Mines and Rock Quarries
We have years of experience in this industry for the valuation of the business, equipment and real estate. Let us help you with our valuation consultation in all areas of the valuation of mines and rock quarry businesses. Below is a brief synopsis of the industry.
Description of Business
Open pit mines where rocks or other minerals are extracted.
General Industry Information
The nonmetallic mineral mining and quarrying industry in the US includes about 4,000 companies with annual revenues of about $20 billion. Major companies include Vulcan Materials, Martin Marietta Materials, and subsidiaries of foreign firms such as Hanson Building Materials (UK); Oldcastle Materials (Ireland); and Rinker Materials (Australia). The industry is highly fragmented, with many small firms serving local geographic markets; about 75 percent of operations have fewer than 20 employees.
Major products include crushed and broken limestone (30 percent of revenue); construction sand and gravel (25 percent); crushed and broken granite (10 percent); and phosphate rock and potassium salts (10 percent). Other products include soda ash, bentonite, clay, and other broken stone. Phosphates and potassium salts are used to make fertilizers. Crushed stone, sand, and gravel are also referred to as aggregates.
Most rock quarries are open-pit mines where the surface is blasted to reach mineral and stone deposits. In order to access deeper deposits, walls are cut in the sides of the mines. The rock is blasted from the mine face, loaded into trucks to be carried into a crusher that will break it down into smaller pieces.
Technology in the industry has become increasingly advanced over the years, leading to heightened efficiency. This is turn has reduced the need for labor.
Red Flags and Risks
The biggest risk for the industry is it’s reliance on consumer demand. The mines and quarries are very abundant and large, and several are shut down or idled due to lack of consumer demand. Strict environmental regulations will also often force mines and quarries to be changed back to their original look and use. Because the mines are very large and the goods are being constantly moved, the industry is very sensitive to increased transportation costs. Often times the cost to move the product exceeds the values of the products themselves. Because of this, pits and quarries are careful to make sure there is a market or their goods nearby.
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