardous ) zone.

4. Environmental restrictions, particularly that relating to noise, do not, prima


facie, prohibit the planned development (refer Section of this Report
Environmental Considerations). However, as previously noted there may
be a requirement for the completion of an Environmental Impact
Statement, and / or Environment Management Plan.

67 Caboolture Shire Council Town Planning Scheme Map numbers 1:10,000 *15 (Issue #1), and 1: 5,000
*14C (Issue #1).
68 Source for information on the Narangba Industrial Estate is the Strategic Land Use Plan (1993),
Caboolture Shire Council (pp. 137 - 138).
69 The Sunshine Coast Economic Development Board claim that the Sunshine Coast region is the fastest
growing population centres in Australia.

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5. Preliminary discussions with Caboolture Shire Council indicate that it is a


likely possibility that it could be acceptable, prima facie, to the local
Council (and meeting likely requirements imposed by the Town Planning
and Health departments in particular).

6. Low or nil level of objection likely posed by local / regional communities,


due to its distant proximity to residential areas and placement within an
identified noxious, offensive, or hazardous locality.

7. It is likely that the a land area of between a minimum of 10 to 15 acres (4 to


6 hectares) is available70.

Area located on the outskirts of the Narangba Industrial Estate - creekbed to the
north / north-east, with some evidence of pollution from other nearby industries.
The area of the Industrial Estate is able to be further expanded towards this
locality, with fire hydrants located strategically along the track seen to the rear of
the photograph.

8. Excellent road access for heavy vehicles. Easy access to the Bruce
Highway.71

9. Bitumen road access available to the Estate.

10. Narangba Industrial Estate enjoys a significant Buffer zone which should
serve to minimise or eliminate any undesirable effect on nearby residential
areas.

70 Whilst indications are that the majority of lots on the Narangba Industrial Estate have been taken up,
the area will be expanded further. Also, there has been limited development occurring on the
outskirts of the Estate inferring that some blocks may become available for resale by private vendors.
71 Very limited exposure to residential areas

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11. Viewing from major arterial roads or highways is highly restricted. This will
assist in minimising, or eliminating, any visual intrusiveness.

12. Close proximity to a number of existing landfill dump sites, including those in
several adjacent shires.

One of the existing Landfill dump sites located in the Caboolture Shire - and a
possibility for co-development with a Petemic Plant located on site. This one is
located at Boundary Road, adjacent to the Narangba Industrial Estate (Caboolture
Transfer Station).

Alternatives to the Narangba Industrial Estate.

There are potentially a number of other fairly suitable sites located within
reasonably close proximity to central Caboolture, for example a 300 acre (121
hectare) site located along Boundary Road72, and existing landfill / dump sites.

There may also be some potential to site the Project on an existing landfill site,
however this would need to be negotiated with the Council and / or waste
management contractor. Design of the plant, however, would need to take
account of the possibility of leeching material. Some caution is advised since any
problems associated with landfilling activities might be wrongly attributed to the
Petemic process.

72 as per advice from DBIRD, Sunshine Coast.

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Section SITE ANALYSIS

The Caboolture Shire Light Industrial Estate at Narangba - not considered a


potential Petemic Technology Plant site due to its zoning, proximity to residential
areas, and existing development use.

A number of apparently suitable alternatives, not eventually considered for a


variety of reasons to be viable, are also apparent. These include the Light Industry
Industrial Estate, the ex Bribie Brickworks site, the Caboolture Shire Sewerage
Treatment Plant (located near the coast between Beachmere and Deception
Bay), and others.

The Noxious, Offensive or Hazardous Industry Zone

The Government gazetted town planning definition of the Noxious, Offensive, or


Hazardous Industry Zone is provided as follows:

To provide for industries which by their nature are likely to be noxious, offensive
or hazardous in relation to other types of land use including other industries. Large
scale general industries may also locate in this zone with Council consent.
Junkyards, and other visually intrusive activities will be encouraged to locate in
this zone. Residential and other forms of incompatible land uses will be restrained
from locating near this zone.

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Section SITE ANALYSIS

The Narangba Industrial Estate - a suitable site for a Petemic Plant. Shown here is
the outskirts of the existing land allocation, at the end of Potassium Street.

Caboolture Shire Council advises that the property is zoned Noxious, Offensive, or
Hazardous Industry73. The proposed use on the Narangba Industrial Estate
therefore conforms with purposes for which buildings or other structures may be
erected or used or for which land may be used without consent of the council74,
including:

a) advertising hoarding, advertising sign, bulk store, car repair station,


domestic pets, general industry, junkyard, light industry, liquid fuel depot,
and park, and

b) caretakers residence, car park, hazardous industry, noxious or offensive


industry, public utility and stockyard.75

Limited consent (purposes for which buildings or other structures may be erected
or used or for which land may be used only with the consent of the council
includes:

agriculture
commercial premises
lot feeding (intensive)
refreshment service

73 A current zoning certificate has not been obtained. The obtaining of such a Certificate is time
consuming and costly, and often an excessive requirement for the purpose of this Report. The
Consultant has therefore relied upon the verbal advice of Council.
74 Definition has been obtained from the Government Gazetted Table of Development: Noxious
Offensive or Hazardous Industry Zone.
75 Such purposes are subject to special conditions

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Section SITE ANALYSIS

Purposes for which buildings or other structures may not be erected or used or for
which land may not be used (i.e. prohibited development) includes:

any purpose not referred to above

Council has advised that there are no immediate planned changes to the land
zoning.

Another view of the Narangba Industrial Estate, taken from the western
extremity of existing development. Note the excellent bitumen road access.

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

KEY MANAGEMENT76
Key management, consisting of three personnel (plus professional support
services), are vested with quite different and distinct responsibilities as follows:

General Manager

The General Manager is responsible to the Petemic Board of Directors for the
implementation of policy, and the leadership of the Petemic team. His is the
ultimate responsibility for the financial performance of the Company and its
production / processing operation. For this reason, his primary role is to
achieve Company objectives.

He must also provide vision to the Company (both upwards and


downwards communication), and must maintain regular contact with the
owners / directors of the business.

Administration Manager

The Administration Managers role is essentially to act as the Company's


internal Bookkeeper and Paymaster. His primary role is to provide financial
information to management, however in the process the Administration
Manager will be responsible for the payment of creditors, exercising debtor
control, maintaining and controlling the accounting system (including
ordering and overseeing other transactional activity), and payment of staff
wages.

The Administration Manager will need to be a strong team player,


maintaining close liaison between the General Manager and the Operations /
Production department. He will also need to implement directives concerning
the engagement of professional service personnel, and on occasion initiate
such engagements.

Production Manager

The Production Manager has a critical role in the Petemic organisation, in that
he is responsible for the engine room of the Company (i.e. production and
processing operations). In addition to being the designated Quality Control
Officer, the Production Manager will need to demonstrate detailed
understanding, flair and initiative in relation to the Petemic process.

This position also carries the ultimate responsibility for the production of the
Petemic end-product to the specifications and standards established as
Company policy (subject to the outcomes of any ongoing research and
development activity). This must be achieved in the most cost-efficient
manner possible.

76 For convenience only, the Consultant has adopted the words he or his when referring to staff
positions and organisational structure. However, the Consultant is committed to presenting data on
an equal opportunity basis and for this reason the words she or her could also be used in
replacement of the foregoing except where otherwise and specifically noted.

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

This position carries the key to achievement of the Companys financial


objectives, from a cost point of view. It is important that he also maintain on a
regular basis his professional and technical knowledge, ensuring that he is fully
acquainted with industry developments in the area of waste management.

Finally, the Production Managers other critical area of responsibility is the day
to day management of most Company staff. It can be expected that this
person will have a key role in the hiring and firing of production and
processing personnel.

The sharp delineation in management responsibilities, as depicted above, will


contribute towards a good working relationship being developed between the
respective personnel.

Delegation of Authority and Succession Planning

The Company will need to consider the implications of the possibility of key
management not being present for extended periods (especially the General
Manager). Not only does this imply that the need for delegation of management
responsibilities, but more importantly it emphasises the importance of putting in
place a "succession plan" (comments follow below) for the current owner-
Directors.

Key Management Risk

There is currently a reliance of "Key Men" (i.e. Walsh, Holbut, and Schulz). Because
of their critical management and other functions undertaken, a risk to their
spouses (as may be applicable), and the ongoing viability of the Company exists,
they become incapacitated for a medium term or longer.

This risk will be considerably exacerbated once the Viability stage has been
completed, and presumably construction commences on a Pilot or Commercial
Plant.

One way that this may be overcome is for key management to identify suitable
persons for succession. It is in fact in their own interest to do so, as the Consultant
is not only cognisant of the personal objectives of the owners, but if the business is
to become more self-reliant, it is imperative that this matter be attended to. This
could be progressed along with a proposed ATFIC77 program to be developed
(the ATFIC is explored in the next sub-Section of this report).

In addition to the above, the management may wish to investigate suitable


income protection insurance , in addition to implementing a system of revolving
work duties, particularly with identified key workmen. This could also be
conducted in conjunction with an ATFIC program

The Petemic Board of Directors

77 ATFIC - Assistance to Firms Implementing Change

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

The Organisation Charts below indicate a Board of three Directors (current


organisational structure is two persons78). These persons are could be:

1. Mr Michael Walsh (existing General Manager)


2. Mr Peter Holbut (existing Research Development & Technology Manager)
3. Mr Graham Schulz (Non-Executive Director)

In the short to medium term, the Consultant recommends that the existing Board
should look for at least two other, independent, non-executive Board members
with expertise in the areas of:

Financial Management
Engineering Technology (preferably with specific skills in the area of waste
management)

This would serve to bolster the skill base and expertise required to effect
implementation of the Project.

Professional Support Services

The following Professional Support Personnel will be required:

Industrial Chemist

The engagement of an independent Industrial Chemist will be required for the


formal testing of product quality and composition. Some stress-testing of product
may also be required to meet the potential requirements of local Councils and
other clients of Petemic79.

The nature and specification of tasks required to be completed would be subject


to client requirements, and tailored to meet needs.

Suggested allocation: $2,000 per month upon construction of the Pilot or


Commercial Plant.

Consultant(s)

Consulting services may be required in the following areas:

General Consultancy (allocation should be made for assistance with the


financial management functions80).

Engineering (implementation of Plant design, and ongoing calculations for


product / process specifications. Plant modification on the fly)81.

78 Mr Michael Walsh, and Mr Peter Holbut.


79 The stress testing of material used, for example, as road base, will almost certainly be required)
80 Financial Planning and Analysis, including analysis of performance, will support the Administration
Managers role. There will be a greater than usual requirement during establishment of the Plant,
and for at least the first six months of operation.
81 A suitable Engineering Consultant has been located in Mr Peter Stone, who is being utilised by
Petemic management as at the date of writing.

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

Suggested allocation: $1,500 per month for the first year commencing upon
completion of the Viability Analysis (General Consultancy), and $1,500 per month
for the first year commencing upon completion of the Viability Analysis
(Consulting Engineer).

Other Professional Support (Ongoing)

An Accountant, Auditor and Solicitor should be appointed. The Solicitor should


ideally be conversant with liscencing requirements of the Petemic Technology.

Suggested allocation: $3,000 per annum for the first year commencing upon
completion of the Viability Analysis (Accountant); $1,500 per annum for the first
year commencing upon completion of the Viability Analysis (Auditor); and $1,000
per annum for the first year commencing upon completion of the Viability
Analysis (Solicitor82).

Sub-Contracted Services

The following services will need to be retained for the provision of various sub-
contracted services:

Maintenance Crew
Assuming one shift only per day:
Allocate $1,000 per month (first year of operation post Plant Construction)
Allocate $2,000 per month (second year of operation)
Allocate $2,500 per month (third year of operation and thereafter)

The maintenance crew (comprising skill areas of fitter and turner, and
boilermaker) will be charged with the responsibility of maintaining the Petemic
plant. A reduced requirement is indicated in the early stages of plant operation.

A formal schedule of regular maintenance tasks will need to be formulated by


Petemic management, in addition to a memorandum of understanding in
relation to ad-hoc maintenance that may be required from time to time.

The Maintenance Crew will be directed by the Production Manager. As with all
sub-contracted and professional services, confidentiality agreements will need to
be executed with the Companies / individuals concerned.

The purpose of the Maintenance Crew is to MAINTAIN PRODUCTION AND QUALITY


by ensuring operation of machinery and mechanical equipment. Job Results are
defined as follows:

1. ENSURES OPERATION OF MACHINERY AND MECHANICAL EQUIPMENT by


completing preventive maintenance requirements on engines, motors,
pneumatic tools, conveyor systems, and production machines; following
diagrams, sketches, operations manuals, manufacturer's instructions, and
engineering specifications; troubleshooting malfunctions.

82 This allocations assumes resolution of all liscencing issues

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2. MAINTAINS EQUIPMENT, PARTS, AND SUPPLIES INVENTORIES by checking


stock to determine inventory level; anticipating needed equipment,
parts, and supplies; placing and expediting orders; verifying receipt.

3. LOCATES SOURCES OF PROBLEMS by observing mechanical devices in


operation; listening for problems; using precision measuring and testing
instruments.

4. CONSERVES MAINTENANCE RESOURCES by using equipment and supplies


as needed to accomplish job results.

5. REMOVES DEFECTIVE PARTS by dismantling devices; using hoists, cranes,


and hand and power tools; examining form and texture of parts.

6. PROVIDES MECHANICAL INFORMATION by answering questions and


requests.

7. DETERMINES CHANGES IN DIMENSIONAL REQUIREMENTS OF PARTS by


inspecting used parts; using rules, calipers, micrometers, and other
measuring instruments.

8. PREPARES MECHANICAL MAINTENANCE REPORTS by collecting,


analyzing, and summarizing information and trends.

9. ADJUSTS FUNCTIONAL PARTS OF DEVICES AND CONTROL INSTRUMENTS by


using hand tools, levels, plumb bobs, and straightedges.

10. CONTROLS DOWNTIME by informing production workers of routine


preventive maintenance techniques; monitoring compliance.

11. MAINTAINS CONTINUITY AMONG WORK TEAMS by documenting and


communicating actions, irregularities, and continuing needs.

12. FABRICATES REPAIR PARTS by using machine shop instrumentation and


equipment.

Security Guard
Assuming one shift only per day:
Allocate $800 per month (first year of operation post Plant Construction)
Allocate $800 per month (second year of operation)
Allocate $800 per month (third year of operation)

The Security Guard will be charged with the responsibility of ensuring the entry of
only those persons authorised to do so, or otherwise legally required, outside of
Plant operation.83

A secondary role will be the securing of the Companys assets.

A reduced requirement would be indicated should the Company proceed to


two shifts, with a nil requirement where three shifts are in operation.84

83 During hours of Plant operation, the Weigh Bridge Operator will be charged with the responsibility of
security.

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

Electronic and Engineering Contractor


Assuming one shift only per day:
Allocate $1,500 per month85 (first year of operation post Plant Construction)
Allocate $1,000 per month (second year of operation)
Allocate $800 per month (third year of operation and thereafter)

The Electrical and Engineering Contractor will be charged with the responsibility
of maintaining the electronics and controls relating to the Petemic Plant. A
reduced requirement is indicated in the early stages of plant operation.

A formal schedule of regular maintenance tasks will need to be formulated by


Petemic management, in addition to a memorandum of understanding in
relation to ad-hoc electronic maintenance that may be required from time to
time.

The Maintenance Crew will be directed by the Production Manager, but with the
input from the Engineering Consultant engaged by Petemic.

ORGANISATIONAL STRUCTURE
The organisational structure of Petemic Technology Pty should be relatively flat,
allowing for smooth communications between factory workers, and
management.

