APPLICATION OF REAL OPTION ANALYSIS ECONOMIC EVALUATION ON THE PLAN TO SWITCH ROTARY KILNELECTRIC FURNACE (RKEF) WITH SELECTIVE REDUCTION FOR NICKEL PIG IRON (NPI) PRODUCTION PROCESS
The need of increased efficiency in nickel processing industry is always rising from time to time. Nickel pig iron (NPI) is a low grade ferronickel that has a role as an alternative of pure nickel especially as the raw material for the construction of stainless steel. The rotary kiln – electric f...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/54423 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | The need of increased efficiency in nickel processing industry is always rising from
time to time. Nickel pig iron (NPI) is a low grade ferronickel that has a role as an
alternative of pure nickel especially as the raw material for the construction of
stainless steel. The rotary kiln – electric furnace process utilized by most NPI
manufacturer in Indonesia is not commercially viable to produce medium grade
NPI or better from low grade lateritic nickel ore. This is a large concern due to the
increasing demand of NPI and nickel price. The utilization of selective reduction –
magnetic separation process has proven to be able to increase the recovery value
to 95% and produce NPI 5% from low grade lateritic nickel ore. Nevertheless, the
proposed change to the production process and the final product itself needs to be
further evaluated and analyzed if it is really going to be upgrading the economic
value of NPI production. The method of real option valuation was utilized because
of its ability to accommodate the uncertainty factor in this analysis, which is the
movement of nickel commodity price. The result of the real option valuation showed
that the implementation of the selective reduction method is economically viable on
an operating smelter because it has higher strategic NPV of $205.784.809 when
compared to existing RKEF process with the strategic NPV of $181.286.503. |
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