ECONOMIC VIABILITY OF FOUR CHARCOAL PRODUCTIVE SYSTEMS FROM MINAS GERAIS STATE

Gabriel Browne de Deus Ribeiro,Sebastião Renato Valverde,Artur Queiroz Lana,Angélica de Cássia Oliveira Carneiro

doi:10.1590/1806-908820200000001

Gabriel Browne de Deus Ribeiro, Sebastião Renato Valverde + Show 2 more

Open Access

https://doi.org/10.1590/1806-908820200000001

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Abstract

ABSTRACT This work analyzed the economic viability of four charcoal productive systems from Minas Gerais state, namely: fornos-fornalha, rabo-quente, encosta and superfície. The evaluated systems have an estimated productive capacity of about 100 cubic meters of charcoal per month. Implementation and maintenance expenses and productive parameters were obtained in the literature and from local producers of Lamim (MG), a productive center in the state, during the year of 2018. Silvicultural costs were not considered, only the wood purchase. For the economic evaluation, Net Present Value (NPV), Modified Internal Rate of Return (MIRR), Payback, capex and opex were analyzed, and it was also evaluated the systems’ economic sensitivity to charcoal price and gravimetric yield variations. The main results showed that all the systems were economically viable by NPV criteria; only rabo-quente system was not viable by MIRR criteria; fornos-fornalha system presented the best economic results, greater capacity of net revenues and free cash flow generation, and lower operational expenses. This productive system was also less sensitive to charcoal price fluctuations and to its charcoal yield reduction. Given this fact, its insertion may be attractive in the productive reality of small and medium producers. In addition, the possibility of selling charcoal fines resulted in improvements in economic indicators, especially for traditional production systems: rabo-quente and encosta.

Highlights

Brazil is one of the world’s largest charcoal producer and the only country that performs this activity on industrial scale, which is mainly destined for pig iron, steel and ferroalloys sectors (EPE, 2018)
The main results showed that all the systems were economically viable by Net Present Value (NPV) criteria; only rabo-quente system was not viable by Modified Internal Rate of Return (MIRR) criteria; fornos-fornalha system presented the best economic results, greater capacity of net revenues and free cash flow generation, and lower operational expenses
In Minas Gerais a significant part of charcoal production is still performed in rudimentary furnaces, such as rabo-quente, encosta and superfície, which are systems with: reduced gravimetric yield, higher gas emissions and fewer carbonization control (CGEE, 2015)

Summary

Introduction

Brazil is one of the world’s largest charcoal producer and the only country that performs this activity on industrial scale, which is mainly destined for pig iron, steel and ferroalloys sectors (EPE, 2018). In Minas Gerais a significant part of charcoal production is still performed in rudimentary furnaces, such as rabo-quente, encosta and superfície (circular), which are systems with: reduced gravimetric yield, higher gas emissions and fewer carbonization control (CGEE, 2015). Though, replacing these rudimentary systems by more technological ones that require higher investment and that would increase carbonization expenses should inhibit their adoption by small and medium producers, who concentrate a significant part of the production (Vilela et al, 2014). Studies should look for the development of systems that combine improvements in production yield, reduction of greenhouse gas emissions, and which are technically and economically viable and accessible to smaller producers

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