Estimating criteria for mining profitability predicting

S. P. Reshetnyak () and D. A. Vedrova ()

Russian Journal of Industrial Economics, 2020, vol. 12, issue 4

Abstract: The development of mineral resources deposits, whether it is open pit or underground mining, involves a large amount of initial investment, much of which is spent on building the infrastructure of the future enterprise. Capital investments will be the greater, the farther the deposit is located from regional centers, settlements, the more complex the structure of the deposit itself is. Modern market economy reality makes the question of equity distribution opportunities on mining one of the most pressing. Participation in the tender for the license acquisition, despite the antitrust policy of the state in this area, can be afforded mostly only by representatives of large businesses, while small regional companies are left to deal with less attractive deposits in terms of investment in the development. The authors of the article have analyzed and ranked the main factors affecting the profitability of mineral deposit development during the period prior to its commissioning, with the aim of offering a method of economic support and incentives for business representatives who are ready to take specific mining risks. Based on the considered factors, a classification of deposits according to the profitability of mining was developed, the use of which can give a more accurate description of the proposed subsoil use areas by the level of necessary investments in the construction of a mining enterprise. The authors have proposed an economic mechanism to stimulate regional subsoil users who are ready to develop deposits of mineral resources that are risky in terms of long-term investment. A refund ratio is proposed – which part of the license cost for subsoil use is supposed to be returned, during the construction of the enterprise period, before it reaches its planned capacity.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ach:journl:y:2020:id:810

DOI: 10.17073/2072-1633-2019-4-511-518

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