ORGANISATIONAL CHARTS
The following charts represent the organisational structure and line operations /
responsibility of the Company for one, two and three shifts86:

84 Since the Weigh Bridge Operator is charged with the responsibility during operation hours, in the
case of three shifts the Plant would always be secured by employed staff.
85 Equivalent to $40 per hour
86 For clarity, a full page of the Organisation Chart for One Shift only is appended to this Report

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

One Shift
PETEMIC TECHNOLOGY PTY LTD
ORGANISATION
ORGANISATION CHART
CHART
(ONE SHIFT)

FULL TIME STAFF EQUIVALENTS = 11 BOARD OF DIRECTORS


Plus Sub-Contractors & Professional x3
Support

GENERAL MANAGER
x1
* Vision
* Leadership
* Management
* Overview

ADMINISTRATION OPERATIONS & SUB- PROFESSIONAL


PRODUCTION CONTRACTORS SUPPORT GROUP

ADMINISTRATION PRODUCTION MAINTENANCE SECURITY GUARD INDUSTRIAL


MANAGER MANAGER CREW CONTRACTOR CHEMIST
x1 x1 x1 x1 x1
* Accounting * Production * Fitter
* Wages *Quality Control * Turner
* Ordering * Operations * BoilerMaker
CONSULTANT
* Scheduling
x1
ELECTRONIC & FREIGHT
SECRETARY ELECTRICAL (Road Transport)
WEIGH LOADER LOADER, FORKLIFT GENERAL
x1 ENGINEERING CONTRACTOR
BRIDGE OPERATOR PULVERISER OPERATOR, HAND
CONTRACTOR x1
OPERATOR x1 & BRICK x3
& SECURITY EXTRUDER STACKER, x1 Freight In / Out
* Sorting
x1 OPERATOR LOADER * Other Duties
x1 OPERATOR
x1

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

Two Shifts
PETEMIC TECHNOLOGY PTY LTD
ORGANISATION
ORGANISATION CHART
CHART
(TWO SHIFTS)

FULL TIME STAFF EQUIVALENTS = 19 BOARD OF DIRECTORS


Plus Sub-Contractors & Professional x3
Support

GENERAL MANAGER
x1
* Vision
* Leadership
* Management
* Overview

ADMINISTRATION OPERATIONS & SUB- PROFESSIONAL


PRODUCTION CONTRACTORS SUPPORT GROUP

ADMINISTRATION PRODUCTION MAINTENANCE SECURITY GUARD INDUSTRIAL


MANAGER MANAGER CREW CONTRACTOR CHEMIST
x1 x1 x1 x1 x1
* Accounting (extended hours) * Fitter
* Wages * Production * Turner
* Ordering *Quality Control * BoilerMaker
CONSULTANT
* Scheduling * Operations x1
ELECTRONIC & FREIGHT
SECRETARY ELECTRICAL (Road Transport)
x2 ENGINEERING CONTRACTOR
WEIGH LOADER LOADER, FORKLIFT GENERAL CONTRACTOR x1
BRIDGE OPERATOR PULVERISER OPERATOR, HAND x1 Freight In / Out
OPERATOR x2 & BRICK x6
& SECURITY EXTRUDER STACKER, * Sorting
x2 OPERATOR LOADER * Other Duties
x2 OPERATOR
x2

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

Three Shifts
PETEMIC TECHNOLOGY PTY LTD
ORGANISATION
ORGANISATION CHART
CHART
(THREE SHIFTS)

FULL TIME STAFF EQUIVALENTS = 34 BOARD OF DIRECTORS


Plus Sub-Contractors & Professional x3

Support
GENERAL MANAGER
x1
* Vision
* Leadership
* Management
* Overview

ADMINISTRATION OPERATIONS & SUB- PROFESSIONAL


PRODUCTION CONTRACTORS SUPPORT GROUP

ADMINISTRATION PRODUCTION FOREMAN MAINTENANCE INDUSTRIAL


MANAGER MANAGER x2 CREW CHEMIST
x1 x1 * Assists Foreman x1 x1
* Accounting (extended hours) in his abscence * Fitter
* Wages * Production * Turner
* Ordering *Quality Control * BoilerMaker
* Scheduling CONSULTANT
* Operations
x1
SECURITY GUARD
CONTRACTOR
SECRETARY
x1
x2
WEIGH BRIDGE LOADER LOADER, FORKLIFT GENERAL HAND
(extended hours)
OPERATOR & OPERATOR PULVERISER & OPERATOR, x 10
SECURITY x4 EXTRUDER BRICK STACKER, * Sorting
x4 OPERATOR LOADER ELECTRONIC &
* Other Duties
x4 OPERATOR ELECTRICAL
x4 ENGINEERING
ADMINISTRATION CONTRACTOR
ASSISTANT
x1
x1
Assists Manager
in his abscence
FREIGHT
(Road Transport)
CONTRACTOR
x1
Freight In / Out

POSITION JOB DESCRIPTIONS


In view of the likelihood of staff turnover, accompanied by expected strong
growth and the changes this will bring about, the matter of job definition is
critical. Appendix D provides a detailed Job Definition of all staff to be
employed.

The development of written Job Descriptions, defining the nature, scope and job
function, along with relevant authority levels, is an important aspect of the
Petemic management function. It is emphasised that a key factor in bringing
about an efficiently managed organisation will be the clear definition of job
functions and reporting lines. This becomes of even greater significance as
employee numbers increase, and where the available time to spend with
employees becomes less.

Job descriptions - developed for all existing and proposed positions, provides in a
written form clear delineation of job duties/responsibilities and reporting lines.
Ideally, each Job Description should be further refined in conjunction with each
employee.

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The Job Description models located at Appendix D could be used as a basis for
the development of all staff positions. The major features of worthwhile and
meaningful job descriptions are:

Results and duties are both stated (the result expected and the duties
needed to accomplish the result)

Accomplishment is emphasised over "doing" (employees need to first know


where they are going - only then can it be explained "how you get there")

The focus is on results (including how the job fits into the overall scheme of
the organisation, and how the job fits into the organisations' mission)

Clear writing style, with job descriptions simple and easy to understand.

Job Descriptions must be changed when job requirements change.

Linkage should be established here possible with QA Procedures


documentation.

Use of Contract Labour and Enterprise Bargaining

The Company may be interested in following up prospects of enterprise


bargaining; from its point of view, in an effort to improve productivity (it may also
have the potential to increase capacity utilisation of factory/processing
operations.).

Should the Company wish to progress this matter, or in order to assist in identifying
the training requirements of the enterprise, the Consultant recommends that the
Company engage the services of Dr. Catherine Norton of the Norton Consulting
Group87, for the purpose of submitting an ATFIC (Assistance to Firms
Implementing Change)88 proposal which would examine these and other issues
related to staffing. The Government may provide up to $40,000 funding for this
purpose. The primary purpose of this program should be to effect improvements
in productivity.

SKILLS AUDIT
The following data is provided to guide management in the selection of
personnel capable of performing executive and other positions planned for
Petemic Technology Pty Ltd.

87 Phone 07-369 5523. The Consultant would be willing to arrange an introduction and preliminary visit if
so desired.
88 ATFIC is a program run by DEET (Dept. Employment, Education & Training), and is designed to assist
firms to expand or restructure and to develop business and human resource practices. The program
assists companies retain or expand their workforce, and is designed for firms who have less than 50
employees, with up to $40,000 in funding over a 12 month period.

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

GENERAL MANAGER

Job Purpose: To ACHIEVE COMPANY OBJECTIVES: develop


business opportunities; meet sales quotas;
manage staff; provide leadership; implement
Board directives.
Estimated Salary per annum: $ 80,000 p.a. + vehicle + performance bonus89
Employ from Month: 0 (Zero)

Skill Required: Experience in Skill Required minimum


area required: Educational
Qualification (if any):

Leadership Demonstrated none


performance in
managing companies
Visionary Demonstrated skills in none
showing initiative and
vision
Personnel management Demonstrated skills in none - some informal
the recruiting, or formal training in
selecting, disciplining, management
appraising and preferred.
training employees
Business development Demonstrated skills in none
growing and
expanding businesses
and achieving sales
targets
Business Ethics Demonstrated none
performance in
maintaining high
business ethics
Professional and technical Experience in the Engineering or
knowledge waste management related discipline
industry preferred preferred but not
essential
Financial management Demonstrated Accountancy or
understanding of related discipline
Company financial preferred but not
accounts and essential
records, including
Balance Sheet
analysis and cash flow
budgeting

89 No award applies - suggested salary is Consultants estimate

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ADMINISTRATION MANAGER

Job Purpose: To PROVIDE FINANCIAL INFORMATION TO


MANAGEMENT: Research and analyse
accounting data; prepare reports; Implement
administrative systems, procedures, and
policies, and monitor administrative projects.
Estimated Salary per annum: $ 45,000 p.a. + vehicle + performance bonus90
Employ from Month: 1 (One)

Skill Required: Experience in Skill area Required minimum


required: Educational
Qualification (if any):

Transaction recording and Demonstrated ability to Accounting or


analysis enter and interpret related discipline
accounting information,
auditing, debtor and
creditor control.
Accounting procedures Demonstrated ability in the Accounting or
development and related discipline
maintenance of
accounting procedures
and systems.
Business Ethics Demonstrated none
performance in
maintaining high business
ethics
Personnel management Limited demonstrated skills none - some informal
in the recruiting, selecting, or formal training in
disciplining, appraising management an
and training employees advantage.
Professional and technical Experience in the waste Accounting or
knowledge management industry related discipline.
preferred. Experience in
the accounting profession
mandatory
Financial management Demonstrated capabilities Accountancy or
in the production of related discipline.
Company financial
accounts and records,
including Balance Sheet
analysis and cash flow
budgeting

90 No award applies - suggested salary is Consultants estimate

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SECRETARY

Job Purpose: To ENHANCE (COMPANY) EFFECTIVENESS:


providing information-management support.
Estimated Salary per annum: $ 21,840 p.a.91
Employ from Month: 3 (Three - or at commencement of plant
construction)

Skill Required: Experience in Skill Required minimum


area required: Educational
Qualification (if any):

Reception Experience in greeting Office


customers and management,
gaining their Business or related
confidence preferred discipline preferred.
Telephone technique Experience in none
answering or referring
enquiries preferred.
Office Procedure Filing, transcribing, Office
maintaining management,
calendars, arranging Business or related
meetings, discipline preferred.
conferences
preferred.
Reporting Experience in Office
providing written and management,
verbal reports to Business or related
management and discipline preferred.
other staff preferred.
Business Ethics Demonstrated none
performance in
maintaining high
business ethics an
advantage.
Word-processing Ability to type at least none
80 wpm mandatory.
Computer skills Demonstrated Office
understanding and management,
ability to operate Business or related
maintain, and back- discipline preferred.
up computers
mandatory.

91 Equivalent to Grade 4 - State Clerical Employees Award ($420 per week base rate)

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

PRODUCTION MANAGER

Job Purpose: To PRODUCE PRODUCTS: Supervise staff and


operations; create new designs and
modifications; establish and enforce quality
standards; test materials and product.
Estimated Salary per annum: $55,000 p.a. + vehicle + performance bonus92
Employ from Month: 0 (Zero)

Skill Required: Experience in Skill area Required minimum


required: Educational
Qualification (if any):

Leadership Demonstrated none


performance in
managing personnel
teams mandatory
Personnel management Demonstrated skills in the none - some informal or
recruiting, selecting, formal training in
disciplining, appraising management
and training employees preferred.
Professional and Experience in the waste Engineering or related
technical knowledge management industry discipline preferred but
preferred not essential
Project management Demonstrated none
experience in
successfully managing
and implementing
projects strongly
preferred.
Financial management Demonstrated Accountancy or
understanding of related discipline would
budgeting and activity be an advantage but
costing a distinct not necessary
advantage
Production scheduling Demonstrated none
experience in scheduling
and assigning employees
mandatory
Production achievement Demonstrated skills in none, however
growing and expanding experience in quality
businesses and achieving assurance
sales targets through implementation
prudent production preferred.
management and cost
effectiveness

92 Suggested salary is Consultants estimate - above appropriate Award rate.

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

WEIGH BRIDGE OPERATOR & SECURITY

Job Purpose: To OPERATE WEIGHBRIDGE AND MAINTAIN


SECURITY: Operates weighbridge equipment;
allows entry / departure of only authorised
vehicles and personnel.
Estimated Salary per annum: $22,447 p.a.93
Employ from Month: 6 (Six - or at completion of plant construction)

Skill Required: Experience in Skill Required minimum


area required: Educational
Qualification (if any):

Weigh Bridge Operation Experience in weigh none


bridge operation
preferred
Security management Experience in none
maintaining security
of company premises
and assets could be
an advantage
Equipment maintenance Experience in none
maintaining weighing
machines or similar an
advantage
Documentation Demonstrated none
experience in
documenting /
completing logs an
advantage

93 Equivalent to General Labour Rate (Building Construction Industry Award) being $431.68 per week

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LOADER OPERATOR

Job Purpose: To TRANSPORT AND MANOUEVRE PRODUCT OR


MATERIAL: Operates a Loader.
Estimated Salary per annum: $ 20,888 p.a.94
Employ from Month: 6 (Six - or at completion of Plant construction)

Skill Required: Experience in Skill Required minimum


area required: Educational
Qualification (if any):

Loader Operation Experience in Loader Loaders ticket /


operation strongly certificate strongly
preferred preferred
Equipment maintenance Experience in none
maintaining Loading
machines or similar an
advantage
Documentation Demonstrated none
experience in
documenting /
completing
maintenance, records
and other logs an
advantage

94 Equivalent to Transport Distribution and Courier Industry Award - Grade 3 being $401.70 per week
(Grade 4: 5-10 tonne)

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

LOADER, PULVERSIER & EXTRUDER OPERATOR

Job Purpose: To FORM PRODUCT and TRANSPORT AND


MANOUEVRE PRODUCT OR MATERIAL:
Operates pulversiser and extruding
equipment; operates Loader
Estimated Salary per annum: $21,283 p.a.95
Employ from Month: 6 (Six - or at completion of Plant construction)

Skill Required: Experience in Skill Required minimum


area required: Educational
Qualification (if any):

Loader and Heavy Equipment Experience in Loader Loaders ticket /


Operation and heavy machinery certificate strongly
operation strongly preferred
preferred
Equipment maintenance Experience in none
maintaining Loading
machines, heavy
equipment or similar
an advantage
Documentation Demonstrated none
experience in
documenting /
completing
maintenance, records
and other logs an
advantage

95 Equivalent to Transport Distribution and Courier Industry Award - Grade 4 being $409.30 per week
(Grade 5: 10-34 tonne)

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

LOADER & FORKLIFT OPERATOR, BRICK STACKER

Job Purpose: To STACK BRICKS and TRANSPORT AND


MANOUEVRE PRODUCT OR MATERIAL:
Operates Loader and Forklift; Stacks Bricks
Estimated Salary per annum: $21,283 p.a.96
Employ from Month: 6 (Six - or at completion of Plant construction)

Skill Required: Experience in Skill Required minimum


area required: Educational
Qualification (if any):

Loader, Forklift and / or Heavy Experience in Loader, Forklift ticket


Equipment Operation Forklift and heavy mandatory. Loaders
machinery operation ticket / certificate
strongly preferred strongly preferred
Equipment maintenance Experience in none
maintaining Loading
machines, forklifts and
heavy equipment or
similar an advantage
Documentation Demonstrated none
experience in
documenting /
completing
maintenance, records
and other logs an
advantage

96 Equivalent to Transport Distribution and Courier Industry Award - Grade 4 being $409.30 per week
(Grade 5: 10-34 tonne)

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

GENERAL HAND

Job Purpose: To MAINTAIN PRODUCTION AND QUALITY:


Ensures operation of machinery and
mechanical equipment; sorts raw material
and other product; attends to general factory
maintenance.
Estimated Salary per annum: $15,080 p.a.97
Employ from Month: 2 - 6 (Two to Six)

Skill Required: Experience in Skill Required minimum


area required: Educational
Qualification (if any):

General Labouring Demonstrated none


experience and track
record in providing
labour services
Maintaining machines Experience in the none, however some
maintaining of light formal training in
and / or heavy mechanical
machines an engineering would
advantage be advantageous
Technical knowledge Mechanical none, however some
engineering skills an formal training in
advantage but not mechanical
necessary engineering would
be advantageous

97 Equivalent to Building Products Minor Manufacture Award - ranges from Junior 16-17 ($188.80 per
week) to Junior ($291.70 per week) and Adult ($343.20 per week). Allowance: average, say $290 per
week.

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Section LABOUR SKILLS AND ORGANISATIONAL STRUCTURE

TRUCK DRIVER (if required)

Note: it is anticipated that deliveries (inwards / outwards) will be sub-contracted.


However, the following is provided should employment be contemplated:

Job Purpose: To TRANSPORT AND DELIVER PRODUCT OR


MATERIAL: Operates a truck and trailer.
Estimated Salary per annum: $21,284 p.a.98
Employ from Month: 6 (Six - or at completion of Plant Construction)

Skill Required: Experience in Skill Required minimum


area required: Educational
Qualification (if any):

Loader Operation Extensive experience Current truck drivers


in Truck Driving and license (over 2
operation strongly tonne) mandatory
preferred
Equipment maintenance Experience in none
maintaining Trucks
and Trailers an
advantage
Documentation Demonstrated none
experience in
documenting /
completing
maintenance, records
and other logs an
advantage

QUALITY ASSURANCE (QA) & TOTAL QUALITY MANAGEMENT (TQM)


Management must recognise the need for proceeding with the implementation
of a formal Quality Assurance program. The Company should proceed to full
implementation a formal program of Quality Assurance, in line with a Quality
System fulfilling the requirements of Australian Standards AS3901 or AS3902 as may
be applicable - the AS3900 Series Standards required by the Clever Country
Policy of the Federal Government and the State Government Purchasing Policy
1991. This will be sufficient to meet the expectations and demand of clients (both
domestic, and potentially international clients), and the industry in general.

