How profitable are rock quarries?
I'm an undergraduate with degrees in economics and geology. I've been spending a while thinking of ideas for profoundly unsexy businesses that have the potential for great cash flow, yet are divorced from the normal consumer market - because to hell with starting a retail-oriented business.
I've always LOVED visiting rock quarries, for fun and treasure and adventure. Judging from the scale of these businesses, I suspect that they must have great cash flow. So....does anyone here know a quarry owner? Just how good are these businesses for ownership?
+1 SB for possibly one of the best thread titles ever!
Here is how you think about it: mining, as everything else, is capital intensive => operating leverage is high. Your biggest costs are excavation and transportation. Depending on the location of the mine, transportation can be more than the actual mining costs.
Everything equal, the better the property/building mkt the better the margin of quarry mines.
With high upfront investment, any reward is reaped in years. And for those years, you are bearing a whole set of risks. IMO, you are right, it is an unsexy biz for a reason.
I know a guy who runs a mine in norther Minnesota. They extract lots of rock too. Their cash flow is solid.
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