Aggregates from natural and recycled sources

Content Cover Image

Ten millimeter aggregate material stone. Source: Creative Commons-by-3.0

Since the beginning of the twentieth century until 2008, infrastructure in the USA has grown enormously. Much of the core infrastructure, including roads, bridges, water systems, and sewers, was put in place during the first half of this century. The Interstate Highway System was constructed during the 1950’s, 1960’s, and 1970’s. Some of this infrastructure is now in a condition where repair or replacement is required. In areas of rapid population growth, new infrastructure may be required to meet growing needs.

Construction materials in general, and aggregates in particular, are important components of infrastructure. Development and extraction of natural aggregate resources (primarily crushed stone and sand and gravel) are increasingly being constrained by urbanization, zoning regulations, increased costs, and environmental concerns, while use of recycled materials from roads and buildings is growing as a supplement to natural aggregates in road construction. Recycling represents one way to convert a waste product into a resource. It has the potential to (1) extend the life of natural resources by supplementing resource supply, (2) reduce environmental disturbance around construction sites, and (3) enhance sustainable development of our natural resources.

This study was undertaken to provide an understanding of the options for aggregates supply in construction. Technical and economic information on the aggregates recycling industry is developed in order to analyze the factors influencing aggregates recycling, determine why recycling is occurring, and assess the effects of recycling on the natural aggregates industry. Although data on aggregates recycling are available, no concise data source exists for this important emerging industry. A discussion of the technological, social, and economic factors influencing this industry is intended to provide background information for informed decisions by those interacting with this industry (operators, suppliers, consumers, or regulators), and for those interested in developing sustainable U.S. natural resource and land-use planning and policies.

Related work currently being conducted by the U.S. Geological Survey (USGS) includes the Aggregates Automation conference, the Construction Debris Recycling conference, Construction Materials Flow studies, the Mid-Atlantic Geology and Infrastructure Case Study, Infrastructure project studies, and the Front Range Corridor Initiative.

Information for this study was gathered from a variety of published sources, site visits, and personal contacts. Cost data were developed from representative industry data. Appreciation is conveyed to Russel Hawkins of Allied Recycled Aggregates, Larry Horwedel of Excel Recycling & Manufacturing, Inc., William Langer, USGS, and Gregory Norris of Sylvatica Inc. for their contributions of data and technical reviews of this paper.

Specific cost assumptions are documented. Costs and prices for the Denver, Colorado, metropolitan area were used in some cases to represent the industry. Although costs and prices in other regions of the country may differ from those assumed in this study, inferences using values different from those used in this study are presented.

Structure of the aggregates industry


caption Figure 1: Construction aggregates flow system (Source: USGS)


Aggregates are defined in this study as materials, either natural or manufactured, that are either crushed and combined with a binding agent to form bituminous or cement concrete, or treated alone to form products such as railroad ballast, filter beds, or fluxed material (Langer, 1988). The most common forms of concrete are prepared using portland cement and asphalt as binding agents. About 87 percent of portland cement concrete and about 95 percent of asphaltic concrete are composed of aggregates (Herrick, 1994).

Figure 1 illustrates a generalized version of the flow of aggregate materials in construction. Most natural aggregates are derived from crushed stone and sand and gravel, recovered from widespread, naturally occurring mineral deposits. Vertical arrows represent losses to the environment, which occur throughout the flow system. More than 2 billion metric tons (tons[1]) of crushed stone and sand and gravel were consumed as aggregates in the United States in 1996, much of which was used in road construction and maintenance. Recycled material used to produce construction aggregates for concrete comes from two primary sources: (1) road construction and maintenance debris, and (2) structural construction and demolition debris (for example, from demolished buildings, bridges, and airport runways). Virtually all the asphalt for recycling comes from roads and parking lots. Some asphaltic concrete is milled and relaid as base material in place, but most recycled material goes through the process of recovery (demolition, breaking, and collecting), transportation (to a local collection point), processing (crushing, screening, separating, and stockpiling), and marketing (as sized products with multiple uses). Recycled aggregates currently account for less than 1 percent of the total demand for construction aggregates, but the amount recycled is thought to be increasing. Precise consumption statistics for the recycled materials are not available, but estimates for each source and market sector are shown in figure 2. A more detailed analysis of construction aggregates substitution is currently being conducted by the USGS.


caption Figure 2: Consumption of aggregates by source and market sector. (Source: USGS)


As shown in figure 2, most of the demand for aggregates is supplied by sand and gravel or crushed stone producers. Aggregates derived from crushed stone are consumed in portland cement concrete, road base, asphaltic concrete, and other applications, whereas almost half of the aggregates derived from sand and gravel is consumed in portland cement concrete. Currently, more than 50 percent of all cement concrete debris and about 20 percent of all asphalt pavement debris end up in landfills. An estimated 85 percent of all cement concrete debris that is recycled is used as road base, with minor amounts used in asphaltic concrete and fill material. About 90 percent of asphalt pavement debris that is recycled is reused to make asphaltic concrete.

