FINANCIAL FEASIBILITY STUDY - MINING OF MARGINAL RESERVES AT CONCESSION BORDER AREA (CASE STUDY AT PT. ABC)

• Main Author: Karnain
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/62550
• Institution: Institut Teknologi Bandung

Referring to the Minister of Energy and Mineral Resources Decree 1827 K/30/MEM/2018 regarding the implementation of good mining practices; mineral and coal mining companies are obligated to implement mineral and coal conservation efforts. The government encourages all potential mineral and coal reserves to be optimally mined and managed. In the PT. ABC Bengalon area, there are 5 million tons of coal reserves which are included in the marginal reserve group. The marginal coal reserves are located in a narrow area constrained by the Trans Kalimantan road and the PT. ABC concession boundary. This is an obstacle in providing infrastructure to support mining operations. Meanwhile, on the other hand, PT. XYZ, the concession owner, which is directly adjacent to the PT. ABC concession, is facing geotechnical issues in an effort to optimize the potential coal reserves of 29 million tons in the border area. In 2017, PT. XYZ submitted a joint mining operation proposal to PT. ABC for optimizing coal reserves in the border area. To overcome these business issues faced by PT. ABC, the opportunity of a joint mining operation PT. ABC and PT. XYZ with 2 alternative schemes has been analyzed in this research. Scheme A, PT. ABC uses PT. XYZ's existing infrastructure facilities and construct an additional new infrastructure within the PT. XYZ concession area. In Scheme B, PT. ABC builds 2 new infrastructures within the PT. ABC concession area and the rest uses PT. XYZ's existing infrastructure facilities. The initial investment value of alternative 1 is US$5.66 Million compared to alternative 2 of US$11.19 Million. The results of technical assessment show that the technical requirements for mining marginal coal reserves in Bengalon East can be fulfilled by PT. ABC through joint mining operation scheme with PT. XYZ in alternative 1 or alternative 2. The results of the financial feasibility study show that all the parameters in the capital budgeting technique for the two alternatives are feasible. The NPV of alternative 1 is US$15.59 Million compare to NPV of alternative 2 US$11.83 Million. Meanwhile, the IRR are 35.19% for alternative 1 and 24% for alternative 2. The results of the risk analysis using the Monte Carlo simulation show that the probability of the alternative 1 to be successful is higher than the alternative 2. The probability of NPV greater than zero of alternative 1 is 68.1% compare to alternative 2 62.1%. Considering the analysis result of technical, financial and risk aspects of the two alternatives, it is recommended that PT. ABC choose a joint mining operation scheme in alternative 1 because it provides a higher profitability and lower risk compared to alternative 2.