Mining Investment Projects Research Articles

Investigation into Mining Economic Evaluation Approaches Based on the Rosenblueth Point Estimate Method

Conducting technical and economic evaluations is important for mining investment and mining operation decision-making. Traditional economic evaluation methods rarely address the issue of evaluation reliability and usually require complex calculations to obtain the optimal solution. In this study, the Rosenblueth point estimate method for reliability evaluation of engineering project schemes is introduced. Combined with the cash flow method for economic evaluation of mines, the Rosenblueth point estimate method for evaluating the reliability of mining economy is established. Based on the technical and economic index of the case mine, taking the ore grade as a sensitivity indicator, empirical research on established models and methods was carried out. The results of the economic reliability evaluation and the variation rules obtained using the Rosenblueth point estimate method model were basically consistent with the actual production and operation rules of mining enterprise. The similar results also proved that the proposed model has good applicability and reliability for mining economic evaluation. Using the proposed RPEM economic reliability model, the economic reliability of a certain iron mine in Liaoning Province was calculated to be 99.95, which was a huge improvement compared with the traditional evaluation method. Additionally, the calculation process of the proposed model for economic reliability evaluation is simple and the accuracy is controllable. The economic reliability of the project can be calculated based on changes in sensitivity indicators, and the value range of sensitivity indicators can also be calculated through the required reliability. The obtained results and the proposed evaluation model provide a decision-making basis for mining investment projects and operation management.

Struggles for land: comparing resistance movements against agro-industrial and mining investment projects

ABSTRACT Investments in large-scale land-based projects increased over the past two decades, with a concomitant rise in community-level resistance. Drawing from data on resistance movements, literature findings, and two case studies in Senegal, this paper compares movements resisting either agro-industrial or mining projects. Building on contentious politics and materialist approaches from political ecology we find that outcomes seem largely case-dependent and determined by political opportunities, while resistance motives, narratives and more confrontational practices differ across both sectors. We suggest that this can be explained through sector-specific material, discursive and institutional factors. Our findings shed light on challenges for cross-sectoral alliances.

Energy-sustainable industrialized growth in the Czech Republic: The Cínovec lithium mining project

Scoping studies of mining investment projects are based on initial drilling data and expert assumptions, generally including an elementary mine plan, a processing method and preliminary estimates of the financial outcomes. They are not detailed enough for investment decision making but should provide at least sufficient knowledge of the project's risks.In this paper, the Cínovec lithium project in the Czech Republic will be assessed at the scoping study level. Data used for this analysis were collected by the Czechoslovakian government from the 1960s to the 1980s. Nevertheless, only information related with significant drill intercepts and the analysis made of the samples was used. Thus, the conclusions that were obtained cannot be considered in any way as a professional recommendation for investment.The purpose of this study is to demonstrate that scoping studies based on adequate data gathered from similar mining investment projects around the world can help to make the case for quick, early, and sound strategic decisions, something that may be especially crucial for small mineral development companies to decide whether they should proceed with further project developments.The basis for this analysis will be the previously published paper, “Lithium mining: accelerating the transition to sustainable energy”, in which five ready-to-go lithium mining investment projects were studied around the world: Whabouchi Project (Canada), Keliber Project (Finland), Cauchari-Olaroz Salars Project (Argentina), Sonora Project (Mexico), and Pilgangoora Project (Australia). Also used from this paper was the probable upper limit that was estimated for lithium carbonate battery-grade spot prices.

Mining Business Risk Management

In the mining industry, as a dangerous industry related to the specifics of its production, in particular, the process of risk management and analysis should be taken into account. One of the main reasons of occupational accidents, in addition to human error and technical failures, is the lack of foresight of possible accidental events, and the lack of assessment by a company of the risks associated with occupational safety. The article considers the main risks in the mining industry, analyses the problems of modern systems of risk assessment and management of mining investment projects, methods and sequence of qualitative and quantitative risk assessment, provides recommendations for their improvement in order to bring them in line with international risk management standards.