As costs, regulations, land-use policies, and social acceptance of more sustainable natural resource practices have a greater impact on the natural aggregates industry, increased aggregates recycling in urban areas is likely to occur. Producers of natural aggregates and independent entrepreneurs are beginning to consider the recycling of construction and demolition debris as one option for material use, as it has the potential to (1) extend the life of natural resources by supplementing resource supply, (2) reduce environmental disturbance around construction sites, and (3) enhance sustainable development of our natural resources—yet it can be profitable. In some urban areas, recycling of concrete and asphalt has reduced the flow of waste to landfill areas and reduced road construction and maintenance costs. In less urbanized areas, aggregates recycling is expensive or impractical on a large scale. Because of the high transportation cost associated with disposal of construction waste materials and the demand for this material in new construction, the aggregates recycling industry has developed locally or regionally, most often in urban areas. As each region has its own particular needs, a thorough understanding of factors affecting the aggregates industry in a particular area is necessary to determine whether aggregates recycling is advantageous.

Because the aggregates industry is a high-volume, low-unit-value industry, a small variation in operation economics can have a significant impact on the profitability of an operation. Entry into this business often requires significant capital investment, particularly for small operators, and equipment suitable for processing natural aggregates may not be suitable for processing recycled aggregates. The relative distance and associated cost of transporting material between construction, mining, processing, and disposal (landfill) sites influence production site location.

Aggregates processing technology


caption Figure 3: Generalized flow diagram for an aggregates recycling operation. (Source: USGS)


Table 1: Significant technological aspects of natural and recycled aggregates
Natural Aggregates Recycled Aggregates
About 2 billion tons of sand and gravel and crushed
stone were reported to have been consumed as
aggregates in the United States in 1996 (Tepordei,
Less than 80 million tons of recycled material were
estimated to have been consumed in construction
applications in the United States in 1996 (T. D. Kelly,
oral commun., 1997).
Aggregates are derived from a variety of source rocks
and mined primarily by surface methods.
Aggregates are derived from debris of road and building
construction projects.
Mining requires environmental monitoring and
reclamation. Costs for exploration, permitting,
overburden removal, site preparation, and both ongoing
and final site reclamation must be considered.
Recycling requires limited monitoring and reclamation.
Costs for exploration, mining, or stripping are not
incurred, but costs for ongoing reclamation, site cleanup,
and dust and noise reduction may be incurred.
Quality depends primarily upon the physical and
chemical properties of the source deposit.
Quality varies significantly due to large variation in type
and impurities of debris sources.
Must conform to Federal, State, or local technical
specifications for each product application.
Must conform to Federal, State, or local technical
specifications for each product application.
Currently used in road base, concrete, and asphalt
applications in all States (see Appendix 1).
Forty-four States allow its use as road base, other
permissible applications vary by State (see Appendix 1).
Processing primarily consists of crushing, sizing, and
Processing similar to natural aggregates, but increased
wear of equipment may result because of variable size
and angularity of feed and the presence of deleterious
Location dependent upon resource. Equipment selection
depends upon numerous technical, economic, and
market factors. Transportation distances and costs
among resources, processing facilities, and markets
affect end uses.
Location determined by feed sources and markets.
Location, equipment selection, and plant layout affect
operational economics. Transportation distances and
costs affect both feed supply and markets.
Mine and plant layout in part determines the efficiency
of an operation.
Recycler must be able to adjust material feed and output
to meet changing product requirements.
Processing generally occurs at mine site, often outside
city limits. Resource suitable for multiple products.
Processing often at centrally located site in urban area
using mobile equipment. Product mix often limited.
Mobile, on-site plants may be used for large projects;
time required for takedown, transport, and setup.
Mobile plants commonly relocate 4 to 20 times each
year, affecting productivity; time required for takedown,
transport, and setup.
Products marketed locally or regionally, mostly in urban
areas. Higher valued products may have larger
marketing area.
Products marketed locally in urban areas. Lower valued
product mix may constrain markets


The technology required for raw material acquisition and processing of aggregates from both natural and recycled sources is summarized in table 1, which focuses on technical factors that provide both incentives and deterrents to aggregates recycling. A detailed description of processing technology and the technical factors influencing equipment selection are reported in Aggregates production technology for the production of aggregates from crushed stone, sand and gravel, recycled aggregates from concrete, and recycled aggregates from reclaimed asphalt pavement.

Figure 3 illustrates the typical steps required to process recycled material. Technology primarily involves crushing, sizing, and blending to provide aggregates suitable for a variety of applications. Concrete and asphalt recycling plants can be used to process natural sand and gravel, but sand and gravel plants usually won’t process recycled material efficiently. Construction concrete often contains metal and waste materials that must be detected and removed at the start of processing by manual picking or magnetic separation. Feed for recycling is not uniform in size or composition, so equipment must be capable of handling variations in feed materials.

Technical factors affecting aggregates recycling

Based upon data from reference documents, personal communications, and site visits, the following technical factors were determined to affect the profitability of an aggregates recycling operation. All factors don’t always apply, but they have been found to apply in many cases.

Product Sizes: Screen product-size distributions determine the amount of each product available for sale. Regional supply and demand considerations often dictate local prices for various size products. Because different products have different values in any given market, the operation that is able to market high-value size distributions is likely to improve its cash flow position. Screen configuration can be adjustable to reflect changing market conditions for different size products. Experienced operators have the ability to maximize production of high-value products and to respond to changes in product requirements.

