c Wt-a- F*rr 10 In-*' Digitized by the Internet Archive in 2012 with funding from LYRASIS Members and Sloan Foundation http://archive.org/details/feasibilityofestOOspin Feasibility of Establishing a Fullers Earth Processing Plant in Marshall County, Kentucky by Spindletop Research Center Lexington, Kentucky prepared for U.S. DEPARTMENT OF COMMERCE John T. Connor, Secretary Area Redevelopment Administration William L. Batt, Jr., Administrator February 1965 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D. C. 20402 - Price 60 cents. FOREWORD The basic responsibility of the Area Redevelopment Admini- stration of the U.S. Department of Commerce is to help revitalize the economies of American communities suffering from chronic unemployment and underemployment. One way of assisting a community is to determine the kinds and the magnitudes of its economic problems and the possible solutions. ARA helps do this through its Technical Assistance program. This publication is a product of a technical assistance contract with the Spindletop Research Center, Lexington, Kentucky. The study surveys the mineral resources of Marshall County, Kentucky, and suggests that its deposits of fuller's earth are sufficient to justify a plant to process the material. The conclusions and recommendations have general, broader applicability to any area which has deposits of this mineral. William L. Batt, Jr., Administrator Area Redevelopment Administration TABLE OF CONTENTS Section Page 1 INTRODUCTION Scope Staff and Acknowledgments 2 SUMMARY AND CONCLUSIONS 3 GEOLOGICAL BACKGROUND 4 FIELD OBSERVATIONS Powell Lease Brummitte Lease 5 CLAY SAMPLING AND TESTING Drilling Methods Testing Procedures Results 6 TECHNICAL PRODUCT EVALUATION Bleaching Uses Absorbent Uses Other Uses 7 MARKET ANALYSIS General Outlook for Fuller's Earth Products Outlook for Clay Products from Marshall County 8 CAPITAL REQUIREMENT AND PRODUCTION COSTS Equipment Selection Scale Factors Production Costs 9 PROFITABILITY ANALYSIS 10 RECOMMENDATIONS Production Recommendations Product Recommendations Marketing Recommendations Promotion Recommendations 11 SELECTED REFERENCES APPENDIX A Drilling Logs B Clay Sampling and Testing Procedures 1- 1 1- 2 1- 4 2- 1 3- 1 4- 1 4- 1 4- 2 5- 1 5- 1 5- 1 5- 3 6- 1 6- 1 6- 1 6- 2 7- 1 7- 2 7-: L4 8- 1 8- 1 8- 5 8- 6 9- 1 10- 1 10- 1 10- 1 10- 2 10- 3 11- 1 111 ILLUSTRATIONS Figure Title Page 1-1 Study Area Location Reference Map 1-1 1-2 Location Maps of Powell and Brummitte Leases 1-3 3-1 Isopach Map of Porter's Creek Clay - Powell Lease 3-2 3-2 Isopach Map of Porter's Creek Clay - Brummitte Lease 3-3 3-3 Clay Sample Locations and Porter's Creek Outcrop Area 3-4 5-1 Typical X-ray Diffraction Patterns for Clay-Fraction of Porter's Creek Samples 5-4 7-1 Fuller's Earth Sold or Used by Producers for Specified Uses, 1948-61 7-2 7-2 Fuller ' sEarth Sold or Used by Producers, 1948-61 7-3 7-3 Average Value Per Short Ton for Fuller's Earth, 1948-61 7-4 7-4 Distribution Techniques Used by Manu- facturers of Fuller's Earth Products 7-5 7-5 Fuller's Earth Used for Absorbent Products, 1948-61 7-9 8-1 Production Flow Chart 8-2 8-2 Schematic Diagram - Fuller's Earth Plant 8-4 IV LIST OF TABLES Number Page 3-1 Chemical Composition of Porter's Creek Clay in 3- 5 Pulaski County, Illinois 5-1 Drilling Results - Powell and Brummitte Leases 5- 2 5-2 Decolorization Power & Oil Retention 5- 5 5-3 Effect of Heat Treatment on Decolorizing Power, Oil Retention, and Water Breakdown 5- 6 5-4 Effect of Heat Treatment and Acid Treatment on Decolorozing Power and Oil Retention 5- 7 5-5 Screen Analysis, Bulk Density and Percent Breakdown in Water 5- 8 7-1 Consumer Prices for Floor Absorbents Delivered in 50-lb Bags 7-2 Consumer Prices for Animal Litter 7-3 Summary of Quantitative Market Analysis for Floor Absorbents 8-1 Estimated Capital Investment 8-2 First Year Labor Requirements 8-3 Fifth Year Labor Requirements 8-4 Labor Availability and Wage Rates 8-5 Natural Gas Cost 8-6 Electricity Costs 8-7 Production Costs 8-8 Sales Costs 8-9 Comparison of Alternative Plants 9-1 Revenue Forecast 9-2 Comparison of Profitability v 7- 9 7- 12 7 = ■20 8- ■ 1 8- • 6 8- ■ 7 8- ■ 8 8- - 9 8- •10 8- -11 8- -12 8- -13 9- - 1 9- - 2 Section 1 INTRODUCTION Marshall County is located in the Jackson Purchase Area of Western Kentucky, approximately 10 miles south of Paducah. (See Figure 1-1.) Here, as well as in extreme southern Illinois, eastern Missouri, western Tennessee, northern Mississippi and northeastern Arkansas, there are extensive deposits of several commercially important clays. One of the most widespread of these clay deposits is composed almost entirely of the mineral montmorillonite . Called the Porter's Creek Clay in Kentucky, it is well known for its natural bleaching and absorbing properties. Fuller's earth is the common name for this clay. Figure 1-1 STUDY AREA LOCATION REFERENCE MAP 1-1 D. J. Enterprise of Benton, Kentucky, leased mineral rights on two farms underlain by Porter's Creek Clay in Marshall County, Kentucky (Figure 1-2); an application for a technical assistance grant was approved by the Area Redevelopment Administration to determine the feasibility of establishing a clay processing plant for fuller's earth products utilizing the clay from these properties. Spindletop Research, Inc., was awarded a contract (No. Cc-6030) by the Area Redevelopment Administration to under- take the feasibility study. Technical assistance is offered as a means toward stimulating employment in Marshall County which qualifies as a redevelopment area under Section 5 (a) of the Area Redevelopment Act of 1961. SCOPE To establish the technical and economic feasibility for a fuller's earth products plant in Marshall County, it was neces- sary to determine : - the quality, quantity, uniformity and accessibility of the fuller's earth deposits - the kinds of products that can be made from the raw materials - the demand and price for these products - projected net sales - the optimum-sized plant to produce the most promising products - capital requirement for mine and plant - plant operating costs - sales costs - profitability based on the above factors. A drilling program was required to determine the quantity, quality, uniformity and accessibility of the fuller's earth deposits. Split-spoon and diamond core samples provided materials for the laboratory testing phase of the project. 1-2 CM U en •H En ti. o CO Q. < h- < o CO UJ CO < - 1 o UJj2 I- z I— UJ p D Z or => cog Q _J i w -i < UJ 5 O Q_ t* \/ f**~, B C 1 TM) / z » — i — *—*zi o ^ — t--^ /^ I- X / UJ / /^ UJ J Op-| Otl \ Ul\\ v-\\ G \ m / / ^v 1- i)i / V / / 4/ A "S \ O \ UJ rS\ >■ / r^n . 3 / / 17 °-^%> " * J/ "J, > _ ■ "Csy 1-3 Representative portions of all samples from alternate drill holes were analyzed by X-ray diffraction techniques to determine variations in mineralogy. Selected representative samples were tested for absorption and other physical properties which determine potential uses. The list of products that can be made from the fuller's earth deposits in Marshall County is quite lengthy. However, the demand for most of these products is very limited. A detailed market survey was required to determine which products have sufficient demand and price to justify building a plant. Because the amount of published data on fuller's earth markets suitable for use in feasibility study is quite limited, primary data had to be collected by the project team. Statistics from the U. S. Bureau of Mines and the Census Bureau constituted the only major secondary sources of information on markets. Cross- sectional studies for all types of distributors and users were made to determine the characteristics of each of the markets for fuller's earth products. The production methods and financial condition of other fuller's earth producers were studied in order to better understand operating problems of competing companies. Selection of the products that could be made from a single plant was based upon promotional and sales considerations, nature of the raw material, plant efficiency, and packaging problems. To determine the optimum-sized plant for manufacturing the products selected, a flow sheet utilizing the most satisfactory, proven features developed by other producers and equipment manufacturers was established. Kiln firing schedules, labor requirements, inventory costs, and market size and potential penetration were the primary considerations for establishing the optimum size for a plant. Profitability analysis is based on a consideration of the three essential elements - capital requirement, operating and sales costs, and net sales - which determine profitability. STAFF AND ACKNOWLEDGMENTS The project was performed by Spindletop's Techno-Economics Research Division, under the direction of Theodore R. Broida with the assistance of the Physical Sciences Division under the direction of Wingate A. Lambertson. 1-4 The project team consisted of: William J. Evans, economist (project manager); Gary R. Gates, economic geologist; Paul Howell, geologist; William H. McGuire, geologist; and James H. Healy, ceramist. The help and cooperation of the following persons and organiza- tions are acknowledged: Don and Joe Sargent, D. J. Enterprise, Benton, Kentucky, who contributed many helpful suggestions; Standard Core Drilling Company, Somerset, Kentucky, which performed the drilling under the direction of Mr. Howell; Mr. John Stoke ly of John A. Stoke ly and Associates, Lexington, Kentucky, whose valuable contributions were incorporated into the drilling and sampling work; W. Doss Lumpkin, who was of valuable assistance in dealing with clay marketing problems in the oil bleaching and clarification field. Cooperation in the fuller's earth trade, both by manufacturers and distributors, was very gratifying. Finally, the assistance of Allis-Chalmers Manufacturing Company, Jeffrey Manufacturing Company, St. Regis Paper Company, Western Kentucky Gas Company, West Kentucky Rural Electric Cooperative Corporation, Louisville and Nashville Railroad Company, and the Kentucky Department of Economic Security, all of whom supplied cost information, is gratefully acknowledged . 1-5 Section 2 SUMMARY AND CONCLUSIONS The purpose of this study is to determine the technical and economic feasibility for establishing a manufacturing plant to produce fuller's earth products in Marshall County, Kentucky. An extensive clay formation consisting dominantly of montmorillonite crops out in a narrow band from extreme southern Illinois through Kentucky and Tennessee, into Mississippi. At several places, the formation is exploited to manufacture fuller's earth products which are used mainly as oil, grease, and water absorbents on floors. Formerly, the clay deposits served as a major source of natural decolorization and bleaching clays in oil processing industries. However, this use has been declining in recent years. Fuller's earth deposits of a different type (consisting mainly of the mineral attapulgite rather than montmorillonite) are found in southern Georgia and northern Florida. Fuller's earth products of the attapulgite type command a higher price than absorbents of the montmorillonite type because of more intensive promotion, lower bulk density, higher oil absorption capacity, and lighter color. However, with a lower price, montmorillonite-type fuller's earth can compete for absorbent markets if proper care is exercised in processing and promotion work to minimize these disadvantages. Soil conditioners and animal litter are manufactured from montmorillonite-type fuller's earth deposits. Soil conditioners consisting of granular montmorillonitic fuller's earth are highly resistant to breakdown in water and are used mainly for golf greens at the present time. Fuller's earth soil conditioners are finding increased use in other soil applications; e.g., football turfs and industrial lawns. The market for cat litter is also growing, and fuller's earth is the most common raw material used to manufacture this product. Other products may someday be profitably developed because of certain properties of montmorillonitic fuller's earth; e.g., filters for treating radioactive water and industrial wastes, and industrial fillers. In Kentucky, the formation containing fuller's earth is called the Porter's Creek Clay. This report is concerned with two farm tracts located in Marshall County where the Porter's Creek Clay crops out 2-1 near gas and electrical lines, transportation facilities, labor supplies, and major U. S. markets. The physical and chemical properties of fuller's earth deposits from two sites in Marshall County indicate that these clays are suitable for manufacturing bleaching clay, floor absorbent, soil conditioner, and animal litter. Other products are technically possible; e.g., radioactive and industrial-waste filters, and fillers. Of the two tracts considered, the Brummitte farm provides the most favorable plant site because of better quality of clays and proximity to rail facilities. It is underlain by 1,680,000 tons of measured reserves of fuller's earth which are adequate to sustain plant operation for at least thirty years. The major risk results from the uncertainty of creating an effective sales organization which can make the most of the marketing opportunities at hand. Proper attention to sales problems, however, should provide sales of approximately .10, 000 tons in the first year in- creasing, to 20,000 tons in the fifth year of operation. The feasibility study indicates that a 60-ton per day plant to produce floor absorbents and soil conditioner is justified. A mechanized plant capable of manufacturing highest quality products at low cost is necessary for profitable operation. A labor-intensive plant, it is concluded, could not return adequate profit in spite of a lower capital requirement. 2-2 Section 3 GEOLOGICAL BACKGROUND The Jackson Purchase area of Western Kentucky is a portion of the physiographic privince known as the Upper Mississippi Embayment. Relatively horizontal sedimentary formations of Quaternary, Tertiary, and Cretaceous age form the exposed geologic section in this area. A recent publication by Pryor and Glass describes the mineralogy of these rocks. A formation known as the Porter's Creek Clay, predominantly a montmorillonite clay of early Tertiary (Paleocene) age, is present on the two leases under investigation (see Figures 3-1 and 3-2). A comprehensive petrographic report on the Porter's Creek Clay at Olmsted, Illinois (40 miles to the northwest of the Marshall County deposits) was prepared by Grim in 1933; chemical analysis of the Olmsted deposits are shown in Table 3-1. The Porter's Creek Clay has recently been mapped in the geologic mapping program of the Kentucky and U. S. Geological Surveys. Maps showing water supply characteristics are also available for the area. Figure 3-3, page 3-4, contains a map showing outcrop of the Porter's Creek and distribution of other clays in the Jackson Purchase area. Fennemon, N.M. , Physiography of the Eastern United States , McGraw-Hill, 1938. 2 Pryor, W. A., and Glass, H.D., "Cretaceous-Tertiary Clay Mineralogy of the Upper Mississippi Embayment, " Journal of Sedimentary Petrology , Vol. 21, No. 1, March 1961. 