BELETE---------

PROJECT PROPOSAL
TO MINE
LIMESTONE
(CONSTRUCTION STONE)
AT
HAKIM GARA

October,2022
 INTRODUCTION

The construction industry is universally regarded as a major indicator of a

country’s economic development. Currently, in Harar construction is growing
in all directions. Literally, hundreds of residential and business buildings and
service sectors, roads etc are being constructed by the government, the
private sector and NGO’s.

The aim and purpose of this project is to get involved in the construction
sector of our region (Harar National Regional state) and nearby towns of
neighbour regions by providing construction stones such as masonry rocks,
gravels, chips and cobble stones . At this scope we have aimed to invest in
mining activities. The project will opens opportunity of employment and plays
active roles in the construction sector that our and neighbour regions demand
by providing construction and industrial stones.

Several studies have been conducted to investigate the limestone deposit of

Hakim Mountain by local and foreign experts. The studies have indicated that
the existence of limestone deposit of economic reserve with standard quality
required for construction as well as for industrial input (limestone) .

Therefore by submitting this project I have highly intended to get a license in

the Hakim Gara area to produce and sell its products to the existing market
demand.
 CHAPTER 1

1.1 General Geology

The geology of Harar region is characterized by five litho logical units ranging in
age from Pre-Cambrian to Neogen, according to Greitzer (1961). These are,
from old young;

Basement complex which is an assemblage of Granites, Gneisses, and schist

sandstone unit (Adigrat sandstone) composed mainly of sand stone alternating
with many layers of marl, chalk, and limestone which is 80m-90m thick resting
uncomformably on the former, Lower limestone unit, which is 170m-180m
thick, consisting mainly of Limestone with many macro fossils, Upper limestone
unit which is 40m to 50m thick, composed mainly of grey limestone and a unit
which is neogen in age. The upper and lower limestone units are named
together as Hamanlei formation by other investigators like V. kazmine (1972)

It is within this formation (Hamanlei) that the Hakim Gara Limestone deposit is
found. Detailed geological study has also divided the limestone into two units,
namely upper and lower limestone units.

The lower limestone unit covers the area extending from the foot of the gentle
slope exposing the upper limestone up to the road. It shows vertical variation
in which a layer of micritic limestone overlies intercalation of thick and thin
beds. The micritic limestone, having more than 50 cm unit bed thickness, is
very fine grained, light gray to white in colour, compact, massive and hard
whereas the intercalation is fine grained grey to light grey, and has beds that
are up to 1m thick.
The upper limestone unit, which is a calcarenite limestone occupies part of the
area forming a gentle slope and lies over the lower limestone unit. It has
colours ranging from light brown though grey to light grey and is fine to
medium grained. An individual bed thickness in this unit is commonly between
50cm to 1m. Occasional fossil structures of bivalves are also embedded in this
rock type.

The limestone covering the whole area has remained unaffected by large scale
tectioc structure such as faults and folds since its deposition. It is, however,
affected mainly by north-west trending joint set which are vertical to sub-
vertical and rarely by south—west trending joint set.

1.2 The Concession Area

The concession area is situated where one of the best limestone formations is
found in abundance. In our survey we have made traverses that enabled us to
observe and study the outcrops carefully with an eye on the deposit required
due to the presence of pre-existing quarry at the site which was used to extract
by artisanal as well as small scale miners. Since our interest is the limestone
deposit, we will deal with this unit in brief.

This unit has about 20 meters thickness above the ground and is finely
grained, aphanetic, light grey massive, compact, and hard, there might be
micro and macro fossils and other secondary sedimentary units. Therefore, this
has been considered as meeting the standard requirement for production of
the desired construction and cobble stones that fulfil the market demand.
1.2.1 Location

Hakim Gara limestone deposit ( especially the concession area ) is located at

6KM south of Harar town on the south west gentle slope of Mount Hakim just
in front of old Mitin plc. quarry.

Geographic coordinates of the concession Area

Corner Latitude Longitude

A 90 16’34.41”N 420 06’54.51”E

B 90 16’32.45”N 420 06’56.63”E

C 90 16’36.05”N 420 06’59.01”E

D 90 16’37.45”N 420 06’57.36”E

1.2.2 Reserve Evaluations

The area of Hakim Gara quarry is about 10,000 m 2.The thickness of the lime
stone above the foot of the hill is about 20 meters. The limestone deposit is
expected to extend to the depth of greater than 10m.

