recycled aggregates case study

Presented at IX Balkan Mineral Processing Congress “NEW DEVELOPMENT IN MINERAL PROCESING”-ISTANBUL 11-13 September 2001

Recycled Aggregates-An environmentally friendly management for the Athens urban area Tsakalakis K.G. National Technical University of Athens, Department of Mining and Metallurgical Engineering Frangiskos, A.Z. Emeritus Professor, National Technical University of Athens Karka H. Dr. Architect, Researcher National Technical University of Athens ABSTRACT: In the present work we investigate the possibility to recover aggregates from the obsolete asphalt pavement or derived from construction and demolition debris in order to be reused in other construction applications. Aggregates recycling from recovered asphalt pavement and demolished concrete debris conserves resources and landfill space, while also generating certain profits for the recyclers. Recycling can be performed either at a permanent facility or at the demolition site, using mobile equipment. A sustainable recycling industry requires numerous factors, including sufficient concrete and asphalt decay and demolition to supply the recycling facilities with raw materials, demand for new infrastructure, favorable transportation distances, product acceptance by the users, and limited landfill place. In Athens area much of the infrastructure, particularly residential buildings in the city center, has been constructed after the second world war and almost sixty years later has become or is going to become during the next years obsolete. That is the reason that they, before long, would be in need of replacement or repair. The today’s practice for the demolished infrastructure in Greece is to be disposed in landfills. But due to strict environmental regulations and the relative legislation (opening new quarries, limited disposal areas) applied for the Attica area, the demolition debris might be recycled and reused in road or other construction applications. The above common practice is applied to a case study referred to the management of the demolition debris generated by the earthquake, occurred in Athens two years ago. INTRODUCTION Europe went ahead in developing and applying recycling techniques from construction debris after the end of 2nd World War when massive amounts of war-ravaged infrastructure required replacement.

But in Europe today, the construction and demolition waste constitutes a highly significant proportion of all wastes. It is well known that those wastes have a very high recovery potential, as shown by the pilot projects carried out and the action taken in some Member States, which have achieved recycling levels of more than 80%.

However, the fact is that only a small proportion (about 25-30%) of this waste is actually recovered in the European Union (DG ENV.E.3, 2000) as a whole (Table 1). At more than 180 million tones per year the construction

and demolition debris constitutes the third largest in quantitative terms waste stream in the European Union, following the mining and farm wastes.

Table 1. Recycling Aggregates in the E-U

Member

State

(m tonnes,

rounded),

% Re-Used or

Recycled

% Incinerated

or Landfilled

Germany 59 17 83

UK 30 45 55 France 24 15 85 Italy 20 9 91 Spain 13 <5 >95 Netherlands 11 90 10 Belgium 7 87 13 Austria 5 41 59 Portugal 3 <5 >95 Denmark 3 81 19


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Greece 2 <5 >95 Sweden 2 21 79 Finland 1 45 55 Ireland 1 <5 >95 Luxembourg 0 n/a n/a EU-15 180 72 72

Roughly 75% of the waste is landfilled and

25% of this waste is recycled. It has been proven from technical point of view and by economic feasibility, that recycling aggregates is not only attainable but profitable as well. The above fact enabled certain Member States (and particular Denmark, the Netherlands and Belgium) to achieve recycling rates of more than 80%. The South European countries (Italy, Spain, Portugal and Greece) recycle very little proportion (lower than 10%) of this waste.

Presently the recycling rate for asphalt pavement is approximately 85 percent. Recycled aggregates are, however, increasingly being used to supplement natural aggregates in road construction in a variety of applications.

In the U.S.A the majority of the States allow their use in road base applications in other cases for backfill, 8 States for portland cement mix, and 7 States for top-course asphalt and selected other applications. Recycled aggregates are commonly used in lower quality product applications such as road base, where recycled aggregates meet or exceed the specifications. This product is presently often not considered acceptable for higher quality product applications such as high-strength concrete because of performance considerations and perception of some decision makers.

Currently, more than 50 percent of all cement concrete debris and about 20 percent of all asphalt pavement debris end up in landfills. An estimated 85 percent of all cement concrete debris, which is recycled is used as road base material, with minor amounts used in asphaltic concrete and fill material. About 90 percent of asphalt pavement debris that is recycled is reused to make asphaltic concrete mixtures.