3 . Grim, R.E., "Petrography of the Fullers Earth Deposits at Olmsted, Illinois (with a brief study of some non-Illinois earths)," Economic Geology , Vol. 28, No. 4, 1933, pp. 344-363 4 0live, W.W. , "Geology of the Elva Quadrangle, Kentucky," Map GQ-230, U. S. Geological Survey, Washington, 1963. -^MacCary, L.M. , and Lambert, T.W. , "Reconnaissance of Ground Water Resources of the Jackson Purchase Region, Kentucky, " Hydrologic Investigation HA-13, U. S. Geological Survey, Washington, 1962. 3-1 Figure 3-1 ISOPACH MAP OF PORTERS CREEK CLAY POWELL LEASE MARSHALL COUNTY, KY • TEST HOLE " SURFACE CONTOURS 20 ISOPACH (THICKNESS) OF PORTERS CREEK CLAY ABOVE 400FT ELEVATION . OUTLINE OF AREA RECOMMENDED FOR DEVELOPMENT OVERBURDEN OF 20 FT OR MORE APPROXIMATE LEASE BOUNDARY 500 480 460 440 420 400 - A ^3 OVER BURDEN EKj] PORTERS CREEK CLAY CROSS SECTION A A' P44 P42 3-2 Figure 3-2 ISOPACH MAP OF PORTERS CREEK CLAY BRUMMITTE LEASE MARSHALL COUNTY, KY. 3-3 ^"~V\ I BALLARD \ V\TO \ /V \ \ 104,110 \ \ ( Vf \ 1.2.3.13.73 ,3 \ •,,;> ^>-V, y' 191/ . \ 30,34. I A l49 A# * • '5 „i .26,28 f\j\ ^200^' f / J CARLISLE / / ( "^T\ r ."■• \ HICKMAN r\ ( ^ (16,16,20,22 A 3« FULTON / FIGURE 3-3 CLAY SAMPLE LOCATIONS AND PORTERS CREEK CLAY OUTCROP AREA SAMPLE LOCATION AND NUMBER Source: Easton, H. D. , Report on The Technology of Kentucky Clays. Ky. Geol. Survey, 4th Series, Vol. 1, Pt. 2, p. 713-921; 1913 SAMPLE LOCATION AND NUMBER (Sources listed below) Samples No. 18 thru 41: Walker, Frank H. , Misc. Clay and Shale Analyses for year 1951-52, Ky. Geol. Survey Report of Investigations No. 6, Series IX; 1953 Samples No. 42 thru 90: Floyd, Robt. J., and Kendall, Thomas A., Misc. Clay and Shale Analyses for 1952-54, Ky. Geol. Survey Report of Investigations No. 9, Series IX; 1955 Samples No. 91 thru 154: McGrain, Preston and Kendall, Thomas A., Misc. Clay and Shale Analyses for 1955-56, Ky. Geol. Survey Report of Investigations No. 13, Series IX; 1957 Samples No. 155 thru 205: McGrain, Preston; Kendall, Thomas A., and Teater, Thelma C. , Misc. Clay and Shale Analyses for 1957-59, Ky. Geol. Survey Report of Investigations No. 3, Series X; 1960 OUTCROP OF PORTERS CREEK CLAY Source: L. M. MacCary, U. S. Geological Survey, Ground Water Branch 3-4 >H < CM Eh co Cm P o O O H U A S3 (0 O H Fh H ^ E-i co h <; co J o D CU Pl, X o a U H J <: u H 2 w E u i o CM co 00 00 00 00 00 00 CN ffi VO in in vo in m ^ in <* co LD *£> CM CN + -H 00 r» CN co co rH o CM ^f co rH in CO r-i CO ffi iH rH rH rH rH H rH Cn CN O CN o ■rH co OOm^COCOvOCMCM criiHoor>-cMcocoiH ^D'st'coiHincorHco o ■H CM cy> CN in r» o r- o *£> CN CO rH rH CM o co O ro • • • » p • • • IS rH O o O o o o CN o kO o CO o CO in m CN o CO CO in ro u ^ o o H rH o o o r> cn H in ^ o vD r- o £> in H m O CN o CN O <* in in r- m CO ^ Cm CO "sf ^ ^ co ^t* CN CO CO V0 £> ^ cn CO CO CM o^in^t^incom 00 r» C7l rH "Hi C£> X) CTiCTirH'Hicn r H L n r _( i£>mvo;Otn>£>vOv£> p P p ■rH •H ■rH ft a ft rH H H ■-H •H -,H rH O O O r nD -a c 1 P H H H W w w CO CD ro ro rH r-l H H ■H vO T3 T) T5 1 i i 1 p rH C G C 00 00 00 CO ro 1 ro ro I'D LO in m in O r> 4-> P P H H rH H CO CO 00 1 1 i 1 r-3 5 t- r» r» r- to T3 CN CN CN CN 5 -P P P w H w W co cn e cn E to E CO CO 00 CO £ rH H rH W w u Cl) CO O o O S3 z a a rHCMco^inccrx-oo (D U ro P P ft £ ro CO HrNn^in^Dr-oo 3-5 The Porter's Creek is up to 200 feet thick, but is thinner in areas where the overlying Claiborne (?) Formation (Eocene age) or post-Eocene continental deposits have formed along the deeply- truncated erosional surface formed in post-Paleocene time. The region is characterized by numerous small-scale faults and local blocks of steeply dipping sedimentary beds. Because of complex structure and a considerable amount of variation in the depth to which the overlying sediments cut into the Porter ' s Creek Clay, only close-spaced drilling and careful observation of outcrop features can reveal the distribution, quality, quantity, and accessibility of deposits in the Porter's Creek Clay. 3-6 Section 4 FIELD OBSERVATIONS POWELL LEASE The Porter's Creek Clay (dark gray to black, montmorillonitic, micaceous, quartz-silty , laminated) is the oldest and lowermost formation outcropping on the Powell lease (Figure 3-1). ■*• Minor amounts of silt and fine-grained mica are disseminated throughout the clay, but commonly the silt is restricted to macro-laminae and blebs. Unweathered samples change from black to a medium gray upon drying, are moderately hard, and fracture concoidally. The lithology is relatively homogeneous both vertically and laterally, although there is a regular transition from weathered to unweathered clays as depth increases. Soft weathered zones near the surface are medium gray and generally stained with limonitic material. The color becomes progressively darker with increasing depth, becoming black at a depth of about 20 feet. Some small micaceous quartz sand dikes are present, but they appear to be less than a foot thick and of un- determinable length. Some limonitic mineralization occurs in and near these dikes from the circulation of chalybeate waters, but oxidation does not occur below six inches due to the impermeable nature of the clay. The Porter's Creek Clay rests conformably on the unexposed Clayton (?) Formation (Upper Cretaceous and Paleocene (?) age) and is overlain un- conformably by the Claiborne (?) Formation (Eocene age) and post- Eocene continental deposits. The surface of the Porter's Creek Clay is an undulating erosional surface with up to 40 feet of relief. The remnants of a post-Porter's Creek channel, filled with post- Eocene continental sand and gravel deposits, form thick overburden trending east-west on the south half of the property. The least amount of overburden is on the northern half of the lease. The highest postulated occurrence of clay is 480 feet elevation; the lowest elevation penetrated, 360 feet (hole B-47), was all Porter's Creek Clay. Thus, the formation is at least 120 feet thick here. Projecting the base from the Brummitte lease on a regional dip of 30 feet per mile, it would probably be encountered at 390-400 feet. All drilling logs are reproduced in Appendix A 4-1 The Powell lease is underlain by 1,500,000 tons of measured reserves on 25 acres with less than 20 feet of overburden and by a considerable amount of indicated reserves under thicker layers of overburden. BRUMMITTE LEASE The Porter's Creek Clay is the oldest and lowermost outcropping formation on the Brummitte lease (Figure 3-1). The lithology is similar to that described on the Powell lease but with an increase of silt and fine-grained mica in the lower 30 feet. The clay mineral composition of the less-than-two micron fraction of samples from the Brummitte lease is characterized by less illite and kaolinite and more montmorillonite than samples from the Powell lease. Gravel encountered in clay similar to Porter's Creek Clay in the lower portion of hole B-16 (see Appendix A) is probably younger, reworked material. On Block 1 (the area north of and adjacent to the ridge road) , the contact with the underlying Clayton (?) Formation occurs at approximately 360 feet elevation along the north edge of the Brummitte lease. This contact does not represent the general elevation of the contact on the rest of the lease because of the dip of clays and faulting through this horizon. The highest elevation of Porter's Creek Clay is 460 feet; thus, total thickness is less than 100 feet. On Block 1, slight to steep (30°) dips were recorded in cores taken on the north side of the gravel road in holes B-15 and B-19. Slight dips were observed in places in holes B-14 and B-31 high on the hill north of the road. Numerous slickensides were present in all core and split-spoon samples. An area underlain by thick overburden trending north- westward on the north side of the road can be interpreted either as a channel fill or as a feature caused by faulting. Overburden 45 feet or thicker is present on the down-dropped side north of this fault and may be flanked by a parallel fault 175 feet north of the one mapped. Due to this fault, no commercial deposit can be expected on the side of the hill below the fault above local drainage. Displacement can not be determined from drill data but is estimated to be 40 or 50 feet. Another abrupt feature centers around hole B-30, which penetrated 37 feet of gravel, sand, and clay without reaching the Porter's Creek Clay. Here the overburden All drilling logs are reproduced in Appendix A 4-2 is limited in extent as determined by surface mapping; it may- represent a downfaulted block or channel fill of post-Eocene continental deposits. The Brummitte lease contains an estimated 1,680,000 tons of measured reserves with less than 20 feet overburden on one tract (Block 1) totaling 21 acres. Reserves include clay above 365 feet elevation only. In addition to these measured reserves, indicated reserves on the west side of the ridge (1,500,000 tons) have been estimated on the basis of published information. Block 2 (166,000 tons indicated reserves) , an oval shaped outcrop 100-150 feet uphill from Block 1, apparently is separated from Block 1 by relatively thick overburden. 1 Olive, W.W. , op. cit., p. 3-1 4-3 Section 5 CLAY SAMPLING AND TESTING DRILLING METHODS Several techniques (augering, coring, and split-spoon sampling) were employed in drilling for clay samples. Hole locations are marked on Figures 3-1 and 3-2. Table 5-1 shows the techniques used and total depth of all holes on both leases (Raymond Powell farm and J. D. Brummitte farm) . Auger and split-spoon samples were taken in soft, weathered clay where coring was not feasible. Harder, unweathered clays were cored, with an average recovery of 90%. Sand and clay overburden was drilled with an auger or with a fish-tail bit. Of the 29 holes, portions of 14 were cored, and portions of 12 holes were sampled with a split-spoon. Augering, for additional control, was used to drill 14 holes and to start all but one hole. After drilling six exploratory holes on the Brummitte lease and finding excessive overburden (over 20 feet) , a change was made in the drilling plan; i.e., 14 test holes were drilled in a concentrated area rather than the 25 to 30 holes originally planned. Detailed sample descriptions are included in Appendix A. TESTING PROCEDURES The Marshall County clay from the Brummitte and Powel leases was evaluated by first determining which areas on the two leases could best be mined. Representative samples for testing were taken from cores (each sample representing about ten feet) selected on the basis of quantity and accessibility of reserves (about one-half of all holes were sampled) . These holes are described in Appendix A. Each sample was analyzed using the X-ray diffraction technique because the structural features of the clay minerals determine most of the critical properties of the fuller's earth products under evaluation. In addition to X-ray analyses, the following tests were performed on selected clay samples: decolorization, oil retention, resistance to breakdown by water, apparent density, slaking test, and response to heat and acid treatment. The tests and general laboratory techniques are described in Appendix B. 5-1 CO En ■H g I CO m w tf O 4-» ft 3 O rC +J ft (D — Q 4J 0) m CN o CO O ^) in o^oirtinoo^t rH (U r^ ro *f CM CN CN rH CNCNrOCOCNCNOOr- f0 Pl, -p •— Eh * h En Eh h Eh ►h s CD 73 r^ >x> o O >£> & u ^ SH fO CN rH rO CO rH rH (D CD CM H CQ >i -P r* -H H CO 3 C r- r-\ ■h r^ "vf v£> & r^ en cn r^ co cr> in rH vc 00 CN ro ro r\j tj< ^ ^f ro Q o CO rH m m o • • • • rH rH o o o o O rH U3 rH in co 1 i • ♦ o o o rH .— ! O O rH rH KD no 0^ O *X> ID LD rH rH KD CO rC ! • • • • t^ r""* • •rH CO O vr> ^D i £ rH C CD in in vx> in l • • • • • # o in CN m <& cn o rH r^ LD r^ co m r> o r- o ro in o cn rH • t • • • ] LD PQ fJQ CQ PQ C • •H ft -p • u 3 >1 rQ r* u •H U ■P 5H 3 ft C -P •P ft CD CO c ■H U -H CD rH CD TJ « rH •H <4-l CD » rC •H N c Pm ra -H CO -p - 1 CT> CO 2 CD c rH 4J rH •H ro O X U ^ CD -H -P -P J g CD S-l T3 fO » rC C ft • u 3 o u 73 CT> >1 ro >i rH CO +J a, CO ro -h Cm rH ^ CO 3 ro G CO u CD - CD s* 73 rH c 'vf ro •H 1 r* u s - rH •H ^ 3 g >i ro pQ t (!• rQ rC - m u U 73 CD 'vt' CO c Cn 1 C -p ro PQ u • CO r* •H 2 ft ft u CD -P 73 rH g ro rH ro ft ft H U u rC g CD Oa Eh ~ ro sh H CO CO g ro g CD CD a U 10 •p CD •H u ■H • ro rH g m u — • . u CD ft . — . Pm -P u rC T3 u fa CO -p u CD CD O 3 CD c +J o O rH Cm CD •H c o CN rH +J ro w r- rH -H >i -P •P — ■ — ' rH rQ c U 73 u u +j CD G 5H > fO -P CD o CTi CO ro >. c g r^ 'Nf C £ £ CD ro ro ^0 rQ P •H «. *. ^ +J +J -p CD CD CD ro ro ro g g CO g 73 ro ro rQ ro T3 73 ro 3 3 <: 13 CD CD U CD CD u CD •H •H 73 73 T3 U U CD ra ro ro rH rH N r4 U rH u ro ro -h Eh ^ Em Eh u CJ CO H CN ro <* in CO 5-8 However, it has been reported 1 that the Fe203 is responsible for the oxidation of the acids in oils during decolorization. Acid solution of the Fe20o can be accomplished commercially. Heating the clays to 700°F and 1200°F increases the oil retention. For example, a sample from the interval between 70 and 7 3.3 feet in hole P-13 gave 66 percent oil retention in the raw state, 71 percent after heating to 700°F, and 77 percent after heating to 1200°F. The effect of heat treatment on the percent of oil retention of other samples is shown in Table 5-3. In some samples, oil retention is nearly the same for heat treatment at 700°F and 1200°F, Prolonged heating at 1200°F might result in higher values of oil retention for these samples. Miller, J. G. , Haden, W.L. Jr., and Oullon, T.D. , The Oxidizing Power of the Surface of Attapulgas Clay, 19.63, oral presentation, 12th National Clay Conference Meeting. 5-9 Section 6 TECHNICAL PRODUCT EVALUATION BLEACHING USES Test results indicate that the bleaching or decolorizing properties of the fuller's earth deposits on the two leases in Marshall County- are suitable for bleaching vegetable oils. Because vegetable, mineral, and animal oils often yield similar results, the clay will, in general, bleach all three types of oil. For the samples tested, decolorization generally is as high or higher than the standards specified by the American Oil Chemists Society. Even though decolorization power compares favorably with some commercial acid activated bentonite, the efficiency of the latter may be up to five times greater because of lower oil retention. -*• Because of the high oil retention of fuller's earth and the trend in the oil industry towards the use of activated bentonite, the use of Porter's Creek Clay for bleaching would be limited. Low oil retention is important to minimize oil lost during processing. Because the specifications for granular agents used in percolation bleaching and minus-200 mesh agents used in contact bleaching are very similar, the Porter's Creek Clay would serve either application equally well. ABSORBENT USES The absorbent properties of processed clay are different when made in a modern large scale plant than when processed and tested in the laboratory. For example, reliable bulk density determinations cannot be made on the basis of laboratory tests because results vary with grain-size distribution produced by commercial-scale processing equipment. The following product discussions are based on an interpretation of laboratory test results and composition of the clays; large scale production factors have been considered on a theoretical basis. ■'-Rich, A.D., "Bleaching Clay," Industrial Minerals and Rocks , American Institute of Mining, Metallurgical and Petroleum Engineers, New York, 1960, pp. 93-101. 