La consulta indígena en la institucionalidad ambiental de Chile: Consecuencias para la minería y las comunidades indígenas Collas de la Región de Atacama

Este trabajo analiza la gobernanza ambiental aplicada al proceso de consulta indígena implementada en el sistema de evaluación de impacto ambiental (SEIA) en Chile. Las consecuencias de la inclusión del Convenio 169 de la Organización Internacional del Trabajo (OIT) sobre Pueblos Indígenas y Tribales en el EIA se evalúan a través de varios estudios de caso de interacción entre la industria minera y las comunidades indígenas Colla en Atacama. Se han analizado modelos alternativos de gobernanza de la evaluación de impacto a través de análisis cuantitativos, entrevistas exploratorias y revisión de documentos judiciales y ambientales, que incluyeron procesos colaborativos y flexibles para la solución de problemas comunes entre las partes interesadas. El análisis describe el proceso que ha llevado a la judicialización de proyectos de inversión mineros por parte de las comunidades indígenas entre 2008 y 2018. Los resultados revelan un proceso consultivo con objetivos poco claros falta de transparencia y diseño centralizado sin considerar las características culturales, temporales y lingüísticas de las comunidades indígenas. El proceso de consulta tiene limitaciones estructurales y de recursos. Esta última se asocia principalmente a restricciones presupuestarias y a una menor participación de los profesionales en el proceso de evaluación. Las limitaciones estructurales se expresan a través de diferencias comunicacionales, políticas y conceptuales entre las partes interesadas. Estas diferencias actúan como barreras que impiden un rol eficiente del Estado de Chile con las empresas privadas y las comunidades indígenas, aumentando la incertidumbre de los inversionistas privados y aumentando la desconfianza histórica hacia las comunidades indígenas.

Lithium mining: Accelerating the transition to sustainable energy

In the actual context of climate change threats, lithium batteries fulfil lot of expectations in order to achieve a cleaner and more sustainable solution for transports, embodied by electric vehicles. According to different studies that identified a noticeable discrepancy between consumption and production, undersupply should be expected until 2045 in the European Union. Thus, ensuring lithium supply for the growth of energy-sustainable industrialised countries is crucial, and different approaches should be undertaken as for the purpose of technological transition, time matters.This paper focuses in analysing lithium prices and their expected evolution. It also studies in deep five ready-to-go lithium mining investment projects worldwide: Whabouchi Project in Canada, Keliber Project in Finland, Cauchari-Olaroz Salars Project in Argentina, Sonora Project in Mexico, and Pilgangoora Project in Australia. The main purpose being to provide an exhaustive analysis of lithium mining investment in order to facilitate the development of preliminary economic assessments of future mining projects, fighting again supply disruption and accelerating the transition to sustainable energy. Conclusionsstate in first place that prices are expected to return to a more stable behaviour, mainly based on a ramping up of the production by miners, as there are sufficient lithium recoverable resources in order to ensure the demand of future electric vehicles. Moreover, recycling of lithium batteries will represent a significant supply for the future.In second place, an order of magnitude both technical and economic of this mining industry is given. Two aspects can be highlighted: (1) it was possible to establish a linear correlation between the capital expense of the lithium mining investment projects and their expected production of lithium carbonate; and (2) continental brine deposits, where the extraction of lithium is conducted by evaporation processes in man-made ponds, will not represent a push out of the market for the lithium extracted from hard rocks and clays using conventional mining methods as they have almost the same operating costs.

Use of Selected Derivatives For Valuation of Mining Investment Projects

The article is devoted to the issue of valuation of mining investment projects (with the use of the Monte Carlo method) via selected derivatives. The purpose of using such instruments in the process of valuation is to secure the revenue of a mining company by guaranteeing raw material prices. According to the authors of the publication, the use of such instruments will help reduce the variability of obtained results and increase their reliability. The article consists of four parts. The introduction to the article specifies the purpose of the work. The second part of the article presents the foundations for the analysis, the purpose of which is to compare the obtained results ofthe investment value for three variants. The first one assumes the use of financial options to secure raw material prices, the second assumes the use of futures, and the last one stipulates that the company does not take action with respect to securing raw material prices. The third part presents the results of the study. Due to the availability of data, sample calculations were carried out on the basis of the financial information published by a copper manufacturer. The obtained results show that from the point of view of the value of the investment and the risk of negative investment value, the most advantageous method is to secure the prices of raw materials in the process of valuation of mining investment projects with the use of options. The last part of the work is a summary presenting the conclusions of the analysis. The article is accompanied by a list of literature used to prepare this study.