The future success of the Company's market penetration to both local, and
potentially export markets, could well depend upon the Company's commitment
to QA accreditation, and should therefore be addressed with some priority. Local
Councils are becoming more insistent that service providers (and Petemic is
potentially one of these) be Quality Assured.

98 Equivalent to Transport Distribution and Courier Industry Award - Grade 4 being $409.30 per week
(Grade 5: 10-34 tonne)

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Progression to TQM is an option further on, however will capitalise and strengthen
a formal commitment to QA principles.

Objective: Implementation of Quality Assurance / Total Quality management to


ensure the highest possible product quality standards, and a
commitment to quality by all staff.

Meaning:99 Traditionally Quality has been assessed by a product's reliability,


durability and conformance to specifications.

While these are still important criteria, customer' expectations today


are broader; they are influenced by perceptions of the whole
organisation, not just the products it makes. Enterprises with a high
overall quality rating in the eyes and minds of customers will win both
market share and repeat business. An ongoing competitive
advantage.

Thus, the starting point for Quality-based management is the


customers' viewpoint. It's the perspective from which the enterprise
will plan to utilise the principles of Quality-based management,
known internationally as Total Quality Management (TQM). Total
Quality Management is the driving force for company-wide
improvement; commitment to improving performance at every level;
strategies to improve its processes and systems; enhanced
productivity and profitability; involvement and development of every
employee.

It embraces all products, all services, all processes, all people, at all
levels.

99 Adapted from NIES brochure - Quality: The Strategic Advantage

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Responsibility:100 Initially, management must have an awareness and


understanding of Total Quality Management. It is they who must
be convinced of its potential strategic advantage. It is they
who must commit to shaping, leading and resourcing their
organisation in the TQM implementation. TQM recognises the
role of people as managers and workers in the system and the
vital contribution they can make together towards
improvement in every aspect of the business.

So quality improvement in an organisation becomes a way of


life; it involves everyone from the CEO to the most junior
employee in the process of on-going improvement.

Implementation: NIES has developed a comprehensive TQM 'How To' model. the
NIES network will assist in the selection of a trained and licensed
consultant.

This should follow the Company's involvement in the QA


process.

A high level of Quality Control can be achieved through the Company's


commitment to a formal program of Quality Assurance / Total Quality
management, including export accreditation if required (AS 3902 - 1987)101.

100 Adapted from NIES brochure - Quality: The Strategic Advantage


101 Company to install a Quality system fulfilling all the requirements of Australian Standards AS3901 or
AS3902, now more generally described as the ISO9000 series.

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Section PRODUCTION & PROCESSING OPERATIONS

PRODUCTION & PROCESSING OPERATIONS

CAPACITY
The capacity of feed and product storage will depend upon aspects such as
supply arrangements, operating schedules, requirements for buffer capacity,
marketing arrangements and seasonal demand for the product. Open stockpiles
offer advantages to silos in that they are more accessible and not prone to
blockage or hold up. On the other hand they take up more ground space and
can be subject to product degradation. Examples of sizes for a 500 tpd waste
plant, receiving on one shift per day, 5 days per week are:

Waste receival 500 tonnes


Intermediate waste 1,500 tonnes
Product 3,000 tonnes

WASTE RECEIVING AREA


The waste receiving area can be bunker or open floor type. The later is
becoming more popular overseas as it enables inspection and some facility for
pre-sorting. It will need to be enclosed to prevent escape of odours, and sloped
to a collection sump to collect drainings and wash-down. Deodorising sprays will
most likely be required.

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Section PRODUCTION & PROCESSING OPERATIONS

WASTE SELECTION WASTE REDUCING MEANS

Garbage Ferrous Metal Pulverisor #1 Primary Pulverisor #2 Secondary


Weighbridge Vibrating
#1 Hopper Sorter Vibrating
Screen Screen

Conveyor #1 Conveyor #2 Conveyor #3 Conveyor #4 Conveyor #5

BUILDERS RUBBLE BINS


Building (Product for Sale) Plastics Small Ferrous BINS
HOUSEHOLD GARBAGE Rubble (Oval) Metal Separator (Product for Sale)
CLAY Crusher MIXER & BINDER STAGE
INDUSTRIAL WASTE
(Non-Toxic)

Weighbridge Binder Mixer Tumble Dryer


#2 Station

Conveyor #6 Conveyor #7 Conveyor #8 Conveyor #9

COMPACTING & HEATING STAGE

Extruder Cutters #1 Revolving Kiln/s Recovery Crusher Storage Bays


and #2 Tumbler (1,200deg.C) Bay

Pre-Heater
(600deg.C)

Conveyor #10 Conveyor #11

Figure 1- Block Diagram of the Petemic Waste Recycling Process (Provisional


Patent)

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Section PRODUCTION & PROCESSING OPERATIONS

BINS
(Product for Sale)
WASTE SELECTION ROAD BASE (Crushed Building Rubble) WASTE REDUCING MEANS

Garbage Ferrous Metal Pulverisor #1 Primary Pulverisor #2 Secondary


Weighbridge Vibrating
#1 Hopper Sorter Vibrating
Screen Screen

Conveyor #1 Conveyor #2 Conveyor #3 Conveyor #4 Conveyor #5

BINS
BUILDERS RUBBLE Building (Product for Sale) Plastics Small Ferrous BINS
HOUSEHOLD GARBAGE Rubble (Oval) METAL Metal Separator (Product for Sale)
CLAY Crusher MIXER & BINDER STAGE METAL
INDUSTRIAL WASTE
(Non-Toxic)

Weighbridge Binder Mixer


#2 Station

Conveyor #6 Conveyor #7 Conveyor #8

COMPACTING & HEATING STAGE

Pan Palletiser Tumble Dryer Kiln/s Recovery Storage Bays


(1,200deg.C) Bay

Conveyor #9 Conveyor #10

Figure 2- Block Diagram of the Petemic Waste Recycling Process (Petty Patent)

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Section ENVIRONMENTAL GUIDELINES / ISSUES

ENVIRONMENTAL GUIDELINES / ISSUES

INTRODUCTION
The primary legislation governing environmental issues in the context of the
operation of a Petemic Plant are addressed in the Environmental Protection
(Interim) Regulations 1995 (SL No. 46 of 1995). The primary areas of responsibility
are:

1. Ozone depleting substances. Regulations set out parameters for installation


and control and release of controlled substances.

2. Licensing. Conditions for licensing are set out, including monitoring of


operations. An Environmental Management Program will be required.

3. Assessment criteria for air quality are set out. National Guidelines for air
quality and control of emissions follow standards adopted by ANZECC & NH
& MRC (1985)

4. Assessment of water quality uses Australian Water Quality Guidelines for


fresh and marine waters (ANZECC). Sampling follows water quality
sampling manual. (2nd Ed. 1995)

5. Noise level parameters are defined. Maximum noise levels are set out in
the schedules. In general the acceptable limit will be 8-10 dB above the
background noise level.

There are 10 schedules to the Regulations defining activities, licensing fees,


controlled substances and compliance limits.

For the Petemic process, an EIS (Environmental Impact Statement) will almost
certainly be required containing very specific data.

An environment management plan will also be required.

Licensing will be dependent on satisfying both the Council and the State
Government. In practice the administration and enforcement of the Act is
devolved to Local Government, but the Consultants believe that the Caboolture
Council is reluctant to specify any clear guidelines in advance of a detailed plan.

OVERVIEW
The disposal or treatment of domestic waste is classified as a Level 1
Environmentally Relevant Activity under the Environmental Protection (Interim)
Regulation 1995 (SL No 46 of 1995) (The Regulation). The Regulation is
Subordinate Legislation as part of the Environmental Protection Act 1994.

The Regulation requires that defined Activities must be licensed, and must
comply with regulatory guidelines.

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The compliance requirements are presently in a state of flux, as new and uniform
guidelines are developed for all Australian States following the passage of the
National Environmental Protection Council Act 1994 (Commonwealth), and the
complementary legislation; the National Environmental Council (Queensland)
Act 1994. In some instances new standards are in force and replace former
guidelines established under a range of earlier Queensland legislation. In other
instances, earlier guidelines will remain in force until new guidelines are
developed. Moreover, it is likely that Environmental Auditing under ISO 14000 will
be implemented in early 1996. Standards Australia through its QRII Committee,
may issue the latest draft of ISO 14000 as an interim standard for Australia.

The Regulation (SL No 46 of 1995) establishes new and detailed guidelines for the
use of ozone depleting substances, particularly refrigerants and other
halogenated hydrocarbons. It is possible that these particular requirements of
the Regulation will not impact greatly on the Petemic process. But in the
absence of detailed information on the process machinery and the nature of the
gas emissions, the writer cannot be certain that there will be no impact at all.

For the other elements of Environmental Compliance, Transitional Provisions will


apply. These Transitional Provisions are included as Part 5 of the Regulation. In
general, the Transitional Provisions apply to air pollution, water quality, and noise.

It can be expected that the new Environmental Guidelines will apply to the
establishment of any Petemic manufacturing facility, the operation of the facility,
and the training of the staff.

It is almost certain that an Environmental Impact Study (EIS) will be required prior
to licensing. It is equally likely that a Management Plan will be required as part of
the licensing procedure.

With the particular product range anticipated from the Petemic Process, it is also
likely that quality parameters will be set for the testing and use of any exported
product.

Although the Minister for Environment and Heritage administers the Environmental
Protection Act 1994, Ministerial powers are usually delegated to Local
Government Authorities.

Accordingly, the administration of licensing and compliance for a Petemic facility


sited in the Narangba Industrial Estate is likely to be managed by the Caboolture
Shire Council. The Council has indicated that the Petemic process is likely to be
classified to a zone for Hazardous, Noxious or Offensive Industry. The potential
site in the Narangba Industrial Estate lies within such a zoning.

Environmental management is a politically sensitive issue nowadays, and


Councils (including Caboolture) will be reluctant to depart at all from accepted
guidelines in licensing a new facility, unless they can be certain that the public
interest is being served, and that community sentiment is strongly in favour of the
establishment of the facility.

The absence of any strong precedents relating to overall compliance under the
new legislation will mean that any and all Councils will be extremely reluctant to
commit themselves to approving any new project having environmental
overtones without a very detailed submission.

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Enquiries with the Caboolture Shire Council have confirmed their level of
uncertainty about the intention of the Government in the administration of the
Environmental Protection Act. It is virtually certain that the Council will decline to
offer any guidelines or advice other than those contained in the Legislation and
Regulation. Moreover, responsible Council Officers have indicated to the writer,
that the Council will not be prepared to offer any opinion on the acceptability of
a project without a detailed submission in terms of the Act.

The present policy of the Council is to require a Request for Terms of Reference
for an Environmental Impact Statement pursuant to Section 8.2 of the Local
Government (Planning and Environment) Act to be lodged with the Department
of Housing, Local Government and Planning. This particular Legislation defines
Designated Developments requiring an EIS. Item 30. of these designated
activities is reproduced below:

30. Refuse transfer station, sewage treatment plant, waste disposal facility,
waste landfill or waste treatment plant for burying, crushing, disposing of,
incinerating, processing, recovering, storing, or transferring hospital wastes
or chemical, liquid, oil, petroleum, or solid wastes.

Caboolture Shire Council is likely to insist on a formal reference in terms of Section


8.2 of the Local Government (Planning and Environment) Act before giving any
opinion at all on the Petemic process.

This would seem to require some operating experience, or at least, a very


detailed specification of operating parameters. It is difficult to see how an EIS
can be constructed without actual operating data derived from the operation of
major plant items using the input feedstock likely to be used in the process.

GUIDELINES BACKGROUND
As mentioned above, Transitional Provisions are in force for designated activities.

These arrangements cover;

1. Air and Emission Quality.

2. Water Quality

3. Noise

Air and Emission Quality

Air quality will be subject to analytical contents standards, and testing for
dispersion. The present interim compliance standards follow Exposure Standards
for Atmospheric Contaminants in the Occupational Environment adopted by
the National Occupational Health and Safety Commission, October 1991. The
interim national air quality standard means the lower value of;

(a) for fluoride-a goal stated in National Goals for Fluoride in Ambient Air and
Forage, March 1990 published by ANZECC;

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(b) for carbon monoxide, lead, nitrogen dioxide, ozone or photochemical


oxidants, sulphur dioxide or particles; a goal adopted in session by the
National Health and Medical Research Council (NHMRC).

(c) for odour, units calculated under the approved laboratory method.

The more recent National Guidelines for Control of Emission of Air Pollutants from
New Stationary Sources was published by the Australian Environmental Council,
National Health and Medical Research Council (NHMRC) in 1986.
These guidelines are included as Schedule 1 at the end of this section.

Water Quality

In general, a facility of this type will be required to retain all liquid effluent
produced on the site. Containment of run-off after rain will also be required if the
run-off is likely to scavenge any pollutants from the surface of the site. The use of
containment ponds to intercept any surface run-off may be required. Where
there is a chance of pollutants percolating through to the groundwater, a
mechanical barrier may be required. The use of sheet sealing to prevent
percolation to the groundwater is becoming a more common feature of urban
refuse landfill sites.

The more stringent requirements for site pollution and percolation should be a
positive point for the Petemic process relative to the increasing compliance costs
in landfill. But compliance will also be a feature of the Petemic operating site,
and care will need to be taken to restrict any risk of site pollution and run-off from
introduced refuse.

The standard criteria for water under the Transitional Provisions of the Regulation
are:

(a) for paragraph (j) of the definition standard criteria in the Act, the
Australian Water Quality Guidelines for Fresh and Marine Waters published
by ANZECC is the relevant standard for an activity involving the release of a
contaminant into waters.

(b) for subsection (1), the collection, storage, preservation and analysis of
samples for measuring a parameter under the Guidelines must be carried
out under the Water Quality Sampling Manual, 2nd edition, February 1995.

It is likely that the relevant ANZECC standard applied will be the guidelines for
raw waters for drinking purposes. These guidelines are attached as Schedule 2.

Guidelines for Noise

The standard for noise is somewhat dependent on location. Proximity to urban


residential areas requires a higher level of noise control than for more isolated
areas. The hours of operation are also relevant. The acceptable upper limit for
noise pollution is dependent on both the time and the ambient noise levels. In
practice, noise levels will be measured at the most noise sensitive point on the
boundary of the site.

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Under these Guidelines, the standard is related to the adjusted average


maximum A-weighted sound pressure level under AS 1055.1-1989; Acoustics-
Description and Measurement of Environmental Noise: Part 1-General
Procedures.

The ambient noise means the totally encompassing sound in a particular


environment. An approved instrument for calculating the level of noise is defined
as an instrument that complies with the specifications for sound level meters type
1 or 2 under AS 1259.1-1990 Acoustics-Sound Level Meters.

Schedule 7 of the Regulation sets the maximum noise level for a commercial
place as 10dB above the background level during the day, and 8dB above the
background level during the night (10pm to 7am).

REFERENCES (Environmental Issues)


Agriculture and Resource Management Council of Australia and New Zealand
(1994) Guidelines for Sewage Systems. Acceptance of Trade Waste (Industrial
Waste). Canberra

Australian Environmental Council, National Health and Medical Research Council


(1986) National Guidelines for Control of Emission of Air Pollutants from New
Stationary Sources - Australian Government Publishing Service, Canberra

Australian and New Zealand Environment and Conservation Council (1992)


Australian Water Quality Guidelines for Fresh and Marine Waters. Canberra

Caboolture Shire Council (1993), Waste Management Strategic Plan Sinclair


Knight Consulting Engineers for Caboolture Shire Council.

Caboolture Shire Council (1993), Strategic Land Use Plan, 1993

Caboolture Shire Council (1993) Procedures for the Submission of Consent


Applications within the Caboolture Shire.

Monahan, D. & Scott, R. (1994), New Approaches to Regulation of Environment


Protection including Waste Minimisation Aspects in Achievements and
Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste
Management Association of Australia; Artarmon NSW. 82-89

Queensland Department of Environment and Heritage (1994), Draft Waste


Management Strategy for Queensland

Queensland Department of Environment and Heritage (1994), Environmental


Protection Act 1994

Queensland Department of Environment and Heritage (1994), Environmental


Protection (Interim) Regulation 1995

Queensland Department of Housing, Local Government and Planning (1992),


Environmental Impact Statements and Designated Developments. Brisbane

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Queensland Department of Housing, Local Government and Planning (1992),


Request for Terms of Reference for an Environmental Impact Statement.
Brisbane.

Stone, P. Neutralysis - A Use for Municipal Waste Proceedings of the


International Conference of Solid and Hazardous Waste Management
(Enviroworld), Singapore, June 1991.