6-1 Floor Absorbents Because high oil absorbtion or oil retention is desirable in floor absorbents, the Porter's Creek Clay has served as a raw material for this use for many years. Resistance to water breakdown compares favorably with products now sold for floor absorbent use. Bulk density for laboratory samples ranges from 36.7 pounds per cubic feet for properly graded material to 49.4 pounds per cubic foot for material with a high percentage of fines. According to Federal Specification P-S-865a, the apparent density (or bulk density) must not exceed 35 pounds per cubic foot. However, some floor absorbents presently sold are higher than 35 pounds per cubic foot. It should be possible, by adjusting gradation of particle size, to approach a bulk density of 35 pounds per cubic foot although the fineness requirements of P-S-865a will not be met. Animal Litter The requirements for an animal litter (used almost entirely for cats) are easily met by the Marshall County clay. Absorption of gaseous odors as well as liquids is important in this application. There are no known published specifications for this product. Commercial litter products vary in method of processing, particle- size distribution, and color, but all receive satisfactory acceptance OTHER USES Soil Conditioner Porter's Creek Clay from other areas is made into a product suitable for soil conditioning. Soil conditioners are still in the develop- ment stage although their application on golf course greens is already established. High absorbing capacity and high resistance to breakdown in water are required. Tests show that a satisfactory product can be made from clay on either the Powell of Brummitte farm. It appears that soil conditioner is one of the few products that montmorillonite-type fuller's earth offers superior quality over attapulgite-type fuller's earth. Radioactive Filtering Fuller's earth filters radioactive contamination such as fallout (radioactive isotopes of cesium, strontium, etc.) from water and other liquids satisfactorily in laboratory tests. However, most clays and soils and many other materials perform with comparable filtering abilities. No specifications have been developed as yet for radioactive-filter materials. 6-2 Fuller's earth offers one advantage over most other materials — superior resistance to breakdown in water. If water supplies ever reach dangerous levels of radioactivity because of fallout, filters made of fuller's earth may prove satisfactory as a material for use in low-cost purification systems. Radioactive Waste Disposal A process described under U.S. Patent 2,717,696 (assigned to the U.S. Atomic Energy Commission) specifies the use of fuller's earth as an absorbent for treating radioactive reactor waste. Because costly organic solvents and diluents are soaked up and are not recoverable, this process is impractical to use. The trend in waste disposal is to reduce the volume as much as possible by evaporation or ion exchange, discharge the harmless effluent by simple disposal means, and fix the high activity portion in some insoluble form which can be safely stored permanently. Therefore, fuller's earth is unsuitable for disposing of reactor waste products. Drilling Mud Many different types of clays and additives are used as drilling muds. Often several will be used in drilling one hole due to specific properties that different clays possess. Attapulgite, for example, has had moderate success as a drilling mud in salt water when other clays tend to flocculate. Scarcely any use has been made of the montmorillonite-type fuller's earth clays in drilling-mud applications. Although Wyoming bentonite (the most widely used drilling mud in the U.S.) is also composed of montmorillonite, it is of a different type with unique properties. The Porter's Creek Clay has never been widely used as a drilling mud and possesses no known unique properties which would make its acceptance likely. Considerable research would be required to develop a commercial drilling mud from the Porter's Creek. Water Purification Clays are generally used in water purification to increase settling rates and filter ability of undesirable constituents by forming floccules that absorb colloidal wastes. Wyoming bentonite and J.W. Nehls, U.S. Atomic Energy Commission, written communication. 6-3 attapulgite have been used for this purpose and perform satisfactorily. In laboratory tests, Porter's Creek Clay forms a weak floccule using hard water. Bentonite forms stronger floccules and disperses better, making it better suited for purifications than the Porter's Creek Clay, Industrial Waste Disposal Various industrial wastes are treated with bentonite and attapulgite in the same way as described above under water purification. Pulverized fuller's earth from Marshall County would probably not compete with bentonite because of the difficulty of dispersing and flocculating the particles. (See Olin and others for a description of this use for bentonite.)! There is a possibility, however, that beds of granular fuller's earth with a carefully-controlled size distribution might find use in treating wastes by a percolating method substituting fuller's earth for part or all of a sand bed. Calcined fuller's earth from Marshall County is resistant to breakdown in water and forms strong granules. It is suggested that the National Council for Stream Improvement, Inc., 271 Madison Avenue, New York, be contacted by an official of the proposed plant to thoroughly investigate the possibility of using calcined granular fuller's earth beds to filter "color" from pulp and paper mill wastes. "Color" which is dominantly lignin and tannin, is the chief waste problem in some mills because effective and economical methods for removal have not kept pace with removal of suspended solids or biochemical oxygen demand (BOD) improvement. The Council "was organized to develop, through research, solutions to the pulp, paper and paperboard industry's waste disposal problems and to make those findings available to (manufacturer) members for application in actual mill operations. 2 Various other industrial wastes might be treated with a granular filter-bed. It is difficult to make generalizations about the many types of industrial wastes; however, fuller's earth might Olin, H.L., Box, R.J., and Whitson, R.E., "Bentonite as a Coagulant for Sewages and Industrial Wastes," Water Works & Sewerage , Dec, 1942 2 "Key to Effective Pollution Abatement," National Council for Stream Improvement, 1960. 6-4 >e considered in any situations where using an absorption method Ls appropriate. >esticide Carriers ?he attapulgite-type fuller's earth found in south Georgia and north Florida is used widely as both dust and granular pesticide carriers, ^ttapulgite is specified by name in the Federal Specifications for jranular pesticides. lany clays can be used for dust pesticides carriers. The desirable )roperties are low bulk density (around 30 pounds per cubic foot) >lus good absorption of chlorinated hydrocarbons or other active igents. Porter's Creek Clay has not been widely used for pesticide :arriers due to its high bulk density. Since pesticides are sold )y the pound, a low density carrier fills a container more completely ;han a high density carrier. Color is also an important factor. .light materials are preferred over the darker gray colors characteristic >f the unweathered, uncalcined Porter's Creek. Thus, the Porter's :reek Clay is technically poorly suited for pesticide use. liscellaneous Fillers !lay fillers are used in the manufacture of many products. The filler ldds necessary weight or bulk without affecting the desirable character- .stics of the product. Fertilizer and feed are examples. Color, >H, density, flowability, toxicity, and other properties are often ;ritical. One of the most important factors is proximity to a arge consumer to maintain low freight costs required to be competi- ive. Filler purchases are generally negotiated on an individual asis. Prime considerations are technical services offered and osts, physical properties, and uniformity, established by each ser; Porter's Creek Clay would be suitable for some uses. In many ases, the filler requirements are trade secrets. If various grades f Porter's Creek Clay are distributed to formulators who might use he material as a filler, suitable applications might be found. ight-Weight Aggregate ests conducted by U.S, urvey, and A & H Materials Testing Corporation show that the Porter's ests conducted by U.S. Bureau of Mines, Illinois State Geological Six samples of fuller's earth from the leased farms showed negative loating tests according to Norris Research Laboratory reports for amples 1472 A through F, dated 9-20-62. 6-5 Creek Clay does not bloat naturally for making a suitable light-weight aggregate. In areas that contain no suitable natural bloaters, it is possible to use relatively expensive processes for inducing bloating with additives such as coal dust. However, the artifical bloaters could not command a price high enough to justify production because competitors in southern Indiana and northern Kentucky utilize excellent bloating clays, which produce light-weight aggregates cheaply. A number of other materials in western Kentucky, particularly some of the Pennsylvanian-age shales, are more suitable than the Porter's Creek for light-weight aggregate production. Blending Clay for Ceramic Uses One of the project responsibilities was to assemble all information on clay resources in the Jackson Purchase Area, and determine whether Porter's Creek Clay could be used for blending purposes with other clays. Figure 3-3 shows the distribution of samples for which there are published analyses. The legend on the map provides a key to locating analyses, descriptions and thickness for various clays in the map area. In addition to these analyses, a comprehensive report by the Kentucky Geological Survey-'- includes a lengthy description of the clays and mining activities in the Jackson Purchase Region. Selling the fuller's earth reserves for $2 to $2.50 per ton for blending purposes would not be advisable if a plant to produce absorbents is constructed. These reserves are more valuable to the manufacturer when left in the ground because the value of the plant is partly a function of the amount of reserves at the plant site. In addition, the bulk of the reserves are unsuited for most blending purposes. Even if the better clays were selectively mined, it would be hard to find buyers who require blending clays of this composition. Therefore, it is probable that no opportunity exists for profitable sales of raw blending clays from either fuller's earth deposit under study. Roberts, J.K. , Gildersleeve, B. , and Freeman, L.B., 1950, Geology and Mineral Resources of the Jackson Purchase Region, Kentucky: Kentucky Geological Survey Bull. 4, Ser. IX, 114 p., maps. 6-6 Section 7 MARKET ANALYSIS The most complex problem in the feasibility study was to produce an accurate and realistic appraisal of marketing conditions to serve as a basis for economic analysis. The original plan was to intensively study eight cities and supply names and addresses of distributors in these cities together with sales estimates for each of the numerous products that possibly could be made from the clay under study. However, it was discovered that fuller's earth products are involved in what amounts to very keen national competition rather than well-defined regional competition. In fact, the combined totals of all fuller's earth products sold, even with 100 percent market penetration, in the eight cities originally designated would not be great enough to justify building a 50 TPD plant, which is considered the minimum size plant that can operate efficiently. Therefore, the market was analyzed more from the viewpoint of significant technical factors and distribution characteristics than from the customer identification approach. Because only a few main products can be efficiently produced at the outset of production for a new plant due to widely varying processing techniques for the possible products, the first step in the market study was to determine which products have growing markets that might be penetrated by a new supplier. The second step was to determine the suitability of the Marshall County clay for making these particular products by comparing technical and marketing factors. The third step was to expand the under- standing of the marketing problems for the products selected by exploring in depth the details of pricing and discounting, promotion, manufacturer services, and methods of marketing and distribution. The detailed insights determined in the last step are used as a basis for establishing feasibility and making specific marketing recommendations. Thus, the negative feasibility determination for a plant based solely on the markets provided by the eight cities originally designated transformed into an economically feasible one for a plant when feasibility was based upon evaluation of larger marketing areas. 7-1 GENERAL OUTLOOK FOR FULLER'S EARTH PRODUCTS The demand for fuller's earth products has slowly increased since 1948 (Figures 7-1 and 7-2). A least-squares line fitted to annual consumption figures for this period shows an annual increase of 0.45 percent. Greater demand during the Korean War probably was due to the generally higher level of business activity characteristic of the nation's economy at that time. The increase for the period after the Korean War (1.46 percent) shows consumption advancing faster than for the late 1940' s. Other Insecticides and fungicides Rotory drilling mud Absorbent uses Vegetable oils and animal fats Mineral oils 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 I960 1961 SOURCE: Minerals Yearbook Figure 7-1 FULLER'S EARTH SOLD OR USED BY PRODUCERS FOR SPECIFIED USES, 1948-61 7-2 Figure 7-2 FULLER'S EARTH SOLD OR USED BY PRODUCERS, 1948-1961 Short Tons 500,000 ,_ 460,000 420,000 380,000 340,000 300,000 ANNUAL TONS SOLD POST-KOREAN WAR INCREASE IN DEMAND J I L 1948 1950 1955 1960 l y = 394,942 + 1,765X (origin at 7/54) 2 y = 390,983 + 5,733X (origin at 7/47) Source: Minerals Yearbook , 1961 In 1961, 422,151 short tons of fuller's earth were produced at a total value of $9,518,238 . The average price for fuller's earth products in the 14-year period from 1947 to 1961 increased 3.5 percent annually (Figure 7-3) . The principal reason for this increase was due to greater use of higher-priced absorbents and a decline in sales of lower-priced bleaching clays (used in raw, uncalcined state) . 