Operational Design: In order to maximize efficiency and profitability, careful consideration must be given to operational layout and design, production capacity, and equipment sizing. Although economy-of-scale efficiencies benefit larger operations, the higher capital cost of equipment and the limited availability of feed material may limit the size of an operation. Equipment configuration also affects product mix (what products are produced; mixes of products) and plant efficiency. Equipment selection is influenced by the decision on whether to be a fixed or mobile recycler. Mobile plants must meet roadway restrictions to be allowed to move from site to site. Fixed site equipment can be somewhat larger and perhaps more durable, thereby trading off lower unit production costs with reduced transportation costs for the mobile unit. Busse (1993, p. 52) explained, “The smaller processing plants are a great concept. They work well for asphalt recycling. But for concrete, the preparation cost is enormous when using small crushers because the material needs to be broken down tremendously. If only flat work or roadwork is being processed, perhaps it can be done. If bridges, parapets, demolition debris, or building columns are being processed, the small plants won’t work. The wear cost is too high.”

Labor: Labor requirements are low for recycling operations. A typical operation would require fewer than 10 personnel, whether it is a small size operation or the largest operation. For a stationary concrete recycling facility, labor accounts for about 20–30 percent of the total operating cost. For a mobile operation, labor costs can be higher due to take down and setup requirements from frequent relocation of equipment.

Feed Source Material Characteristics: The quality of the feed material to be processed affects product mix, production efficiency, and labor requirements. Recycling operations generally receive a variety of materials from numerous sources, so have only limited control over material quality. Because of the variability of source material, recycled aggregates may not be suitable in product applications where a high degree of particle uniformity is required (for example, top course of cement concrete). Broken or fine material increases the production rate, while clean concrete with only limited fines decreases the production rate. Concrete from building construction and demolition debris can contain nonmagnetic debris such as wood, aluminum, or plastic which
must be hand picked, adding to labor costs.

Energy: Energy, primarily electricity and diesel fuel, is required for powering the processing and transportation equipment of both natural and recycled aggregates. Based on a 1996 energy audit of a Denver, Colorado, area recycling facility which processes both portland cement concrete and recycled asphalt pavement, an estimated 34 million joules[2] per ton is required to process demolished portland cement concrete and 16.5 million joules per ton is required for recycled asphalt pavement. The Portland Cement Association reported 1993 energy requirements for natural aggregate materials of 5.8 million joules per ton for sand and gravel material and approximately 54 million joules per ton for crushed stone; however, update and corroboration of this information were not possible. These values do not include the energy required to demolish construction debris or transport this material for processing. Transportation energy requirements are estimated to be 2,700 joules/kilogram-kilometer for sand and gravel, 3,800 joules/kilogram-kilometer for crushed stone, and 3,800 joules/kilogram-kilometer for recycled aggregates.The difference in unit energy consumption is a result of being able to carry a greater tonnage of fine materials (sand) in a given volume.

Infrastructure Life: The useful life of infrastructure affects both supply and demand for recycled aggregate products. Road and building design determines how long such structures will last, and the amount of maintenance required. Aggregate characteristics, economic utility choices, weather conditions, and intensity of use also impact infrastructure life. A large segment of Interstate 70 in Colorado, which had been designed to last 40–50 years, had to be replaced after only 25 years of service because of deterioration of the original concrete due to an alkali-silica reaction, making the concrete more susceptible to local freeze-thaw cycling. After a substantial testing period, the original concrete was replaced with a mix in which 10 percent of the subbase aggregates layer and 75 percent of the asphalt overlay were derived from recycled material. Testing indicated that the mix containing the recycled material should prove to be more durable than other mixes tested.

Asphalt roads can have markedly different lives depending on original design, climate, traffic load, and the schedule and type of maintenance. For example, U.S. Highway 34 through Big Thompson Canyon in Colorado has demonstrated a life of more than 20 years while Interstate 25 through the Denver metropolitan area has demonstrated a life of only 6 years.

Recycled Product Specifications: Many States set technical specifications for selected recycled aggregate product applications. These specifications define product characteristics that must be met for all construction projects within the State. Virtually all States allow recycling of reclaimed asphalt pavement.

Hawkins (1996) listed the following advantages for using recycled concrete products as road subbase aggregates:

  • Recycled concrete is nonexpansive and will not grow or expand with moisture.
  • Recycled concrete has an optimum moisture of approximately 13 percent—about twice that of natural road base, due to its particle size distribution. It may absorb twice the water before becoming saturated.
  • Recycled concrete is 10–15 percent lighter in weight, resulting in reduced transportation costs.
  • Recycled concrete compacts faster—up to two to three times as fast as nonstabilized natural road base.

Recycled concrete aggregates can also have disadvantages:

  • They are often composed of material with highly variable properties.
  • The strength values are often lower than those of natural aggregates, resulting in product application limitations.
  • Use of recycled material must be evaluated on a project by project basis in order to determine suitability. Customers are often not used to matching material characteristics with project quality requirements.

Because aggregates derived from natural and recycled sources can have different properties, blending of different aggregates must be carefully monitored in order to prevent quality problems. Construction contractors that use blended mixes must recognize these property differences and practice application techniques to accommodate such differences.

Transportation factors

Transportation distances and costs are a significant part of the dynamics that define the use of construction aggregates within a region, but they normally do not directly affect operational profitability of the recycler, because costs for transportation are typically incurred by the contractor of a construction project (who supplies feed for recycling), rather than the recycler. The contractor is, however, concerned with the cost associated with transportation. The amount of material that the contractor makes available to the recycler is based in part on a calculation that compares the relative costs of delivering and paying a tipping fee to the recycler, the costs of transporting construction debris to competitors, or the cost of disposing of this material in a landfill. Although site location dynamics are similar in all areas of the United States, local conditions will vary as material sources and markets change.