The area which is Exploitable Rock Total Volume of reserve

covered by the deposit
Thickness

10,000 m2 20 meters 200,000 m3

 CHAPTER 2

2.1 Mining Procedure /Plan

Before the quarry is developed, pre-operational activities and preparations will

be accomplished. These may include excavation of overburden (including
minor floras).

Opening a quarry face at any point, preferably, having a relatively lower

elevation in the proposed area can be used to start quarrying and exploit the
proposed limestone for the project by drilling directly in to the deposit by
compressor. The exploitation will systematically be in progress throughout the
area to have effective mining, which follows appropriate and modern methods
of quarrying including benching and terracing systems etc.

2.2 Limestone Production

Initial stage of mining is started with the drilling of a series of vertical and
horizontal holes from one end of the quarry to another along the deposit’s
strike (i.e. from north to south) by compressor. Chisels of tungsten carbide
with different sizes are inserted through the holes to be drilled and pressure is
exerted using hammers of big sizes to break the boulders or chips from the
parent rock. Breaking is to be carried out in such a way that the width and
height of boulders to be produced is not greater than 250 and 400mm
respectively to make easy detachment of the rock. The running of such
permanent trench and its step wise follow up wide range provides free
operational space for dump trucks, and other quarry machineries for the
smooth operation of the quarry activity.

The detached boulders or chips are then selected and further re shaped in a
desired size and shape by hand hammers manually. The pieces are further
selected and collected in one place using wheel barrows to make ready
available for loading. Finally the collected stones will be loaded on trucks by
labourers and transported to the market demand.

2.3 Production Program

As the project to fully operational it is expected to produce 50m 3 per day that
means based on 300 working days it will be 15,000m3 per year.

The project is not reach full capacity operation in the initial year due to some
preparation. But it is fully operational starting from the second year up to the
project life.
 Chapter 3

Resources requirement

3.1 raw material

The main raw materials to be used for the production and processing
limestone chips will be the massive rock form to be mined from Hakim Gara .
For this raw material the project will pay the government a royalty and tax
which has to be paid according to the Ethiopian mining proclamation from the
total sales revenue and taxable income respectively.

3.2 quarry equipments

List of equipments required for the quarry activity is given in the table below.

Item Description Qty Cost

No estimate(birr)
1 Compressor 1 880,000
2 Plunges Set 10,000
3 Tungeston carbide chisels of various size 15,000
4 Various hand tools 20,000
Total 925,000

3.3 Human resource

No Personnel Qty Monthly Total

salary(birr) salary(year)
1 General manager 1 6,000 72,000
2 Quarry supervisor 1 4,000 48,000
3 Secretary 1 2,500 30,000
4 Sales man 1 3,000 36,000
5 Quarry workers 5 10,000 120,000
6 Guards 2 3,000 36,000
Total 11 342,000
3.4 pre production cost

Pre production costs are supposed to include

1. Consultancy fee-------------------------------------------------------5,000
2. Road construction inside quarry---------------------------------10,000
3. Project promotion (license fee, land rent etc.)----------------3,000

Total--------------------------18,000

3.5 miscellaneous expenses

Fuel consumption-----------------------------------------------------132,000

Perdiem --------------------------------------------------------------------5,000

Safety materials for workers-------------------------------------------5,000

Environmental rehabilitation-----------------------------------------15,000

Total ------------------------157,000
 CHAPTER 4

Environmental Aspects

Some parts of the project area are naturally covered by floras (small trees) so
that it will be necessary to use the excavator to clear the area with a minimum
environmental risk if the project is implemented. The quarry and stone
crushing plant sites are located at a considerable distance away from
settlement area and the existing infrastructures such as road, power lines, etc.
So the exposure of the locals to noise, vibration, dust and any other
environmental hazards resulting from the project operation is minimal. Dust
will be controlled if possible by frequently showering with water for the safety
of the workers as well as the society in relatively distant areas around the site.
For the purpose in the later case, water is available from the nearby source as
much as possible because there is no water source at the site.