1.,, Minerals Yearbooks for 1961, Volume 1 7-3 Dollars 25 _ 20 15 10 AVERAGE VALUE DURING YEAR AVERAGE INCREASE IN VALUE 19.22 + 0.624x, origin at 7/4' 1948 1950 J L 1955 J L 1961 Figure 7-3. AVERAGE VALUE PER SHORT TON FOR FULLER'S EARTH, 1948-1961 Source: Minerals Yearbook, 1961 Fuller's earth products are distributed in several ways as illustrated in Figure 7-4. Bleaching clays are used at relatively few centers where oils are processed and are generally sold directly by the clay manufacturer to the refiner. On the other hand, absorbents are sold through various brokers, distributors, and jobbers or in some cases, directly to the larger users. The marketing area for the major fuller's earth products is nation- wide. However, 86 percent of the tonnage and 89 percent of the value of the 1961 production 1 is derived from the Florida-Georgia Minerals Yearbook, 1961 7-4 are just north of Tallahassee. The one major producing area with many processors ships most of its products to the entire United States. Similarly, the scope of the Mississippi-Tennessee producers is nationwide. Slight differences in products and the fewer producers in the latter area tend to prevent the establishment of regional market patterns. It follows that at present, neither product application nor transportation cost determine the market area. MANUFACTURER Commercial Warehouse Broker or Mfr's. Representative Janitorial, Industrial, and Automotive Supply Distributors > 5- Petroleum Products Bulk Plant Operator Oil Processor f~\. Janitorial, Industrial, and Automotive Supply Distributors Floor Absorbent User Pet Food Manufacturer Pet Supply Grocery Wholesaler Retailer Pet Products User Figure 7-4. DISTRIBUTION TECHNIQUES USED BY MANUFACTURERS OF FULLER'S EARTH PRODUCTS 7-5 Fuller's earth markets are dominated by clay produced in southern Georgia and northern Florida where, in 1958, 10 of the 14 fuller's earth plants were located. Attapulgite, as the Georgia-Florida clay is known, is superior in many applications to the montmorillonite-type fuller's earth clays. The bulk density of granular calcined attapulgite is very low (22-28 pounds per cubic foot) and absorption is very high. Both of these qualities are desirable in most commercial uses. Ninety different products are made from attapulgite by one large processor. The versatility of this clay, the desirable characteristics of the products produced from this clay, and the acceptance through many years make competition formidable. There exists in the clay trade a notion that the northernmost deposits of Porter's Creek located in Tennessee and Kentucky are inferior to the southern deposits of Porter's Creek equivalents in Mississippi. This has not, as far as is known, been demonstrated experimentally . Montrnorillonite-type fuller's earth products are presently being manufactured by the following five plants: Star Enterprise, Inc., Olmsted, Illinois; Southern Clay Company, Paris, Tennessee; Tennessee Absorbent Clay Co., Paris, Tennessee (also owns a plant in Wrens, Georgia); Wyandotte Chemicals Corp., Blue Mountain, Mississippi; Oil-Dri Corporation of America, Ripley, Mississippi. (Oil-Dri also owns a plant in Cairo, Georgia.) These plants account for less than 15 percent of all fuller's earth sold. All of these plants are processing the Porter's Creek formation, making only absorbent products. Analysis of production statistics from the Bureau of Census and the Bureau of Mines combined with field interpretation indicate the average output per plant of the two plants in Mississippi and the two plants in Tennessee to be 10,500 to 12,500 tons per year. Bentonite has almost completely replaced fuller's earth as a bleaching agent for oils. The acid-activated bentonites dominate Census of Mineral Industries, 1958. In 1964, five plants operate in Mississippi, Tennessee, and Illinois. 2 Chapley, N.R. Attapulgite: 1 Process, 90+ grades. Chemical Engineering, V 68, No. 26, Dec 1961, pp 60-62 7-6 this market today, having captured at least 85 percent of the total bleaching clay market. Diatomaceous earth also is used extensively in oil bleaching. Bleaching Clays The most significant change in the consumption of fuller's earth since World War II has been a decrease in its use as an oil bleaching agent (Figure 7-1) . This decline has been greatest in mineral-oil (petroleum products) processing, consumption falling from 200,000 tons in 1946 to 25,000 tons in I960. 1 More efficient oil-processing techniques and increased use of the more economical acid-activated bentonites resulted in the use of less natural bleaching clays. Although there has been an increase in the amount of oil processed, the more efficient processing techniques offset the need for additional bleaching clays. The average price for bleaching-grade fuller's earth is $17.50 per ton FOB plant. Oil processors use large quantities of bleaching clays (at least three percent raw clay is used by weight for most oils) and buy directly from clay processors. Vegetable oils are generally bought by manufacturers as crude oils and bleached or clarified before making the desired products (salad dressing, shortening oil, paint, soap, etc.). Mineral oils are bleached with clay during extraction. Most bleaching in petroleum oil refining is done in the manufacture of lubricating oils where sludge, water, and carbon are removed. Oxidation properties, acidity, emulsion properties, and viscosity index are also improved by treating. Less bleaching clay is required for refining Pennsylvania-type crudes because they contain less asphaltum and other undesirable constituents. Technological improvements like the solvent extraction process in the production of lube oil have resulted in an increasingly cleaner and more Rich, A.D., 1960, Bleaching Clay in Industrial Minerals and Rocks pp 93-101, Ch 6, American Institute of Mining Metal and Petroleum Engineering, New York. 2 That bleaching power of raw clay is 1/3 that of acid activated bentonite is a common rule of thumb in the oil processing trade. 3 Minerals Yearbook, 1961 7-7 saleable product. Thus, the demand for clays by the oil refiners has declined considerably. Not all refineries are even potential customers since some do not produce lubricating oil. Absorbent Uses Fuller's earth used as an absorbent represents the largest and most rapidly increasing usage, amounting to nearly 45 percent of the fuller's earth production in 1961 (Figure 7-1). The three main absorbent products ranked by consumption are floor absorbent, animal litter, and soil conditioner. The upward trend in the use of fuller's earth as an absorbent may be leveling off 1 because consumption was essentially static (Figures 7-1 and 7-5) for absorbent products during the last three years for which figures are available (1959 to 1961) 2. Part of this leveling off may be due to machinery replacement in industry. Although the older equipment used in many factories depends on open lubrication, many newer machines scavenge lubrication oil for reuse or have sealed bearings that never need lubrication. Service stations and auto repair garages, although increasing in number, may not use as much floor absorbent per unit as before, because many service stations are now built without car lubrication facilities. Some garages and car service centers are so well maintained that nothing is tolerated on the floor, including floor absorbents. Soaps and detergents are used to remove dirt, grease and oil from the floor in these facilities . Floor Absorbents . Wholesale prices for floor absorbents vary from $17 - $36 per ton FOB factory. Retail prices vary widely also. (See Table 7-1.) The difference in price depends on product differentiation the manufacturers have been able to establish, grades, and source of material. Attapulgite-type floor absorbent, for example, sells in all cases for at least $3 per ton more than the montmorillonite type. U. S. Bureau of Mines data for 1962 published after this was written indicate that the use of fuller's earth in absorbents is continuing the general upward trend. 2 Recently published figures (Minerals Yearbook, 1962) show an increase to 206,978 tons for 1962. 7-8 Short Tons 200 i— 180 160 140 120 100 80 60 Annual Tons Sold Average Increase in Tons Sold 1 J I L J I L 1948 1950 1955 1961 Figure 7-5 FULLER'S EARTH USED FOR ABSORBENT PRODUCTS, 1948-1961. Source: Minerals Yearbook , 1961 Table 7-1 CONSUMER PRICES FOR FLOOR ABSORBENTS DELIVERED IN 50-lb BAGS 1 Amount Price Per Bag Price per Ton Number Manufacturer ' s of Bags High Suggested Low 1 $3.50 $3.00 $1.97 2-5 3.00 6-9 2.75 10-19 2.00 20-39 2.00 1.75 40-199 1.8125 1.475 $72.50 200-399 400 2 1.7375 1.375 69.50 1.6875 1.313 67.50 iThese prices were determined in detail in Louisville and checked for accuracy in other Midwestern cities. 2 A price of $46.50 per ton was obtained for 680 bags (17 tons) FOB Lexington, Kentucky from one distributor in Chicago (material was to be shipped direct from mine in Tennessee) . 7-9 Grades of floor absorbents are determined by calcining temperature and by type of clay raw material used in manufacture. A floor absorbent calcined 1000-1200°F will perform well in absorbing oil, grease and water. Heating the same raw material to 600-800°F results in a product that breaks down much quicker in water and can be used only for grease and oil absorption. The floor absorbent made from attapulgite clay is considered in the trade to be of a higher grade than the absorbent made from Porter's Creek Clay because of lower bulk density and higher absorption capacity. (See Section 5.) Another factor affecting prices is promotional costs. These costs are paid by the manufacturer in the case of Mississippi and Florida-Georgia fuller's earth processors, and these expenditures are passed on to the distributors in the form of higher prices. The Tennessee manufacturers spend relatively little for promotion, leaving this task to brokers and distributors. This is another reason for their lower prices. The reseller of Mississippi and Florida-Georgia products gets sales help and literature from company representatives who often write orders for the reseller. Local ware- housing of material for resellers who can not or will not buy in carload lots also is a service some manufacturers or their brokers offer to customers. Floor absorbents are distributed directly by the manufacturer (particularly to big users) , and also by distributors selling to smaller users (Figure 7-4) . Commercial warehouses in larger cities and brokers selling to distributors also are important in the distribution network. Janitorial supply firms, as well as distributors selling other supplies such as solvents and lubricants, sell absorbents to industrial accounts. Service stations and auto repair garages generally buy fuller's earth from automotive supply wholesalers as well as petroleum bulk plants who distribute products to a chain of outlets, such as Standard Oil Company. Regardless of who is the final user, one or more of the following functions is performed in distributing absorbents: warehousing, delivery (often a bag or two at a time), credit extension (generally on a 30 day basis), and soliciting. Although industrial users probably represent the largest market for absorbents, consumption figures are not available, nor can an average plant consumption be derived because of variation in sizes and types of plants. Most service stations use three to five 50-pound bags of floor absorbent per year depending on degree of 7-10 cleanliness and size of station. Annual total floor absorbent consumption is approximately 135,000 tons in the United States, based on estimates using data from Minerals Yearbook. Animal Litter . Animal litter, especially cat litter, represents a growing usage for absorbent clay. If only one third of the eleven million families owning cats bought a 10 pound bag per month, the potential consumption would be 220,000 tons per year or about half of the total present yearly consumption of fuller's earth for all uses. Many processors of fuller's earth now make or can make cat litter, the chief requirement being equipment suitable for bagging small quantities of material. Processors sell to pet supply whole- salers, brokers, pet supply manufacturers, and grocery jobbers throughout the United States. Due to this myriad of resellers, little meaningful information can be collected on the extent of the market, although it is substantial and growing, amounting to an estimated 40,000 tons per year. The producers are generally secretive about sales breakdown and production. The price to the distributor for cat litter is higher than for floor absorbents, because of the extra production costs for smaller bags and more handling, plus greater promotional costs. ($45-50 per ton FOB plant is a common price charged distributors in 50 pound bags). A retail price schedule is shown in Table 7-2. The supermarkets have greatly affected the retail price since their entry into the cat litter market. Chain grocery warehouses or their suppliers and pet supply manufacturers and wholesalers are good potential customers for cat litter. Large suppliers of pet foods and/or products like Ralston-Purina and Hartz Mountain are possible customers although they buy from established plants at the present time. Cat litter complements a pet food line, making more profit for retail and wholesale customers because of fewer supply sources and less handling. Realizing this, manufacturers are attempting more and Pet Food Institute 6th Annual Convention "Highlights" September 15-17, 1963. 7-11 more to sell to pet food manufacturers. A representative from a large supermarket chain said his company was interested in a low- priced and highly-advertised cat-litter product. Table 7-2 CONSUMER PRICES FOR ANIMAL LITTER Package Retail Price Deal er Distribution Size Chain Store Common Suqqested Larqest Smallest FOB Plant 4 lb. .29 5 lb. .39 .45 .59 .25 .31 .16 10 lb. .49 .89 1.15 .47 .59 .30 25 lb. 2.25 2.75 1.10 1.42 .70 50 lb. 3.95 4.50 1.90 2.50 1.20 *Prices are based on detailed analysis in the Louisville area and are typical for the Midwest as determined by spot interviews in other areas. Prices are quoted in dollars and cents. Soil Conditioner The market for calcined fuller's earth as a soil conditioner has not been fully developed. Presently, golf courses are using the material on greens to improve the water-holding capacity of the soil and represent the largest market. The material is also now being used on a very limited basis in greenhouse benches, cold frames, hot beds, etc. The turf market potential is large if favorable results continue to be reported. The number of golf) courses is increasing! and turf specialists are willing to experi- ment. Low water breakdown is very important in this application since the beneficial characteristics of the material are lost if it slakes down rapidly. Calcined Porter's Creek Clay is particularly good in resistance to water breakdown^ making the use of this product highly desirable in soil conditioner applications ^-According to the Wall Street Journal , Oct. 15, 1963, there are 7,600 golf courses in the United States today, and about 700 new ones are constructed each year in the United States . 