Table 2: transportation costs on a typical highway construction project in New England
Layer thickness
of typical 1.6-km
length of 4-lane
Amount of
material per
kilometer of
Average f.o.b.2
price ($/ton)
Total material
cost ($)
cost (56 km;
Total cost
Percent of total
cost related to
12.7 cm asphalt 8,700 $28.66 $249,000 $63,000 $312,000 20%
130 cm crushed
14,400 $7.72 $111,000 $105,000 $216,000 49%
30 cm gravel 14,900 $5.51 $82,000 $108,000 $190,000 57%
15-61 cm sand 27,900 $5.51 $154,000 $203,000 $357,000 57%
Base course
?6,900 NA3 NA NA NA NA
Total 72,700 NA $596,000 $479,000 $1,075,000 45%
  1. The term "tons" refers to the metric ton unite of 2,205 pounds
  2. f.o.b., Free on board, processing plant.
  3. NA, not available
Source: Socolow, 1995

Construction aggregates are primarily used in bulk quantities that are transported to a point of use by truck, rail, or water carrier. On a national average, approximately 85 percent of all aggregates are delivered by truck, 6 percent by rail, 3 percent by water carrier, and the remainder is consumed on-site. The average 1995 cost of trucking aggregates 1 kilometer is reported to be approximately $0.13 per ton. The distance that aggregates can be hauled economically varies regionally; however, each kilometer that a ton of aggregate is hauled can add $0.13 to its cost, if trucks return empty to get more aggregates. Backhauling of material from the delivery site can reduce delivery cost by as much as 50 percent.

Table 2 illustrates the importance of transportation costs on a typical highway construction project in New England. For an assumed 56-kilometer transportation distance, the cost of transporting the lower layers of road base exceeds the estimated purchase price of the product. Therefore, the proximity between construction project and aggregates source, particularly for lower value products such as road base material, is critical. A recycler must be able to position operations such that it is more cost effective for the construction contractor to send construction debris to the recycler rather than transport it to a landfill. Although transportation costs are considered important in terms of plant location and competitiveness, feed supply transport costs were not included in the cash flow analysis of this study because the cost of transporting feed material to the recycling facility is commonly incurred by the supplier. Movement on-site by heavy equipment is included as a cost to the operation. Products were assumed to be sold free on board (f.o.b.) plant; cost of product transportation would be incurred by the purchaser.

Locating an aggregates recycling facility

Minimization of the distances between a recycler and its suppliers and markets is critical to the economic success of an aggregates recycling facility. The primary source of recyclable concrete is obsolete infrastructure. Areas of urban renewal or suburban growth offer the greatest opportunity as markets for recycled concrete aggregates. Figure 4 illustrates the factors that need to be considered when locating a recycling facility.


caption Figure 4: Locating a concrete recycling facility. (Source: USGS)


A recycler will normally not be located within a growth area because of zoning restrictions or community resistance, unless it is a mobile plant temporarily located at a large construction site. Because a landfill may represent an alternative to recycling construction debris, distances to local landfills also need to be considered. A construction contractor often must choose whether to dispose of debris at a landfill or send it to a recycling facility. Relative transportation costs and distances, and associated tipping fees (charges by either a landfill or recycler to process material at that facility) most often influence this decision.

In the simplified case illustrated in figure 4, where relative transportation distances serve as a proxy for relative transportation costs and fees, a construction contractor demolishing obsolete infrastructure at the center of the metropolitan area would most likely choose to deliver first to the recycling facility located at C, then B, then A because transportation costs would be less, all other things being equal.

A recycler would set its tipping fee at a level low enough to attract sufficient feed material to meet the demand of its local markets but high enough to cover its expenses. Recycler C may be able to charge higher tipping fees than B or A, because of its location closer to the source of construction debris. With proper fee management, recycler C would probably receive sufficient construction debris to supply its local growth area; but recyclers B or A may not receive sufficient material to satisfy the need of their larger growth areas, unless tipping fees are lowered or other operational factors make them attractive to construction contrators.

In the case where the distance from the infrastructure to A is about equal to the distance to the landfill, and recyclers B and C are not accepting material for whatever reason, then tipping fee differences between the landfill and recycler A will most likely determine where the construction debris is sent. Further discussion of tipping fees is given in the cost section of this report.

Costs of producing recycled aggregates

Of the costs associated with the production of recycled aggregates, product price and tipping fee were found to have the greatest effect on operational economics; variations of these parameters were analyzed. A method of economic evaluation presented here can be used for making informed planning and policy decisions related to aggregate production from recycled sources.


Table 3: Assumptions used in this evaluation
Category Value Basis
Operational capacity small-110,000 tons1 per year
Medium-253,000 tons per year
Large-312,000 tons per year
Selection based upon known
producer capacities and available
cost data.
Land requirement 2 hectares for small operation;
4 hectares for medium operation;
6 hectares for large operation
Selected as representative of
Land lease rate 9 percent of land value Average rate for Denver, Colo.,
Cash flow period 11 years Chosen to permit sufficient time
to recover capital.
Rate of return 12 percent per year Selected as representative of
Inflation rate 3 percent per year Chosen to reflect recent trends
Depreciation period 7 years (straight line method) Reflects industry standard for
crushing equipment
Federal tax rate 34 percent Federal tax rate
State tax rate 5 percent Colorado tax rate
Debt Equity Ration 0.9 A rate of 90 percent debt
financing assumed based on
industry practice
Loan interest rate 10 percent Reflects typical industrial rate
Average tipping fee2 $1.10 per ton Reflects average for Denver area
Average product price $5.23 per ton Reflects average price in Denver
area for recycled aggregate
derived from 60:40 mix of asphalt
and concrete
Average production rate
(percent of design capacity)
88 percent Based on site visits and contracts
Production schedule 1-8 hour shift per day, 5 days per
Based on site visits and contracts
  1. In accordance with USGS standards, all figures have been reported in metric units.
  2. Tipping fees are often charged to process construction debris; fees vary locally depending upon the
    characteristics and quality of the waste, the general level of competition for feed material, and local landfill

Costs for producing recycled aggregates were developed based on data from the Denver, Colorado area. Costs in other regions of the United States may differ due to raw material supply, operational, competition, or demand variations. The methodology used in this study allows for variation in costs and revenues to be evaluated and analyzed.