Application of Real Options on the Decision-Making of Mining Investment Projects Using the System Dynamics Method

Estimating the valuation of mining projects has great significance for investment decision-making. Since the existing valuation methods are not appropriate for mining projects affected by various uncertainties over the long term, this paper presents a hybrid investment evaluation model that is based on real options and system dynamics for mining projects. To address uncertainties and managerial flexibilities that are contained in mining projects, the model integrates the static net present value calculated by traditional discount cash flows and the real options value generated by the Black-Scholes model into the total value of mining projects. Subsequently, the model applies system dynamics modeling to analyze the dynamics of the complicated mining operation system, quantify its variables and interactions, and estimate its volatility, which enables a more accurate real options valuation. A realistic case of the Hongwei uranium deposit in China is the basis for the presented numerical illustration of the model. The findings indicate that investors are prone to losing an opportunity to invest if they only rely on traditional discount cash flows' methods, because the value of the project calculated by discount cash flows is -175.59 million yuan that under zero. However, the results obtained from the method proposed in this paper suggest that the project has a value of 327.65 million yuan.

Using Copulas in the Estimation of the Economic Project Value in the Mining Industry, Including Geological Variability

Geological variability is one of the main factors that has an influence on the viability of mining investment projects and on the technical risk of geology projects. In the current scenario, analyses of economic viability of new extraction fields have been performed for the KGHM Polska Miedź S.A. underground copper mine at Fore Sudetic Monocline with the assumption of constant averaged content of useful elements. Research presented in this article is aimed at verifying the value of production from copper and silver ore for the same economic background with the use of variable cash flows resulting from the local variability of useful elements. Furthermore, the ore economic model is investigated for a significant difference in model value estimated with the use of linear correlation between useful elements content and the height of mine face, and the approach in which model parameters correlation is based upon the copula best matched information capacity criterion. The use of copula allows the simulation to take into account the multi variable dependencies at the same time, thereby giving a better reflection of the dependency structure, which linear correlation does not take into account. Calculation results of the economic model used for deposit value estimation indicate that the correlation between copper and silver estimated with the use of copula generates higher variation of possible project value, as compared to modelling correlation based upon linear correlation. Average deposit value remains unchanged.

Evaluating Investment Risks of Metallic Mines Using an Extended TOPSIS Method with Linguistic Neutrosophic Numbers

The investment in and development of mineral resources play an important role in the national economy. A good mining project investment can improve economic efficiency and increase social wealth. Faced with the complexity and uncertainty of a mine’s circumstances, there is great significance in evaluating investment risk scientifically. In order to solve practical engineering problems, this paper presents an extended TOPSIS method combined with linguistic neutrosophic numbers (LNNs). Firstly, considering that there are several qualitative risk factors of mining investment projects, the paper describes evaluation information by means of LNNs. The advantage of LNNs is that major original information is reserved with linguistic truth, indeterminacy, and false membership degrees. After that, a number of distance measures are defined. Furthermore, a common status is that the decision makers can’t determine the importance degrees of every risk factor directly for a few reasons. With respect to this situation, the paper offers a weight model based on maximizing deviation to obtain the criteria weight vector objectively. Subsequently, a decision-making approach through improving classical TOPSIS with LNNs comes into being. Next, a case study of the proposed method applied in metallic mining projects investment is given. Some comparison analysis is also submitted. At last, the discussions and conclusions are finished.

The impact assessment of quality parameters of coal and waste rock on the value of mining investment projects – hard coal deposits

