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To cite this article: Agus Wahyudi et al 2021 J. Phys.: Conf. Ser. 1811 012115 - Characterization of perlite and expanded
perlite from West Sumatera, Indonesia
Didit Adi Darmawan, Agus Wahyudi,
Hasudungan Eric Mamby et al.

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ICOSTA 2020 IOP Publishing
Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115

Technical and economical evaluation of high-quality slag

remover production from Indonesian perlite rock

Agus Wahyudi1*, Didit Adi Darmawan2, Hasudungan Eric Mamby3, and Ijang
Suherman4
1,2,3,4
Research and Development for Mineral and Coal Technology (TEKMIRA),
Ministry of Energy and Mineral Resources (ESDM), Jalan Jenderal Sudirman 623
Bandung 40211 INDONESIA

*Corresponding author : a.wahyudi80@gmail.com

Abstract. Perlite is a volcanic mineral that potentially used as a functional material in various
fields of application. One of the applications is as a slag remover material used in the metal
casting industry. In present work, perlite rock from Padang Pariaman, West Sumatra, Indonesia
has been used for production of slag remover, with a capacity of 20 ton/day or 6,000 ton/year.
Technical aspects, such as characterization of raw materials, testing of process equipment, and
characterization of the product, have been carried out. In conventional slag remover
production, the drying process was carried out by sun-dried, so it takes a long time and
sometimes the specified moisture content is not achieved due to weather factors. Meanwhile, in
this work, a rotary dryer was used so that the drying process can be done faster. The resulting
slag remover has a particle size of -10 mesh to +60 mesh and a moisture content of less than
0.5%, so that it meets the industrial specifications. Economic calculations were also carried out
by calculating the investment costs, operating costs, bank interest, and inflation. With a
production capacity of 6,000 ton/year and 15 years of project period, the financial feasibility
analysis was as follows: NPV of IDR18,722,373,778; IRR of 34%; and PP of 4 years. Based
on the analysis, the production of high-quality slag remover from Indonesian perlite was
feasible.

1. Introduction
Perlite is a generic name for amorphous volcanic silicate/alumina rock which can be expanded when
rapidly heated at its softening point [1]. Because of its characteristic, perlite is widely used in many
applications, such as for lightweight material, adsorbent, filler and also a growing medium for plants.
For those purposes, perlite needs to be heated at a high temperature of about 1000 C so that it can
expand up to 20 times from its original volume[2]. Another application of perlite is as slag coagulant
or slag remover material. For this purpose, perlite does not need to be heated at high temperatures. The
manufacturing process is simply by crushed to a certain size and then dried.
Slag remover is widely used in the foundry industry, especially in the manufacturing of automotive
components. This material is used to gather the infusions on the surface of the molten metal solution to
make it easy to remove and ensure the purity of the molten metal solution[3]. Conventionally, slag
remover material is produced by drying the perlite using sun-dried, so it takes a long time and
sometimes the specified moisture content is not achieved due to weather factors. Therefore, an

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ICOSTA 2020 IOP Publishing
Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115

additional technique should be applied, such as using rotary dryer, to speed up the drying process so it
will increase the production rate.
The abundance of perlite minerals is always associated with volcanic activities. According to the
Indonesian Geological Agency, the availability of perlite in Indonesia is spread out from Sumatera to
West Nusa Tenggara, with the biggest occurred in the district of Padang Pariaman, West Sumatra
province with a total deposit of about 12 million tons [4]. In this work, the technical and economic
aspects of slag remover production from Padang Pariaman perlite have been evaluated with a
production capacity of 6,000 ton/year.

2. Methods

2.1. Materials
Perlite rock was obtained from Padang Pariaman district, West Sumatera, Indonesia. The chemical
composition of the perlite was analyzed using X-ray fluorescence (XRF) and the results are shown in
table 1. Sieving analysis was conducted to measure particle size distribution of the product using
standard screens in several sizes, namely 10 mesh, 16 mesh, and 60 mesh. The moisture content was
also measured using moisture analyzer.