Working Group Environmental Auditor Certification (1995), Outline Proposal for


Environmental Auditor Certification System. Artarmon NSW

Working Group Environmental Auditor Certification (1995), Progress Update - April


1995. Artarmon NSW

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Section ENVIRONMENTAL GUIDELINES / ISSUES

Schedules to Environmental Guidelines & Issues


SCHEDULE 1.1

Table 1
Schedule of Pollutants

Pollutant Standard applicable to Standard Notes

Dark smoke102 Stationary fuel-burning sources


1. Fired by solid fuel Ringelmann 1
2. Fired by any other fuel Ringelmann 1

Shipping Ringelmann 1
Opacity1 All sources 20%
(excluding effect except the following:
of water vapour Portland cement plants
- clinker cooler 10%
- other 20%
Nitric acid plants 10%
Iron and steel plants
- basic oxygen process furnaces 10%
- dust handling equipment 10%
- other 20%
Primary aluminium reduction plants
- prebake 10%
- other 20%
Lime manufacturing plants
- rotary lime kilns 10%
- other 20%
Petroleum refinery FCCU
- other 30%
Kraft pulp mills
- recovery furnaces 35%
other 20%
Solid particles Boilers other than power stations 0.25 g.m.-3 2% CO2
burning solid fuels reference
Power station boiler 0.08 g.m. -3 level

12% CO2
reference
level

102 The more stringent (level) of Dark Smoke or Opacity to apply, dependent on measurements
available.

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Section ENVIRONMENTAL GUIDELINES / ISSUES

SCHEDULE 1.2

Table 1
Schedule of Pollutants (continued)

Pollutant Standard applicable to Standard Notes

Solid particles Incinerators


- less than 300 kg/hr 0.5 g.m. -3 12% CO2
- equal to or greater than 300 kg/hr 0.25 g.m. -3 reference
Furnaces for the heating of metals 0.1 g.m. -3 level
12% CO2
Any other trade, industry process, 0.25 g.m. -3 reference
industrial plant or fuel-burning level
equipment Except where
standards in
Table 2 apply
Soot Any boiler or furnace burning liquid Bacharach Other than
or gaseous fuels Shade 3 for lighting or
soot blowing
Sulphuric acid Any trade, industry or process other 0.1 g.m. -3
mist and sulphur than sulphuric acid plants and fuel expressed as
trioxide burning equipment SO3
Fuel-burning equipment
Sulphuric acid plants or plants
producing sulphur trioxide 0.2 g.m. -3
Any trade, industry or process expressed as
manufacturing sulphuric acid SO3
Sulphur dioxide 0.075 kg.t-1 of
100% acid or
equivalent

2.0 kg.t -1 of
100% acid
Acid gases 0.4 g.m. -3 Acid gases
and mists
readily
soluble in
water and
expressed as
hydrochloric
acid

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Section ENVIRONMENTAL GUIDELINES / ISSUES

SCHEDULE 1.3

Table 1
Schedule of Pollutants (continued)

Pollutant Standard applicable to Standard Notes

Nitric acid or Nitric Acid Plants 2.0 g.m. -3 Expressed as NO2


oxides of
nitrogen103 Steam Boilers Nitrogen oxides
For liquid and solid fuels calculated as
- general industrial 0.5 g.m. -3 NO2 at a 7 per
- for electricity generation cent oxygen
where rated electrical output is as reference level104
follows:
less than 30 MW 0.5 g.m. -3
greater than 30 MW 0.8 g.m.-3
For gaseous fuels 0.35 g.m.-3

Gas Turbines
For gaseous fuels
- rated electrical output as follows:
less than 10 MW 0.09 g.m. -3 Nitrogen oxides
greater than 10MW 0.07 g.m. -3 calculated as
For other fuels NO2 at a 15 per
- rated electrical output as follows: cent oxygen
less than 10 MW 0.09 g.m. -3 reference level2
greater than 10 MW 0.15 g.m. -3
Fluorine Any process or industrial plant used 0.02 g.m. -3
compounds for the manufacture of aluminium expressed as
from alumina hydroflouric
acid Limit refers to total
emissions from
Any other trade, industry or process 1.0 kg F or F new primary
compounds aluminium
expressed as F smelting facilities
per tonne of
aluminium
produced
0.05 g.m. -
expressed as
hydrofluoric
acid

103 The corrected nitrogen oxide emission concentration is calculated as follows:


Corrected NOx concentration
= Measured Nox concentration x [21% volume, minus Reference Oxygen Concentration (% volume)]
[21% volume, minus Measured Oxygen Concentration (% volume)]

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Section ENVIRONMENTAL GUIDELINES / ISSUES

SCHEDULE 1.4

Table 1
Schedule of Pollutants (continued)

Pollutant Standard applicable to Standard Notes

Chlorine and Any trade, industry or process 0.2 g.m. -3


chlorine expressed as
compounds other chlorine
than hydochloric
acid
Carbon Any trade industry or process other 1.0 g.m. -3 Processes
monoxide than cement manufacture, brick exempt
manufacture and stationary should be
industrial diesels fitted with
stacks in
order to
achieve
adequate
dispersion
Hydrogen Any trade, industry or process 5.0 mg.m -3
sulphide
Total of antimony, Any trade, industry or process 10.0 mg.m -3 Addition of
arsenic, each metal
cadmium, lead, or compound
mercury and Any trade, industry or process 3.0 mg.m. -3 expressed as
vanadium and Any trade, industry or process expressed as the metal in
their respective cadmium each case
compounds 3.0 mg.m -3
Cadmium and its expressed as
compounds mercury
Mercury and its
compounds

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Section ENVIRONMENTAL GUIDELINES / ISSUES

SCHEDULE 1.5

Table 2
Schedule of Hazardous Pollutants*

Pollutant Standard applicable to Standard Notes

Nickel and its Any trade, industry or 20.0 mg.m -3 expressed


compounds, process as nickel
except nickel
carbonyl Any trade, industry or 0.5 mg.m. -3 expressed Tentative standard
Nickel carbonyl process as nickel only
Beryllium and its Extraction plants, 10.0 g over 24 hour Limit refers to total
compounds ceramic plants, period emissions from all
foundries etc. points in a facility
Mercury and its Mineral ore processing 2300 g over 24 hour Limit refers to total
compounds and mercury cell period emissions from all
chlore-alkali plants points in a facility
Waste-water-sludge 3200 g over 24 hour Limit refers to total
incinerators period emissions from all
Vinyl chloride points in a facility
monomer Ethylene dichloride 20.0mg.m-3
purification 0.1 g.kg - 100% ethylene Limit refers to total
Ocychlorination dichloride product emissions from all
points in a facility
Vinyl chloride formation 20.0 mg.m -3
and purification 20.0 mg.m -3
Polyvinyl chloride
polymerisation plants
Asbestos An emission standard for asbestos fibres is at present exceedingly
difficult to define.
To assist in the design of equipment for the control of asbestos emissions,
the following is recommended:
All emissions shall be passed through a fabric filter collection device
complying with section 61.154 of the United States Federal Register 48
(135):p. 32132, July 13, 1983, or equivalent before they escape to or are
vented to the outside air.
There shall be no visible emissions.
Best available control technology shall be used to minimise fugitive
emissions. There shall be no visible fugitive emissions.

*These pollutants will be kept under review. Further standards will be declared when
appropriate.

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Section ENVIRONMENTAL GUIDELINES / ISSUES

SCHEDULE 2.1

Table 4.1 Summary of quality guidelines for raw waters for drinking purposes subjected
to coarse screening

Parameter Guideline values (mg/L, unless otherwise stated)

Biological parameters
Micro-organisms:
Total coliforms Up to ten coliform organisms may be occasionally accepted in
100 mL. Coliform organisms should not be detectable in 100 mL
of any two consecutive samples. Throughout any year, 95% of
samples should not contain any coliform organisms in 100 mL.

Faecal coliforms No sample should contain any faecal coliforms in 100 mL


Algae Up to 5,000 cells/mL may be tolerated; levels of 1,000 - 2,000
cells/mL of cyanobacteria may result in problems
Toxic parameters

Inorganic:
Arsenic 0.05
Asbestos NR
Barium 1.0
Boron 1.0
Cadmium 0.005
Chromium 0.05 = 50 ug/l
Cyanide 0.1
Lead 0.05
Mercury 0.001
Nickel 0.1
Nitrate-N 10.0
Nitrite-N 1.0
Selenium 0.01
Silver 0.05

Organic:
Benzene 10.0 ug/L
Benzo(a)pyrene 0.01 ug/L
Carbon tetrachloride 3.0 ug/L
1,1-Dichloroethene 0.3 ug/L
1,2-Dichloroethane 10.0 ug/L
Pentachlorophenol 10.0 ug/L
Pesticides (Table 4.2)
Polychlorinated biphenyls 0.1 ug/L
Tetrachloroethene 10.0 ug/L
2,3,4,6-Tetrachlorophenol 1.0 ug/L
Trichloroethene 30.0 ug/L
2,4,5-Trichlorophenol 1.0 ug/L
2,4,6-Trichlorophenol 10.0 ug/L
Radiological:
Gross alpha activity 0.1 Bq/L
Gross beta activity 0.1 Bq/L
(excluding activity of 40K)

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Section ENVIRONMENTAL GUIDELINES / ISSUES

Table 4.1 Summary of quality guidelines for raw waters for drinking purposes subjected to coarse
screening (continued)

Parameter Guideline values (mg/L, unless otherwise stated)

Aesthetic parameters
Physical:
Colour 15.0 Pt-Co
Taste & odour Not objectionable*
Turbidity Site-Specific determinant
Chemical:
Aluminium 0.2
Ammonia (as N) 0.01
Chloride 400.0
Copper 1.0
Oxygen > 6.5 (> 80% saturation)
Hardness (as CaCO3) 500.0
Iron 0.3 = 300 ug/L
Manganese 0.1
Organics (CCE & CAE) 0.2
pH 6.5-8.5
Phenolics 0.002
Sodium 300.0
Sulfate 400.0
Sulfide 0.05
Surfactant (MBAS) 0.2
Total dissolved solids 1,000.0**
Zinc 5.0

NR No guidelines recommended at this time; MBAS Methylene blue active substances

* Engineering & Water Supply Department suggests combined concentration of


geosmin and methylisoborneol should be less than 20 ng/L

** Levels in excess of 500 mg/L cause a deterioration in taste

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Section BUSINESS PREMISES & INFRASTRUCTURE SUPPORT

BUSINESS PREMISES & INFRASTRUCTURE SUPPORT

INFRASTRUCTURE REQUIREMENTS
Supporting infrastructure Requirements are assessed as follows (further details are
shown at Attachment 5 of this Report):

Land Requirements

Requirement Specification

Land Area 10 to 15 acres (4.05 to


6.07 hectares)
minimum105.
Zoning Noxious, hazardous or
offensive zoning, or
similar

Services

Requirement Specification

Power 4,040 to 4,850 kilowatts per hour of


operation106.
Transformer & Substation required.
5,700 kWh/hr installed capacity
Telephone
Access Road Bitumen
Sewerage and Septic (Staff Amenities)
Gas or Recycled Furnace Oil (optional) Fuel Oil: 780 to 2,100 litres per hour
of operation107.
90 Gj/hr maximum gas
requirement.
Water (fresh) Approx. 1,210 cubic metres
maximum per day108
See note below
Can be treated sewerage water
Lime (used for gas scrubbing) 3,000 tpa
Diesel (fuel for plant) 354 kL/yr109

105 40,469 to 60,703 square metres


106 4,040 kWh/hr average running requirement; 4,850 kWh/hr peak running requirement; 5,700 kW
installed capacity
107 The fuel oil requirement could vary from of the order of 780L/hr using heat recovery to 2100 L/hr
without heat recovery. If gas is required then the maximum requirement is 90 Gj/hr.
108 Equivalent to 42,731 cubic feet, or 1,583 cubic yards
109 354,000 litres per annum

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1,200 m3/day of water is required (may be recycled water) plus portable water
@ 0.2 m3/person/day.

The 1,210m3/day is based on:

Washdown and pallet makeup: 70 m3 day


Scrubber water: 116 m3 day
Gas Cooling: 1,024 m3 day
Total: 1,210 m3 day

General Infrastructure

Requirement Specification

Water Holding Tank 90Kl (concrete)110


Silos Steel or Concrete
350 tonne111 holding capacity
Bunker Holding Pits x 3 Open floor space is
preferred112
Bunker Holding Pit (see note below Fully enclosed113
table)
Control Equipment, Electronics, Wiring approx. 15% of capital cost (as
per engineers specifications)
114
Air filtration Unit115 as per engineers specifications
(see Note below table)
Engineering Design Fee 10% of final capital cost (say
$6.0m)
Environmental Management Plan
Environmental Impact Statement May not be required (not
included for the purpose of this
analysis)116

110 The water holding tank is needed for surge capacity only. Capacity of this tank is estimated at 90kL.
111 Equivalent to 350 cubic metres. On ground stockpiles are preferred. Open stockpiles offer
advantages to silos in that they are more accessible and not prone to blockage or hold up. On the
other hand they take up more ground space and can be subject to product degradation.
112 As above (Open stockpiles offer advantages to silos or as in this case, bunker holding pits)
113 A Waste Transfer Station has now been completed at Narangba. This means that there is a reduced
requirement for holding pits since waste can be accessed directly and locally on a virtually ad
hoc basis (i.e. as required). Also, refer note below table: Drainage collection and deodorising
required.
114 Estimated electrical cost (from Perry Chemical Engineers Handbook 6th Edition Table 25-50) is from
13% to 25% of delivered equipment cost. Instrumentation is estimated to be between 3% and 12% of
delivered equipment cost.
115 This is for the purpose of gas emission, and air pollution control
116 This Report assumes that all Research and Development has been completed, a Pilot Plant
established which has proven the concept. This Report assumes operation of a full scale
commercial / semi-commercial Plant, i.e. Stage IV operation as described in the attached Report
completed by Enginneers Chemquip Pty Ltd. Therefore, development phases (Stages I to III being
Conceptual, Bench Scale Testing, and Pilot Scale Stage) are assumed to have been successfully
completed.

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Section BUSINESS PREMISES & INFRASTRUCTURE SUPPORT

Explosion suppression and relief on as per engineers specifications


Pulveriser
Fuel Storage Bunds as per engineers specifications

The waste receiving area can be bunker or open floor type. The later is
becoming more popular overseas as it enables inspection and some facility for
pre-sorting. It will need to be enclosed to prevent escape of odours, and sloped
to a collection sump to collect drainings and wash-down. Deodorising sprays will
most likely be required.

The air pollution equipment specified will vary depending on the licence
conditions. It could be reasonably expected to include:

afterburner

quench (cooling)

acid gas scrubbing

particulate removal (baghouse or ESP)

The above specifications do not include:

1. Engagement of Plant Construction Team (supply and installation of plant)

2. Computer Programming and Software

BULDING (PREMISES)

Requirement Specification

Main building area to house plant and 10,000 sq.m.


machinery Height minimum 6 metres.
Slab size 4 to 12 inches
reinforced117
Sound-proofed Pulversing Room and 500 sq.m. approx.
Crushing Plant Explosion proof
12 inch reinforced slab floor118
Computer Room 25 sq.m.
air-conditioned
Office 80 sq.m.
air-conditioned
Staff Amenities Block 150 sq.m. minimum, including
lunch room, showers, lockers and
toilets.

117 The slab sizes will vary from say 4 inch to approximately 12 inch depending on use. The pulverises
and other large equipment will require special foundations and slab design.
118 To be advised by Engineer Mr Peter Stone (matter currently being investigated)

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Section BUSINESS PREMISES & INFRASTRUCTURE SUPPORT

SUNDRY PLANT & EQUIPMENT

Requirement Specification

Front End Loaders x 3 to 4119


Forklift x1
Motor Vehicles120 x 3121
Computer, Printer One 16Mb Ram, 500Mb Hard disk;
486 or Pentium
5 ppm Laser printer or better
One Notebook 486 Computer122
Office Furniture & Equipment
Staff Amenities Fridge
Uniforms
Safety Equipment
Safety Equipment Fire Fighting Main, Hydrants and
Hosepoints
Fire Fighting Extinguishers
First Aid kit
Respiratory Protection
Gloves, earmuffs, helmets, etc.
Security System as per engineers specifications
Computer based Plant Control System

119 3 or 4 front end loaders are likely to be required (1 or 2 for waste receival, 1 for product, 1 for
intermediate product handling).
120 Motor vehicles are provided for the General Manager, Administration Manager, and the Production
Manager
121 A plant utility will be required but may be one of the 3 vehicles listed.
122 There is likely to be a requirement for at least one notebook computer for plant work

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Section COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING & ANALYSIS

COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING &


ANALYSIS

INTRODUCTION
Technical consultants Chemquip Pty Ltd suggest that the Project can be
progressed on the basis of a four stage development program. This would be
required to bring the technology from the present concept stage to commercial
viability. The suggested program encompasses bench and pilot scale testing.
Product produced in these tests will need to be tested for at least leachability
and engineering properties, dependent on the final market.