7-12 FOB prices are around $60-per ton to golf courses; distributors pay $32-35. The recommended rate of application is 200 pounds of calcined clay per thousand square feet, applied with an aerifier machine. This may be doubled or tripled depending on soil type, etc. Application rates have not been fully determined since much work is still in the experimental and development state. The clay is also used on cemeteries, schools and stadium turf. The football field at Purdue University, for example, has 100 tons of calcined clay fuller's earth worked into the soil. It is estimated that less than 12,000 tons a year are sold in the United States for soil conditioner. Distribution is by brokers and distributors to consumers. Direct sales are not important in this application, since golf courses are usually supplied by local or regional distributors who offer many services including application and consulting services. These distributors are well established, making sales through them more beneficial, at least at present. Other Fuller's Earth Products Twenty-five percent of all fuller's earth sold is used as a pesticide carrier for insecticides, fungicides, and herbicides. However, all of the fuller's earth used as carrier is of the attapulgite type because of technical reasons discussed in Section 6. Demand has fluctuated between 58,000 tons and 100,000 tons since 1953. Figures on amount of fuller's earth used in pesticides are not available prior to 1953. Markets for attapul- gite used as a carrier generally have increased, but consumption severely declines periodically (e.g., the 1957 usage was almost half that for 1956), because infestation by insects and diseases varies greatly with weather factors. Other pesticide carriers such as talc, kaolin, bentonite, and pyrophyollite compete with fuller's earth. Insecticide formulators use both dust and granular carriers, and any formulator would be a potential customer. However, the entrenchment of attapulgite producers in this market makes the prospect for developing sales of Porter's Creek Clay doubtful . Other uses for fuller's earth are drilling muds, water purifica- tion, and fillers for soaps. Fuller's earth is also used in varying amounts in some plastics, polishes, and greases. Attapulgite fuller's earth is used for these applications because 7-13 of its lower bulk density, or other desirable property such as color, and because it has been more effectively promoted. OUTLOOK FOR CLAY PRODUCTS FROM MARSHALL COUNTY Comparative Advantages Fuller's earth products from Marshall County would have several advantages over competitors. Freight . Any plant in Western Kentucky has a freight advantage over 11 of the 13 fuller's earth processing plants for sales in the industrial Midwest. Some freight rates are: To From ; Ga. Plants Miss. Plants Ky. & Tenn. Plants Chicago $14.10/ton $10.56/ton $ 9.56/ton Cincinnati 12.25 9.38 7.93 Louisville 11.64 8.56 7.06 St. Louis 12.46 7.98 4.85 Physical Properties . The Porter's Creek Clay found in Mississippi, Tennessee and Kentucky resists breakdown in water better than the clays found in the Florida-Georgia area. This resistance to "mudding up" is advantageous, especially for soil conditioner and floor absorbent uses. The reddish-pink color could be an advantage, especially for cat litter, if it were promoted as being aesthetically more appealing (to cat owners) . The attapulgite clay is much lighter in color (almost white) than Porter's Creek when calcined. New Productive Capacity . The processing plant proposed for Marshall County, if operated at capacity, should be more efficient in terms of unit cost than the typical plant now in operation. Much of the plant would be automated, reducing labor costs. Also, since raw material for this plant will be adjacent to the plant, it will be possible to have very low clay acquisition costs. Comparative Disadvantages The high bulk density of Porter's Creek Clay is a disadvantage in most product applications. The lower absorption properties 7-14 (see Section 5) especially for the granular material, is a dis- advantage also. The entrenchment in many markets with most existing customers by the present producers will be a disadvantage to any new plant . Competitors' Marketing Activities Present producers of fuller's earth, especially the Georgia, Florida and Mississippi operators, offer many services to their customers. They have salesmen calling on large accounts on a regular basis and helping with selling problems. The company representative often accompanies distributor salesmen on sales calls to improve their sales techniques and knowledge about the products. The distributor expects to receive some orders for absorbents from the manufacturer's salesmen. One manufacturer stocks 80 commercial warehouses with his products for customer use . Specific Product Evaluations The chief factors that were considered in evaluating the specific uses for the Marshall County clay deposit include adaptability of raw material to making the various products, market sizes locations, and prices and price trends. Bleaching Clay . Porter's Creek Clay, although formerly used extensively for bleaching purposes, no longer meets the require- ments for most uses in the mineral-oil, vegetable-oil, or animal-oil industries. It has been replaced by materials such as acid- activated bentonite which are more efficient because of lower oil retention. Although a few oil processors may continue to use natural fuller's earth for bleaching oils, this use can be considered minor and unlikely to expand. It is particularly hard to break into the bleaching clay market because the bleaching trade is supplied on a past-performance basis. A supplier must prove the value of his product in the customer's plant before orders can be obtained. Therefore, considerable sales promotion would be required to develop this use. Because of the declining market for natural bleaching clays and the unlikely prospect for any improvement, very little if any clay from the Porter's Creek could be sold to oil processors. 7-15 Floor Absorbent . It will be possible to manufacture a salable floor absorbent from the Porter's Creek Clay in Marshall County. As covered in Section 6, this product will not meet federal specifications, but tests show it will at least equal in quality the floor absorbent currently being produced from the Porter's Creek Clay by the four plants in Tennessee and Mississippi. The locational advantages offered by Marshall County mean lower freight rates to central and north-central markets in the United States over plants in Georgia, Florida, and Mississippi. There is no freight advantage, however, over the two existing plants in Tennessee . The market for floor absorbents includes the entire United States; however, due to the concentration of population and industry the prime market area for floor absorbents manufactured in Western Kentucky would be the north-central and eastern states. In this area, approximately 110,000 tons of floor absorbent are consumed yearly, and there is an indication that this is a growing market. This is not to say business should not be solicited in the rest of the country, but rather that the first efforts should be concentrated in this heavy-consuming area. Prices are relatively stable at the present time. The attapulgite- type floor absorbent sells to distributors for a higher price than the montmorillonite type. The former sells in the mid-thirty dollar range per ton; the latter in the low thirties. Some manu- facturers, however, sell to large distributors at less than $20 per ton, thereby competing with their own brokers and smaller distributors . The Marshall County plant, given effective salesmen, several key accounts, and some large distributors or brokers could capture 7 percent of the United States market in the first year of operation; 10 percent by the second year, with 14 percent by the fifth year. To attain these market penetrations, which are relatively high percentages of the total market, it is estimated that a major portion of the product will have to be sold through brokers at relatively low cost. Otherwise, such high market penetrations probably could not be obtained. However, more than half the sales will have to be made through company salesmen acting through distributors (representing penetrations of 4 per- cent, 6 percent, and 8 percent in the first, second, and fifth 7-16 years of operation, respectively) . The Marshall County operators should be able to "sell amounts at average wholesale prices as follows : Floor Absorbent Sold Through Distributors Direct to Users Sold Through Brokers Total Tons 4,000 $18.00 6,000 $18.00 8,000 $18.00 9,500 14, 100 18,800 1st Year 5,500 tons @ $20.00/ton 2 2nd Year 8,100 tons (§> $20.00/ton 5th Year 10,800 tons d> $20.00/ton Animal Litter . A satisfactory, salable animal litter product can be easily made from Porter's Creek Clay. Plant location would have little bearing on sales since promotion and timing are the only practical differences between the present manufacturers who are succeeding with their litter line and those who are not. The market potential is large and will not be satisfied for several years even though the cat population is declining slightly. ^ The picture is bright, but much energy and many ideas would be necessary to get established in this market. It would be difficult, but not impossible, to get 5 percent of the estimated national litter market. If achieved it would result in sales of 2,000 tons per year. However, the present production cost for this amount would be excessive and would not justify investment in production equipment and additional labor. When the 1 See Table 7-1 for range in consumer prices for floor absorbents in a typical market area, Louisville. Consumer prices range from slightly under $70 to about $80 per ton. Transportation, ware- housing, handling, and distributors costs account for up to three-fourths of the price to the consumer. 2 The wholesale price for absorbents (including attapulgite types) varies from $17-36 per ton as discussed on page 7-8. The average price for a Marshall County plant is estimated at $20 mainly on the basis of quality of the product and price level necessary to attain the desired market penetration. 3 Pet Food Institute, ot 7-17 floor absorbent line is profitably established and a considerable effort can be given to litter development, the situation should then be reviewed. Soil Conditioner . Because of nearness to the north-central markets and good qualities of Marshall County fuller's earth for making soil conditioners, this use will be an important but small sales item. However, the market will have to expand before much can be profitably accomplished. Emphasis should be placed on this market after floor absorbent sales are well established. Soil conditioner could materialize in the next three to five years into a large market for fuller's earth. Currently, the total market is estimated at about 10,000 to 12,000 tons per year. With a concentrated effort, 500 tons should be sold in the first year of operation at $30 per ton FOB plant. The second and fifth year sales are conservatively estimated at 600 and 900 tons, respectively, at the same price. Pesticide Carriers . There is little likelihood that Porter's Creek Clay will ever become an acceptable carrier for pesticides due to its high bulk density and dark color. (See Section 6.) Specific Market Area Evaluations To estimate the local demand in cities in the vicinity of the proposed plant, particular attention was given to the population, degree of industrialization, and modes of distribution of products for each area. The intricacies of marketing products with the most promising national demand were studied in detail in Louisville, Lexington, and Indianapolis. Virtually every company and individual selling fuller's earth products was interviewed in these three cities to establish the marketing pattern. Spot interviews with sellers located in Cincinnati, Chicago, Evansville, Columbus and St. Louis were used to verify that marketing patterns were similar in regional and local marketing areas. Salesmen covering the northeastern and north- central United States were also interviewed; the sales estimates, prices, and marketing conclusions were read to one independent salesman who confirmed that the findings were realistic. The market area with the most potential is the northeastern and north-central states. Due to competition and lower demand, the southeastern United States offers the poorest market potential . 7-18 Average per capita consumption for fuller's earth floor absorbents is 1.5 pound based % on the 1960 census and 1961 Bureau of Mines production statistics (Table 7-3). However, the north-central states, where an estimated 55,000 tons of absorbents are sold, yield an average per capita consumption of slightly over 2.0 pounds. The estimate of tons sold in the north-central states is based on results of interviews with distributors and manufacturers combined with population and production statistics, and degree of industrialization. The estimates are rough approximations because distributors and manufacturers almost invariably with- held the exact amount of absorbent sold in each area to protect their competitive positions. Adjustments from average local and regional per capita consumption were made to reflect the prevailing market factors. For example, St. Louis is less than three times larger than Louisville, but it is estimated that more than three-and-a-half times as much absorbent is sold in the former because of proportionately more heavy industry and a larger service area in St. Louis and vicinity On the other hand, Louisville and Indianapolis, it is estimated, have roughly comparable demand and size. Table 7-3 summarizes the estimated demand in four regions and eight cities. Other cities such as New York, Boston, Cleveland, Milwaukee and Akron are large consumers and should also eventually be served by the proposed plant . 7-19 ro I f0 Eh W Eh H ffl C« O CO PQ < o s K O CO H CO >H Hi i & o- CO p M-l C f0 ro CN 00 r- rH H IT) CO ro CN ro r» O CN O r-l & -sT rH en rH CN r^ rH oo co CN ID rH rH (U » - o 00 >£> o IT) ^) rH ro ro rH £ tr cn o CO «x> "tf rH 3 4-) CN l—l 13 £ 1 •H rH ro ■H +J u r- CT> ro CN ro ro <£> r^ c r^ rH ro rH o CN O ro VO rH rIOlfl o i-H CO rH rH rH <£) rH rH CTl ro cn cn m •rH -p ro r-> cn ro ro rH O LO CN 01 O rH r- ro CN r> rH r» in r- <£> CN 00 cn cn ro en H ro i£> KD en o o o r^ vd rH CN H kO 3 » a cn ^t* LD LT) CN pm i-H W C Eh c o T3 •rH CD -P <* -P a o O O o o o o o o o O O O f0 rH 6 o o O o o o o o o CO o oo m g ro 3 o o o o o cn in r-- r- rH o r- •H 3 CO » -P c (3 LT) LT) in LO o rH CN 00 CO C O ro LO in rH rH w ro TS CO -P C O > rQ > tn in c CD c A -H h! CO g CO ro C ro ro -P • CD -P p U -HP C U -rH -H 01 ■H w u 3 CO C • 3H ro •H X-O U C • • CD •H -p O P> rC CU C < D S3 S3 CO £ O CO J u H O h1 H cn (U cn rH •H ro ■H rH -P ^ cn CO rH 3 T3 T3 cn C C ro •H CD H U cn CD CD G 2 -p •H p S-l rC •H 3 -P rH P M U ro rH ro CD ro m g 3 CO •H c - C • ro U ro CO g 0) 3 rH cn CO CD rH ro C rH 3 0) rQ m TS U ro • CD S-l CN m cn CD 3 >£• 3 rC T3 cn P 1 rH cn CD r-l 4-1 » CD o c p 2 3 TS o cn ro C CQ o fl ro o H ro » -p 3 0) P in CQ rH ro 00 o rQ P rH o » ro o • S-l > -P - CO 3 -P 3 o "0 •H O m • o A t> ■H T5 ro -P 3 « C -p CN TJ ro ro rQ >x> CU A ro cn >1 > •p rH o H-l » rH G cn S-l • » ft 3 CD CD ro ^ g ■P > CD o CD O ro CD S-l u ^ < m C C •H O •H T5 II! c ro •H C ro -p P » •H -P ro ro 00 • •H Q rH m r* rH rH 3 cn >£> > ft rH cn ft p rQ rH O •H ft r-l U r-l u ro a +J 4-1 m P ■H • CD no O >H u a C -a cn 0) ro CD cn P c T3 •P • -P rH c 5-1 > C -P ro ro (D •H ro -p (D -H g u rQ -P TS c U -H CD r-l •H C S n -P C TS ro o 0.0665 per 100 cu ft 26.60 950,800 cu ft @ 0.0595 per 100 cu ft 565.73 Monthly Cost $ 600.70 12-Months Basis $7 ,208.40 20, 000 TPY Production using 2,001,600 cub ic : feet/month : 1,000 cu ft $ 1.50 2,000 cu ft d> 0.0895 per 100 cu ft 1.79 7,000 cu ft d> 0.0725 per 100 cu ft 5.08 40,000 cu ft <§> 0.0665 per 100 cu ft 26.60 1, 951,600 cu ft @ 0.0595 per 100 cu ft 1 ,168.77 Monthly Cost $1 ,203.74 12-Months Basis $14 ,444.88 Electricity. Western Kentucky RECC will supply electrical service to the proposed plant. Power requirements for the plant are based on information supplied by Allis-Chalmers Manufacturing Company. Electricity costs are shown in Table 8-6 for 10,000 and 20,000 tons annual production. Other Production Costs. (See Tables 8-7 and 8-8. ) Payroll taxes and benefits were estimated at twenty percent of base pay for all employees. Insurance on buildings and equipment was calculated at $2.00 per $100 value. This is somewhat high because the plant would be more than eight miles from a fire station. Property taxes were calculated at $2.40 per $100 applied to one- third of the assessed valuation. Rate was obtained from the Marshall County tax office. Straight-line depreciation was estimated at 6.7 percent on a 15-year schedule on the basis of U. S. Treasury Department's Publication No. 456 (7-62). 