Feasibility Study of Road Improvement Geotextile using Discounted Cash Flow Method: Study Case of PT Berau Coal

Abstract

Lati Mine Operation is one of the open pit mining operational owned by PT Berau Coal. This area has overburden removal production annual target 134,556,000 BCM and coal getting 8,631,000 MT in year 2022. In the first semester of 2022, actual overburden removal was achieved in 94% under the year to date plan. Based on pareto loss production analysis, the biggest lost contributor of overburden removal was came from hauler productivity parameter. The root cause of hauler productivity problem is material used for road surfacing which has implication to road condition. Road surfacing material was came from redisturb material that cause low bearing capacity on subgrade layer and impacted to road damage on the surface. One of improvement can be done to increase productivity and reduce cost maintenance is investment of geotextile implementation to mine road reinforcement. Therefore, project investment need to be evaluated through a comprehensive financial analysis to get financial feasibility of this project. This research will use capital budgeting analysis to evaluate the financial feasibility, including sensitivity analysis and risk analysis. The baseline of feasibility analysis regarding improvement project shows good result with Net Present Value (NPV) worth IDR 2.232.785.016, Internal Rate Return (IRR) of 42,56%, 1,46 of Profitability Index (PI) , and 1,2 years of payback period (PBP). Based on Monte Carlo Simulation, the probability of this project failing (NPV < 0) is 0%, or in the other words, there is no probability that the NPV project will generate negative value or loss in this project. In conclusion, mine road improvement using geotextile is feasible and potentially give optimum impact on increase productivity and cost efficiency regarding to mine road maintenance.