The development program is likely to take between 5 and 7.5 years. A preliminary
estimate of funding requirements based on what was spent on Neutralysis
development is $16.5 million.

Alternate strategies are suggested for consideration. These are separate


treatment of building rubble, specific target marketing, and obtaining a licence
for the Neutralysis process. These alternate strategies have not been factored into
the Commercial Viability tests which form part of this Report.

Status of Development Work

At this point of time the development work has been basically conceptual. Only
one limited trial has been attempted.

Assuming the pre-feasibility study shows that the project is viable, and providing
there are considered to be no insurmountable restrictions due to the patent
situation, then the next stage of the process should concentrate almost
exclusively on technology development.

Development of the technology should proceed in four stages as outlined in the


attached Report Petemic Technology - A Technology Review. The results of
each stage should be reviewed prior to commitment to proceed with the next
stage. Reviews should also be held at appropriate times during each stage.

These four stages are summarised below:

STAGE 1 - CONCEPTUAL

At this initial stage the basic process parameters and testing requirements should
be defined. Any restraints imposed by potential problems such as patent
infringement should be built in to the project.

STAGE 2 - BENCH SCALE TESTING

The stage determines the feasibility of operating at the selected conditions,


which are checked using bench scale equipment. Small batches of product
should be produced to provide samples for initial testing for key properties.

Operations at this stage are essentially on a batch basis.

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Section COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING & ANALYSIS

STAGE 3 - PILOT SCALE STAGE

The pilot stage is used:

for validation of the process

for an assessment of continuous operation

to provide the basis for scale-up to the semi-commercial or commercial


design

to produce sufficient product for large scale testing and trials

to develop quality control procedures for the inputs, outputs and process

to enable development of confidence amongst plant designers and


equipment suppliers so that a process guarantee can be obtained for the
plant performance. This guarantee is usually required to obtain funding for
the commercial plant.

for the detailed examination of process parameters and for the solution of
operating problems. Some of the parameters which may need to be
investigated are, typically, process control, residence times, pellet fusion,
thermal stresses, gas quality, kiln ringing, and emissions composition.

During this stage a generic engineering design is often carried out to assist in
market development and to define capital costs more closely.

STAGE 4 - SEMI-COMMERCIAL/COMMERCIAL

This stage is usually a scale up from the Pilot Scale Stage and follows the
completion of a major feasibility study which would include a detailed
engineering study. For a plant of the type envisaged for the Petemic Technology
a scale-up factor of approximately 8 to 10:1 is appropriate for developmental
units.

Usually fine tuning and development of the process would be expected to


continue at this stage, leading to a modified and improved design for the
second plant.

The stage incorporates detailed process and engineering design, procurement,


construction and commissioning.

It is also this stage against which the Commercial Viability is assessed which is the
subject of this Report.

TIMING
The estimated duration of the above stages is within the following ranges:

Stage 1 6 - 9 months
Stage 2 12-18 months

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Stage 3 24-30 months


Stage 4 24-36 months

Some overlapping is possible. The estimated total duration from the


commencement of concept planning to completion of the commissioning of a
commercial or semi-commercial plant is between 5 and 7.5 years. This assumes
that an order is received for a commercial plant immediately after the
completion of pilot scale testing.

The financial projections in this Report assume the following milestones: (for
detailed information, refer Attachment 4 - Plant Construction and Capital
Development Program)123

Stage Project Stage Description Commencement Duration

1 Conceptual 15-Dec-94 9 months


2 Bench Scale Testing 14-Sep-95 12 months
3 Pilot Scale Stage 13-Sep-96 24 months
4 Date to Commence Commercialisation 13-Sep-98
Plant Construction 13-Sep-98 14 months

Plant Construction Completed 13-Nov-99

Commercial Product / Equipment Testing 13-Nov-99 4 months


Commercial Production / Sales Commences 14-Mar-2000 6 months

Project Completion
(Commercial Plant Built & In Full Operation) 12-Sep-2000

Total Project Duration to Plant Commissioning 3.8 Years


Stage 4 (Commercialisation) 2.0 Years
Total Project Duration 5.8 Years

SUPPORTING DATA FOR ESTABLISHING COMMERCIAL VIABILITY


(FINANCIAL PROJECTIONS AND ASSUMPTIONS)
The supporting data behind the financial and production projections contained
in this Report are comprehensively detailed in the following Attachments:

Attachment 5 - Commercial Viability Supporting Schedules

Schedule 1 - Primary Base Assumptions


Schedule 2 - Major & Secondary Inputs & Outputs (Material Balance)
Schedule 3 - Infrastructure & Costs
Schedule 4 - Building (Premises)
Schedule 5 - Sundry Plant & Equipment
Schedule 6 - Plant Operating Equipment
Schedule 7 - Depreciation Schedule
Schedule 8 - Primary Operating Costs / Quantities
Schedule 9 - Schedule of Salaries, Wages, & Sub-Contractors

123 Also, refer Schedule 1 of the of the Commercial Viability Supporting Schedules.

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Section COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING & ANALYSIS

Schedule 10 - Cash Flow Assumptions (Sundry)


Schedule 11 - Loans, Leasing & Hire Purchase Schedule

Attachment 6 - Cash Flow Budgets

Cash Flow Budget - Year 1


Cash Flow Budget - Year 2
Cash Flow Budget - Year 3
Cash Flow Budgets - Years 1, 2, 3, and Y.I.Y.O.

Attachment 7 - Profit & Loss Summary (Years 1, 2, 3, and Year-In-Year-Out).

Attachment 8 - Balance Sheet Analysis (Years 0, 1, 2, and 3).

Attachment 9 - Break Even Analysis (Profit & Loss Summary)

The above attachments will be referred to throughout this section of the Report:

FINANCIAL PLANNING & ANALYSIS


Objectives

In overall terms, the major objectives in completing the financial planning and
analysis section of this Report are:

To establish commercial viability of the Project.

To establish the parameters upon which commercial viability can be


demonstrated.

To establish the level of funding required to implement the Project.

To determine the point (operating and other parameters) at which the


Project can Break - Even.

To determine the variables upon which the Project is most sensitive.

Commercial Viability - Overview of Results

The Financial Projections contained in this Report demonstrate that the Project is
marginally viable, with a Year-In-Year-Out Net Profit After Tax of approximately
$0.5m.

The primary base assumptions used in calculating this amount are that of 503
tonnes of Municipal Solid Waste (MSW) Garbage is received daily at a price
$40.00 per tonne, with an output of 500 cubic metres of aggregate (350
tonnes)124 sold at $14.00 per tonne.

124 Based on 0.7 bulk density

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Section COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING & ANALYSIS

The above primary assumptions are critical in the calculation of net profit, i.e. the
Project is very sensitive to changes in MSW Garbage or Aggregate receipts / sale
prices. For example, the level of Net Profit After tax approximately doubles where
the price received for MSW Garbage is $45.00 per tonne.

The capital required to fund the Project is $20m, with the base model assuming
that 80% ($16m) is derived from investors, and the balance ($4m) obtained
through debt funding. This will support capital works in the order of $18m, and a
further $2m working capital.

The Break-Even point125 is reached where the amount received for MSW
Garbage is $34.60 per tonne (assuming 100% equity / investor) funding.

The Project will take approximately four years (from the commencement of the
commercialisation stage) to achieve annual profitability, although this could be
achieved up to 12 months earlier should the required Capital funding be wholly
obtained from investors rather than partially obtained with debt.

Sales Estimates - Major Assumptions

The primary assumptions in establishing sales levels are contained within


Schedules 1 (Primary Base Assumptions) and 2 (Major & Secondary Inputs &
Outputs) of Attachment 5 of this Report. This information is summarised hereunder:

SCHEDULE 1
PRIMARY BASE ASSUMPTIONS BASE MODEL

Aggregate
Production 500.0 cubic metres per day
Bulk density 0.70 tonnes per cubic metre
= Production (available for sale) 350 tonnes per day

Building Rubble
Receivals 102.0 tonnes per day
= Production (available for sale) 100.0 tonnes per day

Production levels from Plant Completion date (post equipment testing)


Estimated time to full capacity = 6 Months
Estimated capacity @ Month Cash Flow (Project) Month
Capacity is 10.00% 0 18 Mar-2000
Capacity is 25.00% 1 19 Apr-2000
Capacity is 40.00% 2 20 May-2000
Capacity is 55.00% 3 21 Jun-2000
Capacity is 70.00% 4 22 Jul-2000
Capacity is 85.00% 5 23 Aug-2000
Capacity is 100.00% 6 24 Sep-2000

Clay
Clay: Dry Garbage ratio 100.00%
= Required clay input 341.00 tonnes per day

125 The Break-Even point is defined as being Net Profit After Tax equalling $zero Year-In-Year-Out.

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SCHEDULE 2
MAJOR INPUTS & OUTPUTS (MATERIAL BALANCE) - PRICES, & QUANTITIES REQUIRED
tonne per
Tonnes / Tonnes / Tonnes / Tonnes / Cost / Price
BASE MODEL tonne of
day week month Year per tonne ($)
MSW
Days per period = 7.0 28.0 336.0
INPUTS
Wastes
Municipal Solid Waste (MSW) Garbage 503 3,521 14,084 169,008 $40.00 1.000
Liquid waste (or water) 51 357 1,428 17,136 $0.00 0.101
Other
Clay 341 2,387 9,548 114,576 $4.50 0.678
Lime (for flue gas scrubbing) 8 56 224 2,688 $208.00 0.016
Scrubber Water 104 728 2,912 34,944 $0.00 0.207
Quench Water 1,176 8,232 32,928 395,136 $0.00 2.338
Natural Gas 8 56 224 2,688 $460.00 0.016
Combustion Air 3,390 23,730 94,920 1,139,040 $0.00 6.740
Total Inputs 5,581 39,067 156,268 1,875,216 n/a 11.095

OUTPUTS
Products
Aggregate 350 2,450 9,800 117,600 $14.00 0.696
Reclaimed metal 28 196 784 9,408 $57.50 0.056
Wastes
Rejects (non-metal) 29 203 812 9,744 $5.00 0.058
Scrubber Residues * 17 119 476 5,712 $0.00 0.034
Flue Gas 5,157 36,099 144,396 1,732,752 $0.00 10.252
Total Outputs 5,581 39,067 156,268 1,875,216 n/a 11.095
* For re-processing back through the Recycling Plant

SECONDARY INPUTS & OUTPUTS - PRICES, & QUANTITIES REQUIRED


Tonnes / Tonnes / Tonnes / Tonnes / Price per
day week month Year tonne ($)
Days per period = 7.0 28.0 336.0

INPUT
Building Rubble
Quantity Received 102 714 2,856 34,272 $20.00
Losses 2.00% 2 14 57 685

OUTPUT
Building Rubble
Production (Sale of Road Base) 100 700 2,800 33,600 $9.00

Notes on Primary Operating Costs

In addition to information shown on the above tables, primary operating costs


are shown at Schedule 8 (Primary Operating Costs / Quantities) of Attachment 5,
summarised as follows:

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SCHEDULE 8
PRIMARY OPERATING COSTS / QUANTITIES BASE MODEL
Description Unit
Fuel Oil
Quantity Required (minimum): 780.0 litres per hour of operation (using heat recovery)
Quantity Required (maximum): 2,100.0 litres per hour of operation (without heat recovery)
Percentage of time operated: 5.00% without heat recovery
Quantity Required (average): 846.0 litres per hour of operation
Quantity Required (average): 568,512.0 litres per month of operation
Cost: $262.89 per tonne
= Cost: $0.2300 per litre (BP) - Shell is @ $0.30 per litre

Gas
Natural or LPG - maximum required: 90.0 Gj per hour
LPG - Cost: $0.46 per Kilogram
LPG or Natural gas $0.23 per Litre (CIG or Elgas)
Cost: $0.00 per Gj

Water (Fresh)
Maximum per day required: 1,210.00 cubic metres per day
= Equivalent to: 1,210,000 litres
= Equivalent to: 266,200 gallons

Diesel (Fuel for Plant)


Useage = 354.00 Kilo litres per annum
= equivalent to 29,500.00 lites per month
Cost = $0.6290 per litre

Power
Average Running Requirement = 4,040.00 Kilowatts per hour
Peak Running Requirement = 4,850.00 Kilowatts per hour
Installed Capacity Requirement = 5,700.00 Kilowatts per hour
Cost of Power = $0.0770 per Kilowatt hour (first 16 hrs)
Cost of Power = $0.0310 per Kilowatt hour (next 8 hours)
Cost of Power = $0.0617 per Kilowatt hour (average for 24 hr period)
Cost of Power = $167,418 per month average requirement

Clay
Cost = $2.50 per tonne
Average delivery charge = $2.00 per tonne
Total Delivered Cost = $4.5000 per tonne

Fuel Consumption

Some factors such as fuel consumption will be considerably influenced by factors


such as the degree of heat recovery and the process flow of the gasses. For
instance the fuel oil required may vary by a factor of three times depending on
whether the heat is received from the gasses evolved from the waste. Fuel oil
including recycled oil can be used provided the temperature required for clay
hardening can be achieved. Otherwise LPG or natural gas will be necessary.

Water Utilisation

The amount of water used will vary depending on the moisture in the waste, the
clay properties, and the air pollution control system used. By far the largest
amount used is for scrubbing plus gas cooling.

Capital Investment Requirements

Capital Investment Requirements are summarised as follows:

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CAPITAL WORKS SUMMARY

See
Schedule
INFRASTRUCTURE & COSTS $5,107,850 3
BUILDING (PREMISES) $4,858,350 4
SUNDRY PLANT & EQUIPMENT $1,289,590 5
PLANT OPERATING EQUIPMENT $6,788,650 6
TOTAL $18,044,440

Equity & Debt Ratio

Debt to Equity Ratios

Proposed Total Capital Funding = $20,000,000


Equity: 80.00%
Debt: 20.00%
EQUITY REQUIRED: $16,000,000
DEBT REQUIRED: $4,000,000

Profit & Loss / Cash Flow Statements

Refer Attachment 6 (Cash Flows), and Attachment 7 (Profit & Loss Summaries).

Balance Sheet Analysis

Refer Attachment 8

Break Even Analysis

Refer Attachment 9

SENSITIVITY ANALYSIS
A 10% sensitivity analysis126 on the "base Model" cash flows for each of the years
1, 2, and 3 has been completed (refer right hand column on the cash flows at
Attachment 6). These amounts show in broad terms the Projects overall sensitivity
to cost/price squeeze.

In addition, sensitivities to various prices, costs, and production / input levels have
been conducted, with the results shown graphically below:

126 This analysis assumes 10% lower income, and 10% higher variable costs (i.e. loan repayments, etc.
are assumed static)

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PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
300 400 500 600 700
Cubic metres per day

Production of Aggregate

PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
60.00 80.00 100.00 120.00 140.00
Production per day

Building Rubble Production

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PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$25.00 $30.00 $35.00 $40.00 $45.00 $50.00 $55.00
Price per tonne ($)

MSW Garbage - Price Received

PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$3.00 $4.00 $5.00 $6.00
Cost per tonne ($) delivered

Cost of Clay

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PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$140 $160 $180 $200 $220 $240 $260 $280
Cost per tonne

Cost of Lime (for flue gas scrubbing)

PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$0.30 $0.40 $0.50 $0.60 $0.70
Cost per Kilogram ($)

Cost of Gas

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PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$10.00 $12.00 $14.00 $16.00 $18.00 $20.00
Price per tonne ($)

Price Received for Aggregate

PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$40.00 $50.00 $60.00 $70.00 $80.00
Price per tonne

Price Received for Reclaimed Metal

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PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
25 30 35 40 45 50
Average Life of Asset (Years)

Allowance for Depreciation - YIYO

PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$150.00 $200.00 $250.00 $300.00 $350.00
Cost per Tonne ($)

Cost of Fuel (Furnace) Oil

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PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
600 800 1,000 1,200
Average Quantity (litres per hour of operation)

Quantity of Fuel (Furnace) Oil Required

PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
250 300 350 400 450 500
Kilo litres per annum

Useage of Diesel

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PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$0.40 $0.50 $0.60 $0.70 $0.80 $0.90
Cost per Litre ($)

Cost of Diesel (Fuel for Plant)

PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
2,500 3,000 3,500 4,000 4,500 5,000 5,500
Average Running Requirement (Kilowatts per hour)

Power Useage

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PETEMIC TECHNOLOGY PTY LTD


SENSITIVITY ANALYSIS

$2
NPAT - $ per annum (YIYO)

$1

Base Model
Millions

$0

($1)
$0.04 $0.05 $0.06 $0.07 $0.08 $0.09
Power Cost per Kilowatt Hour (average 24 hr.)

