AKO General Discussion, page-166

Great context!

Looking back at my previous post

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WILD Assumptions
Let's say we use 90t Triple Road Trailers (as per BSE's latest DFS - https://hotcopper.com.au/threads/ann-dfs2-enhances-scale-and-economics-of-the-toliara-project.6308828/ )

2,000,000 tonnes of ore / 90t per truck = 22,222 trips per year (yikes - sounds like a lot)

22,222 trips / 360 days = 61 trips x 90t Triple Road Trailers per day.

Let's assume that each truck isn't fulled to the brim or some days a lost due to weather, so let's say we up it to 80 trips x 90t Triple Road Trailers - OR 40 trucks doing 2 trips per day which now doesn't sound so crazy.

Based on the screen shot above, each round trip looks to be about 900kms and will take about 12 hours to complete.

If we assume each truck driver could do one return trip shift per 12 hour shift.

This would likely be outsourced to a transport partner, and to costs for trucks and fuel would be standard, but the drivers pay and the profit margins by the operator would likely be less than in Australia.

90t x $10/t = $900 per truck per trip
or $1800 per day per truck
$1800 per truck X 330 trips per year = $600k
$600k per truck X 40 trucks = $24m per year in haulage costs.

This is a lot of money in a poor country like Madagascar.

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People have suggested we would not be able to use this size of truck. Fair enough.

Looking at the quality of these roads, I would imagine they could handle a 90t truck trundling down the road in the built up areas at 30km/h, but for arguments sake, let's say we use smaller 60t trucks.

What does this do to the costs? Obviously the freight partner will need to charge more per tonne, but before we dive into those numbers, let's have a look at the cost of a truck.

If you want to look at new trucks only (ie, a limited pool) - https://www.trucksales.com.au/items/dealer-new-silotype/trucks-category/tipper-subcategory/over-200000/

If you want to look at new and used trucks - https://www.trucksales.com.au/items/trucks-category/tipper-subcategory/over-250000/

60t payload examples

USED 2018 model for $450k - https://www.trucksales.com.au/items/details/2018-kenworth-t900-series-t909/SSE-AD-7505435/

This 2019 model for $220k has 736,000 km - https://www.trucksales.com.au/items/details/2019-volvo-fh16/SSE-AD-13792767/

Would mean each truck would get at least 3 years of service.

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3 Year Revised Figures in AUD

Truck and Trailer
Let's say each truck and trailer in NEW condition is about $600k (very generous budget)

And each truck is doing 900kms per day x 330 days = ~300,000kms per year

Assuming a truck could do at least 900,000kms before being "retired" (some do A LOT more)

Surely the trailer could be used WELL beyond 3 years.

$600k capital outlay paid over 3 years.

At the end of the term, 2 options:
- Truck then sold at the end of the term ($200k? as per example above?).
- Keep clocking up KMS until it dies or maintenance is no longer sustainable.

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Fuel
1L of diesel is $1.15USD or $1.80AUD - https://www.globalpetrolprices.com/Madagascar/diesel_prices/

We know it is downhill from the mine to the port, so fuel consumption whilst fully loaded should be quite good, and we know we will be empty driving up hill back to the mine, so fuel consumption should again be pretty good.

I have been unable to find official fuel consumption numbers for 60t trucks, so I am clutching at straws here, but given the above caveat let's say each truck uses 30L of diesel per 100kms.

Or 30L x $1.80 per 100kms = $54/100kms x 9 (900kms) = $486 per round trip x 2 trips per day = $972 in fuel per day per truck.

$972/d x 330 days operation = $320,760 per year

$320,760/y x 3 years = $962,280AUD in fuel per truck over 3 years

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Drivers
2 x drivers @ $24k per year = $48k per year x 3 years = $144k in drivers costs over 3 years

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Insurance and Maintenance
Let's say 15% of purchase price per year on maintenance = $90k x 3 years = $270k in insurance and maintenance over 3 years

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3 year Totals (with contingency)
$500k truck (assumes selling the truck and trailer for $100k)
$1m fuel
$150k drivers
$300k Insurance and maintenance

$2m per truck (VERY VERY GENEROUS) for 3 years

or

$660k per truck per year.

Let's work backwards from there:

2,000,000 tonnes of ore / 60t per truck = 33,333 trips per year

33,333 trips / 330 days (was 360 previously, but let's say about 6 days per week instead of 7) = 101 trips x 60t Triple Road Trailers per day.

So this is about 50 trucks per day doing 2 trips.

330 days x 2 trips per day = 660 trips per truck per year.

$660k per truck per year / 660 trips = $1,000 per trip.

$1000 per trip / 60t = $17/t

50 trucks @ $660k per year = $33m per year in haulage.

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Anyone willing to validate my math on this one?