operation oaxaca: it’s too much.

why AMD water treatment loses economically. (035)

Carlos Manuel Jarquín Sánchez
3 min readApr 3, 2024

this is carlos.

let’s prove me wrong with the acid mine drainage (AMD) water treatment.

then in the next one, i’ll show the cement numbers.


AMD leaks.

it turns out…

that people were already considering making one of these AMD filtration plants.

and utilize their contents to make a profit.

however, how much would we need before we can start filtering metals?

and this is what i found.

some technical terms to know:

PE → purchased equipment.

all values are in USD.

Estimate fixed capital investment (FCI)

total capital investments (TCI)

items were quoted freight on board (f.o.b.), meaning the purchaser pays the freight.

while freight can depend on a number of factors such as weight and distance from the plant and method of transport…

a 10% multiplier of PE cost was used to estimate delivery costs.

the total, delivered PE cost for the base case was estimated at $3.3 million.

the total FCI for the indirect cost base case was estimated at $10.1 million.

TCI is composed of the FCI plus working capital; the $2.5 million estimate is added in table below.

working capital consists of the total amount of money invested in the following areas:

  1. raw materials and supplies carried in stock.
  2. finished products in stock and/or semifinished product in the process of being generated.
  3. accounts receivable.
  4. cash kept on hand for monthly payments of operating expenses such as salaries, wages, and raw material purchases.
  5. accounts payable.
  6. taxes payable.

(when i come back, finish with the profit, and what chemicals it’s attempting to ffilter, after that, wer’e done. then look for data on the cement, and see which route to go, because economics is king.)

revenue + profit.

when filtering AMD… the most profitable product is potassium sulfate, or K2SO4.

revenue streams for potassium sulfate.

forms and prices:

liquid form: priced at $250/ton, with a noted small demand.

bulk (filter cake) form: priced at $450-$500/ton, contains a maximum of 15% moisture, available in bulk or bags.

dry granular form: priced at $550/ton, granulated to achieve maximum market value.

potential profit analysis.

let’s assume a scenario where the plant focuses on producing dry granular potassium sulfate due to its maximum market value:

price used in analysis: $0.275/lb for dry granular potassium sulfate.

annual production volume: the document does not specify the plant’s production capacity for potassium sulfate.

for this analysis… let’s presume a hypothetical annual production of 10,000 tons of dry granular potassium sulfate.

revenue: selling 10,000 tons at $550/ton would generate a revenue of $5,500,000 annually.

costs considerations: the total manufacturing and operational costs would need to be deducted from this revenue to calculate profit.

but the document does not provide detailed production cost specific to potassium sulfate.

profit margin: assuming a simplified scenario where the production costs (including operational expenses, labor, maintenance, etc.) form 60% of the revenue (a common industry estimate for manufacturing ventures)…

we will get:

total costs = 60% of $5,500,000 = $3,300,000

annual profit = revenue — costs = $5,500,000 — $3,300,000 = $2,200,000

it’s good… but we still have the leftover costs.

there’s FCI & TCI remaining.

so it won’t win.

we’ll try cement now.


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