Determination of the effect of operating cost uncertainty on mining project evaluation

Hesam Dehghani and Majid Ataee-pour

Resources Policy, 2012, vol. 37, issue 1, 109-117

Abstract: Mining projects are complex businesses that demand constant risk assessment. This is because several kinds of uncertainties influence the value of a mine project, typically. These uncertainties may be classified as exploration uncertainties, economic uncertainties and engineering uncertainties. The evaluation of a mine project under these uncertainties is a complicated job, which may lead to making a wrong decision by managers and stockholders. Therefore, at first, the engineers must recognize the mining uncertainties before carrying out the project evaluation. The economic uncertainties are the most important factors, which may affect the project evaluation. Among the mentioned uncertainties, the operating cost uncertainty is an important and effective factor, which is ignored to a certain extent.

Keywords: Economic uncertainty; Metal price; Operating costs; Net present value; Binomial tree technique (search for similar items in EconPapers)
JEL-codes: Q39 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:37:y:2012:i:1:p:109-117

DOI: 10.1016/j.resourpol.2011.11.001

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