A Feasibility study for cemented tungsten carbides recycling in South Africa to support investment decisions

Du Toit, De Wet (2018-12)

Thesis (MEng)--Stellenbosch University, 2018.

Thesis

ENGLISH ABSTRACT: This study evaluates the financial feasibility of recycling tungsten carbide in a South African context. This study is inspired by the inevitable value creation opportunities that accompanies the large amounts of tungsten carbide waste generated by the mining and tooling industry in South Africa. This is a unique waste-to-resource opportunity to deliver tungsten carbide to South Africa, as tungsten is not a widely available resource in this country, and therefore tungsten carbide must be imported for local use. The first objective of this study was to gain a thorough understanding of the different tungsten carbide recycling methods and to map these value creation opportunities. The second objective was to understand the key elements which must be considered when conducting a financial feasibility study. The third objective was to financially model a selected number of recycling methods. The final objective was to create a business case with a feasibility framework. An industrial partner, Pilot Tools (Pty) Ltd was consulted to gain general knowledge of tungsten carbide recycling plant inputs. Three recycling methods were selected and modelled financially, namely: the zinc recycling method (PRZ), the coldstream process, and acid leach method. Each of the three selected methods were modelled three times, each time at different capacities resulting in nine models. Two direct recycling methods and one indirect recycling method were chosen to model. The financial model uses a factorial method which requires the input costs of equipment, raw material, labour, utilities, and waste treatment to estimate the total manufacturing costs and capital investment needed. input from specialists, data from literature and quotations were used for the equipment costs and adjusted using the Lang factor method. From this model a ten-year net present value (NPV) analysis is done on all nine processes. A scenario analysis is conducted to determine the biggest risks of each input value to the ultimate ten-year NPV value. The NPV analysis and the scenario analysis forms the basis from which the business case is created. The final output of the study was a business case detailing when each of the recycling alternative becomes viable. This study found that all three of the recycling processes are financially feasible. The coldstream and zinc recycling processes are a much safer investment option as shown with the scenario analysis. The scaling opportunities of these two methods are also more financially viable than that of the acid leach method. Due to the nature of the problem no one ”best” option can be chosen, but the business case attempts to provide a best scenario given the decision criteria of investors. The best configuration for the zinc recycling method is the process optimised for 45.5 kg/h throughput. The process breaks even at 48.5% of maximum capacity with an IRR of 51.34% and a NPV of R127.88 million. The best configuration for the acid leach process is at 68.75 kg/h. The process breaks even at 82.50% of the maximum capacity with an IRR of 16.96% and a NPV of R72.94 million. The best configuration for the coldstream process is at 44.5 kg/h. The process breaks even at 49.50% of the maximum capacity with an IRR of 51.31% and a NPV of R131.39 million. Using the knowledge in gained in this study, a business case for tungsten carbide recycling in South Africa is created.

AFRIKAANSE OPSOMMING: Hierdie studie evalueer die finansie¨ele haalbaarheid om wolfram karbied binne ’n Suid Afrikaanse konteks te herwin. Die studie word ge¨ınpsireer deur die waarde toevoegings geleenthede wat gepaard gaan met die massa skroot wolfram karbied wat gegenereer word deur die myn en vervaardigings sektore in Suid-Afrika. Hierdie bied ’n unieke afval-tot-hulpbron geleentheid om wolfram karbied aan die Suid-Afrikaanse vervaardigins mark te lewer, aangesien dit ’n skaar hulpbron is wat meestal ingevoer word. Die eerste doel van die studie was om ’n deeglike verstaan van die verskillende herwinnings prosesse, asook die gepaardgaande waarde toevoegingsgeleenthede, te bekom. Die tweede doel was om die sleutel elemente wat hierdie prosesse be¨ınvloed op ’n operasionele vlak sowel as ’n finansiele vlak te verstaan. Die derde doel se mikpunt was om finansi¨ele modelle van ’n aantal verkose proseese te bou. Die vierde en laaste doel was om om ’n haalbaarheids raamwerk te ontwwikkel, wat beleggers assisteer om ’n beleggings besluite in terme van die herwinning van wolfram karbied te neem. n Suid-Afrikaanse maatskappy en bedryfsvennoot, Pilot Tools (Pty) Ltd, was geraadpleeg om algemene wolfram karbied proses insette te bekom en die prosesse beter te verstaan. Na aanlyding van die besoek aan Pilot Tools, sowel as die literatuur studies, is drie prosesse gekies om finsie¨el gemodeleer te word. Die drie verkose prosesse is: die sink herwinnings proses, suur loog proses, asook die coldstream proses. Elkeen van die drie prosesse was drie keer gemodeleer teen verskillende maksimum kapasiteite. Die uiteinde is dus nege modelle. Die finansie¨ele model maak gebruik van ’n faktoriaal metode wat insetkostes van toerusting, rou materiale, arbeid, water en elektrisiteit, en afval verydering gebruik om die totale vervaardigingskoste en nodige kapitale beleggings te bepaal. Insette van spesialiste, data uit literatuur en kwotasies is verkry om die toerusting kostes te bepaal. Die kwotasies was aangepas deur die Lang faktor metode te gebruik. Die finansie¨ele model word gebruik om ’n tien jaar netto huidige waarde analise uit te voer op die nege modelle. ’n Senario analise word uitgevoer om die risiko van elke insetwaarde op die uitsette te bepaal. Die netto huidige waarde analise, gelykbreeksanalise, sowel as die senario analise vorm die kern van waar die haalbaarheids raamwerk ontwikkel word. Die haalbaarheids raamwerk detaileer ook teen watter deurset elkeen van die prosesse lewensvatbaar raak. Die studie het bevind dat elkeen van die drie prosesse haalbaar is. Die coldstream proses en sink herwinnings prosesse is egter as meer finansieel lewensvatbare opsies deur die senario analise bewys. Hierdie twee prosesse kan ook makliker en veiliger geskaleer word as die suur loog prosess. Die probleem verleen hom nie aan een ”beste” oplossing nie, maar die haalbaarheids raamwerk probeer om ’n beste oplossing vir gegewe scenarios te beskryf. Die beste opset vir die sink herwwinnings proses is waar die proses geoptimeer word vir 45.5 kg/h deurset. Die proses breek gelyk by 48.5% van die maksimum kapasiteit van die proses met ’n interne opbrengskoers van 51.34% en ’n netto huidige waarde van R127.88 miljoen. Die beste opset vir die suur loog proses is waard die proses geoptimeer is vir 68.75 kg/h. Die proses breek breek gelyk teen 82.50% van die maksimum kapasiteit met ’n interne opbrengskoers van 16.96% en ’n netto huidige waarde van R72.94 miljoen. Die beste opset vir die coldstream proses is waar die proses geoptimeer word vir 44.5 kg/h deurset. Die proses breek gelyk by 489.5% van die maksimum kapasiteit van die proses met ’n interne opbrengskoers van 51.31% en ’n netto huidige waarde van R131.39 miljoen. Die kennis verkry deur adie verskeie analises word gebruik om die haalbaarheids raamwerk te bou.

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