8-9 Table 8-6 ELECTRICITY COSTS 1 10,000 TPY Production using 50, 400 KWH/month: 100 ® 0.03 $ 3.00 400 ® 0.02 8.00 1,000 ® 0.01 10.00 1,500 ® 0.008 12.00 12,000 @ 0.011 132.00 25,000 @ 0.006 150.00 10,400 @ 0.004 41.60 356.60 Demand 100.00 456.60 Tax 3% 13.70 Total monthly cost $ 470.30 12-months basis $5 ,644.00 20,000 TPY Production using 100, 800 KWH/month: 100 @ 0.03 $ 3.00 400 @ 0.02 8.00 1,000 @ 0.01 10.00 1,500 @ 0.008 12.00 12,000 @ 0.011 132.00 25,000 @ 0.006 150.00 60,800 ® 0.004 Demand Tax 3% 243.20 558.20 100.00 658.20 19.74 Total monthly cost 677.94 12-months basis $8 ,135.00 !Based on information supplied by Allis-Chalmers Mfg. Co. (electrical requirements) and West Kentucky RECC (rates). 8-10 Table 8-7 PRODUCTION COSTS 60 TPD PLANT FIXED COSTS General Manager (1/2 Production, 1/2 Sales) $ 4,000 Plant Foreman 6,000 Clerical 2,340 Payroll taxes and benefits 2,468 Building and equipment maintenance 2,500 Insurance 7,400 Property taxes 2,962 Depreciation 24,790 Land rent 36 Interest on borrowed fixed & working capital 19,440 Total fixed costs $71,936 VARIABLE COSTS 10,000 TPY 20,000 TPY Labor Mining $ 5,200 $ 5,200 Operators 10,800 20,160 Maintenance 4,680 4,680 Utility men 7,056 21,392 Payroll taxes and benefits 5,547 10,286 Total labor cost 33,283 61,718 Power Electricity 5,644 8,135 Gas 7,208 14,445 Supplies Bags 28,000 56,000 Fuel, oil and grease 7,000 13,000 Pallets 7,500 15,000 Other Royalties 1,000 2,000 Miscellaneous 4,482 8,515 Total variable cost $94,117 $178,813 8-11 Table 8-8 SALES COST General Manager (1/2 Sales, 1/2 Production) $ 4,000 Salesmen (two) 20,000 Payroll taxes and benefits 4,800 General sales expense 3,000 Travel and subsistence expense 20,000 Total sales cost $51,800 Land rent of 50 cents per acre per year was obtained from the lease between Mr. Brummitte and the principals. Interest on borrowed money was estimated at four percent on an ARA loan of $262,360, six percent on a loan from a local development corporation ($40,400), and an average of 5^ percent on loans from the Kentucky Industrial Development Finance Authority (KIDFA) and banks ($80,670). Ninety-five percent of $403,630 represents the maximum amount which an applicant can borrow from ARA and other sources. It was further assumed that working capital would be borrowed at a rate of six percent. Borrowed working capital was estimated at $40,000 in the first year, $30,000 in the second, and $10,000 in the fifth year. To derive interest costs for the first and fifth years (Table 8-9) , monthly repayment was assumed for the ARA loan and annual payments for other loans. St. Regis Paper Company quoted bag prices at seven cents each. Fuel, oil and grease (including service costs) for the mining and processing equipment were estimated by the project team. Pallets were estimated at a cost of $1.50 each. One-half the production was considered palletized for easier and more economical handling for both the manufacturer and the distributor. Royalties were calculated at ten cents per ton as set forth in the lease with Mr. Brummitte. Miscellaneous costs of five percent were used to cover any unforeseen production cost. The general manager and the salesmen salaries were estimated at $8,000 and $10,000 per year, respectively. 8-12 Table 8-9 COMPARISON OF ALTERNATIVE PLANTS ESTIMATED CAPITAL REQUIREMENT Capital Labor- Capital- Intensive intensive intensive Plantl Plant 2 Plant (Infra- red Oven) 3 Land - 9 acres g> $300/acre $ 2,700 $$ 2,700 $ 2,700 Plant & equipment - 60 TPD 370, 000 257, 000 335, 000 Site clearing & preparation 30,930 20,300 30,930 Total $403,630 $280,000 $368, 630 4 ESTIMATED OPERATING COSTS FIRST YEAR (10,000 TPY) FIFTH YEAR (20,000 TPY) 7 Capital Labor- Capital- Capital Labor- Capital- Intensive intensive intensive Intensive intensive intensive Plant* Plant 2 Plant (Infra- Plant 1 Plant 2 Plant (Infra- Fixed costs red Oven) 3 red Oven) 3 General manager 1/2 time $ 4,000 $ 4,000 $ 4,000 $ 4,200 $ 4,200 $ 4,200 Plant foreman 6, 000 6,000 6,000 6,300 6, 300 6,300 Clerical 2, 340 2,340 2,340 2,440 2,440 2,440 Pavroll taxes and benefits 2,468 2,468 2,468 2,468 2,468 2,468 Building & equipment maintenance 2,500 3,100 2, 100 2,500 2, 500 2,500 Insurance 7,400 7,500 7, 200 7,400 7,400 7,400 Property taxes 2,962 2,400 2,830 2,962 2,962 2,962 Depreciation (straight-line) 24,790 17, 350 21, 970 24,790 17, 350 21,970 Land rent 36 36 36 36 36 36 Interest on borrowed fixed 19,440 14,450 18,950 14, 578 13, 250 14, 150 and working capital Total fixed costs $ 71,936 $ 59,644 $ 67,894 $ 67,674 $ 57,706 $ 64,426 Variable costs Labor $ 33,283 5 $ 47.500 6 $ 33,283 5 $ 64.804 8 $114, 450 9 $ 64.804 8 Power 12,852 13,100 12,852 22,580 25, 100 22, 580 Supplies 42, 500 42, 500 42,500 85,680 85,680 85,680 Other 5,482 7, 100 5,482 14, 690 19,770 14,690 Total variable costs $ 94,117 $110, 200 $ 94,117 $187,754 $245,000 $187, 754 Sales costs 51,800 51,800 51,800 53,660 53,660 53,660 Total costs $217,853 $221,644 $213,811 $309,688 $377, 566 $306,440 1 Turnk.ey-plant estimate supplied by equipment contractor-supplier. 2 Labor-intensive plant, based on duplication of other Porter's Creek Clay producers; but with higher-temperature calcining equipment. Preliminary (pre -pilot testing) estimates Does not include research and development costs or engineering expenses for proving infrared . ^ Nine employees Thirteen employees 7 A 5 percent increase was added to labor cost for 20,000 TPY plant in Table 8-7 and 2 percent to the cost of supplies to adjust for increased cost five years hence. Miscellaneous costs were also increased slightly to reflect the older plant. ° Thirteen employees ^Twenty- three employees 8-13 Section 9 PROFITABILITY ANALYSIS Table 9-1 contains a revenue forecast for the first, second, and fifth years. Table 9-1 REVENUE FORECAST Year Sales (Tons) Average Price Per Ton Total Revenue 1st Year 2nd Year 5th Year 10,000 14,700 19,400 $ 19.70 19.71 19.59 $ 197,000 288,000 387,000 In Table 9-2, the revenue figures for the first and fifth years are combined with cost figures developed in Section 8 in order to compare profitability of the three types of plants. The sales volume anticipated for the first year is not sufficient to return a profit for any one of the three alternative plants. Even after five years, when maximum sales will have been achieved, the labor-intensive plant shows only a small profit. However, both the capital-intensive and the infrared plants should operate at attractive profits during the fifth year. Because the infrared equipment has not been developed for use in fuller's earth processing, technical feasibility of the infrared plant is questionable. It is concluded however, that the capital-intensive plant is technically and economically feasible. 9-1 Table 9-2 COMPARISON OF PROFITABILITY BY TYPE OF PLANT Total Total Net Type of Facility Revenue Costs Income 1st Year Capital-intensive Plant $197,000 $217,853 $(20,853) Labor-intensive Plant 197,000 2 21,644 (24,644) Capital-intensive Plant Utilizing 197,000 213,811 (16,811) Infrared Oven 5 th Year Capital-intensive Plant $387,000 $309,688 $ 77,312 Labor-intensive Plant 387,000 377,566 9,434 Capital-intensive Plant Utilizing 387,000 306,440 80,560 Infrared Oven In order to determine the point at which the capital-intensive plant would achieve profitability, second year costs for this plant were developed as follows : Production costs Fixed Variable Sales costs $ 68,419 136,465 51,800 Total costs $256,684 Because revenue during the second year is estimated at $288,000, a profit of $31,316 is indicated. This is equivalent to 7.8 percent of original capital investment. DEBT RETIREMENT Although the capital-intensive plant is considered feasible, it will be necessary to seek a moratorium on principal repayment of the ARA loan. If it is assumed that $262,360 (65 percent of capital require- ment) is borrowed from ARA for a term of 15 years, payments during the first year would amount to $23,298, of which $10,260 would be interest and $13,038 principal. After deductions of interest payments to ARA and other lenders, a loss of $20,853 results for the first 9-2 year. A cash flow of only $3,937 (depreciation of $24,790 minus the loss) would be generated during the year. Since principal payments of $3,563 would be made to other lenders representing (30 percent of capital requirement) , it would not be possible to make any payments toward principal from internally generated funds on the ARA loan during the first year. During the second year, cash flow would amount to approximately $51,800 (after-tax profits of about $27,000 plus depreciation). Thus, the firm would be able to begin principal payments on the ARA loan during the second year of operations. 9-3 Section 10 RECOMMENDATIONS PRODUCTION RECOMMENDATIONS Che foregoing profitability analysis indicates that a capital-intensive 5lant with an initial capacity of 60 tons per day with provisions for expansion to 75 tons per day is economically justified. ?o insure low operating costs and guaranteed production, it is re- :ommended that a reputable equipment manufacturer with an experienced mgineering-design staff be asked to design and construct an automated slant, and supervise start-up. The profitability analysis is based on :onventional and automated equipment and not on new or unproven .nnovations. If pilot tests indicate that infrared equipment is more suitable than rotary equipment, serious consideration might be given ;o this method of production. ?he Brummitte lease is recommended for the plant site location. Of ;he two leases under consideration in Marshall County, the Brummitte farm has the better plant site due to the nearness of the railroad ind higher quality clay. A railroad siding is necessary to compete ;ith other fuller's earth producers. The low specific value of ibsorbent products means they must be sold in large amounts to large resellers, making total reliance on trucking too costly. The smaller distributor and other small buyers who buy on a less-than- >ne-carload basis will have to be sold by a warehousing broker or listributor rather than in truck-load lots. 'RODUCT RECOMMENDATIONS ?he plant initially should manufacture mainly floor absorbent and, >n a limited basis, soil conditioner. The market and production :osts indicate the greatest and quickest success with these two >roducts. 'uture expansion may include additional soil conditioner and a special line of cat litter, perhaps in the 4th or 5th year, depend- .ng on marketing conditions at that time. Radioactive filters and ndustrial-waste absorbents could be subjects for research when the :ompany can afford product development expenses. 10-1 MARKETING RECOMMENDATIONS Company Sales For promotion work, the new plant will require the services of two salesmen and half the time of the general manager. The sales force should start calling on potential customers shortly after plant construction begins. Company salesmen should establish a broker and distributor network which will be required to achieve sales goals. Initially, brokers will be more desirable than distributors because they provide more services. Several effective manufacturer's representatives also would be desirable. At first, direct sales to consumers are not advised because efforts with resellers will result in more volume movement. Brokers Brokers generally sell only to resellers. They are able to promote, warehouse, and sell to many small accounts that the company salesmen cannot afford to contact. Brokers demand and get low prices because they perform a number of promotional services. Distributors Distributors are generally of two types: carload buyers and less-than-carload buyers. The former can be contacted on a direct basis at times (depends on timing of purchases) whereas the latter should be handled by a broker, by a commercial warehouse agent, or by a large distributor. The potential realized in selling absorbent clay products will depend on the number of cooperating distributors and the product quantity they can sell. It probably will be necessary to have at least one effective distributor in each city of more than 250,000 population to sell the plant's output. Sales Agencies The Marshall County plant can hire an independent sales agency to initially set up the sales and promotion organization. The sales agencies will contact prospective customers to determine their particular needs and requirements and then write orders for those who are interested. This service costs approximately $45.00 per day plus nine cents per mile for transportation, for one salesman. Ten regional marketing cities the size of Cleveland could be 10-2 serviced for approximately $20,000 a year. The advantages are many, especially since the first consideration of the principals in the new plant will be solving production problems. Once the plant is operating smoothly, sales can then be managed by a sales force directly controlled by the new plant. Continuing to work the plan established by professional salesmen will make this job easier and much more likely to succeed. PROMOTION RECOMMENDATIONS Regardless of how the initial selling phase is handled, the first contacts with potential customers should be to obtain information useful in the product development phase. The needs of users should be studied and new uses might even be found. Ideas that might come from the initial contacts may result in a 30- or 60-pound bag rather than the 50-pound bag, common in the trade. A dispenser or dispensing-type container might also be advised. To combat the bulk density problems, a 60- or 66-pound bag might be introduced at the same price as the competitors' 50-pound bag. Conceivably, such a price cut might accomplish more sales without depressing prices of competitors' 50-pound bags. Many ideas will have to be tried to find the most profitable approach. If effective promotions are planned and conducted according to market findings of Section 7 and new findings of the sales force, the plant can sell the 10,000 tons for the first year and 20,000 tons by the fifth year. If little or no promotion or enthusiasm is generated, sales will suffer. 