Cost of Power

TRADE TARIFFS, CUSTOMS & EXCISE


Tariffs Applying to Building Aggregate

Building aggregate is referred to as Tariff Item No: 2517.20.00. The following


summaries provide an insight into tariff protection applying to selected overseas
countries. (It is assumed that the most immediate opportunities exist in Asia)127:

Japan

No import duty. Consumption tax of 3% based on C.I.F. (Cost, Insurance, Freight)


applies.

The Philippines

10% tariff applies based on C.I.F. 10% Value Added Tax also applies. A pre-
shipment inspection is required if goods are valued at over US$500. (If this applies,
call SGS on 262 7200)

Indonesia

Import duty of 15% based on C.I.F. applies. Also Value Added Tax of 10%. A pre-
shipment inspection is required if goods are valued at over US$5000. (If this
applies call Surveyor Indonesia Australia on 900 411)

127 Please refer to the Consultant for Tariffs that may apply to other countries not listed

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Customs & Excise128

The Federal Government imposes excise duties on a narrow range of products.


The principal items affected are oil, petroleum products, normal strength beer,
spirits, and tobacco.

Customs tariffs are levied on a wide range of imported goods. These tariffs
provide protection for Australian manufacturers and producers. Tariff levels are
altered only after a review of the industry concerned has been carried out by the
Industries Assistance Commission (IAC). The IAC considers submissions from those
likely to be affected by a change in tariff.

Where there is no equivalent Australian manufactured product or equivalent


goods sold in a separate market, it may be possible to obtain a tariff concession
order, reducing duty on the product imported to minimum levels.

In the case of Petemic and their technology, some tariff concessions may be
available, offsetting the costs of the importation of some of the processing
equipment and apparatus (i.e. capital set-up costs). However, it is not possible to
be too definitive without formal application, and accordingly the commercial
viability tests conducted in this Report assumes that no tariff concessions have
been made available to the Company.

Where goods exported from Australia contain imported materials, a refund of


duty paid on importation may be available to the exporter under a duty
drawback system. An extension of this is known as the By-Law for Export, which is
designed for regular users of the Drawback System. It allows for the goods to be
imported without payment of duty and sales tax, providing they are imported for
industrial processing and are subsequently exported.

It is assumed, for the purpose of viability analysis and testing, that all product
inputs and outputs required / generated by the Petemic process will be acquired
/ sold to local (domestic) markets.

Further, where goods have been sold to Australia at an export price less than
their normal value (which is determined as being the domestic price in the
country of origin) Anti-Dumping legislation provides for the imposition of a penal
duty in addition to that which would normally be payable. Similarly, a
comparable remedy, known as countervailing duty, applies where there has
been a subsidy, bounty, or other assistance paid in the country of export, which
has caused injury of threatened to injure or hinder the establishment of an
Australian industry.

As the outputs of the Petemic process are not subject to competition with
equivalent imported product, it has been assumed that the Federal
Governments anti-dumping legislation will not apply.

PATENTS, COPYRIGHT AND INDUSTRIAL DESIGNS129

128 Acknowledgment is given to primary source for information in this sub-section to: Coopers & Lybrand,
Tax Facts and Figures 1988-89, Coopers & Lybrand Aust, 1988, Australia.

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The matter of Patents and liscencing of the Petemic technology will be


addressed in the next section of this Report.

However, it should be noted that, in relation to impact upon the cash flow, any
expenditure incurred by a taxpayer in obtaining or seeking the grant of a patent,
registration of a copyright or design, or extension of the term of a patent or
design, is deductible to the extent that the expenditure was incurred.

The deduction may be allowable even though the taxpayer was unsuccessful in
obtaining the grant or extension, providing that the expenditure was incurred for
the purposes of producing assessable income.

Capital expenditure incurred on the development or purchase of such a patent,


registered design or copyright, or for the purchase of a licence to use such an
asset, is deductible over the effective life of the right. The deduction commences
from the first year in which the right is used for the purpose of producing
assessable income.

This Analysis assumes that all deductibility of patents and liscencing of the
technology has been taken account of in earlier stages of the Project, i.e. during
the bench scale testing and pilot plant stages. It is, however, acknowledged that
some benefit of the patent (and subsequent deductibility) will be applicable
over the Commercialisation (and later) stage(s), however in the context of the
overall Project this is not anticipated to be significant in terms of impact on tax
payable.

TRADE MARK REGISTRATION130


The matter of Patents and liscencing of the Petemic technology will also be more
fully addressed in the next section of this Report. This section deals with the
marketing and commercial aspects of trade mark registration.

Trade marks distinguish goods or services of a trader from those of other traders.
They can be in the form of a word, picture or symbol, or a combination of these.

In the case of Petemic Technology Pty Ltd, a distinguishing trademark symbol will
serve to differentiate the Company and its products - especially in the context of
its recycycling involvement, and the favourable image that this creates.

Registration of trade marks is obviously not compulsory, but has several benefits.
These benefits include:

Protection of investments made in products and their promotion

Legal rights to exclusively control and use the trade mark for the goods or
services for which it was registered

129 Acknowledgment is given to primary source for information in this sub-section to: Australian
Government Publishing Service, Taxation, AGPS Press, 1991, Canberra
130 Primary source for this information is: AIPO Trademark Leaflets 1, 2, 3 & 4, Printed by AIPO Print Room,
March 1995.

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Ownership rights additional to common law rights

Protection of trade mark from misleading use in the market place

Australia wide registration, which can be useful when seeking registration


overseas.

Only distinctive marks, or marks that are capable of becoming distinctive, can be
registered. These could include; names represented in a distinctive manner, an
invented word, or a distinctive mark.

Trade mark registration differs from business name registration. A business name is
a name, style, title or designation under which a business is conducted, whereas
a trade mark is used to identify and distinguish goods or services of a business or
trader.

To apply for a trade mark an application form must be filled out and lodged.
Application forms are available from the Trade Marks Office. Applications are
examined in order of lodgment, and it is usually several months before the
application is processed. Applications are examined to determine whether they
meet the requirements of the Trade Marks Act. Results of the examination are
sent to the applicant.

If the application is in order a notice of acceptance is sent to the applicant. An


advertisement of acceptance is placed in the Official Journal of Trade Marks,
and there is a three month period where any person may give notice of
opposition to the registration. If there is no opposition and the fee has been paid,
the trade mark will be registered and a certificate of registration will be sent out.
Registration lasts for seven years initially. After that it can be renewed for 14 year
periods.

For further information contact the Trade Marks Office:

7th Floor
280 Adelaide St
Qld 4000
Ph: (07) 864 8277

ASSISTANCE MEASURES FOR MANUAFCTURING, EXPORTING &


RESEARCH & DEVELOPMENT APPLICABLE TO THE PROJECT
The Industry Research & Development Board

Specific elements of the Industry Innovation Program - 150 per cent Tax
Concession, Competitive Grants and Concessional Loans131 - are administered
by the Industry Research and Development Board132.

131 See next sub-section for details on these programs


132 The Head Office of AusIndustry / Industry Research and Development Board is 51 Allara Street,
Canberra City ACT 2601 (PH: 06-2762307, FAX: 06-2761122)

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The Boards role is to help companies successfully enter local and export markets
by encouraging:

more and better use of research and development;

successful commercialisation of new technologies; and

greater collaboration and networking between firms and research


institutions.

The Board has a number of committees which consider expressions of interest


and applications on eligibility and merit. AusIndustry advise that strict
precautions are taken by the IR&D Board and its committees to avoid conflicts of
interest on information provided by applicants.

Department of Trade Industry & Regional Development (DITRD - formerly


DITAC)133

DITAC may have funds available with / through the TCFTA - the latter whom may
have funding money134 available for value added processed products. The
Discretionary Grants Scheme also provides grants for developing internationally
traded goods, systems or services, specifically targeted for Companies unable to
receive adequate benefit from the 150% research and development (R&D) tax
concession but seek R&D assistance for projects that would otherwise not
proceed. It is also specifically targeted to small start up companies wanting to
enter international markets and to industries involved in industry restructuring.
Projects can be:

" assisted for up to three years

" maximum grant is 50% of eligible project costs exceeding $50,000 (for the
purpose of salaries, outside contracted work. and purchase of equipment
used directly in the R&D and overheads).

Generic Technology Scheme

Grants under this scheme are available for a maximum of three years covering
up to 90% of total eligible costs, for strategic research and development in
technologies which have widespread application in industry. Projects must have
at least one commercial partner and one public sector research body such as a
University or the CSIRO. The Company would therefore need to source a public
sector research body interested in, for example, waste manufacturing
technology and / or other manufacturing processes.

Advance Manufacturing Technology Development Program (AMTDP)

Grant funds of up to 50% of project expenditure in excess of $500,000 may


become available for an Advance Manufacturing Technology Development
Program (AMTDP). This scheme is designed to encourage the development,

133 Refer Ms Alex Appleman and Mr Shane Campbell of DITAC (Ph 07-2315111)
134 There ore many highly desirable features of the Project which enhance prospects for a successful
result in obtaining funds from this source. Reference should be made to Mr Shane Campbell 07-
2315111

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production and use of AMT in Australian Industry. Assistance is provided for the
development and use of:

" advanced materials and related process technology

" advanced manufacturing techniques or services

" advanced computer controlled or microprocessor -based equipment used


in the design. testing or handling of a product.

Whilst only joint applications from an applicant company and a collaborating


partner are considered, the Company, if it becomes a partly Network Venture
capital resourced organisation, may well qualify for assistance135 ( but please
bear in mind the qualifying size of the Project as indicated above).

Federal Department of Industry, Science & Technology

Export Access

Financial assistance is available for those enterprises requiring training or practical


assistance for the development of offshore activities. Participation in Export
Access assists with:

Identification of opportunities (evaluation of Company's products / services


and advice on financial and management requirements).

Training (assistance with strategic planning and assisting with the


preparation of a Business Plan).

Overseas market visits (up to 10 days subsidised accommodation and living


costs per company in the target market)

Post Market Evaluation

This program could be utilised for the purpose of proceeding to the development
of a Marketing or Business Plan.

Competitive Grants for Research and Development136

Competitive Grants for Research and Development are intended to support


projects involving R&D or product development (including development of
prototypes) or trial or demonstration and related market research.

The maximum grants if 50 per cent of project costs.

Grants are provided, on a competitive basis for:

market driven R&D in dynamic firms needing assistance but unable to gain
full financial benefit from the 150 per cent Tax Concession for R&D;

135 Contact Mr Shane Campbell on 07-231511 or the IR&D Hotline 008-026121


136 Contact is the Queensland office for AusIndustry which is:
12th Floor, AGL House, 60 Edward Street, Brisbane Qld. 4000, Phone 07-2315111 Fax: 07-2290017.

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collaborative R&D activities, that are high risk but could provide extensive
benefit to Australia;

trial and demonstration activities between technology developers and


potential customers; and

collaborative R&D activity between industry and research institutions.

Concessional Loans for Commercilaisation of Technological Innovation137

Concessional loans support small firms in the early commercialisation of


technological innovation of goods, systems or services.

The maximum loan is 50 per cent of project costs.

Commercialisation activities supported by the loan are limited to the following


activities, which may include related market research:

product/process design;

trial production runs including tooling up costs;

regulations and standards compliance;

protection of core intellectual property;

trial and demonstration activities; and

product documentation.

Loans will be made for a maximum period of six years from the date of the loan
agreement, with repayment commencing after 42 months.

Interest will begin to accrue three years from the date of the loan agreement. At
the time of writing, interest was being calculated daily at 40 per cent of the
Commonwealth Bank Loan Reference Rate.

TAXATION IMPLICATIONS FOR RESEARCH & DEVELOPMENT


All income tax concession is available to a company for expenditure incurred on
qualifying research and development in Australia. The concession is in the form of
a deduction against assessable income. As of 30 June 1995 the allowable
deduction is 100 per cent of qualifying research development expenditure138.

The following major points relate to the taxation implications for Research and
Development, and have been incorporated into the financial analysis contained
in this Report:

137 Contact is the Queensland office for AusIndustry which is:


12th Floor, AGL House, 60 Edward Street, Brisbane Qld. 4000, Phone 07-2315111 Fax: 07-2290017.
138 Source: Australian Government Publishing Service, Taxation, AGPS Press, 1991, Canberra

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Section COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING & ANALYSIS

The 150% tax concession (against income earned) for R&D is still available.
The definition of R&D expenditure basically applies up to but NOT
INCLUDING Marketing stage, including conducting Market research. That is,
R&D is only claimable until the Marketing stage unless the product is being
in some way modified or further improved. The concession is subject to, inter
alia:

1. Companies which incur expenditure on research and development


may claim a 150% deduction in respect of wages, salaries, other labour
costs and expenditure exclusively for R&D activities.

2. Research and development activities cover systematic, investigative,


or experimental activities which involve innovation and technical risk,
carried on for the purpose of:

acquiring new knowledge (whether or not it will have special


practical application).

Creating new or improved materials, products, devices,


processes or services (i.e. experimental or developmental)

Activities directly related to R&D activities including industrial


design, engineering design, production engineering, operations
research, mathematical modelling and analysis, psychological
research; design, construction and operation of prototypes
where the primary objective is technical testing or to make
technical improvements; and finally feedback R&D directed at
problem solving beyond the R&D stage, e.g. technical problems
arising during initial production runs.

3. To be eligible for R & D concessions a company must be registered with


the Australian Industrial Research and Development Incentives Board,
or the Industry Research and Development Board.

Certain other benefits also apply in particular situations.

In many situations it will be possible to "claw back" expenditure made - and


not claimed - for the previous four years, and sometimes beyond.

A good contact enabling (at a cost) a "ruling" to be obtained for relevant


expenditure is:

Mr. Paul Scammell


Assistant Director, Tax Concessions
Dept. Industry Technology & Commerce
GPO Box 2704 Canberra ACT 2601
Phone: 06-2761000
Fax: 06-2761122

Generally speaking, expenditure of $50,000 and above (meeting the


criteria) will be an acceptable minimum. Expenditure below this level may
be subject to a "sliding scale".

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Section COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING & ANALYSIS

Company management should maintain accurate records for the purpose


of obtaining R & D expenditure claims as detailed.

The Company should also be aware that they may have the opportunity to
directly employ a graduate through the National Teaching Co. scheme
specifically for the research and development of new products.

SALE OF THE NEUTRALYSIS WASTE PROCESSING PLANT


Indicative costings for used equipment may be gained from recent experience -
the sale of a Pilot Neutralysis Waste Processing Plant in early 1995.

This Plant, sold to an undisclosed buyer, was reportedly sold for an amount in the
region of $300,000, with the auctioneers originally anticipating sale value of at
least $250,000 piecemeal139. Several of the major plant items are similar to that
contemplated for the Petemic process. The Newspaper Clipping below outlines
the type of plant and equipment sold:

Clipping 2 - The Courier Mail, 31 March, 1995

According to auctioneer Scott Bendall, the above Pilot Plant was said to have
been originally constructed for a cost of approximately A$6.0m.

139 These amounts were provided by MGS Turners Auctions (c/- Mr Scott Bendall).

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Section COMMERCIAL VIABILITY: INCLUDING FINANCIAL PLANNING & ANALYSIS

Whilst the above costings are indicative only at best, it nevertheless demonstrates
the significant savings that might be gained from purchasing used plant and
equipment.

This Report, however, assumes that all equipment will be purchased new.

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Section LICENSING OF THE TECHNOLOGY

LICENSING OF THE TECHNOLOGY

A full review of the licensing aspects of the Petemic Technology is provided in the
Attachment: Licensing, as prepared by Attorneys-at-Law Collier, Shannon, Rill &
Scott.

The following is an excerpt from this document, taken from the Executive
Summary:

Introduction
This section of the pre-feasibility study for Petemic Technology Pty Ltd (Petemic)
focuses on the issue of licensing the technology which forms the basis of
Petemics waste recycling process and apparatus (the Petemic Technology or
the Technology). The remainder of this introduction provides a summary of the
methodology and findings:

Prospects for Licensing:


In this section, the prospects for licensing the Petemic Technology, from both a
legal and commercial perspective, are evaluated. A brief summary is provided of
the possible intellectual property rights subsisting in the Petemic Technology.

On the assumption that Petemic will obtain patent protection in connection with
its Technology, it is concluded that the Petemic Technology embodies suitable
intellectual property rights which can be the subject of a technology transfer
license.

