Investment Analysis in Mining Industry

Abstract

Mining used to be a business primarily focused on the technical aspects of getting
valuable ore out of the ground and extracting the minerals in a metallurgical efficient way. Although
the importance of these skills cannot be denied, a narrow focus on technical issues is no longer
sufficient to guarantee success, even in the richest ore bodies. Skill in economics is an essential
partner to technical skill in every step of the mining process. The economic way of thinking starts
from before the first drill hole is put in the ground. It includes not just the most economic way of
mining, but also the most economic way of going about assessing mining projects. It directs mining
strategy and takes equal notice of the forces of world progress and the forces governing individual
human action. The scope of this project includes what is meant by a cost-effective mining scheme. It
includes the economics of information, as well as the procedures for rational evaluation of mining
projects under uncertainty. It reexamines the definition of ore from an economic perspective .The
application of DCF techniques in an operating mine environment is given expanded coverage,
and examples are drawn from real-life studies. A real life case study of a mine (Bhubaneswari
O.C.P) is taken and the balance sheet is analyzed to prepare a cash flow statement for the same.
This paper also throws light on the computational approaches that can be used for investment
analysis. Few computer programs show some aspects of capital budgeting techniques
calculations in form of C&C++ programs.