10-3 SECTION 11 SELECTED REFERENCES Amero, R. C, Fuller's Earth, A General Review, Mining Engineering , May 1951, p 441-446 Calver, J. L. , The Fuller's Earth Industry, Mining Engineering , April 1956, p 393-395 Grim, R. E., Petrography of the Fuller's Earth Deposits at Olmsted, Illinois (with a brief study of some non-Illinois earths, Economic Geology , V 28, No. 4, p 344-363 Grim, R. E., Applied Clay Mineralogy ; McGraw-Hill Book Co., Inc., New York, 1962 Jaffee, W. A., Terra-Green Soil Conditioner Manual: Oil-Dri Corp. of America, Chicago, 1962 Murray, H. H. , Clay _in Industrial Minerals and Rocks, Am. Inst . Mining, Metal., and Petroleum Eng ., 1960, Ch 12, p 259-284 Pryor, W. A., and Glass, H. D., Cretaceous-Tertiary Clay Mineralogy of the Upper Mississippi Embayment, Jour. Sedimentary Petrology , V 31, No. 1, p 38-51 Rich. A. D., Bleaching Clay _in Industrial Minerals and Rocks, Am. Inst. Mining, Metal., and Petroleum Eng ., Ch 6, p 93-101 Sterns, R. G., Cretaceous, Paleocene, and Lower Eocene Geologic History of the Northern Mississippi Embayment, Geol. Soc . America Bull. , V 68, p 1077-1100 U. S. Bureau of Mines, Minerals Yearbook , 1962; V I, Metals and Minerals (except fuels); V II, area reports; U. S. Government Printing Office, Washington, D.C. U. S. Bureau of the Census, U. S. Census of the Mineral Industries , 1958; V I, Summary and Industry Statistics; V II, Area Statistics; U. S. Government Printing Office, Washington, D.C. 11-1 APPENDIX A- DRILLING LOGS Appendix A DRILLING LOGS Raymond Powell Farm Marshall County, Kentucky Elva Quadrangle HOLE P-13 Elevation 493.7 feet Total Depth 75.3 feet Drilling Record: 8-12 feet 4-in. auger 12-43.2 feet Fishtail bit 43.2-45.4 feet NX spoon 45.4-75.3 feet NX core Post-Eocene continental deposits: 0-1.5 Topsoil, light tan and light red mottled; very fine silt; few roots. 1.5-6 Clay, reddish-brown, micaceous; very fine silt, slightly plastic. 6-8 Clay, as above; some very fine light-tan sand in lower one-half foot; few limonitic chert fragments one-half to one inch in diameter, angular, some moderately round. 8-24 Clay and gravel: clay, as above; gravel, quartz and limonitic chert, small to large; gravel forms up to 40% of total sample in places. 24-27 Silt, sandy, clayey, light reddish-brown, very fine; no gravel. 27-31 Clay, light reddish-brown; silty; no gravel. Claiborne (?) Formation: 31-41 Sand, tan, fine to coarse; some silt. 41-43.2 No sample. Porters Creek Clay: 43.2-48.2 Clay, dark black-gray, micaceous, laminated, indurated; number of silty very fine micaceous laminae and blebs, light gray. A-l HOLE P-13 (cont'd) Powell Farm 48.2-55.3 Clay, as above; few to no sandy silt lenses from 49.5 feet to 55.3 feet. 55.3-65.3 Clay, as above; a few silty sand laminae and blebs . 65.3-75.3 Clay, as above; some massive, few very fine sandy silt laminae and blebs, micaceous; few vertical macro joints with b axis of clastic mica flakes normal to the walls. TOTAL DEPTH: 75.3 feet HOLE P-16 (1) Elevation 448 feet Total Depth 32 feet Drilling Record: 0-3 feet auger 3-14.1 feet NX spoon 14.1-32 feet NX core 0-14 feet 3-in. casing 0-3 Soil; clay, reddish-brown; silty. 3-6 Clay, grayish-brown; laminae and blebs of pale gray material, stiff when slightly moist. 6-7 No sample. 7-9 Clay, reddish-brown, conglomeratic with gravel and sand, hard in dry state. Porters Creek Clay: 9-14.1 Clay, pale gray, plastic, moist; streaks of reddish-brown limonitic clay. 14.1-23 Clay, medium gray, some laminated, some massive, few streaks of limonitic material. 23-32 Clay, gray to dark gray, laminated, massive in places; some of the laminae appear to be dipping about 8° between 28 to 32 feet. TOTAL DEPTH: 32 feet A-2 Powell Farm HOLE P-17 (1) Elevation 462.9 feet Total Depth 40 feet Drilling Record: 0-30 feet 30-40 feet 0-30 feet Fishtail bit NX core 3 -in. casing 0-30 Clay, light red-brown to yellow; some limonitic sand and gravel. Porters Creek Clay: 30-35.7 45.7-40 TOTAL DEPTH: Clay with sandstone dike splitting half the core; sandstone, fine to coarse, very limonitic, mineralized more at contact with clay, mica; clay, dark gray where not mineralized with limonite, (scaled graphical interpretation suggests the dike is 6 in. thick) . Clay, black-gray, laminated, few thin silt laminae, very fine mica fragments disseminated throughout. 40 feet HOLE P-21 Elevation 436.7 feet Total Depth 21 feet Drilling Record: 0-23 feet auger 0-1 1-2 2-7 7-8 8-13 13-21 TOTAL DEPTH: Clay soil, umber brown, silty, humic. Clay soil, reddish-brown, silty, slightly plastic. Clay soil, brown, becoming sandy with depth. Clay, reddish-brown; very fine sand and some small gravel; very moist. Clay, as above; fine to coarse sand forms 50% or more of sample 11-13 feet. Clay, umber-brown; sand, fine to coarse; sand and small gravel forms 60% of sample 15-18 feet 21 feet A-3 Powell Farm HOLE P-22 Elevation 422.3 feet Total Depth 20 feet Drilling Record: 0-13 feet auger 13-20 feet NX core 0-13 feet 3-in. casing Porters Creek Clay: 0-2 Clay soil, yellow tan, traces of laminated structure. 2-3 Clay soil, as above, but faintly brown, fragment of gray, sample dry. 3-5 Clay, pale gray to some yellow. 5-7 Clay, brown, some gray blebs, very moist and plastic; no longer has true Porters Creek character. 7-8 Clay, as above; traces of small gravel. 8-11 Clay, as above. 11-13 Clay, brown gray. 13-14.5 Clay, medium gray to dark gray, medium hard, fine silt laminae, some are limonite stained. 14.5-20 Clay, dark gray, occasional laminae of fine mica and quartz sand silt. TOTAL DEPTH: 20 feet HOLE P-23 Elevation 423 feet Total Depth 26 feet Drilling Record: 0-5 feet auger 5-11.5 feet NX spoon 11.5-26 feet NX core 0-11.5 feet 3-in. casing 0-1 Clay, soil, pale gray, some silt, sample dry. 1-3 Clay, red-brown, laminated, some fine sand. A-4 HOLE P-23 (cont'd) Powell Farm Porters Creek Clay: 3-4 Clay, pale light gray mixed with red clay (Red clay is probably uphole contamination) . 4-5 Clay, reddish brown, blebs of gray clay as above; sample mixed with uphole material. 5-6 Clay, brown to yellow brown and pale gray, laminated. 6-11.5 Clay, light gray, some dark gray and yellow brown . 11.5-13 Clay, pale gray to whitish-gray, medium hard, some yellow where limonitic. 13-16.3 Clay, medium gray to dark gray. 16.3-22.6 Clay, dark gray, few sandy silt laminae. 22.6-26 Clay, dark gray, as above; small irregular sandstone mass at 25 feet. TOTAL DEPTH: 26 feet HOLE P-24 Elevation 413 feet Total Depth 15 feet Drilling Record: 0-15 feet auger 0-1 Clay soil, brown, silty, wet. 1-2 Clay, as above; slightly grayish, some small gravel, silty. 2-4 Clay, brown, very sandy, silty. 4-6 No Sample. 6-7 Clay, brown, sand, slightly laminated. Porters Creek Clay: 7-8 Clay, brown mottled with dark gray, some fine sand and silt on the brown clay. 8-9 Clay, as above, but more of the darker gray, micaceous, wet, plastic. 9-11 Clay, medium dark gray, wet, plastic, some brown clay blebs. 11-12 Clay, dark black gray, moist, plastic, some fine mica. 12-15 Clay, dark black gray, stiff. TOTAL DEPTH: 15 feet A-5 Powell Farm HOLE P-40 Elevation 431 feet Total Depth 20 feet Drilling Record: 0-5 feet auger 5-10 feet NX spoon 10-20 feet NX core 0-10 feet 3-in. casing Recent (soil and possibly some weathered Porters Creek Clay) . 0-2.5 Clay soil, reddish-brown, traces of pale gray, faintly laminated. 2.5-3.5 Clay, dark reddish-brown, silty, moist, slightly plastic. 3.5-5 Clay, brown, silty, very little fine sand, moist, slightly plastic, traces of gray clay. Porters Creek Clay: 5-12.6 Clay, pale to medium gray, darker gray with depth, moist, plastic, hard in places; some limonitic staining along joints and fractures; few micaceous silt and fine sand laminae. 12.6-13.6 Sandstone, fine quartz, very micaceous, some limonitic mineralization and staining. 13.6-18 Clay, medium gray to slightly dark gray, hard; no silt and only traces of mica; few red and yellow limonitic laminae. 18-18.3 Sandstone, fine quartz, very micaceous, limonitic mineralization. 18.3-18.7 Clay, medium gray to gray. 18.7-19.4 Sandstone, fine quartz, micaceous; clay fragments up to 4 mm form 20% of dike. 19.4-20 Mica dike, clayey, clay black; few stringers of pale gray micaceous sandstone with some limonitic mineralization. TOTAL DEPTH: 20 feet A-6 Powell Farm HOLE P-41 Elevation 438 feet Total Depth 26 feet Drilling Record: 0-26 feet auger 0-1 Clay soil, yellow reddish brown, few streaks of pale gray; gray clay is plastic; some fine silt; sample is moist. 1-2 Clay soil, as above, nearly dry. 2-3 Clay soil, yellow brown; fine silt. 3-4 Clay, as above; darker and moist. 4-5 Clay, brown, some moist and plastic; fine silt. 5-6 Clay, umber brown, moist, plastic; fine silt. Porters Creek Clay: 6-7 Clay, pale gray, some yellow brown, moist plastic. 7-8 Clay, mostly brown with hues of gray. 8-10 Clay, as above; specs of white gray clay; sandy; some ferruginous material. 10-14 Clay, red with some gray brown and gray, laminated structures, increase in gray brown and gray with depth; some uphole contamination of material similar to samples from 8 to 10 feet 14-17 Clay, gray to gray brown, moist, plastic. 17-21 Clay, medium gray, moist, plastic. 21-26 Clay, gray to dark gray, moist, plastic; some fine silt and mica. TOTAL DEPTH: 26 feet. HOLE P-42 Elevation 451 feet Total Depth 39 feet Drilling Record: 0-39 feet auger 0-1 Top clay soil, humic, dark gray brown, fine silt, moist. A-7 HOLE P-42 (cont'd) Powell Farm 1-2 Clay soil, red orange, fine silt, some blebs of brown clay, slightly moist. 2-3 Clay soil as above; some pale gray blebs, gray is faintly laminated. 3-4 Clay soil, dark reddish-brown, silty, slightly laminated, dry. 4-5 Clay soil, fine silt, pale dusty yellow brown when dry, pale brown when wet; sample is dry. 5-6 Clay, pale dusty yellow gray when dry, brown when wet; sample is dry. Porters Creek Clay: 6-7 Clay, as above; some yellow brown and light pale gray clay, laminated, slightly moist. 7-9 Clay, as above, but more of the clay is pale gray; slightly moist in the centers. 9-10 Clay, pale gray, some medium brown, some yellow limonitic staining, moist, slightly plastic. 10-11 Clay, medium brown gray, slightly plastic. 11-20 Clay, gray, moist, plastic, traces of yellow brown clay. 20-25 Clay, dark gray, moist, plastic, partly contaminated with yellow brown clay from above . 25-39 Clay, dark black gray, relatively unweathered in lower half. TOTAL DEPTH: 39 feet HOLE P-43 Elevation 435 feet Total Depth 31 feet Drilling Record: 0-31 feet auger 0-1 Clay soil, yellow brown, loamy, humic, moist 1-10 Clay, brown to red brown, some silt and fine sand throughout, moist, plastic. A-8 HOLE P-43 (cont'd) Powell Farm Porters Creek Clay: 10-15 Clay, brown gray, micaceous, laminated, moist, stiff. 15-17 Clay, dark gray, some brown gray, mica, little fine silt. 17-23 Clay, dark gray, moist, stiff, some fine mica. 23-31 Clay, dark black gray, micaceous, moist, very stiff, little very fine silt. TOTAL DEPTH: 31 feet. HOLE P-44 Elevation 435 feet Total Depth 25 feet Drilling Record: 0-25 feet auger 0-1 Top soil, dark brown clay, some silt, humic moist to wet. 1-2 Clay, yellow reddish brown, silty, moist, plastic. Porters Creek Clay: 2-5 Clay, yellowish brown, faint hues of pale gray, silty, very fine, very moist, plastic. 5-8 Clay, red mottled with red brown, some hues of pale gray, laminated, moist, plastic. 8-10 Clay, yellow reddish brown, some gray, slightly laminated, moist, plastic. 10-11 Clay, gray brown to brown gray, moist, plastic, traces of red brown clay from above, 11-15 Clay, dull medium gray, wet. 15-25 Clay, gray to dark gray, moist, stiff, probably relatively unweathered. TOTAL DEPTH: 25 feet. A-9 Powell Farm HOLE P-45 Elevation 454 feet Total Depth 20 feet Drilling Record: 0-20 feet auger 0-1 Topsoil, brown, silty, clay, humic, moist. 1-6 Soil, silt, clay, yellowish brown, some brown laminated clay, dry. 6-10 Clay, yellowish brown, wet 6-9, dry 9-10. 10-12 Clay, yellowish brown, silt; 60% chert gravel. Porters Creek Clay: 12-16 Clay, red, laminated, some fine silt; some mixing with uphole material. 16-17 Clay, yellowish brown, moist, plastic. 17-19 Clay, gray brown to brown gray, moist, plastic 19-20 Clay, gray, moist, plastic. TOTAL DEPTH: 20 feet HOLE P-46 Elevation 472 feet Total Depth 30 feet Drilling Record: 0-2 feet auger 2-12 feet NX spoon 12-30 feet NX core 0-12 feet 3-in. casing 0-1 Clay soil, reddish yellow brown, very fine silt, plastic when moist. 1-3.5 Clay, reddish brown, few streaks of pale gray clay, laminated; some ferruginous material in the reddish brown clay and some limonitic chert gravel. Porters Creek Clay: 3.5-5 Clay, medium gray, some limonitic stained clay, plastic when moist. A-10 HOLE P-46 (cont'd) Powell Farm 5-6 Clay, reddish yellow brown, sandy, silty, conglomeritic in places, moist. 6-7 Sandstone, yellow tan, very fine, friable; apparently a weathered sand dike. 7-8 Clay, yellowish brown, some pale gray. 8-10 Clay and sandstone: clay, yellow brown, some pale gray, laminated, plastic when moist; sandstone, limonitic, clayey, friable, possibly a dike emplacement. 10-12 Clay, medium gray, laminated, some limonitic streaks along joints and silt laminae, micaceous 12-14 Clay, as above; slightly darker gray, some red and brown clay, silty, very micaceous, number of silt laminae. 14-30 Clay, as above; gray and becoming almost dark black gray at 23 feet. TOTAL DEPTH: 30 feet HOLE P-47 Elevation 419 feet Total Depth 74 feet Drilling Record: 0-4 feet auger 4-10 feet NX spoon 10-74 feet NX core 0-10 feet 3-in. casing 0-1 Clay soil and gravel: soil, yellow brown, silty, sandy; gravel, limonitic chert, small to large moderately rounded. Porters Creek Clay: 1-4 Clay, light gray, some yellow and red brown streaks; upper 1 in. plastic, lower 3 in. stiff; fine mica throughout. 4-10 Clay, medium gray, numerous limonitic filled macro joints, number of thin silt laminae and silt blebs, limonitic. A-ll HOLE P-47 (cont'd) Powell Farm 10-13 Clay, medium gray to gray, laminated, dipping 30° or more, many slickensides ; yellow brown clay and limonitic chert gravel 11.5 to 12 feet. 13-19.6 Clay, dark gray, faintly green, fine mica and silt, laminated, dipping 30°. 19.6-19.9 Sandstone, dark black green, glauconitic, very micaceous, foliation of mica approximately 45° to the horizontal; slickensides with clay above and below. 19.9-23 Clay, dark black gray, broken, some soft, fragments of sandstone from above. 23-27 Sandstone, dark black green, glauconitic, very micaceous, foliation of mica 45° to the horizontal contact with clay above 70° to the horizontal . 27-28 Clay, dark black gray, hard, micaceous, fragments of sandstone from above. 28-29 Sandstone, dark black green, glauconitic, very micaceous, foliation of mica 10° to the horizontal . 29-30 Clay, dark black gray, weathered, crumbly. 30-36 Clay, black gray, faintly green, hard, micaceous, some silt, few slickensides. 36-46 Clay, black gray, hard, some laminated, horizontal, some massive, micaceous, silty, occasional blebs of light gray fine sand. 46-50 Sandstone, dark black green, glauconitic, very micaceous, 2 in. of clay in base (sandstone may all be caved material) . 50-55 Clay, black gray to black, increase in mica content, silty in places. 55-65 Clay, as above; silty, micaceous, some silty micaceous laminae, mostly massive. 65-74 Clay, as above; hard, massive, less mica and silt, few vertical joints with "washboard" surfaces . TOTAL DEPTH: 74 feet A-12 J. D. Brummitte Farm Marshall County, Kentucky Elva Quandrangle HOLE B-14 Elevation 437.5 feet Total Depth 70 feet Drilling Record: 0-6 feet auger 6-8 feet NX spoon 8-11.5 feet BX spoon 11.5-70 feet NX core 0-6 feet 3 in. casing 0-4 Soil, brown, clay and gravel, dry, roots. Porters Creek Clay: 4-8 Clay, medium gray, plastic when very moist, stiff when slightly moist. 8-10 Clay, as above; laminae of white silt sand. 10-17.5 Clay, medium gray, some highly weathered zones; 20% gravel from 12.5 feet to 13.5 feet (possibly the filling of a root cavity; source no more than speculative) . 