Production cost information for three representative fixed-site recycling operations is presented. Costs used in this evaluation were developed from data collected from published literature, personal contacts, and site visits. Based on these data, cost models were built to represent small (110,000 tons/year), medium (253,000 tons/year), and large (312,000 tons/year) capacity aggregates recycling operations. The recycling models represent facilities processing a 60:40 percent mix (tonnage basis) of recovered asphalt pavement to cement concrete debris. Assumptions for the recycling models are shown in table 3.

For each size model, capital expenditures for the processing plant and associated equipment, as well as all necessary reinvestments, were estimated. Investments include mobile and stationary equipment, construction, engineering, infrastructure, and working capital. Infrastructure includes the cost for construction and installation of access and haulage roads, water facilities, power supply, and personnel accommodations. Working capital was estimated at 15 percent of the variable operating cost.

Land requirements for recycling operations are typically small (generally 2–6 hectares). Consequently, many operations lease land rather than purchase it. In this study, land was assumed to be leased. Based upon reported lease fees[3] for comparable industrial land in the Denver area, an average annual cost of land of about $97,000 per hectare was assumed. Lease rates in the Denver metropolitan area ranged from 8 to 10 percent of the property value; a value of 9 percent was assumed for this study. Based upon these data, a leased land charge of approximately $19,000 was assumed for the small operation, $43,000 for the medium operation, and $53,000 for the large operation. These charges were included in the fixed operating costs. Operating costs are a combination of variable and fixed costs. Variable operating costs include production and maintenance labor, operating supplies, and utilities. Fixed operating costs include technical and clerical labor, payroll overhead, land lease costs, administrative costs, facilities maintenance and supplies, advertising, and sales. Taxes, insurance, depreciation, permitting costs, and other local fees are also included in this analysis.

A range of different size products is typically produced by recycling operations to meet the varying needs of local markets. Prices for each product can vary regionally due to demand and market considerations. An average price of $5.23 per ton was assumed for this study, based upon an assumed throughput ratio of asphalt to cement concrete of 60:40 and a weighted average of reported 1996 prices for known products in the Denver area. Products containing different proportions of cement/asphalt concrete would generate different prices depending upon the prices of these products for the area of the United States in question. Recovery of byproducts such as rebar from recycling operations was not considered in the evaluations.

Table 4: Estimated 1996 costs for recycled aggregate operations.
Operation Capacity (tons/year) 110,000 253,000 312,000
Capital Costs1 $842,000
Working Capital2
(15% of variable operating cost)
Total Capital Costs $895,000
Variable Operating Costs3 ($/ton)

Equipment Maintenance




Permits and Fees















Net Operating Costs ($/ton)

Recovery of Capital (Straight line depreciation over
a 7 year period)

Fix Costs (Overhead)









Total Operating Costs ($/ton) $5.89 $3.20 $2.92
Tipping Fee Credit ($/ton) ($1.10) ($1.10) ($1.10)
Average Market Price ($/ton) ($5.23)5 ($5.23)5 ($5.23)5
Net Present Valuea6 (At 12% DCFROR, reported tipping
fee and market price of assumed product mix)
$-72,000 $631,000 $901,000
  1. Assumes equipment is purchased new. Excludes cost for purchased land; includes cost for reclamation bond.
  2. Includes cost for ongoing environmental remediation.
  3. Reported for 1996 (assumed initial year of model production).
  4. Values in parentheses reflect percent of total unit operating cost.
  5. Reflects composite 1996 price in Denver, Colo., area for recycled aggregate derived from 60:40 mix of asphalt and concrete.
  6. Net Present Value refers to the present value of all revenues less the present value of all costs, including initial capital costs.

After production parameters and cost estimates were determined for each model, the production data were entered into PCMINSIM, a software package developed by the former U.S. Bureau of Mines to perform discounted-cashflow rate of return (DCFROR) analyses of mineral properties. The DCFROR is commonly defined as the rate of return that makes the present worth of cash flow from an investment equal to the present worth of all after-tax investments (refer to Davidoff, 1980). For this study, a 12 percent rate of return was considered the necessary rate of return for operations to cover the opportunity costof capital plus risk.



caption Figure 5: Estimated 1996 costs for a 253,000 t/yr recycled aggregates operation. (Source: USGS)


Cost models for the three size operations are given in table 4 and shown in figures 5, 6, and 7. Capital costs, operating costs, and revenues are represented for each model. From these data, the costs associated with equipment (such as equipment capital, equipment maintenance, and recovery of capital) clearly are a significant contributor to total production costs for a recycling operation, particularly a smaller size facility. Recycling requires initial capital expenditures of approximately $4 per ton of production capacity for the large recycling operation to about $8 per ton for the small operation. In general, larger operations are not as capital intensive as smaller operations. Costs reflect the purchase of new equipment; used equipment may be an option in some cases. Capital recovery of equipment (depreciation) constitutes an additional 14–20 percent of total operating cost, and is highest for the larger operation. During the period of capital recovery, equipment maintenance constitutes about 22–24 percent of the total unit operating cost.