Streszczenie Artykuł stanowi próbę oceny wpływu parametrów geologicznych i górniczych na poziom przychodów, kosztów oraz wartość przedsięwzięć inwestycyjnych w górnictwie węgla kamiennego. Teza pracy wiąże się z przekonaniem autora, iż w obszar czynników istotnie współokreślających ocenę przychodów, kosztów i efektywność eksploatacji należy wpisać, obok parametrów jakościowych węgla, także uzysk kopaliny. Pomijanie lub pobieżna ocena parametrów jakościowych węgla w pokładach oraz wpływu uzysku na postęp i koszty wydobycia może istotnie zniekształcać ocenę potencjału konkretnych aktywów geologiczno-górniczych. Dotyczy to w szczególności wydobycia w nowych rejonach wydobywczych lub też nowych złożach. Do badań symulacyjnych zbudowano dedykowany model oceny pozwalający skwantyfikować kierunek i siłę wpływu wartości opałowej, zawartości popiołu i siarki oraz współczynnika uzysku węgla netto (UWN) na poziom i zmienność łącznych przychodów, kosztów i ostatecznie wartość projektów geologiczno-górniczych. W tym celu opracowano również autorskie formuły szacowania kosztów stałych i zmiennych w funkcji zmiennego UWN. Rezultaty badań przedstawiono ostatecznie w konwencji analizy scenariuszowej. Uzyskane wyniki wskazują na istotny wpływ wartości opałowej i ilości skały płonnej mierzonej zmiennością uzysku węgla netto na poziom generowanych przychodów, kosztów oraz prognozowane miary oceny działalności operacyjnej hipotetycznej kopalni węgla kamiennego. Wykazano, że zmiana o 1 GJ wartości opałowej może powodować od 3,57% do 4,76% wzrostu/spadku łącznych przychodów. W przypadku złóż węgla kamiennego, dla których realny uzysk węgla może wahać się w przedziale 60–80% można oczekiwać zmiany kosztów wydobycia węgla nawet o 53,0% w tym zakresie. Błąd oszacowania NPV, przy zmienności wartości opałowej w przedziale 21–27 GJ/Mg, może wahać się w przedziale 0–78%, natomiast spadek uzysku węgla o 18 pkt. może obniżać wycenę działalności operacyjnej kopalni nawet o 872,4%, co wynika z cech metody NPV i opracowanego scenariusza bazowego (NPV ≈ 0). W publikacji nie wyczerpano zakresu analizowanej problematyki. Artykuł stanowi część większej całości prac nad sformułowaniem wytycznych (wskazówek) pozwalających właściwie szacować wartość aktywów geologiczno-górniczych w warunkach zmiennych parametrów geologicznych i górniczych, biorąc pod uwagę dodatkowo błędy oszacowania wartości średnich cech jakościowych wydobywanej kopaliny.

Evaluation of mining investment projects with a new software

Since mining activities depend on natural conditions, there are more risks in mining investment projects than other industrial projects. Therefore, in order to ensure that the mineral resources are used efficiently, a risk assessment is required before the implementation of any mining project. The decision to invest in a mining project is usually made on the basis of classical method; however, the use of the assumed parameters in these methods can give erroneous evaluation results. The main purpose of this study is to examine the risk level of mining investment projects, based on the Monte Carlo method. To evaluate the risks of the projects on probability basis, a new program named UnRisk has been developed in DELPHI.

Rio Tinto’s talc earnings level, but TiO 2 feedstock business suffers from oversupply & overstocking

Scoping studies of mining investment projects are based on initial drilling data and expert assumptions, generally including an elementary mine plan, a processing method and preliminary estimates of the financial outcomes. They are not detailed enough for investment decision making but should provide at least sufficient knowledge of the project's risks.In this paper, the Cínovec lithium project in the Czech Republic will be assessed at the scoping study level. Data used for this analysis were collected by the Czechoslovakian government from the 1960s to the 1980s. Nevertheless, only information related with significant drill intercepts and the analysis made of the samples was used. Thus, the conclusions that were obtained cannot be considered in any way as a professional recommendation for investment.The purpose of this study is to demonstrate that scoping studies based on adequate data gathered from similar mining investment projects around the world can help to make the case for quick, early, and sound strategic decisions, something that may be especially crucial for small mineral development companies to decide whether they should proceed with further project developments.The basis for this analysis will be the previously published paper, “Lithium mining: accelerating the transition to sustainable energy”, in which five ready-to-go lithium mining investment projects were studied around the world: Whabouchi Project (Canada), Keliber Project (Finland), Cauchari-Olaroz Salars Project (Argentina), Sonora Project (Mexico), and Pilgangoora Project (Australia). Also used from this paper was the probable upper limit that was estimated for lithium carbonate battery-grade spot prices.