17.5-19.5 Clay, gray to dark gray, number of limonitic streaks, laminated, laminae dip approximately 10°, white to pale gray silt laminae form 5% of sample. 19.5-21.5 Clay, gray, few to no silt laminae and limonitic streaks. 21.5-29.5 Clay, gray to dark gray, some mica, occasional slickensides, weathered soft 23.5 to 24.5 feet; few vertical joints mineralized with limonitic material 27.5 to 29.5 feet. 29.5-36.5 Clay, dark gray to black gray, micaceous silt laminae. 36.5-44 Clay, black gray, indurated, number of micaceous silt laminae in places, slickensides in lower 2 feet, laminae dipping approximately 10°. 44-46 Clay, dark gray, indurated, micaceous silt laminae in lower 1 foot, laminae dipping 30°-40 , 46-48 Clay, dark black gray, indurated, micaceous, practically no silt laminae, laminae dipping 5 . A-13 HOLE B-14 (cont'd) Brummitte Farm 48-56 Clay, as above, indurated laminae relatively horizontal, micaceous but no silt laminae seen in wet core, some vertical or nearly vertical joints. 56-66 Clay, as above, laminae horizontal, micaceous silty sand blebs, very micaceous and silty in lower 3 feet. 66-70 Clay, as above, some massive, vertical joints with macro "washboard" surfaces. TOTAL DEPTH: 70 feet HOLE B-15 Elevation 407 feet Total Depth 35 feet Drilling Record: 0-7 feet NX spoon 7-35 feet NX core Porters Creek Clay: 0-0.5 Top soil; clay, red brown, moist, stiff; roots 0.5-9 Clay, pale gray with yellow brown streaks, becomes darker gray with depth, micaceous, silty. 9-13 Clay, gray to dark gray, some black gray, hard with intermittent zones weathered soft, occasional limonitic stained streaks. 13-19 Clay, gray, weathered soft. 19-21 Clay, dark gray, hard. 21-23 Clay, yellowish gray, silty, highly weathered, some dark black gray and light gray clay. 23-25 Clay, dark black gray, laminae of pale yellow and white gray silt. 25-27 Clay, dark black gray, unweathered, hard, same as above, slickensides 26.5 to 27.5 with multiple directions of striae. 27-29 Clay, gray, brown, highly weathered, blebs of yellow stained limonitic clay. A-14 HOLE B-15 (cont'd) Brummitte Farm 29-31 Clay, dark black gray, unweathered; hard occasionally thin lenses of pale dust gray silt; numerous slickensides 29-31 with random orientation. 31-35 Clay, medium gray to gray, soft to medium hard, some yellow brown clay streaks. TOTAL DEPTH: 35 feet HOLE B-16 Elevation 375 feet Total Depth 15 feet Drilling Record: 0-7 feet NX spoon 7-15 feet NX core 0-3 Clay soil, brown, gray brown and yellow brown, silty; some gravel. 3-5 Clay, red, brown to yellow brown, laminated; some red chert gravel. Porters Creek Clay (?) 5-7 Clay, medium gray, yellow limonitic streaks, medium weathered; some gravel (contamination down root cavity?) . 7-9 Clay, medium gray, laminated, moist, numerous limonitic clay streaks. 9-11 Clay, as above; clay-gravel conglomerate in lower % foot, possibly contamination. 11-14 Clay-gravel conglomerate, red brown, very sandy, 14-15 Clay, pale gray, 10% gravel, 25% gravel in lower 3 inches . TOTAL DEPTH: 15 feet. A-15 Brummitte Farm HOLE B-18 Elevation 372 feet Total Depth 21 feet Drilling Record: 0-2 feet 2-11 feet 11-21 feet 0-8 feet auger NX core Fishtail bit 3- in. casing 0-4 Clay soil, red brown; lots of chert gravel, silty, sandy. 4-7 Clay, medium gray and red brown, inter- laminated with silt laminae; 30% ferruginous chert gravel. Gravel, sand and clay, red brown . Porters Creek Clay: 20-21 Clay (no samples) water flushed gray. TOTAL DEPTH: 21 feet HOLE B-19 Elevation 392 feet Total Depth 35 feet Drilling Record: 0-3 feet 3-11 feet 11-28.5 feet 28.5-35 feet auger NX spoon NX core BX spoon Porters Creek Clay: 0-1 1-5 5-7 7-11 Clay, medium gray to red brown, micaceous, few silt laminae; 5% of sample is chert gravel. Clay, medium gray, streaks of brown, laminated, silt laminae, laminae dipping 15°. Clay and conglomeritic clay: clay, 50%, medium gray, some yellow brown, laminated, medium hard; conglomeritic clay, 50%, limonitic chert gravel. Clay, gray, semi-hard in places, micaceous, silty, thin lenses of gravel and sand 9 to 10 feet A-16 HOLE B-19 (cont'd) Brummitte Farm 11-20 Clay, gray to dark gray, laminated, occasional micaceous silt laminae. 20-22 Clay, gray to dark gray, highly weathered, few limonitic streaks, laminae dipping 25-30 . 22-28.5 Clay, gray to dark gray, weathered, micaceous silt layer 28 to 28.3. 28.5-30.5 Clay, as above, weathered, laminae dipping 25-30° 30.5-35 Clay, as above; micaceous sand lenses and blebs in lower 5 inches. HOLE B-2U Elevation 403 feet Total Depth 27 feet Drilling Record: 0-27 feet auger Porters Creek Clay: 0-2 Clay, pale light gray, micaceous. 2-6 Clay, pale to medium gray, micaceous. 6-13 Clay, medium gray to dark gray with depth, moist, slightly plastic. 13-27 Clay, gray to dark gray, becomes relatively hard with depth in unweathered portion. TOTAL DEPTH: 27 feet HOLE B-30 Elevation 403 feet Total Depth 37 feet Drilling Record: 0-3 feet auger 3-37 feet BX spoon 0-3 Clay soil, red brown, brown, some gray, silty; occasional small gravel. A-17 HOLE B-30 (cont'd) Bruiranitte Farm 3-7 Clay, various hues of brown, some gray and white; gravel. 7-37 Clay and gravel, very sandy, red and brown; cavity with water 25 to 27. TOTAL DEPTH: 37 feet HOLE B-31 Elevation 439 feet Total Depth 60 feet Drilling Record: 0-4 feet auger 4-14 feet BX spoon 14-60 feet NX core 0-10 feet 3 in. casing 0-1 Soil, clay and gravel, silt, light brown tan. Porters Creek Clay: 1-4 Clay, pale light gray and brown, laminated, micaceous. 4-14 Clay, medium gray to light gray, micaceous, silty, hard, laminae dipping 5°, some limonitic streaks . 14-17 Clay, gray, few silt laminae and blebs of light gray sand, some are limonitic. 17-20 Clay, dark gray, silt laminae and blebs 19 to 20. 20-30 Clay, dark black gray, micaceous, silt, some limonitic mineralization along macro joints; increase in silt content in lower 5 feet. 30-40 Clay, black gray, laminated, some massive, laminae dipping 5° or less. 40-50 Clay, as above. 50-60 Clay, as above; hard; lower 3.6 feet lost in hole, TOTAL DEPTH: 60 feet A-18 Brummitte Farm HOLE B-2 0-2 2-3 3-5 5-7 7-20 Elevation 379.6 feet Total Depth 20 feet Drilling Record: 0-20 feet auger Chert gravel and dark gray soil, moist. Clay, red, laminated, some silt. Clay, as above, small ferruginous gravel Clay, red with some brown; small gravel. Clay and gravel, orange red, dry. TOTAL DEPTH: 20 feet HOLE B-6 Elevation 377 feet Total Depth 20 feet Drilling Record: 0-20 feet auger 0-1 Top soil, brown and yellow brown; clay, silty; some gravel . 1-3 Clay soil, red brown, silty, moist, slightly plastic. 3-4 Clay, dark reddish brown, silty, moist, slightly plastic; no gravel or sand. 4-5 Clay, faintly gray brown, moist. 5-9 Clay, dark reddish brown and gray brown, moist. 9-14 Clay, dark reddish brown to brown, silty, very moist, plastic; some small gravel and trace of sand 12 to 13. 14-20 Clay, red brown to brown, lots of silt and fine sand, stiff. TOTAL DEPTH: 20 feet 0-2 HOLE B-7 Elevation 381 feet Total Depth 20 feet Drilling Record: 0-20 feet auger Soil, brown, clayey, humic; some limonitic chert gravel. A-19 HOLE B-7 (cont'd) Brummitte Farm Porters Creek Clay: 2-6 Clay, pale gray to brown gray, moist, plastic, occasional silt; traces of small limonitic gravel. 6-11 Clay, yellow brown, very micaceous, silty, moist, plastic, blebs of gray, some mottling of brown and gray. 11-13 Clay, orange brown, micaceous, very moist, plastic, becomes medium gray at 14 feet with some mottling of brown. 13-16 Clay, gray brown to brown gray, very moist, plastic, becomes medium gray at 14 feet with some mottling of brown. 16-20 Clay, medium gray to gray, laminated, streaks of limonitic clay, moist plastic. TOTAL DEPTH: 20 feet HOLE B-9 Elevation 371 feet Total Depth 20 feet Drilling Record: 0-20 feet auger 0-20 Conglomeratic clay, dry, hard. TOTAL DEPTH: 20 feet HOLE B-ll Elevation 411 feet Total Depth 36 feet Drilling Record: 0-36 feet auger 0-5 Chert gravel, limonitic, small to 1 in. moderately round to sub-angular, some clay soil matrix. A-20 HOLE B-ll (cont'd) Bruinmitte Farm 5-6.5 Chert gravel, as above but smaller, \ inch or less Porters Creek Clay: 6.5-11 Clay, light medium gray, some yellow brown, moist, plastic, becomes darker with depth. 11-16 Clay, medium gray, micaceous, no contamination. 16-21 Clay, dark medium gray, micaceous. 21-25 Clay, gray. 25-32 Clay, gray, some slightly yellow brown. 32-34 Clay, gray. 34-36 Clay, gray, some yellow brown material from uphole; contamination 5% of total sample. TOTAL DEPTH: 36 feet. HOLE B-13 Elevation 404 feet Total Depth 45 feet Drilling Record: 0-3 feet auger 3-40 feet NX spoon 40-45 feet Fishtail bit 0-36 feet 3 in. casing 0-1 Top soil, reddish brown, clayey, silty; some gravel . 1-5 Clay and silt, brown red, traces of laminated structure; some ferruginous gravel in lower two feet. 5-45 Conglomeratic clay, red, limonitic chert gravel, fine to one inch. TOTAL DEPTH 45 feet. A-21 APPENDIX B: CLAY SAMPLING AND TESTING PROCEDURES APPENDIX B CLAY SAMPLING AND TESTING PROCEDURES SAMPLE PREPARATION Approximately 1000 grams of each core sample were dried at 95°C and ground in a Fitzmill containing a screen with 0.40 -inch diameter holes. A sieve analysis was run on each lot, divided as follows: Hole Depth (feet ) Hole P-16 9-19 19-29 29-32 P-23 3-13 13-23 23-26 P-40 5-15 15-20 P-41 6-16 16-26 P-42 6-16 16-26 26-30 P-46 3.5-13 13-23 Depth (feet ) B-14 4-14 14-24 24-34 23-44 44-54 54-64 64-70 B-15 0-11 11-20 20-31 31-35 B-19 0-10 10-20 20-30.5 B-20 0-10 10-20 20-27 After grinding, samples to be tested were heated in an electric furnace to 371°C (700°F) and 649°C (1200°F) as indicated in Tables 5-4 and 5-6. X-RAY ANALYSIS Three grams of each clay sample were thoroughly mixed, ground in a mortar and pestle, and placed in a four-ounce jar full of de-mineralized water. A small amount of sodium hexametaphosphate was added to prevent f locculation. After thoroughly shaking the mixture to better fractionate the clay, it was allowed to stand for one hour. Two cubic centimeters were pipetted from a point one quarter of an inch below the liquid surface and then deposited on a microscope slide. The purpose of the B-l settling was to obtain particles of less than two microns in size. After drying, the slide contained oriented particles (the clay- minerals are plate-like) , ready for X-ray analyses (number 1 traces in Figure 5-1) . Unoriented powder samples were prepared by using conventional sample holders containing material ground to minus 100 mesh. X-ray diffraction patterns were obtained with a General Electric XRD-5 unit. The less-than-two-micron samples, after scanning from 2° to 30° were treated with ethylene glycol vapor in a dessicator- type container. The ethylene glycol molecules replaced water between the montmorillonite layers and expanded the structure from about 14 to 17.7 Angstoms as revealed by the X-ray diffraction patterns (see Figure 5-1, number 2 traces) . Samples were also heated to 371°C (700°F) , evaporating all of the ethylene glycol and reducing the distance between structural layers to about 10 Angstoms, as shown by the X-ray diffraction patterns in Figure 5-1 (number 3 traces) . Definitions of terms and descriptions of X-ray diffraction characteristics of clay minerals are available in a standard reference. ■*- DECOLORIZATION The degree of decolorization of crude soy bean oil by clay was determined by measuring the percent of light transmission at 460 millimicrons wave length. Ten grams of ground clay were mixed with 40 cc of benzene and a given percentage of crude soy bean oil in a 250-cc Erlenmeyer flask. The stoppered flask was agitated for 30 minutes. The mixture was then filtered through Whatman No. 3 filter paper. The filtrate was placed in a test tube and the percent transmission measured at 460 millimicrons on a Bausch and Lomb "Spectronic 20", calibrated at zero and 100 percent by using pure benzene. ^ Brown, G. (editor), X-ray Identification and Crystal Structures of the Clay Minerals , Mineralogical Society of Great Britain Monograph , 1961. 2 T.A. Klinefelter and H.P. Hamlin, "Syllabus of Clay Testing" U.S. Bureau of Mines Bulletin 565, 1957, p. 47. B-2 OIL RETENTION TEST The objective of the oil retention test was to determine the amount of oil retained when the clay was used to bleach oils. The test also provided an assessment of the clay as an absorbent on floors. In the former case, it was desirable to have a low oil retention value. In the latter case, a high value. Oil was added slowly to 10 grams of clay in a 250-ml beaker with a spatula. The end point was reached when a putty-like paste was formed and the mixture could be pushed against the side of the beaker, while leaving a very thin oil smear on the glass. The value is expressed as the percent of oil used (oil divided by the clay, times 100, on a weight basis) . RESISTANCE TO BREAKDOWN WITH WATER If the product does not break down in water, it will be less messy, have a longer useful life, and be more economical to use as a floor absorbent. Fifteen grams of minus 10 mesh, plus 30 mesh clay were placed in a six ounce jar; 50 ml of de-mineralized water were added and the mixture shaken for one minute. A 2-cc sample was pipetted, transferred to a tared crucible, and dried at 100°C to a constant weight. Percent breakdown equals the weight of the solids in the crucible, multiplied by 500, and divided by the weight of the sample. (Factor of 500 derives from factor of 5 to convert portion withdrawn to total breakdown and factor it 100 to convert it to percentage basis) . APPARENT DENSITY Federal specifications on sweeping compounds P-S-008656 (GSA-FSS) were used to determine the apparent density (product bulk density) . The clay was graded according to paragraph 3.4 of the above specifica- tions as follows: U.S. Standard Percent Retailed sieve number Minimum Maximum 30 52 78 40 73 90 60 90 97.5 1 Wyandotte Chemicals, J.G. Ford Division Publication, F-6584. B-3 A 250-ml, weighed, graduated cylinder is filled with the sample to approximately the 240-ml mark. The material is settled by raising the cylinder approximately one inch above the surface of a lead sheet and allowed to fall freely. This is repeated seven more times. The volume of the settled material is read to the nearest ml and weighed to the nearest 0.1. Density in pounds per cubic feet equals the weight of sample in grams times 62.43, divided by the volume in milliliters after settling. SLAKING TEST To test the slaking properties, large pieces of clay were placed in a beaker of water. Fuller's earth generally splits into large irregular fragments with no mud, whereas most other clays break up into fine particles. All Porter's Creek Clay samples tested slaked into large, irregular fragments. ACID TREATMENT One hundred grams of clay were placed in a 100-cc beaker, and 60 cc of concentrated H2SO4 and 540 cc of water were added. The mixture was boiled for one hour on a hot plate. After cooling and allowing the clay to settle, the clear liquid was decanted and 600 cc of de-mineralized water added. This was repeated five times. The residue was then filtered out, washed five times, allowed to drain overnight, and then dried at 100°C for 24 hours. The dried, acid- treated clay was crushed, ground, and graded in the same manner as raw clay. Klinefelter and Hamlin, Op. cit B-4 PENN STATE UNIVERSITY LIBRARIES ADDDD7 EflTObT