Table 1. Chemical composition of perlite from

Padang Pariaman

Composition Wt (%)
SiO2 76.49
Al2O3 12.92
Fe2O3 0.93
TiO2 0.12
MgO 0.13
CaO 0.92
Na2O 1.87
K2O 4.52
*
LOI 2.1
*
Loss on ignition

2.2. Slag remover production

Slag remover was produced by processing perlite in several steps, including crushing, drying, and
sizing. Table 2 shows the apparatus used for the production and figure 1 shows the production line.
The experiment was conducted in pilot scale with capacity production of 20 ton/day. The heating
temperature of rotary dryer was set at 400 C and the screen size was installed using 3 screens, namely
10 mesh, 16 mesh, and 60 mesh, as per particle size specification of the slag remover. The particles
that pass the screen are marked with “minus” sign, such as -10 mesh, -16 mesh and -60 mesh, while
the retained particles on the particular screen are indicated by a “plus” sign, such as +10 mesh, +16
mesh, and +60 mesh.

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ICOSTA 2020 IOP Publishing
Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115

Table 2. Production equipment

Equipment Quantity
Jaw crusher 1 unit
Vibrating feeder 1 unit
Hammer mill 1 unit
Screw feeder 1 unit
Rotary dryer 1 unit
Hopper 2 unit
Trommel screen 1 unit
Packing machine 1 unit
Belt conveyor 4 unit
Oil burner 1 unit
Flow conveyor 1 unit
Bucket elevator 1 unit
Genset 250 kVA 1 unit
Forklift 1 unit
Excavator 1 unit

Perlite Jaw Hammer Rotary

rocks crusher crusher dryer

Slag Packing Trommel

remover machine screen

Figure 1. Production flow of slag remover from perlite rock

2.3. Financial analysis

Financial study was conducted by calculating the revenue and the expenses, such as energy, raw
materials, labour, maintenance, and capital investment, into an income analysis and cash flow analysis.
The financial model was presented by three indicators, namely net present value (NPV), internal rate
of return (IRR), and payback period (PP)[5]. Those values will determine whether the project is
feasible or not.
The project was set for 15 years with the production capacity of 6,000 ton/year of slag remover and
the selling price is IDR 2,900,000 per ton[6]. Table 3 shows the scenario and assumption of the
project.

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ICOSTA 2020 IOP Publishing
Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115

Table 3. Project scenario and assumption

Parameter Scenario/assumption
Production capacity 6,000 ton/year
Selling price IDR 2,900,000 per ton
Tax 20%
Bank interest 10%
Inflation 4%
Marketing cost 5%
Administration cost 0.5%
Depreciation 15 years

3. Results and discussion

3.1. Technical evaluation

3.1.1. Product characterization. The prepared slag remover has particle size distribution dominated in
fraction of -10mesh to +60 mesh around 74%. The fine particles (-60 mesh) cannot be used as slag
remover due to its fine and lightweight characterization, make them fly when put into the metal
smelter. Such material alternatively can be used as a mixture of cement or concrete[7,8]. While the
coarse material (+10 mesh) can be reground to reduce the particle size. Some of the material become
dust and loss about 6%. Table 4 shows the particle distribution of the prepared slag remover.

Table 4. Particle size distribution of the product

Particle size (mesh) Wt. (%)

+10 4.77
-10 to +16 9.04
-16 to +60 64.78
-60 15.41
Loss 6.00
Total 100.00

Based on the particle size, the product has two categories, namely -10 to +16 mesh and -16 to +60
mesh. The prior used for cast steel application and the latter used for cast iron application. According
to the moisture content analysis, the prepared slag remover has moisture content of 0.2%. The value
meets standard specification of commercial slag remover which the moisture content should be less
than 0.5%. Besides that, the chemical composition of the material (table 1) also meets the specification
of commercial slag remover[9,10].

3.1.2. Energy consumption. Electricity and fuels were used to generate energy of the factory. The
electricity is needed to power the production process equipment, such as jaw crusher, hammer crusher,
rotary dryer, trammel screen, and packing machine. The amount of electricity can be calculated from
total kilowatt hour (kWh) used of each equipment during the process. The average power recorded
when using the equipment as stated in table 2 plus for lighting is 693.64 kWh per day to produce 20

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ICOSTA 2020 IOP Publishing
Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115

ton of slag remover. Thus, it becomes 183,121 kWh for one year. While fuels are used for the
equipment that consume diesel for the process, such as oil burner, genset, and forklift. Genset is only
used in case of blackout. The recorded average use of fuel is 276 L per day to produce 20 ton of slag
remover, so that it requires 87,360 L of fuel in a year. Table 5 shows the consumption of electricity
and fuels for the production of 6,000 ton of slag remover per year.