Recycled aggregates currently account for less than 1 percent of the total demand for construction aggregates, but the amount recycled is thought to be increasing. Aggregate recycling rates are greatest in urban areas where replacement of infrastructure is occurring, natural aggregate resources are limited,

disposal costs are high, or strict environmental regulations prevent disposal. In Figure 1 are shown the Construction aggregates sources, distribution and life cycle (after Wilburn and Goonan, U.S.G.S, 1998) Figure 1. Construction aggregates sources, distribution and life cycle (after Wilburn and Goonan, U.S.G.S, 1998) The construction materials sector is a vital sector in the Greek economy (Tsakalakis, 2001). THE AGGREGATES RECYCLING INDUSTRY

Natural Aggregates (Quarrying)

Recycled Aggregates

Construction (Residential, Commercial)

Infrastructure construction (Roads,

bridges, tunnels)

Landfill Recycle

Losses to the environment (Air,

water, soils)


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Factors influencing the aggregates recycling industry Urbanization and large scale construction projects for the preparation of Olympic Games 2004 has generated a high demand for construction (natural) and low-cost aggregates (road base material). Additionally the increased quantities of construction debris may provide other sources of aggregates. The factors, which must be taken into account for the elaboration of an aggregates-recycling industry are:

1. The high demand for construction aggregates due to urbanization

2. The quantities of the construction debris generated

3. The impact by local and regional conditions

4. The market specifications for the products 5. The transportation distances and the costs

for construction and demolition 6. The competition from the natural

aggregates producers 7. The availability of local landfills 8. The plant characteristics (location, design,

capacity) have a significant impact on economic performance

9. The characteristics of the feed material (quantities supplied, consistency and quality) affect plant efficiency

10. The availability of skilled labor 11. The cost of the equipment, labor and

overhead 12. The expected revenues based on product

pricing and tipping fees are also a very factor affecting undertaking success

Production cost and viability of the recycling aggregates industry The production cost plays a significant role on the viability of an aggregates recycling industry, but this cost depends on many factors, which are summarized in:

1. The annual capacity of the plant (Low annual capacity causes increased production cost because of the economics of scale

2. Tipping charges or fees 3. Product price

4. Transportation cost, which is closely associated with the feed stock acquisition

But it has been proved from various case studies that, even small – capacity recyclers can achieve economic viability by:

1. Increasing tipping fees 2. Charging higher product prices 3. Locating their plants in such an area in

order to gain transportation cost advantages over competitors

4. Receiving government subsidies or recycling mandates

Incentives and deterrents for recycling aggregates The success of aggregates industry varies by State and municipality and depends highly on the support offered by the public opinion and the relative legislation. There are not only incentives, but deterrents as well for the aggregates recycling industry (Wilburn and Goonan, 1998).

1. Incentives

• Recycling may reduce the amount of construction debris sent and disposed of in landfills

• May reduce the rate of depletion of natural resources and extend the life of natural resources by supplementing resource supply

• Recycling reduces the environmental disturbance from the open-pit mining operation for the aggregates production

• Enhance sustainable development of our natural resources

• Causes energy and cost savings by reducing construction and maintenance cost

• An abundant supply makes the venture attractive not only for the supplier but for the construction contractor as well

2. Deterrents


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• If large quantities of natural aggregates are available

• The limited control over production and demand

• The high capital requirements • The inadequate public support

There are also other critical factors making a recycling aggregates industry non-profitable and insecure.

• The improper site design and process layout

• The improper equipment and operator efficiency

RECYCLING AGGREGATES IN GREECE As it was mentioned above, there is only a small activity towards aggregates recycling in Greece. This is, first of all, due to the great availability of natural-aggregate resources. The major area of Greece consists of carbonaceous rocks suitable for natural aggregates production.

But, the increase of urbanization, the strict environmental regulations in opening and operating new quarries close to urban areas and the great seismicity of Greece indirectly generating concrete debris, offered an evident warrant for this work.

This warrant was given from the strong earthquake, which struck the Athens area generating a high volume of concrete debris and the need to be effectively managed. These debris possessed a high-value potential providing a sound opportunity for the growth of the aggregates recycling industry in Greece. CASE STUDY Definition of the problem On Tuesday (September 7, 1999) an earthquake of magnitude 5.9 (Richter) struck the northern suburbs of Athens, Greece. The earthquake left close to 125 dead and more than 100.000 without homes. The unemployment rose to 30000 persons in affected areas immediately.

