Chapter 302 Price Of Steel

Alexander's calculation for the price of steel had been a long and detailed one.

First, he had to calculate the labor cost, which was subdivided into various categories.

There were three thousand ( 3,000) men that worked the iron mines, among which two thousand (2,000) were slaves that were promised freedom in five years, while the last thousand (1,000) were hardened criminals with no chance of freedom.

The latter had all been captured by Cambyses in her raid and in the following subsequent days as the city guards hunted down all that escaped, a task made much easier by the fact there were very few young or adult free male Adhanians in Zanzan, most either dead, missing or enslaved.

These captured slaves were of relative low maintenance, costing Alexander around only 2 ropals a day in food.

Much more expensive were the two thousand (2,000) soon-to-be freed slaves.

Alexander had paid a grand sum of ten thousand (10,000) ropals per worker for them, a sum that still stung when remembering how Ptolomy had skinned him on this deal, and he had to transfer these expenses to the produced product.

And to recuperate this expense within the next five years, given that the workers will have a few days of rest like the new year and other religious holidays, Alexander calculated that he would have to add six (6) ropals per worker per day that was in addition to the regular two (2) ropal food expenses.

And then there were the equipment costs- the shovels, the pickaxes, the ropes, the torches, the cost of firewood, the cost of lumber that was to make the scaffolding that held the caves, all these Alexander estimated to be around 2 ropals.

So in total, per day, just the three thousand (3,000) miners cost Alexander twenty-four thousand (24,000) ropals.

After that came the coal miners, who were all war prisoners and thus would be free in five years, and so the same math as the former two thousand (2,000) applied to them as well.

Alexander used a thousand coal miners, and so that came to a daily total of nine thousand ropals (9,000), assuming two ropals for food, and one ropal for equipment, less because the open pit did not have much logistics support.

Limestone was next and as cement production used it too, Alexander halved six thousand (6,000) to get thirty thousand 30,000 ropals for three thousand workers (30,000)

And thus only the raw materials cost Alexander fifty-three thousand (63,000) ropals per day.

And then were around a thousand similar slave laborers who worked on actually producing the steel, from operating the coke bed, to roasting to operating the various furnaces, and at last to driving the horse carts.

Thus only the running cost of the steel plant came to seventy-three thousand (73,000) ropals per day.

As for the fixed costs, or more accurately the setup cost, Alexander had no idea, and just decided to make it seven thousand (7,000) ropals to make the total cost an even eighty thousand (80,000) ropals per day.

To put that into perspective, assuming eighteen hundred (1,800) ropals were the equivalent of the American median income of seventy thousand (70,000) dollars per annum, that gave the steel plant a daily bill of around three million (3,000,000) dollars.

And since Alexander produced around thirty-five tons of steel a day, it made the price of steel ingot a bit over 2 ropals per kilogram, or about seventy times cheaper than the original hundred fifty (150).

"It costs each kilogram of ingot 3 ropals," Alexander gave the much-anticipated answer, hiking up the price that little bit more.

"*Shoooo*" Came another huge gasp of surprise, as the same two words were uttered by everyone in their minds, 'So cheap!'

In fact, the actual cost was much lower, because Alexander had made some pretty large errors in this maths.

In actuality, Alexander per day only used a fraction of the mined two thousand (2,000) tons of coal, the actual number only being around thirty (30) tons, while only 12 tons of the total mined 600 tons of limestone was used for steel, the majority of that actually going toward cement production.

Also, the seven thousand (7,000) ropals per day for the setup cost was a ludicrous number, as, given the structures would last well over thirty years, made the entire project's cost close to eighty million (80,000,000) ropals.

Alexander probably spent a hundredth or even a thousand of that.

Alexander certainly knew about these discrepancies but did not bother with such nitty-gritty details as even with such over-inflated values, the price was fifty times lower, and of much higher quality than every other steel in existence.

"My lord, that's too cheap!" Heliptos cried out not in joy at the quoted number.

