Research Article of American Journal of Engineering Research and Reviews
Assessing Plausible Options For Sourcing Spare Parts Of Earthmoving Equipment On The Profitability Of Nigeria’s Iron Ore Company
Osemenam Uchea Thomas .B. Afeni, Ph.D. Witsb,
aDepartment of Economics, University of Nigeria, Enugu State.
bDepartment of Mining Engineering, Federal University of Technology Akure, Ondo State.
As Nigeria takes a bold step to revive her iron ore company, it is pertinent she takes adequate account of her economic and technological limitations, in order to achieve a return on this venture. To this end, the Net Discounted Present Value approach to investment appraisal in mine economics, was employed to evaluate two feasible investment options (spare part importation and conventional sand casting) for sourcing parts of earthmoving equipment on the profitability of Nigeria’s iron ore mining company (NIOMCO),over a period of five years. Findings revealed that, both options are not profitable to the federal entity, owing to the high rate of Nigeria’s inflation (15.98%) and unfavorable market exchange rate of $1 to 359.201. However, it recommends that the entity be privatized to financially buoyant investors, able to withstand the cost of operating the company. Also, a new price has to be set, using the absorption pricing technique, in order to absorb running costs, through the projected period of five years. In addition, no additional unit of labour, be employed, due to its evident burden on running expenses, over the projected period of five years. Unfortunately, selling iron ore concentrate at the prevailing market price ($62.59) was found not to be profitable to the entity. To this effect, the design of modalities aimed at penetrating and coping in the domestic market is a necessity, to enhance the entity’s sustainability, in the short-run. This is subject to further research.
Keywords: Iron ore, Spare parts, Earthmoving, Equipment, Profitability
How to cite this article:
Osemenam Uchea Thomas .B. Afeni, Ph.D. Witsb,. Assessing Plausible Options For Sourcing Spare Parts Of Earthmoving Equipment On The Profitability Of Nigeria’s Iron Ore Company. American Journal of Engineering Research and Reviews, 2018, 1:13
1. Adebimpe, R.A., & Akande, J.M., (2011).Engineering economy analysis on the production of ore in Nigeria. Journal of Scientific Research, Vol.1; 14-20; DOI: 10.4236/gm:2011.11002
2. Ahuja, H.L., (2008). Advanced economic Theory: Microeconomic Analysis (19th Edition).New Delhi, India. S. Chand Publications. Pp.1304-1305
3. Ammen, C.W., (1979). The Complete Handbook of Sand Casting (1st Edition). United States of America. Tag Books Publications
4. Baligidad, S.M., Krishnamurthy, N., Narenda, N., & Srinivasan, N., (2014). Sand casting: conventional and rapid prototyping manufacturing approaches. International Journal of Research in Engineering and Technology, Vol.3 (11): 234-238
5. Engineering Export Info Bulletin (2015): Country profile on Nigeria. Engineering export promotion council. Vol.8, issue No. 1
6. Jinghan, M.L., (2004). Money, banking, international trade and public finance, 7th edition. Vrinda publications. Pp.279-282
7. Ministry of Budget and Planning, (2017): Appropriation Bill, Federal Government budget proposal, 2017.Budget Office of the Federation. Retrieved from https://www.google.com.ng/search?q=Appropriation+Bill%2C+Federal+Government+budget+proposal%2C+2017&rlz=1C1CHBD_enNG809NG809&oq=Appropriation+Bill%2C+Federal+Government+budget+proposal%2C+2017&aqs=chrome..69i57.967j0j8&sourceid=chrome&ie=UTF-8
8. Nwosu, J.I & Nwankwoala, and H.O., (2012): Influence of some economic parameters on cut- off grade and ore reserve determination at Itakpe iron ore deposit, North Central Nigeria. International Research Journal of Geology and Mining, Vol. 2(4); 82-87
9. Nasir, I., (2013). Constraint of a multibillion naira project. Retrieved from http://www.dailytrust .com.ng/ news/business/niomco-constraints-of-a-multibillion-naira project/12268.html
10. Olamide, (2016). About 70%of Nigeria’s iron ore deposit unproven-Osinbajo. Retrieved from https://www .premiumtimesng. com/news/more-news/202490-70-nigerias-iron-ore-deposit- unproven-osinbajo.html
11. Osemenam, U., (2017): Collapse of the nation’s iron ore deposit: A case of Itakpe iron ore deposit, Kogi State. Journal of Humanities and Social Sciences, Vol, 22 (5); 29-33
12. Saadat, (2016). The Impact of mineral resources on economic growth of Pakistan. Journal of Resource Development and Management. v. 20, p.105-111
13. Sanjiv, T, Ritesh, K.S and Sharad, C.S. (2016) Optimization of green sand castings process parameters for enhancing quality of mild steel castings. International Journal of Productivity and Quality. Vol.17; 127- 141
14. Shakti, N., (2015). Performance analysis of heavy earthmoving machineries (HEMM) in open cast coal mines. National Institute of Technology, Rourkela. Retrieved from https://www.google.com.ng/search?q=Shakti%2C+N.%2C+(2015).+Performance+analysis+of+heavy+earthmoving+machineries+(HEMM)+in+open+cast+coal+mines.+National+Institute+of+Technology%2C+Rourkela&rlz=1C1CHBD_enNG809NG809&oq=Shakti%2C+N.%2C+(2015).+Performance+analysis+of+heavy+earthmoving+machineries+(HEMM)+in+open+cast+coal+mines.+National+Institute+of+Technology%2C+Rourkela&aqs=chrome..69i57.945j0j8&sourceid=chrome&ie=UTF-8
15. Taguchi, G. (1993). Taguchi on robust technology development: Bringing quality upstream. ASME, New York.