caption Figure 6: Estimated 1996 costs for a 253,000 t/yr recycled aggregates operation. (Source: USGS)



caption Figure 7: Estimated 1996 costs for a 312,000 t/yr recycled aggregates operation. (Source: USGS)


The largest component of operating cost for a recycling facility is fixed overhead, including major expense items such as management and clerical salaries, building and land rental costs, advertising expense, and property and real estate taxes. Overhead ranged from 26 percent of total unit operating cost for the large operation to 30 percent for the small operation. Land lease costs represent a significant portion of operational overhead.

Labor costs contribute about 20–23 percent to total unit operating cost. For the capacities assessed in this study, labor requirements vary little on a percentage of total cost basis, but vary significantly on a unit cost basis. Most recycling plants require pickers to ensure that feed material is as free as possible from deleterious material. Large-sized recycling plants require only one or two additional equipment operators to handle a significant capacity increase. Consequently, the large plant, with a capacity of about three times the small plant, incurs a labor cost per unit of product that is 42 percent of the small operation. A unit cost savings is achieved. Productivity of the large plant is also higher. At full capacity, productivity estimates for this study range from 52,000 tons per person for the large operation to 22,000 tons per person for the small operation.

Fuel costs average 6–7 percent of total unit operating cost, mainly for diesel fuel and electricity used to provide power for mobile and stationary equipment. Energy, supplies, and permitting fees generally constitute less than 10 percent of the total unit operating cost.


caption Figure 8: Estimated costs and revenues of recycled aggregates. (Source: USGS)


Figure 8 relates the costs reported in this study with reported U.S. costs, prices, and tipping fees. The wide variation in product price is a result of the variable nature of recycled aggregate products and regional markets. Highly specialized products such as sprayed landscape rock may sell for as much as $15 per ton, while poor quality fill material might sell for less than $1 per ton. The price spread for road base, the principal market for recycled aggregates, is much narrower; the reported Denver price of $5.23 per ton fits well with reported U.S. sale prices for road base which range from $2.76 to $6.61 per ton.

The reported range in U.S. tipping fees for recycling operations is likewise quite broad. The assumed Denver tipping fee of $1.10 per ton falls on the low end of this range. Aggregates from both natural and recycled sources are readily available in the Denver market, and local landfill charges for construction debris are relatively low. A low fee would be expected where source material is readily available and costs of alternatives are low.

Operating costs for the three model operations fit well within the U.S. range reported by Deal (1997). Cost variation across the United States is much smaller than variation in either product price or tipping fee.

Public policy

A complete picture of the aggregates recycling industry cannot be presented without considering the effect of Government policy on this sector. Societal concern for the environment has in recent years resulted in increased emphasis on promoting a more sustainable use of our natural resources. Recycling is considered by many to be one program contributing to such a goal. Local, State, and Federal officials have implemented different methods to promote recycling efforts, contributing to the development of a new and expanding industry. The Texas Department of Transportation (TxDOT) has developed an extensive database recording State recycling activities and incentive programs. Although policies and regulations vary across the United States, all affect the industry by shaping new markets and helping to determine costs. Specific areas of government activity are covered in the following discussion.

Federal Legislation: Several pieces of Federal legislation enacted in recent years have affected the aggregates recycling industry. Such legislation has in effect provided mandates to recycle. The effect of such mandates has been to create new businesses and markets, reduce the risk of uncertainty for the growing industry, and increase competition for existing recyclers.

DeGroot and others (1995) listed examples of Federal legislation that has contributed to the emergence of the aggregates recycling industry:

  1. The Solid Waste Disposal Act (1965), as amended by the Resource Conservation and Recovery Act (RCRA, 1970) called for the Federal procurement of products with recycled material content. As a result, most Federally funded construction projects require incorporation of a set percentage of recycled material.
  2. The Resource Conservation and Recovery Act (1976): RCRA explicitly recognized that dumping of recoverable materials is a national problem and acknowledged the importance of recycling as part of the Nation’s solid waste management efforts. Specifications for secondary materials (such as recycled concrete and asphalt) and revision of existing specifications to include such materials were called for under the Act.
  3. The Strategic Highway Research Program (1987): The Strategic Highway Research Program (SHRP) is part of the Surface Transportation and Urban Relocation Assistance Act of 1987. SHRP is a project-oriented program that is targeted to produce performance-based specifications, improved equipment, advanced-technologies test procedures, and training aids that highway agencies can use in the short term to improve the performance of pavements and enhance highway construction and maintenance. The program sponsored efforts to develop technologies to enhance recycling of asphalt and concrete pavement.
  4. Intermodal Surface Transportation Efficiency Act (ISTEA) (1991): The U.S. Congress explicitly dealt with the use of recycled materials in transportation through Section 1038 of the ISTEA, which was passed in 1991. This Act is mainly concerned with issues related to asphalt.

State and Local Incentives: In some areas, States and local municipalities are encouraging recycling activities in a variety of ways, while receiving financial benefits. The following summarizes four agreements that serve as recycling incentives.