Until September 14, 1999, the 56.000 dwellings visited by the state inspectors were classified on a three- color system and the split was as follows: Red: Buildings with dangerous structure required demolition, 11% (about 6000)

Yellow: Buildings with damaged structure not suitable to be used as dwellings, 39% (about 22000) and Green: Buildings with minor damage, which could be occupied, 50% (about 28000). More than 100 buildings (including three great industrial facilities) were fully collapsed during the earthquake. Assumptions If 6000 buildings were in need of demolition and 200 m3 / building was the mean reinforced-concrete volume, which could be produced from the demolition, then the total volume of concrete debris would be: 6000x200 m3= 1200000 m3 The total weight of the concrete could be: 1200000x2.5 t= 3000000 t of concrete debris (2.5 t/ m3 the concrete specific gravity). If this material was recycled by crushing and sizing in a processing plant and the recovery after processing was only 60%, then the material, which could be sold, arises to: 3000000 t x 0.6 = 1800000 t The above recovered material possesses a volume of 1800000 t / 2 t/ m3 = 900000 m3 and it can be used as road base material for the road construction activity. If in the Athens urban area for the road construction activity, which is about 100 km annually of 20 m width roads (here it is included the new roads for the Athens 2004 Olympic Games), the road base material (thickness 0.4 m) annually needed is: 100000 m x 20 m x 0.4 m = 800000 m3 The material from the recycling of earthquake debris produced from two plants of 250000 t or 125000 m3 annual capacity (distributed in 6 years production) is: (900000 m3 / 800000 m3 ) / 6 = 1.125 / 6 = 0.1875 or 18.75% of the whole annually needed.


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Pre-feasibility study Here it is examined, using the known economic evaluation techniques, the profitability of such an investment. The assumptions made for this evaluation are: Operation capacity (annual): 250000 t / plant Construction time period: 2 years Capital: 0% Borrowed money (only equity capital) Land requirement: 40000 m2 / plant Cash flow period: 12 years Rate of return: Uknown (searched) Depreciation period: 6 years Tax rate: 40% (35% federal and 5% municipality tax) Production schedule: 1 shift per day ( 8h/shift), 5 days per week. It is already known (Wilburn and Goonan, 1998), that for a medium capacity plant of an operation capacity (annual) 250000 t, the capital cost is 1.2 million $ (purchase of new equipment). The other operational estimations for such an investment, applied to the cost in Greece, are: Operation Capacity: 250000 t / year Capital Cost: 1.2 million $ Working Capital: 120000 $ Salvage value (after 12 years): 72000 $ Depreciation / year: 200000 $ Operating Cost (Labor, Equipment Maintenance, Fuel, Supplies and Fees), $/t of feed material: 0.75 $/t (-) Landfill fee of the residues after processing, $/t of feed material: 0.14 $/t (-) Tipping fee credit ($/t of feed material): 0.25 $/t (+) Gain from the recovery of steel bars ($/t of feed material)*: 0.72 $/t (+) Market price ($/t final product): 2.50 $/t (+) * It is assumed that, for old constructions (dwellings), the total steel bars load (reinforced concrete) was 60 kg / m3 concrete. If 80% of these bars are recovered by magnetic separation methods during the recycling process (crushing and screening), then the material recovered from the total feed is: 1200000 m3 concrete x 60 kg / m3 x 0.8 = 5.76x107 kg steel bars .

The market price for this material sold as scrap is 0.0375 $/kg. Thus, the gain totally is: 0.0375 $/kg x 5.76x107 kg = 2.16 million $. If it is projected for 1t of feed material then the gain becomes: 2.16 million $ / 3x106 t = 0.72 $/t feed material Figure 2. Time diagram for the annual cash flow Annual cash flow Using the amortization schedule to prepare a before-tax time diagramm of expenses and income from the project we have Figure 2.

The next step is the calculation of the after-tax annual cash flow and set up a present worth equation to solve for the DCF-ROR i.

1. Depreciation period (6 years) Assuming that the annual income X1 remains constant for the recycling time period (6 years) and X2 for the rest 6 years (Figure 2), then the annual gross profit (net plant return – operating costs) is: 250000 t x 0.6 (recovery after processing) x 2.5 $/t + (0.25 + 0.72) $/t x 250000 t – (0.75+0.14) $/t x 250000 t = 395000 $ (annual gross profit). The annual cash flow for the depreciation period (after tax) is: + 395000 $ (Gross profit)

- 200000 $ Depreciation (straight line)

0 1

2

1

2

10 11 (+)

(-)

Plant erection time (two years)

Production period (n years)

Q1 Q2 Q3

X1 X1 X2 X2 X2


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+ 195000 $ Taxable income - 78000 $ Taxes (effective rate 40%)

+ 117000 $ Net Profit + 200000 $ Depreciation

X1 = + 317000 $ Annual cash flow for the depreciation period (after tax)

2. Annual cash flow after depreciation (rest 6 years of plant lifetime)

The annual cash flow, after the depreciation is completed, becomes:

+ 395000 $ (Gross profit)

+ 395000 $ Taxable income - 158000 $ Taxes (effective rate 40%)

