Investment Planning for Sand and Gravel Mining

Time:  2021.1.5    |    Source:  JJTZ

Construction sand and gravel is the key raw material for constructing the concrete skeleton, and is a bulky building material product that consumes numerous natural resources.

Up to now , the total number of sand and gravel mining rights offered nationwide exceeds last year's 957, at 1,070 cases, with a combined resource price of over 93.8 billion yuan. The construction stone (tuff) mine in Wenling, Zhejiang, for which we provide investment planning services, is one of the top 10 sand and gravel mining with the highest total resource price in 2023.

How to make investment decisions for Sand and gravel industry practitioners as well as investors interested in entering this industry, this article will provide investors with decision-making ideas.

（I）Market Research

Scientific market research is conducted to purposefully and systematically collect, record, organize and analyze the construction sand and gravel market situation, to get to know the product development solutions and trends, to assist investors in making market forecasts and business decisions, and to provide an objective basis for the investors to formulate the implementation plan of the project.

（II）Unit Price Forecast

The forecast is established on the basis of adequate research on market prices, determined through establishing forecasting models, conducting technical analysis, and other suitable methods.

（III）Product Solutions Identification

The market has a high demand for mineral product, and the demand for different mineral products varies depending on the type of engineering projects. It is necessary to determine the product solution based on actual market research results and the advantages of the investors.

（IV）Investment Calculations

After conducting sufficient market research, investment calculations are made based on relevant information and data. Taking into account the mining cost, policy processing fee, transaction service fee, vegetation restoration fee, soil and water conservation compensation fee and other expenses related to the planned mine investment, the construction investment is estimated. Based on the nature of the project, suitable evaluation methods are selected to estimate project operating income, various costs and taxes, analyze the project's cash inflows and outflows, construct a project profit and loss statement, calculate financial indicators such as internal rate of return (IRR) and net present value (NPV), evaluate the financial profitability of the project, and conduct break-even analysis.

（V）Investment Decisions

To assist investors in determining viable investment plans, sensitivity analysis method is adopted to study the range of uncertainty factors and analyze the project's ability to bear risks, along with providing project risk alerts. Meanwhile, our company can calculate the total cost unit price of the mine based on the single lifting price, assisting investors in determining an appropriate mining price.

Based on the actual situation of the mine, our company conducts research on project investment, market, finance, and other aspects to scientifically evaluate the financial benefits generated after mining and the potential risks that may be encountered. Additionally, we interpret national and local policies and industry planning related to construction sand and gravel for investors. We provide answers to policy and approval process issues faced during project financing and implementation. We also assist in communication among stakeholders involved in the project implementation process and participate in key stages such as project evaluation, aiming to facilitate the smooth implementation of the project.

Conclusion Remarks

Investment planning is a crucial guarantee for the success of a project. It assists investors in identifying investment opportunities, setting investment goals, designing investment plans, conducting comparative analysis, and achieving investment returns.

Jianjing possesses abundant experience in mining investment planning and has developed a mature consulting methodology that encompasses market research, demand analysis, investment and financing scheme development, financial analysis, and risk assessment, among others. Furthermore, we provide comprehensive and high-quality customized investment consulting services from the perspective of our clients. We tailor investment planning solutions that are both practicable and achievable to meet the diverse needs of different projects.