Physical impacts on the environment are probable mainly due to excess

excavation of the stone. The process involves excavation and quarrying of the
lime stone, loading and transporting, and crushing and screening, which may
entail topographical changes and generate noise and dust during the
operation. Under such conditions, appropriate measures will be considered to
mitigate the effect. The exploitation scheme follows modern stone quarrying
methods like benching and terracing designed by an experienced quarry
technician. The planned average excavation depth is about below the existing
ground surface, which is going to be carried out systematically according to the
appropriate quarrying mechanisms. In this case, no pronounced hazardous
landform will be resulted since the anticipated exploitation pits will
progressively be refilled according to the
Planned reclamation schedule. Nearly, 10% of the quarry material is supposed
to be a leftover in the lime stone quarrying and aggregate production process
so that this, added to other soil matter to be delivered from areas somewhere
around the project site, could be used to help the back filling rehabilitation
program.

Planting appropriate trees and other intervening vegetation, and assuring their
growth then will afforest the area at the end, according to the planned
environmental rehabilitation program. In order to protect workers from
personal injuries and damages to human life in the processes of quarrying and
stone crushing, appropriate protection measures such as providing safety
wears, including safety goggles, helmet etc. will properly be considered.
 CHAPTER 5

Revenue and Financial Evaluation

5.1 Revenue

The annual production and processing capacity of the project is about

15,000m3 of limestone chips.

During the initial year of operation the mine may not attain the envisaged full,
capacity, mainly due to the preparation period which may extend through the
first six months, and to some extent due less gained technical experience, to
fully run the project. Hence capacity utilization in the first year is assumed to
the 50% of the annual production capacity that of the remaining years being
100%

5.2 Financial Evaluations

The financial and profitability analysis of the project is due considering the
following assumptions.

1. The average price per m3 (200 birr) of limestone boulder is assumed to be

constant throughout the project life.
2. The fixed and preproduction costs are considered to be cost required to
make some verification of the resource, license acquisition and other pre
production operation expenses, amortized in 10 years.
3. The annual operating cost amount 499,000 Birr is considered for 100%
capacity utilization, supposed to be attained starting from the second year.
4. The tax, royalty and other similar points considered in the analysis are
based on Mining Laws and Regulation of Ethiopia.

Based on these assumptions and the data in the preceding sections, the
projects financial evolution, in terms of profit and loss statement, is presented
in the following table.
 Description Year

1 Cash flow 0 1 2 3 4 5 6 7 8 9 10

A Pre- 18
production
cost
B Fixed cost 925

C Operating 499
cost
Total 1,442
2 Sales rvenue 1,500 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
3 Rayality 45 90 90 90 90 90 90 90 90 90
(3%)
4 Depreciation 94.3 94.3 94.3 94.3 94.3 94.3 94.3 94.3 94.3 94.3
5 Operating 249.5 499 499 499 499 499 499 499 499 499
cost
6 Total cost 388.8 683.3 683.3 683.3 683.3 683.3 683.3 683.3 683.3 683.3
7 Taxable 1,111.2 2,316.7 2,316.7 2,316.7 2,316.7 2,316.7 2,316.7 2,316.7 2,316.7 2,316.7
income
8 Income tax 388.92 810.85 810.85 810.85 810.85 810.85 810.85 810.85 810.85 810.85
(35%)
9 Net profit 722.28 1,505.15 1,505.15 1,505.15 1,505.15 1,505.15 1,505.15 1,505.15 1,505.15 1,505.15
10 cash flow -943 -220.72 1,284.43 2,789.58 4,294.15 5,799.88 7,305.03 8,810.18 10,315.33 11,820.48 13,325.63
 CHAPTER 6

Benefits and Beneficiaries

6.1 Infrastructural Development

About 1 kilometre rod will be constructed to provide all season access to the
quarry site. As the path leading to the area is muddy and water logged during
rainy season, this will contribute towards alleviating accessibility problems
existing in the area.

6.2 Social Benefits

The planned organizational structure of the projects avails job opportunities

for 2 women and 9 men permanently . This is believed to contribute to the
reducing of unemployment existing in the country.

During implementation of the project, employees will acquire experiences in

mining industry, thereby contributing to the development of mining skills in
the country.

The project will also contribute to satisfying the demands of the ever-
increasing construction activates in and around Harar Town.

6.3 Economic Benefits

The project’s employee will benefit from salaries and wages. The revenue to
be generated from the project implementation will benefit the investor and
government, in the form of income from profit and income tax & royalty
payment respectively. The investor’s ten years cumulative earning from profit
is forecasted to be 13,325,630 birr, while that of the Government is 8,533,630
birr. The local community will also benefit from compensation made during the
project area land acquisition. The overall benefit goes to the economic
development of the country, in general.