+ 237000 $ Net Profit

X2 = + 237000 $ Annual cash flow after the depreciation period (after tax)

3. Set up of the present worth equation

The equation used for the calculation of N.P.V. (net present value) for the investment described is:

1 13 8

2 29 2 2

1 2 3 2

. . . ...(1 ) (1 )

1.. ( )(1 ) (1 ) (1 )

1 11 (1 )

n n

X XN PVi i

X X W Si i i

Q Q Qi i

+ +

= + + ++ +

+ + + ⋅+ + +

− − ⋅ − ⋅+ +

(1)

where: X 1 , X 2 annual cash flow as above i rate of return W working capital S salvage value Q1 capital investment at the beginning of the first year Q2 capital investment at the beginning of the second year Q3 capital investment at the end of the second year

n years of plant lifetime In order to calculate the discounted cash flow rate of return (DCF-ROR) I, the value of N.P.V. in Equation (1) must be set equal to zero. Thus by rearranging Equation (1) becomes:

6 6

1 26 2 2

1 22

3 2

(1 ) 1 (1 ) 1. . .(1 ) (1 )

1 1( )(1 ) 1

1 0(1 )

n

n

i iN PV X Xi i i i

W S Q Qi i

Qi

+ +

+

+ − + −= ⋅ + ⋅ +

⋅ + ⋅ +

+ + ⋅ − − ⋅ −+ +

− ⋅ =+

(2)

If Q1 , Q2 and Q3 were 500000 $, 350000 $ and 350000 $, respectively and n = 12 years (6+6 years), then the equation for solution becomes:

6 6

6 2 12 2

12 2

2

(1 ) 1 (1 ) 1317000 237000(1 ) (1 )

1(120000 72000) 500000(1 )

1 1350000 350000 01 (1 )

i ii i i i

i

i i

+ +

+

+ − + −⋅ + ⋅⋅ + ⋅ +

+ + ⋅ − −+

⋅ − ⋅ =+ +

(3)

Solving equation (3) for i yields: i = 0.178 or 17.8% The value of discounted cash flow of return (DCF-ROR) i indicates that the investment, under the conditions already referred, is profitable. If the money invested was also to some extent (50%) borrowed money and it was also taken into account the annual inflation (3-5%), the DCF-ROR would be lower than 17.8% but the investment continues to be profitable.

It must be underlined here that after the initial six-years time period the material available for recycling must be sufficient to meet the present industry demand. In any case it is expected that the aggregates recycling industry will continue to be viable due to the infrastructure decay and the need for replacement. CONCLUSIONS The trend towards urbanization in Greece and the great demand for low-cost aggregates gives a


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strong reason for recycling aggregates generated from the demolition of our obsolete infrastructure.

The strict environmental regulations applied to the opening and operation of new quarries, close to the urban areas, the transportation costs and the landfill fees are also very significant reasons.

The market price of the product, the tipping fees credit, the availabilty and acquisition of feed material detemine among others the profitabiltiy of such an operation.

From this work, it has been proved that, based only upon economic considerations, aggregate recycling is an attractive and profitable operation. The aggregate recycling would start in Greece and the great availability of resources must not be an inhibitory factor.

On a limited area basis (urban areas), it is unlikely that recycling could ever completely replace natural aggregates in certain applications, such as road base material in road construction.

But, there are many problems related to the plant site location, the permits, the support by the State and the municipality and the legislation ensuring the profitabiltiy of such an investment. REFERENCES Wilburn R.D. and Goonan, Aggregates from

Natural and recycled Sources, Economic Assessments for Construction Applications- A material Flow Analysis, U.S.G.S Circular 1176, p. 40, 1998.

Tsakalakis K.G.and Frangiskos, A.Z., Principles of Economic Evaluation for Mining Investment Projects, General Aspects, Mining and Metallurgical Annals, Vol. 71, pp.17-36, ), 1989, (in Greek).

Tsakalakis K.G. and Frangiskos, A.Z., Principles of Economic Evaluation for Mining Investment Projects and Application in Mineral Processing Plant Design, Mining and Metallurgical Annals, Vol. 72, 1989, (in Greek).

Tsakalakis K.G., The important Role of the Greek Cement and Concrete Industry and new Trends towards the environmentally friendly Production and Use of Cement and Concrete, Mining and Metallurgical Annals, Vol. 10, Issue 2, 2001, pp. 79-89, (in Greek).

European Commission Directorate-General Environment, Directorate E- Industry and Environment ENV.E.3-Waste Management, Management of Construction and demolition Waste, DG ENV.E.3, April 2000.

recycled aggregates case study

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