Also provided is a summary of contacts with various clients and others in the
environmental engineering industry to obtain an informal and preliminary
indication as to the prospects for licensing the Petemic Technology. Based on
these contacts it appears that the Petemic Technology is potentially licensable,
provided it can satisfy the relevant regulatory requirements and become a viable
alternative to competing processes and end products. However, the recycling
process developed by Petemic would have to compete with the alternative of
relatively inexpensive landfill disposal and strong existing markets for recyclable
products. As such, several contacts concluded that the demand for the Petemic
Technology is uncertain.

Protecting The Petemic Technology


In this section the intellectual property protection which may be available to
Petemic is discussed, with particular emphasis on patent and trademark
registration.

The need to protect the Petemic Technology through a carefully negotiated and
properly drafted license agreement is emphasised. Methods for formulating a

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Section LICENSING OF THE TECHNOLOGY

commercially viable royalty rate are suggested. Also provided is a brief analysis of
Petemics potential areas of exposure.

Licensing - Evaluation Against Alternatives:


An analysis of the potential advantages and disadvantages of licensing the
Petemic Technology is provided here, particularly as compared with the pros and
cons of Petemic establishing a recycling facility either on its own or as part of a
joint venture.

Subject to the qualifications set out previously, it is concluded that licensing


presents a viable lower risk option when compared with the establishment of a
recycling facility either independently or as part of a joint venture arrangement. It
is suggested that a carefully devised licensing strategy is worthy of further
consideration.

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Section DISCLAIMER & QUALIFICATION BY CONSULTANT

DISCLAIMER & QUALIFICATION BY CONSULTANT

It should be noted that much of the data and material presented in this Final
Report for the Feasibility Study, including financial data, has been acquired from
a number of sources, including Petemic Technology Pty Ltd management. This
information has been made available to the consultant for analysis. Our report is
prepared on the basis that full disclosure of all information and facts which may
affect our report and / or advice has been made, and therefore the Consultant
cannot accept any liability or responsibility whatsoever for the report and / or
any advice contained therein unless such full disclosure has been made.

In accordance with the normal practice of Gary O Garner & Associates, I confirm
that this report is confidential to, and solely for use of, the Directors of Petemic
Technology Pty Ltd, subject to its provision to the Department of Business Industry
& Regional Development (as instructed). No responsibility is accepted to any
third party who relies on the whole or any part of our report.

GARY OWEN GARNER


B.Bus., A.V.L.E.(Val.), Assoc.Dip.Val., P.Ag., Dip.Ag., A.I.M.M., M.A.A.C. Registered Valuer (Qld) No. 1959

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Section APPENDICES

APPENDICES

Appendix A - Job Descriptions


The following examples140 demonstrate the general format for each position in
the organisation.

JOB TITLE:

GENERAL MANAGER
JOB PURPOSE: ACHIEVES COMPANY OBJECTIVES
by
developing business opportunities; meeting sales quotas; managing staff;
providing leadership; implementing Board directives.
ESSENTIAL JOB RESULTS:

% of % of
Time Time
1. PROVIDES LEADERSHIP & VISION 6. MEETS SALES OBJECTIVES
by by
communicating Company objectives establishing sales quotas; monitoring
and assisting the Board in design of demographic sales results; applying
Company direction. marketing research; defining strategies.
2. ENSURES COMPLIANCE 7. MAINTAINS STAFF JOB RESULTS
GOVERNMENT REGULATIONS by
by counselling and disciplining employees;
maintaining environmental monitoring planning, monitoring, and appraising job
files; coordinating efforts with all results
Company departments.
3. MAINTAINS STAFF 8. MAINTAINS PROFESSIONAL AND
by TECHNICAL KNOWLEDGE
recruiting, selecting, orienting, and by
training employees. attending educational workshops;
reviewing professional networks;
participating in professional societies.
4. DEVELOPS TRUST AND OTHER 9. ACHIEVES FINANCIAL OBJECTIVES
NONCORE FEE INCOME BUSINESS by
by ensuring preparation of the annual
publicizing the Companys service budget; overview of scheduling
capabilities. expenditures; analyzing variances;
initiating corrective actions.
5. GENERATES BUSINESS 10. CONTRIBUTES TO TEAM EFFORT
by by
meeting potential customers in the accomplishing related results as
business (private and public sector) needed.
communities.

140 Job descriptions have been, in the main, adapted from source material: Plachy RJ, Plachy SJ,
Results-Orientated Job Descriptions, Amacon (1993)

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JOB TITLE:

ADMINISTRATION MANAGER
JOB PURPOSE: PROVIDES FINANCIAL INFORMATION TO MANAGEMENT
by
researching and analyzing accounting data; preparing reports;
Implementing administrative systems, procedures, and policies, and
monitoring administrative projects.

ESSENTIAL JOB RESULTS:


% of % of
Time Time
1. PREPARES ASSET, LIABILITY, AND 12. MAINTAINS FINANCIAL SECURITY
CAPITAL ACCOUNT ENTRIES by
by following internal controls.
compiling and analyzing account
information.
2. DOCUMENTS FINANCIAL 13. PREPARES PAYMENTS
TRANSACTIONS by
by verifying documentation, and
entering account information requesting disbursements.
3. RECOMMENDS FINANCIAL ACTIONS 14. ANSWERS ACCOUNT PROCEDURE
by QUESTIONS
analyzing account options. by
researching and interpreting account
policy and regulations.
4. SUMMARIZES CURRENT FINANCIAL 15. COMPLIES WITH FEDERAL, STATE,
STATUS AND LOCAL FINANCIAL LEGAL
by REQUIREMENTS
collecting information; preparing by
balance sheet, profit and loss studying existing and new legislation
statement, and other reports. enforcing adherence to requirements,
and advising management on needed
actions.
5. SUBSTANTIATES FINANCIAL 16. PREPARES SPECIAL FINANCIAL
TRANSACTIONS REPORTS
by by
auditing documents collecting analyzing, and summarizing
account information and trends.
6. MAINTAINS ACCOUNTING 17. MAINTAINS CUSTOMER
CONTROLS CONFIDENCE AND PROTECTS
by OPERATIONS
preparing and recommending policies by
and procedures. keeping financial information
confidential.

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JOB TITLE:

ADMINISTRATION MANAGER (continued)

JOB PURPOSE: PROVIDES FINANCIAL INFORMATION TO MANAGEMENT


by
researching and analyzing accounting data; preparing reports; Implementing administrative
systems, procedures, and policies, and monitoring administrative projects.

ESSENTIAL JOB RESULTS:

7. MAINTAINS WORK FLOW 18. MAINTAINS PROFESSIONAL AND


by TECHNICAL KNOWLEDGE
studying methods; implementing cost by
reductions; and developing reporting attending educational workshops;
procedures reviewing professional publications;
establishing personal networks;
participating in professional societies.
8. RECONCILES FINANCIAL 19. DEVELOPS ADMINISTRATIVE STAFF
DISCREPANCIES by
by providing information, educational
collecting and analyzing account opportunities, and experiential growth
information. opportunities
9. SECURES FINANCIAL INFORMATION 20. MAINTAINS SUPPLIES INVENTORY
by by
completing data base backups. checking stock to determine inventory
level; anticipating needed supplies;
placing and expediting orders for
supplies; verifying receipt of supplies.
10. COMPLETES OPERATIONAL 21. CONTRIBUTES TO TEAM EFFORT
REQUIREMENTS by
by accomplishing related results as
scheduling and assigning administrative needed
projects; expediting work results.
11. CREATES AND REVISES SYSTEMS
AND PROCEDURES
by analyzing operating practices, record
keeping systems, forms control, office
layout, and budgetary and personnel
requirements; implementing changes.

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JOB TITLE:

SECRETARY
JOB PURPOSE: ENHANCES (COMPANY) EFFECTIVENESS
by
providing information-management support.

ESSENTIAL JOB RESULTS;


% of % of
Time Time
1. PRODUCES INFORMATION 7. MAINTAINS OFFICE SUPPLIES
by INVENTORY
transcribing, formatting inputting, by
editing, retrieving, copying, and checking stock to determine inventory
transmitting text, data, and graphics. level; anticipating needed supplies;
placing expediting orders for supplies;
verifying receipt of supplies.
2. ORGANIZES WORK 8. KEEPS EQUIPMENT OPERATIONAL
by by
reading and routing correspondence; following manufacturer's instructions
collecting information; initiating and established procedures.
telecommunications.
3. MAINTAINS COMPANY'S SCHEDULE 9. SECURES INFORMATION
by by
maintaining calendars for Company completing data base backups.
personnel; arranging meetings,
conferences, teleconferences, and
travel.
4. COMPLETES REQUESTS 10. PROVIDES HISTORICAL
by REFERENCE
greeting customers, in person or on the by
telephone; answering or referring utilizing filing and retrieval systems.
inquiries.
5. MAINTAINS CUSTOMER 11. MAINTAINS TECHNICAL
CONFIDENCE AND PROTECTS KNOWLEDGE
OPERATIONS by
by attending educational workshops;
keeping information confidential. reading secretarial publications.
6. PREPARES REPORTS 12. CONTRIBUTES TO TEAM EFFORT
by by
collecting information. accomplishing related results as
needed.

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JOB TITLE:

PRODUCTION MANAGER
JOB PURPOSE: PRODUCES PRODUCTS
by
Supervising staff and operations; creating new designs and modifications;
establishing and enforcing quality standards; testing materials and product.

ESSENTIAL JOB RESULTS:


% of % of
Time Time
1. PLANS PROJECTS 9. MAINTAINS PRODUCTION STAFF
by JOB RESULTS
studying customer requirements, by
market demand, and competitors' coaching, counselling, and disciplining
products; identifying and analyzing employees; planning, monitoring, and
trends in technology; conferring and appraising job results.
collaborating with other members of
management.
2. DETERMINES FEASIBILITY OF 10. ACHIEVES FINANCIAL OBJECTIVES
PROJECT by
by preparing the production budget;
identifying and forecasting costs and scheduling expenditures; analyzing
requirements. variances; initiating corrective actions.
3. COMPLETES PROJECTS 11. COMPLIES WITH FEDERAL, STATE,
by AND LOCAL LEGAL REQUIREMENTS
directing design and modification by
activities. studying existing and new legislation;
anticipating future legislation; enforcing
adherence to requirements; advising
management on needed actions.
4. MAINTAINS PROFESSIONAL AND 12. MAINTAINS PRODUCTION
TECHNICAL KNOWLEDGE OPERATIONS
by by
attending educational workshops; initiating, coordinating, and enforcing
reviewing professional publications; project, operational, and personnel
establishing personal networks; policies and procedures.
participating in professional societies
5. COMPLETES PRODUCTION 13. MAINTAINS PRODUCTION DATA
PROJECTS BASE
by by
scheduling and assigning employees; developing information requirements;
following up on work results. designing an information system.
6. MAINTAINS PRODUCTION STAFF 14. CONTRIBUTES TO TEAM EFFORT
by by
recruiting, selecting, orienting, and accomplishing related results as
training employees. needed.

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JOB TITLE:

PRODUCTION MANAGER (continued)

JOB PURPOSE: PRODUCES PRODUCTS


by
Supervising staff and operations; creating new designs and modifications; establishing and
enforcing quality standards; testing materials and product.

ESSENTIAL JOB RESULTS:

7. MAINTAINS PRODUCT QUALITY 15. PREPARES PRODUCT AND


by PROCESS QUALITY REPORTS
enforcing quality assurance policies and by
procedures and government collecting, analyzing, and summarizing
requirements; collaborating with other information and trends.
members of management to develop
new product and engineering designs
and manufacturing and training
methods.
8. COMPLETES QUALITY ASSURANCE 16. ESTABLISHES STANDARDS FOR
OPERATIONAL REQUIREMENTS THE DISPOSITION OF FINISHED
by PRODUCT
scheduling and assigning employees; by
following up on work results. devising evaluation tests, methods, and
procedures.

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Section APPENDICES

JOB TITLE:

WEIGH BRIDGE OPERATOR & SECURITY


JOB PURPOSE: OPERATES WEIGHBRIDGE AND MAINTAINS SECURITY
by
operating weighbridge equipment; allowing entry / departure of authorised
vehicles and personnel.

ESSENTIAL JOB RESULTS:


% of % of
Time Time
1. DETERMINES SEQUENCE OF 6. ENSURES OPERATION OF
OPERATIONS EQUIPMENT
by by
studying specifications, and work completing preventive maintenance
orders. requirements; following manufacturer's
instructions; troubleshooting
malfunctions; calling for repairs.
2. PREPARES MACHINE FOR 7. MAINTAINS SECURITY &
WEIGHING CONTINUITY AMONG WORK TEAMS
by by
positioning and securing equipment. documenting and communicating
actions, irregularities, and continuing
needs.
3. REGULATES OPERATION 8. DOCUMENTS ACTIONS
by by
setting and adjusting controls. completing weigbridge, security and
quality logs.
4. MAINTAINS SPECIFICATIONS 9. CONTRIBUTES TO TEAM EFFORT
by by
observing operations; detecting accomplishing related results as
malfunctions; inspecting parts; needed.
controls; replacing dies.
5. RESOLVES WEIGHBRIDGE 10. MAINTAINS SECURITY
PROBLEMS by
by ensuring only authorised entry and
altering process to meet specifications; departure of people and vehicles
notifying supervisor to obtain additional
resources.

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JOB TITLE:

LOADER OPERATOR
JOB PURPOSE: TRANSPORTS AND MANOUEVRES PRODUCT OR MATERIAL
by
operating a Loader.

ESSENTIAL JOB RESULTS:


% of % of
Time Time
1. DETERMINES CONDITION OF 5. MAINTAINS SAFE VEHICLE AND
VEHICLE CONDITIONS AND PROTECTS LOAD
by by
inspecting vehicle before and after use; complying with organization policies
logging inspection; reporting and procedures and regulations.
requirements.
2. ENSURES CORRECT LOADING OF 6. CONSERVES RESOURCES
VEHICLE by
by using equipment and supplies as
loading product or material; directing needed to accomplish job results.
material handlers.
3. DELIVERS & MANOUEVRES 7. MAINTAINS RECORDS
PRODUCT OR MATERIAL TO by
DESTINATION completing driver log; filing documents.
by
loading product or material; directing
material handlers.
4. ENSURES OPERATION OF 8. CONTRIBUTES TO TEAM EFFORT
EQUIPMENT by
by accomplishing related results as
completing preventive maintenance needed.
requirements; following manufacturer's
instructions; troubleshooting
malfunctions; calling for repairs;
maintaining equipment supplies;
evaluating new equipment and
techniques.

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JOB TITLE:

LOADER, PULVERSIER & EXTRUDER OPERATOR


JOB PURPOSE: FORMS PRODUCT and TRANSPORTS AND MANOUEVRES PRODUCT OR
MATERIAL
by
operating pulversiser and extruding equipment; operating Loader

ESSENTIAL JOB RESULTS:


% of % of
Time Time
1. DETERMINES SEQUENCE OF 9. MAINTAINS STOCK INVENTORY
OPERATIONS by
by checking stock to determine amount
studying blueprints, specifications, and available; anticipating needed stock;
work orders. placing and expediting orders for stock;
verifying receipt of stock.
2. PREPARES PULVERISER AND 10. MAINTAINS CONTINUITY AMONG
EXTRUDING MACHINES FOR WORK TEAMS
PRODUCTION by
by documenting and communicating
positioning and securing stops, guides, actions, irregularities, and continuing
and other equipment. needs.
3. REGULATES MACHINING 11. DOCUMENTS ACTIONS
by by
setting and adjusting controls. completing production and quality logs.
4. MAINTAINS SPECIFICATIONS 12. MAINTAINS SAFE VEHICLE AND
by CONDITIONS AND PROTECTS LOAD
observing operations; detecting by
malfunctions; inspecting parts; controls; complying with organization policies
replacing consumables. and procedures and regulations.
5. RESOLVES PRODUCTION 13. CONSERVES RESOURCES
PROBLEMS by
by using equipment and supplies as
altering process to meet specifications; needed to accomplish job results.
notifying supervisor to obtain additional
resources.
6. DETERMINES CONDITION OF 14. MAINTAINS RECORDS
LOADER VEHICLE by
by completing driver log; filing documents.
inspecting vehicle before and after use;
logging inspection; reporting
requirements.

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JOB TITLE:

LOADER, PULVERSIER & EXTRUDER OPERATOR (continued)

JOB PURPOSE: FORMS PRODUCT and TRANSPORTS AND MANOUEVRES PRODUCT OR MATERIAL
by
operating pulversiser and extruding equipment; operating Loader

ESSENTIAL JOB RESULTS:

7. ENSURES CORRECT LOADING OF 15. ENSURES OPERATION OF


LOADER VEHICLE EQUIPMENT
by by
loading product or material; directing completing preventive maintenance
material handlers. requirements; following manufacturer's
instructions; troubleshooting
malfunctions; calling for repairs;
maintaining equipment supplies;
evaluating new equipment and
techniques.
8. DELIVERS & MANOUEVRES 16. CONTRIBUTES TO TEAM EFFORT
PRODUCT OR MATERIAL TO by
DESTINATION accomplishing related results as
by needed.
loading product or material; directing
material handlers.