  1. In 1995, the city of Sunnyvale, California entered into a 5-year contract with Raisch Products to recycle construction debris. The nearest landfill is 43 kilometers from town and charges a tipping fee of $46 per ton. Raisch charges a fee of $11 per ton to process this material (includes materials other than concrete), and produces a product suitable for road base, which is used on municipal road contracts. Under this arrangement, the company has an assured source of feed material while the city receives $120,000 per year plus a percentage of revenue over a certain threshold. The city also benefits from a cost savings of $35 per ton in transportation
    and disposal charges. Sunnyvale residents are able to dispose of waste driveway concrete free of charge under this agreement.
  2. The town of Epping, New Hampshire established a contract with the Environmental Resource Return Corporation (ERRCO) in 1997 under which the town’s public works department and local residents supply ERRCO with construction refuse free of charge and purchase end products at discounted prices. The town receives a fee beginning at $0.55 per ton of product, which should generate revenues of about $87,000 per year when the facility reaches full production.
  3. The State of Iowa, in an effort to increase recycling to 50 percent, awarded a $500,000 grant to a concrete/asphalt recycling operation to demonstrate that it could significantly reduce the amount of construction and demolition debris sent to State landfills. Previously, economics for such an operation were questionable because of the area’s relatively low tipping fee of $33 per ton charged by the landfill. Today the landfill diverts 50 percent of its incoming waste to recycling, providing a 32.5 percent reduction in the amount of material that is disposed of at the site. Recycled aggregates are sold for about $1.10 per ton less than locally available natural aggregates.
  4. Flexible contracts have also been used to provide an economic incentive for aggregates recycling. An agreement was reached between a recycler and a contractor in California to supply recycled road base at approximately $1.96 per cubic meter below market price. In return, the recycler was allowed to set up a mobile recycling plant on the contractor’s land for free. The contractor was able to obtain aggregates at a discounted rate and could place orders on an as-needed basis, while the recycler was able to set up operations close to ready markets while incurring no land costs. As a result of this agreement, the contractor was able to exceed the 25 percent minimum California recycling mandate.

Local Tax Revenues: The amount of local tax revenue available for infrastructure renewal and local transportation improvement can impact the quantity and extent of aggregates production from both natural and recycled sources. Such revenues and their distribution determine whether there will be enough money to support rebuilding of roads and (or) construction of additional infrastructure, or whether only spot repairs are possible. Spot repair jobs, being small, generally do not meet the job-size requirements to support a recycling operation.

Permits and Fees: Regulatory costs affect the cost of doing business and the competitiveness of recycled aggregates with natural aggregates. Such costs apply to both sectors in different ways, perhaps with less of an effect for the recycling industry.

Federal Highway Budgets: The amount of Federal funding available to supplement local infrastructure budgets and provide funding for research impacting the recycling industry (for example, to create specifications for recycled aggregate products) appears to be increasingly scarce as money and priorities shift. The current trend is to shift responsibility for road construction and maintenance to the States. It is up to State highway departments (with or without Federal grants) to promulgate standards and specifications for the industry.


The trend towards urbanization in the United States has provided, and probably will continue to provide, a strong demand for high-volume, low-cost aggregates material for repair and development of additional infrastructure. The total demand for aggregates, driven by demographics, urbanization, and the economy, is expected to remain strong in the short term.

Recycling of construction materials has grown along with demand for aggregates. Recycled aggregates compete favorably with natural aggregates in many local markets as road base material. Recycling has the potential to reduce the amount of waste disposed of in landfills, preserve natural resources, and provide energy and cost savings while limiting environmental disturbance. Potential sources for recycled material grow as maintenance or replacement of the Nation’s infrastructure continues. Because of the finite life of such infrastructure, this “urban deposit” may be considered a renewable resource. The relative costs and charges (tipping fees) of recyclers, their competitors, and landfills determine the amount of material ultimately available for recycling. At approximately $0.13/ton/kilometer, the cost of transportation has a significant impact on the economics of construction operations. It is not surprising that mobile, job-site recycling is becoming common for larger construction projects, as a means of avoiding high transportation, disposal, and new material costs. Even so, the amount of material available overall for recycling is insufficient to meet present industry demand. On a national basis, it is unlikely that recycling will ever completely replace natural aggregates as road base in road construction.

Transportation costs are part of the dynamics that define the market for recycled material, but they most often do not directly affect the profitability of the recycling operation. The supplier of material from the “urban deposit” to the recycler is aware of transportation costs. The amount of material that the supplier will make available to the recycler is based on a calculation that compares delivering and paying a tipping fee to the recycler, to any competitor of the recycler, or to the landfill. Transportation distance and costs are very significant factors in determining the optimum location of a recycler when assessed alongside sources of material, competitors, and customers. General site location dynamics are similar in all areas of the United States, but specific local conditions must be assessed by a potential recycler when developing a business plan.

Based upon economic considerations alone, aggregate recycling should continue. Product pricing and tipping fees are the most significant factors influencing the competitiveness of a recycling operation. Under the conditions specified in this analysis, both medium and large recycling operations can operate profitably because of the tipping fee and lower overall costs. Even so, a combination of economic, social, and legislative factors tend to restrict the use of recycled material to lower valued product applications in road construction.

Slight variations in revenues generated by product prices or tipping fees can affect operational profitability significantly. Equipment capital, operating, and maintenance costs, coupled with plant layout and efficiency, also have significant impact on economic performance. Operator experience in crushing technology, material handling, and efficient plant design are important to success. Although land requirements are typically small for recycling operations, land costs can have a significant impact on economics, particularly for smaller operations.