And then suggested, " With this steel being of the highest quality in the world, then we can sell it double…no triple the price of a regular ingot." Heliptos's eyes shone green with greed, as he held out his five fingers and said, "Five hundred! We should charge five hundred (500 ropals) per kg, my lord."

'Hmmm, this guy might not be suitable to run the economy,' Alexander only placidly looked at the man proposing such a brain-dead price point

He then let out a cheerful laugh as he asked, "Hahaha, Lord Heliptos has made some good points. Does anyone object to this new price?"

"..." The others looked at each other as Alexander scanned the crowd for any potential detractors.

"You…how about you, Cambyses?" Seeing no one speak up, Alexander at last pointed to Cambyses with his chin.

"My lord, I don't think it's a good idea." Cambyses quickly spoke up, "At the cost of 3 ropals per kilogram of steel, we will spend more than one hundred thousand (100,000) ropals every day producing the thirty-five tons."

"In other words, we will have to sell more than one hundred thousand (100,000) ropals worth of steel per day."

"And if we set such a high price of steel, that will be impossible."

"......." Cambyses's answer made the veteran merchant blush.

'Darn, The cost! Of course the cost!' Heliptos lamented that overcome by greed, he had momentarily forgotten about the cost and made himself look like such a fool in front of Alexander and everyone else.

While the others slapped themselves for not coming up with the answer soon enough.

"Excellent answer, Lady Cambyses," Alexander always addressed Cambyses very formally in these council meetings, and then asked with a light smile, "So how much do you think we should charge?"

Cambyses paused for a while to think, and then reasoned, "Hmmm, considering the quality, and since the cost of the steel ingot is one-fiftieth (1/50) of others, let's charge one-fiftieth (1/50) of Lord Heliptos's suggestion, 10 ropals a kilogram."

Alexander was pleased with this number, and so he nodded, "Umm, then 10 ropals for the raw ingot it is," adding, "We will charge 7 roplas from our allies the king and pasha Farzah, and its export will be banned to our enemies."

"The pasha is wise," The others agreed.

But Alexander was not finished, as he quoted one last price, "And the price of it for the pasha of Zanzan will be five ropals."

This weird statement produced some confused looks as Melodias chirped, "My lord, what do you mean?"

And so Alexander elucidated, "This steel foundry becomes to me, Alexander the citizen. And so, if the Pasha of Zanzan and the head of house -Alexander wants to buy it from me, I will charge him 5 ropals per kg."

This might sound very much like taking money out of one's right pocket and putting it into the left, but it was nothing like that.

"My lord I believe the price is too low. We believe you should charge 20 ropals for Zanzan! After all, you have already spent so much, upwards of 600 hundred million." Menicus quickly suggested.

"That's right, my lord. The taxpayers of Zanzan cannot leech off you forever," Melodias joined.

And such sentiment was shared by most, at least outwardly, as they remembered everything up until had come from Alexander's own pocket.

This was because until very recently, Zanzan did not currently really have an economy to speak of, with almost the entirety of its male population enslaved, and its production capability very nearly zero.

Of course, it was not all goodwill and altruism, as Alexander's complete monopoly over the economy meant he wielded almost complete power in the city, and most importantly, as he controlled the pay of the soldiers, he commanded the military, something the lords and high-ranking officials were reluctant to see continue for too long.

This was similar to how the kid in the playground who had the ball got the first say in most matters, he got to be the captain, got to choose his team first, and scoring disputes usually favored him.

And Menicus and the other lord were basically trying to wean off this influence by sharing some burden.

Because by spending the taxpayer's money, it would give Zanzan a voice, a voice that would be spoken through the mouths of the lords.

Alexander knew this and though he did not oppose it, as he could never run the military by himself in the long run, still decided to this favorable price, as even at this price point, he would be making a hundred and fifty to two hundred percent (150% - 200%) profit.

"Haha, lets it at that for now. We can discuss changing it later," Alexander chuckled the reply.