THE IMPACT OF LIMONITE NICKEL ORE OPTIMIZATION ON THE VALUATION OF MINING PROJECT IN KOLAKA, SOUTHEAST SULAWESI
Nickel ore mining in Indonesia is generally conducted using open-pit mining methods, with most activities still focused on the saprolite zone. The limonite zone, located above the saprolite zone, is often regarded as waste and is not economically utilized. Currently, limonite ore can be supplied to...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/86966 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Nickel ore mining in Indonesia is generally conducted using open-pit mining methods, with most activities still focused on the saprolite zone. The limonite zone, located above the saprolite zone, is often regarded as waste and is not economically utilized. Currently, limonite ore can be supplied to High-Pressure Acid Leach (HPAL) plants, which process low-grade nickel ore into Mixed Hydroxide Precipitate (MHP), a key material for manufacturing electric vehicle batteries. This study aims to calculate the optimization of limonite ore and evaluate its impact on the valuation of the mining project in Kolaka, Southeast Sulawesi. Optimization was carried out by calculating the volume of limonite nickel ore from the Kolaka mine that can be supplied to HPAL plants and subsequently valuing it using the Discounted Cash Flow (DCF) method to assess changes in the Kolaka mining project's valuation before and after optimization. Additionally, Sensitivity Analysis Method (SAM) was used to identify the variables most influencing the project's feasibility.
The data used in this valuation include drilling data, block model resource and reserve data from the Kolaka Nickel Mining Business Unit (UBPN), mining plans, limonite nickel ore specifications, and economic assumptions such as inflation rates, nickel price projections, exchange rates, funding structure, discount rates, taxes, and royalties. The optimization results show that 8,695,118 wmt of limonite ore with an average nickel grade of 1.19% can be economically utilized for HPAL plants. Mining and sales of limonite ore will take place over four years, from 2027 to 2030. The total revenue from limonite ore optimization amounts to USD 841,440,180, an increase of 14% from the current business revenue. The optimization also leads to a 17% increase in production costs. Based on the calculated feasibility model, the optimization of limonite ore has a positive impact on the project's feasibility, with the Net Present Value (NPV) increasing to USD 98,328,854, representing a 14% rise from the previous NPV. Furthermore, all feasibility parameters for the limonite ore optimization project meet the criteria set by ANTAM and MIND ID, including a cost-benefit analysis of 1.22, a Modified Internal Rate of Return (MIRR) exceeding the Weighted Average Cost of Capital (WACC) at 75.33%, and a payback period of one year.
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