Aggregate recycling operations often must overcome risks associated with feed and product availability, pricing, and quality. A facility that is able to maintain a high level of sustained production and secure consistent, long-term sources of feed material has a greater chance of success. Similarly, a facility that produces consistent, quality products suitable for diverse markets has a greater opportunity for success.

Recycling operations that would normally not be profitable as fixed-site operations must use creative methods to establish a market niche for themselves. Examples of successful approaches that are being used include (1) operating as a mobile, job-site operation; (2) geographic repositioning to gain competitive advantage; (3) job-site subcontracting; (4) establishing supplemental businesses; (5) State or municipal contracting; and (6) mutually beneficial or flexible pricing contracts. Such entrepreneurial operations appear to be growing in number.

Natural aggregate producers, however, continue to supply the bulk of material for building and road construction, because they are able to supply sufficient high-quality material for a wide variety of higher valued product applications in established markets. Commonly, recycled material does not meet specifications for high-quality applications such as portland cement concrete and top-course pavement, and natural aggregates will continue to dominate these markets. The revenue (tipping fee) that is received for processing construction waste material does, however, enhance the competitive position of the recycler, often allowing new recyclers to successfully enter selected markets such as road base. Recycling operations will not be able to effectively compete as suppliers of these higher quality products unless recycling is made a more attractive option for contractors, either through improved education and awareness, specification changes, or legislative mandates.

The economic benefit for a producer of natural aggregates, which generally relies on its own resource, has a deeper market penetration, and has demonstrated the ability to produce quality products, to begin recycling is substantial. The producer is already supplying a large portion of the road aggregates market. It has the necessary processing equipment and expertise in place to process recycled material (perhaps with minor modifications). Recycled material can supplement natural sources and prolong the life of natural aggregate deposits, thus sustaining the life of the operation. Recycling appears to be profitable and in most cases can meet demand requirements of lower value product applications such as road base, thereby freeing up higher quality material for higher value applications.

Opportunities for new entrants will continue to emerge, but adding new recycling capacity to a market with a limited level of feed material impacts the profitability of all competitors in a given area as downward pressures on product prices and tipping fees are created. A given location has a finite amount of material on which to draw for recycling at one time, and as costs or local regulations limit the distance this material can be transported, recyclers compete for this material, thereby drawing prices and tipping fees down. A new operation coming on line in the same territory might reduce its tipping fee to generate feed supply. If demand is fixed, prices would be expected to remain stable until the total level of local production reached the maximum amount of feed material available, at which time prices would be expected to decline and the less competitive operation would begin to lose market share.

In today’s urban setting, a policy maker often must weigh the potential benefits of recycling with competing land-use and development issues. The economic climate for recycling can be improved by making waste disposal in landfills less attractive (imposing higher tipping fees), increasing markets for recycled materials, educating the public as to the benefits of recycling, increasing research and development to improve recycled aggregates quality or show consumers where recycled products are competitive with natural materials, expanding specifications to accept more recycled material where it has demonstrated its ability to compete technically, and facilitating the flow of market information.

Data gaps still remain in assessing aggregates recycling. Reliable data on how much recyclable material is available and how much recycling is actually occurring by industry are needed to quantify future market potential and industry impact. Further quantitative studies of the flow of construction materials such as aggregates are also needed in order to anticipate future economic activity and commodity use.


  1. ^ For this study, all figures have been reported in metric units in accordance with USGS practice. The term “tons” is used to refer to the metric ton unit of 2,205 pounds.
  2. ^ Energy from both electricity and fuels. For perspective, a barrel of oil contains about 6.12x1012 joules.
  3. ^ Based upon data provided by Fuller and Company, Denver, Colorado, August 31, 1997.

Appendix 1

Appendix 1. State Concrete Recycling Activity
The following table shows the applications where recycled concrete is used by State.
State Road
Asphalt Drainage
Backfill Mandates Tax
AL Y                    
AK NR                    
AZ E                    
AR E         Y          
CA Y Y       Y X X X   X
CO E   Yb Yb         X    
CT Y Y     Y Y          
DE Y         Y          
FL Y                    
GA Y                    
HI NU                    
ID Y                    
IL Y Y   Y              
IN Y       Y Y          
IA Y                    
KS Y   E     Y          
KY Yb                    
LA Y Y   Y   Y          
ME NU                    
MD E         Y          
MA Y                    
MI Y Y   Y Y            
MN Y Y   Y   Y          
MS Y                    
MO Y     Yb              
MT Y Yb       Y          
NE Y     Y              
NV E                    
NH E Y                  
NJ Y         Y          
NM NU                    
NY Y                    
NC Y         Y          
ND Y                    
OH E                    
OK E                    
OR Yb         Y          
PA Y                    
RI Y         Y          
SC Yb                    
SD NU                    
TN NR                    
TX E                    
UT NU                    
VT NU                    
VA Y                    
WA Y       Y Y          
WV NU                    
WI Yb                    
WY E     Yb              
E = Experimenting with recycled concrete in this application [TxDOT (1996) and DeGroot (1995)].
NR = no response to TxDOT survey.
NU = No use of recycled concrete in this application [TxDOT (1996)].
X = Information from Moore (1993).
Y = Uses recycled concrete for this application, and has specifications in place [TxDOT (1996) and DeGroot (1995)].
Yb = Uses recycled concrete in this application, but has no specifications in place [TxDOT (1996) and DeGroot (1995)].


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