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JOB TITLE:

LOADER & FORKLIFT OPERATOR, BRICK STACKER


JOB PURPOSE: STACKS BRICKS and TRANSPORTS AND MANOUEVRES PRODUCT OR MATERIAL
by
operating Loader and Forklift; Stacking Bricks

ESSENTIAL JOB RESULTS:


% of % of
Time Time
1. DETERMINES CONDITION OF 6. MAINTAINS SAFE VEHICLES AND
VEHICLES CONDITIONS AND PROTECTS LOAD
by by
inspecting vehicles before and after complying with organization policies
use; logging inspection; reporting and procedures and regulations.
requirements.
2. ENSURES CORRECT LOADING OF 7. CONSERVES RESOURCES
VEHICLE by
by using equipment and supplies as
loading product or material; directing needed to accomplish job results.
material handlers.
3. DELIVERS & MANOUEVRES 8. MAINTAINS RECORDS
PRODUCT OR MATERIAL TO by
DESTINATION completing driver log; filing documents.
by
loading product or material; directing
material handlers.
4. ENSURES OPERATION OF 9. CONTRIBUTES TO TEAM EFFORT
EQUIPMENT by
by accomplishing related results as
completing preventive maintenance needed.
requirements; following manufacturer's
instructions; troubleshooting
malfunctions; calling for repairs;
maintaining equipment supplies;
evaluating new equipment and
techniques.
5. STACKS BRICK PRODUCT OR
MATERIALS TO DESTINATION
by
loading product or material; placing
material into designated position(s)..

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JOB TITLE:

GENERAL HAND
JOB PURPOSE: MAINTAINS PRODUCTION AND QUALITY
by
ensuring operation of machinery and mechanical equipment; sorting raw
material and other product; attending to general factory maintenance.

ESSENTIAL JOB RESULTS:


% of % of
Time Time
1. ENSURES OPERATION OF 8. MAINTAINS EQUIPMENT, PARTS,
MACHINERY AND MECHANICAL AND SUPPLIES INVENTORIES
EQUIPMENT by
by checking stock to determine inventory
assisting with completing preventive level; anticipating needed equipment,
maintenance requirements on engines, parts, and supplies; notifying
motors, pneumatic tools, conveyor supervisors for the placement and
systems, and production machines; expedition of orders; verifying receipt.
assist with troubleshooting
malfunctions under supervision.
2. LOCATES SOURCES OF PROBLEMS 9. CONSERVES MAINTENANCE
by RESOURCES
observing mechanical devices in by
operation; listening for problems; using using equipment and supplies as
precision measuring and testing needed to accomplish job results.
instruments.
3. REMOVES DEFECTIVE PARTS 10. PREPARES MECHANICAL
by MAINTENANCE REPORTS
assisting with the dismantling of by
devices under supervision; using collecting, and summarizing
hoists, cranes, and hand and power information and trends for analysis by
tools; examining form and texture of supervisor(s).
parts.
5. ADJUSTS FUNCTIONAL PARTS OF 11. MAINTAINS TECHNICAL
DEVICES AND CONTROL KNOWLEDGE
INSTRUMENTS by
by attending educational workshops;
using hand tools, levels, plumb bobs, reviewing technical publications;
and straightedges under supervision. establishing personal networks.
6. CONTROLS DOWNTIME 12. MAINTAINS CONTINUITY AMONG
by WORK TEAMS
assisting with, or carrying out routine by
preventive maintenance techniques; documenting and communicating
monitoring compliance under actions, irregularities, and continuing
supervision. needs.
7. MAINTAINS PRODUCTION
CONTINUITY
by
Sorting raw material and other product
in accordance with specifications.

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Section APPENDICES

JOB TITLE:

TRUCK DRIVER (if required)


JOB PURPOSE: TRANSPORTS AND DELIVERS PRODUCT OR MATERIAL
by
operating a truck and trailer.

ESSENTIAL JOB RESULTS:


% of % of
Time Time
1. DETERMINES CONDITION OF 5. MAINTAINS SAFE VEHICLE AND
VEHICLE CONDITIONS AND PROTECTS LOAD
by by
inspecting vehicle before and after use; complying with organization policies
logging inspection; reporting and procedures and highway rules and
requirements. regulations.
2. ENSURES CORRECT LOADING OF 6. CONSERVES RESOURCES
VEHICLE by
by using equipment and supplies as
loading product or material; directing needed to accomplish job results.
material handlers.
3. DELIVERS PRODUCT OR MATERIAL 7. MAINTAINS RECORDS
TO DESTINATION by
by completing driver log; obtaining shipper
loading product or material; directing and receiver authorizations; filing
material handlers. documents.
4. ENSURES OPERATION OF 8. CONTRIBUTES TO TEAM EFFORT
EQUIPMENT by
by accomplishing related results as
completing preventive maintenance needed.
requirements; following manufacturer's
instructions; troubleshooting
malfunctions; calling for repairs;
maintaining equipment supplies;
evaluating new equipment and
techniques.

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Section

WASTE SELECTION WASTE REDUCING MEANS

Garbage Ferrous Metal Pulverisor #1 Primary Pulverisor #2 Secondary


Weighbridge Vibrating
#1 Hopper Sorter Vibrating
Screen Screen
APPENDICES

25 Septemmber 1995
Conveyor #1 Conveyor #2 Conveyor #3 Conveyor #4 Conveyor #5

BINS
BUILDERS RUBBLE Building (Product for Sale) Plastics Small Ferrous BINS
HOUSEHOLD GARBAGE Rubble (Oval) Metal Separator (Product for Sale)
Crusher MIXER & BINDER STAGE
CLAY
INDUSTRIAL WASTE
(Non-Toxic)
PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT

Provisional Patent Application)

Weighbridge Binder Mixer Tumble Dryer


#2 Station

Conveyor #6 Conveyor #7 Conveyor #8 Conveyor #9


PRE-FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A RECYCLING PLANT

COMPACTING & HEATING STAGE

Extruder Cutters #1 Revolving Kiln/s Recovery Crusher Storage Bays


and #2 Tumbler (1,200deg.C) Bay

Pre-Heater
(600deg.C)

Conveyor #10 Conveyor #11


Page 160

PreFeasibility Study Establish Solid Waste Recycling Plant.DOC


Appendix B - The Petemic Waste Recycling Process (Block Diagram for
Section

BINS
(Product for Sale)
WASTE SELECTION ROAD BASE (Crushed Building Rubble) WASTE REDUCING MEANS
Appendix C -

Garbage Ferrous Metal Pulverisor #1 Primary Pulverisor #2 Secondary


Weighbridge Vibrating
Vibrating
APPENDICES

#1 Hopper Sorter

25 Septemmber 1995
Screen Screen

Conveyor #1 Conveyor #2 Conveyor #3 Conveyor #4 Conveyor #5

BINS
BUILDERS RUBBLE Building (Product for Sale) Plastics Small Ferrous BINS
HOUSEHOLD GARBAGE Rubble (Oval) METAL Metal Separator (Product for Sale)
Petty Patent)

Crusher MIXER & BINDER STAGE METAL


CLAY
INDUSTRIAL WASTE
(Non-Toxic)
PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT

Weighbridge Binder Mixer


#2 Station

Conveyor #6 Conveyor #7 Conveyor #8


PRE-FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A RECYCLING PLANT

COMPACTING & HEATING STAGE

Pan Palletiser Tumble Dryer Kiln/s Recovery Storage Bays


(1,200deg.C) Bay
Page 161

Conveyor #9 Conveyor #10

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The Petemic Waste Recycling Process (Block Diagram for
PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT
PRE-FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A RECYCLING PLANT Page 162
Section APPENDICES

Appendix D - Panoramic View of the Narangba Industrial Estate

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Section APPENDICES

Appendix E - Newspaper Clipping #1: Waste Management

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Section APPENDICES

Appendix F - Newspaper Clipping #2: Waste Composition

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Section APPENDICES

Appendix G - Acknowledgments
Acknowledgment is hereby given to technical adviser and consultant Mr John
Mackenzie of Sloane, Cook & King Pty Ltd, who have undertaken the majority of
market analysis and environmental considerations contained in this Report.

Mr Peter Stone of Chemquip Pty Ltd (Brisbane) has provided various input in
relation to technical engineering matters (also, refer various Attachments to this
Report completed by Chemquip Pty Ltd).

Ms Helen Gibson of Caboolture has provided constructive criticism and advice in


relation to various sections of this Report, and has assisted with specific matters
relating to local Council requirements, raw materials, site assessment, and
strategic planning.

Coller, Shannon, Rill & Scott (Sydney) have provided the complete review of
licensing requirements.

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Section APPENDICES

Appendix H - References and Further Reading


1. Brookes, G., Kenley, R., Kerby, N., & Ellwood, D. (1994), "Shire of Hornsby: Economic
& Operations Feasibility Study for Major Recycling Initiatives and a Council
Operated Transfer Station" in Achievements and Challenges; Proceedings of the
2nd National Hazardous & Solid Waste Convention, Melbourne. Australian Water
& Wastewater Association and Waste Management Association of Australia;
Artarmon NSW.

2. Brunner, Calvin R. (1991) "Handbook of Incineration Systems" McGraw-Hill, New


York, ISBN: 0-07-008589-7

3. Caboolture Shire Council (1993), "Waste Management Strategic Plan" Sinclair


Knight Consulting Engineers for Caboolture Shire Council.

4. Caboolture Shire Council (1993), "Strategic Land Use Plan, 1993"

5. Cook, J.B. & van den Broek, B. (1994), "A Plan to Achieve 50% Waste Diversion in
Sydney". in Achievements and Challenges; Proceedings of the 2nd National
Hazardous & Solid Waste Convention, Melbourne. Australian Water & Wastewater
Association and Waste Management Association of Australia; Artarmon NSW.

6. Duston, Thomas E. (1993) "Recycling Solid Waste" Quorum Books, Connecticut,


ISBN: 0-89930-754-X

7. Environmental Protection Agency. USA (1994), "Characterisation of Municipal


Solid Waste in the United States. Executive Summary" EPA Publication No EPA530-
S-94-042

8. Graham, R.A., Sharpley, G.E., & Thorpe, J.L. (1994), "Environmental Audits and
Management Planning for Canberra's Landfills" in Achievements and Challenges;
Proceedings of the 2nd National Hazardous & Solid Waste Convention,
Melbourne, Australian Water & Wastewater Association and Waste Management
Association of Australia; Artarmon NSW.

9. Monahan, D. & Scott, R. (1994), "New Approaches to Regulation of Environment


Protection including Waste Minimisation Aspects" in Achievements and
Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste
Management Association of Australia; Artarmon NSW.

10. O'Flynn, M. (1986), "Revision of Industrial Rock and Mineral Resources in


Caboolture Shire" reported in Caboolture Shire Council (1993), "Strategic Land Use
Plan, 1993", as revised from Dept. Mines Publication (1989)

11. Queensland Department of Environment and Heritage (1993), "Environment


Protection Bill"

12. Queensland Department of Environment and Heritage (1994), "Draft Waste


Management Strategy for Queensland"

13. Skinner, J.H. (1975), "Demonstration of Systems for the Recovery of Materials and
from Solid Wastes" Resource Recovery and Utilisation, ASTM STP 592, American
Society for Testing and Materials.

25 Septemmber 1995 PreFeasibility Study Establish Solid Waste Recycling Plant.DOC


PETEMIC TECHNOLOGY PTY LTD - FINAL REPORT
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Section APPENDICES

14. Stone, P. Neutralysis - A Use for Municipal Waste Proceedings of the


International Conference of Solid and Hazardous Waste Management
(Enviroworld), Singapore, June 1991.

15. Tasmanian Government (1994), "Solid Waste Plan" Reported at the Local
Government Conference - Waste.

16. Victorian Government (1994), "The Resource and Recovery Council; Grant
Programs 1993-94. "Reported at the Local Government Conference - Waste.

17. Wang, F.S., Richardson, A.J. & Roddick, F.A. (1994), "Swim: an Interactive Model for
Solid Waste Integrated Management: in Achievements and Challenges;
Proceedings of the 2nd National Hazardous & Solid Waste Convention,
Melbourne. Australian Water & Wastewater Association and Waste
Management Association of Australia; Artarmon NSW.

18. Agriculture and Resource Management Council of Australia and New Zealand
(1994) Guidelines for Sewage Systems. Acceptance of Trade Waste (Industrial
Waste). Canberra

19. Australian Environmental Council, National Health and Medical Research Council
(1986) National Guidelines for Control of Emission of Air Pollutants from New
Stationary Sources - Australian Government Publishing Service, Canberra

20. Australian and New Zealand Environment and Conservation Council (1992)
Australian Water Quality Guidelines for Fresh and Marine Waters. Canberra

21. Caboolture Shire Council (1993) Procedures for the Submission of Consent
Applications within the Caboolture Shire.

22. Monahan, D. & Scott, R. (1994), New Approaches to Regulation of Environment


Protection including Waste Minimisation Aspects in Achievements and
Challenges; Proceedings of the 2nd National Hazardous & Solid Waste
Convention, Melbourne. Australian Water & Wastewater Association and Waste
Management Association of Australia; Artarmon NSW. 82-89

23. Queensland Department of Environment and Heritage (1994), Environmental


Protection Act 1994

24. Queensland Department of Environment and Heritage (1994), Environmental


Protection (Interim) Regulation 1995

25. Queensland Department of Housing, Local Government and Planning (1992),


Environmental Impact Statements and Designated Developments. Brisbane

26. Queensland Department of Housing, Local Government and Planning (1992),


Request for Terms of Reference for an Environmental Impact Statement.
Brisbane.

27. Working Group Environmental Auditor Certification (1995), Outline Proposal for
Environmental Auditor Certification System. Artarmon NSW

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Section APPENDICES

28. Working Group Environmental Auditor Certification (1995), Progress Update - April
1995. Artarmon NSW

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Section ATTACHMENTS

ATTACHMENTS

Attachment 1 - Organisation Chart (Three Shifts Basis)

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Section ATTACHMENTS

Attachment 2 - Project Implementation & Action Plan

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Section ATTACHMENTS

Attachment 3 - Strategic Management & Action Plan

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Section ATTACHMENTS

Attachment 4 - Plant Construction & Capital Development Program

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Section ATTACHMENTS

Attachment 5 - Commercial Viability Supporting Schedules


Schedule 1 - Primary Base Assumptions
Schedule 2 - Major & Secondary Inputs & Outputs (Material Balance)
Schedule 3 - Infrastructure & Costs
Schedule 4 - Building (Premises)
Schedule 5 - Sundry Plant & Equipment
Schedule 6 - Plant Operating Equipment
Schedule 7 - Depreciation Schedule
Schedule 8 - Primary Operating Costs / Quantities
Schedule 9 - Schedule of Salaries, Wages, & Sub-Contractors
Schedule 10 - Cash Flow Assumptions (Sundry)
Schedule 11 - Loans, Leasing & Hire Purchase Schedule

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Section ATTACHMENTS

Attachment 6 - Cash Flow Budgets


Cash Flow Budget - Year 1
Cash Flow Budget - Year 2
Cash Flow Budget - Year 3
Cash Flow Budgets - Years 1, 2, 3, and Y.I.Y.O.

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Section ATTACHMENTS

Attachment 7 - Profit & Loss Summary (Years 1, 2, 3, and Year-In-


Year-Out).

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Section ATTACHMENTS

Attachment 8 - Balance Sheet Analysis (Years 0, 1, 2, and 3).

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Section ATTACHMENTS

Attachment 9 - Break Even Analysis (Profit & Loss Summary)

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Section ATTACHMENTS

Attachment 10 - Locality Map - Narangba Industrial Estate

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Section ATTACHMENTS

Attachment 11 - Petemic Technology - A Technology Review


(Engineers Report - Chemquip Pty Ltd, June 1995).

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Section ATTACHMENTS

Attachment 12 - Mass & Energy (Heat & Material) Balances


(Engineers Report - Chemquip Pty Ltd, 20 July,
1995).

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Section ATTACHMENTS

Attachment 13 - Heres the Plan (Brisbane City Councils Waste


Reduction Program).

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Section ATTACHMENTS

Attachment 14 - Provisional Specification for Patent Application -


"A Waste Recycling Process and Apparatus"
(Intellpro)

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Section ATTACHMENTS

Attachment 15 - Scale Drawings of Primary Apparatus

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Section ATTACHMENTS

Attachment 16 - Licensing (Report prepared by Attorneys-at-Law:


Collier, Shannon, Rill & Scott, September, 1995).

25 Septemmber 1995 PreFeasibility Study Establish Solid Waste Recycling Plant.DOC