OPTIMIZATION OF BAUXITE ORE MINING USING MIXED INTEGER LINEAR PROGRAMMING TO MAXIMIZE NET PRESENT VALUE: A CASE STUDY OF PT KALIMANTAN BERKAH INTI TAMBANG (HARITA BAUXITE)

• Main Author: Rizki Fadhilah, Muhammad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/85397
• Institution: Institut Teknologi Bandung

Mining activities only consider technical factors, namely from the grade parameters sent, without considering long-term economic factors. This approach implies that high operating cost and capital expenditure can lead to lower profits, even though the Al2O3 grade in the MGB (Metallurgical Grade Bauxite) shipped is high. Additionally, the demand for MGB products desired by buyers is not only determined by the Al2O3 grade but also by the reactive silica (R.SiO2) content. Optimization is necessary to maximize the Net Present Value (NPV) using a mixed integer linear programming model in the planned mining area. Subsequently, cash flow streams are created and analyzed to identify the opportunities and challenges that will be faced. This analysis will lead to decision-making in selecting the best scenario based on the discounted cash flow method. Based on NPV, Internal Rate of Return (IRR), Payback Period (PBP), and CAPEX & Working Capital parameters, B scenario is the most optimal scenario to implement at present. Each formed scenario has different NPVs; however, the differences in values across scenarios do not yield significant differences in results due to the normally distributed Al2O3 grades around the mean value.