Table 5. Energy consumption

Description Consumption (per year)

Electricity 183,121 kWh
Fuel 87,360 L

3.2. Financial evaluation

3.2.1. Capital expenditure and initial investment costs. The business scheme of slag remover project
with the production capacity of 6,000 ton/year requires investment for procurement, such as land,
building and equipment, environmental and other permit costs, and commissioning with total amount
of IDR 7,186,800,000. The equipment needed for this project as mentioned in table 2. The Capex
requires additional two months of operational costs amounting to IDR 2,033,181,075. Thus, the total
required investment is IDR 9,219,981,075. Table 6 shows details initial investment costs of this
project.

Table 6. Initial investment costs

Investment Amount (IDR)

Capex:
• Land 1,500,000,000
• Building 3,000,000,000
• Equipment 2,280,000,000
• Environmental permit 406,800,000
Additional investment:
• Initial operational costs* 2,033,181,075
Total amount 9,219,981,075
*
Taken from production cost (table 7) for 2 months

The initial investment costs may come from own capital, bank loans or combination of them. For
this project, the initial investment 100% sourced from bank loans, for 10 years with an interest rate of
10% per year.

3.2.2. Operational expenditure. Operational expenses of this project are all the costs related to
produce slag remover from perlite, such as raw materials, energy from electricity and fuel, labour,
packing, and maintenance. According to the technical evaluation above, to produce 6,000 ton of slag
remover, the company needs 8,108 ton of perlite. The cost of electricity, fuel, labour, and packing are
based on the calculation, while the maintenance cost assuming 7.5% from capex. Table 7 shows
details the production costs per year.

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ICOSTA 2020 IOP Publishing
Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115

Table 7. Production costs (per year)

Description Quantity Price (IDR) Total (IDR)

Variable costs:
• Perlite rock 8,108 ton 1,000,000 8,108,000,000
• Fuel 87,360 L 10,560 922,521,600
• Electricity 183,121 kWh 1,444.7 264,554,851
• Packing (@ 25kg) 240,000 pack 2,000 480,000,000
• Labour 13 months 145,000,000 1,885,000,000
Fixed cost:
• Maintenance and spare part 7.5% 7,186,800,000 539,010,000
Total amount 12,199,086,451

3.2.3. Income projection. Based on the cost components above, the profit/loss of the project can be
prepared by involving business costs consisting of marketing costs and administrative costs assumed
to be 5% and 0.5% of production costs, respectively. A projection of income statement for the slag
remover business project can be prepared for the period of 15 years as can be seen in table 8.

3.2.4. Cash flow projection. Based on the income calculation above and considering the cost of
returning receivables and depreciation of investment values, a cash flow projection of the slag remover
business project can be prepared for a period of 15 years as can be seen in table 9.

3.2.5. Financial feasibility analysis. The aspects used to state whether the commercialization of slag
remover is feasible or not are net present value (NPV), internal rate of return (IRR), and payback
period (PP). The results of the cash flow calculation above are then used to calculate the NPV, IRR,
and PP. Table 10 shows the value of them.

Table 8. Summary of financial feasibility indicators

Parameter Value
NPV IDR 18,722,373,778
IRR 34% per year
PP 4 years

From the value of the financial feasibility indicator, it is known:

• NPV is positive, namely IDR 18,722,373,778, so the commercialization of the project is
economically profitable;
• IRR of 34% per year is quite high compared to the rates of return obtained from the financial
market, such as interest of bank deposits of around 6.56% per year;
• PP for 4 years, considered short enough to pay off the capital.
Thus, the slag remover commercialization project scenario is concluded to be financially feasible.

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ICOSTA 2020 IOP Publishing
Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115

Table 9. Income statement projection (in IDR)

