ECONOMIC EVALUATION OF LATERITE NICKEL MINING BUSINESS SCHEME WHICH IS INTEGRATED WITH THE MIXED HYDROXIDE PRECIPITATE (MHP) PROCESSING PLANT OF PT XYZ USING THE REAL OPTION METHOD

• Main Author: Aura Amaliyah, Andi
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77020
• Institution: Institut Teknologi Bandung

As of 1 January 2020, Indonesian Government had legalized Peraturan Menteri ESDM No.11 Tahun 2019 which reads the banning of raw ore export, one of which is nickel. The approval of this regulation encourages Indonesia to start Its own nickel processing plant. The current rampant construction of processing plants will certainly have an impact on investment and business aspects which can be assessed by analogy with the stock market. The method that can be used to assess mining investments which adapted from stock option valuation is called the Real Option method. In this study, there are 2 scenarios that will be reviewed and compared, namely the scenario of a mining project with the sale of raw ore and a scenario of a mining project that is integrated with a processing plant with the sale of MHP Nickel. This review was carried out using the Discounted Cash Flow method which was then followed by an analysis using the Real Option method with the Binomial Lattice approach to obtain maximum analysis results. Based on the analysis carried out using the Discounted Cash Flow method, it was found that both scenarios were feasible to run. However, based on the analysis conducted with Real Option, it was found that a better scenario is a mining project that is integrated with a processing plant with the sale of MHP Nickel where the option value is $152,004,735.14.