Support of mining investment choice decisions with the use of multi-criteria method

Abstract

The article presents the use of Analytic Hierarchy Process (AHP) method for the support of decisions regarding the choice of mining investment. The mining investment, as understood in the analysis conducted in the article is an acquisition of a plant mining zinc and lead ore together with the processing plant producing concentrates of these metals as well as the deposits potentially viable for mining. The subject of analysis consisted of 11 polymetallic ore deposits with different degrees of utilization and mining infrastructure which could be a subject of investment activities in Serbia, Kosovo, Montenegro and Macedonia.In order to choose the best investment solution, a hierarchic model was built which took into account 5 main criteria and 15 partial criteria. These included in particular quantitative criteria, due to which the degree of subjectivism has been reduced. The main criteria included: geological and mining conditions, technical condition of the mining infrastructure, influence of the conducted mining activity on the environment, capital expenditure for particular stages of the investment and finally – social and political background which described the investment risk.The assessment of influence of the mining plant on the environment was conducted using the influence matrix, so called Leopold's matrix. The method allowed for identifying influences which affected the environment's components and simultaneously permitted to quantify the degree of this influence.For each criterion, accordingly to the AHP method's principles, weights (priorities) have been calculated. The weights were then used for construction of aggregating indicators. The choice of the best investment solution was obtained thanks to the use of an aggregating indicator which is a measure of assessment of particular polymetallic ore deposits. The indicators were the base for creating a rating for the mining objects from the point of view of assessment for the investor's needs.