Profit/loss calculation (IDR)
Business costs
Year Revenue Production costs Profit Earn before tax Tax Net Income
Marketing Administration
1 17,400,000,000 12,199,086,451 5,200,913,549 609,954,323 60,995,432 4,529,963,794 905,992,759 3,623,971,035
2 18,096,000,000 12,687,049,909 5,408,950,091 634,352,495 63,435,250 4,711,162,346 942,232,469 3,768,929,877
3 18,819,840,000 13,194,531,905 5,625,308,095 659,726,595 65,972,660 4,899,608,840 979,921,768 3,919,687,072
4 19,572,633,600 13,722,313,182 5,850,320,418 686,115,659 68,611,566 5,095,593,193 1,019,118,639 4,076,474,555
5 20,355,538,944 14,271,205,709 6,084,333,235 713,560,285 71,356,029 5,299,416,921 1,059,883,384 4,239,533,537
6 21,169,760,502 14,842,053,937 6,327,706,565 742,102,697 74,210,270 5,511,393,598 1,102,278,720 4,409,114,878
7 22,016,550,922 15,435,736,095 6,580,814,827 771,786,805 77,178,680 5,731,849,342 1,146,369,868 4,585,479,474
8 22,897,212,959 16,053,165,538 6,844,047,420 802,658,277 80,265,828 5,961,123,316 1,192,224,663 4,768,898,653
9 23,813,101,477 16,695,292,160 7,117,809,317 834,764,608 83,476,461 6,199,568,248 1,239,913,650 4,959,654,599
10 24,765,625,536 17,363,103,846 7,402,521,690 868,155,192 86,815,519 6,447,550,978 1,289,510,196 5,158,040,783
11 25,756,250,558 18,057,628,000 7,698,622,557 902,881,400 90,288,140 6,705,453,017 1,341,090,603 5,364,362,414
12 26,786,500,580 18,779,933,120 8,006,567,460 938,996,656 93,899,666 6,973,671,138 1,394,734,228 5,578,936,910
13 27,857,960,603 19,531,130,445 8,326,830,158 976,556,522 97,655,652 7,252,617,984 1,450,523,597 5,802,094,387
14 28,972,279,027 20,312,375,663 8,659,903,364 1,015,618,783 101,561,878 7,542,722,703 1,508,544,541 6,034,178,162
15 30,131,170,188 21,124,870,689 9,006,299,499 1,056,243,534 105,624,353 7,844,431,611 1,568,886,322 6,275,545,289

Table 10. Cash flow projection (in IDR)

Loan payments
Year Investation Net Income Depreciation Net cash flow Accumulation
Principal Interest
0 (9,219,981,075) (9,219,981,075) (9,219,981,075)
1 3,623,971,035 921,998,108 921,998,108 614,665,405 2,394,640,225 (6,825,340,850)
2 3,768,929,877 921,998,108 829,798,297 614,665,405 2,631,798,878 (4,193,541,972)
3 3,919,687,072 921,998,108 737,598,486 614,665,405 2,874,755,883 (1,318,786,089)
4 4,076,474,555 921,998,108 645,398,675 614,665,405 3,123,743,177 1,804,957,088
5 4,239,533,537 921,998,108 553,198,865 614,665,405 3,379,001,970 5,183,959,058
6 4,409,114,878 921,998,108 460,999,054 614,665,405 3,640,783,122 8,824,742,180
7 4,585,479,474 921,998,108 368,799,243 614,665,405 3,909,347,528 12,734,089,709
8 4,768,898,653 921,998,108 276,599,432 614,665,405 4,184,966,518 16,919,056,226
9 4,959,654,599 921,998,108 184,399,622 614,665,405 4,467,922,275 21,386,978,501
10 5,158,040,783 921,998,108 92,199,811 614,665,405 4,758,508,269 26,145,486,770
11 5,364,362,414 - 614,665,405 5,979,027,819 32,124,514,589
12 5,578,936,910 - 614,665,405 6,193,602,315 38,318,116,905
13 5,802,094,387 - 614,665,405 6,416,759,792 44,734,876,697
14 6,034,178,162 - 614,665,405 6,648,843,567 51,383,720,264
15 6,275,545,289 - 614,665,405 6,890,210,694 58,273,930,958

4. Conclusions
Perlite from Padang Pariaman, Indonesia has been successfully processed into slag remover material
with quality that meets specifications of commercial product. With a production capacity of 6,000
ton/year, the plant can generate profits of IDR 3-6 billion per year. By accounting the capital costs and
operational costs that are spent, this project has payback period of four years. In addition, the NPV of
this project is positive and the IRR is greater than interest rate of bank deposit. Thus, this project is
declared technically and economically feasible.

5. References
[1] Rashad A M 2016 A synopsis about perlite as building material – A best practice guide for Civil
Engineer Constr. Build. Mater.121 338–53
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[3] Liapis I G and Chasiotis A 2015 Hot stage processing of steel slag and the benefits for
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International Conference on Bituminous Mixtures and Pavements, ICONFBMP 2015 pp 33–
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[4] Geology Agency 2018 Annual Report of Indonesian Geology Agency of 2017 (Bandung,

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Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115

Indonesia)
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[9] Fusaike-casting.com. 2020. Casting Refractory Materials Unexpanded Perlite Ore. [online]
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ICOSTA 2020 IOP Publishing
Journal of Physics: Conference Series 1811 (2021) 012115 doi:10.1088/1742-6596/1811/1/012115