The optimisation rule for investment in mining projects
Investment in mining projects involves significant uncertainty. Project investment is usually high risk, irreversible and challenged by major economic factors. Mining commodity prices in particular always show greater volatility than any other primary products. The variation of these prices is criti...
| Main Authors: | , , |
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| Format: | Journal Article |
| Published: |
Pergamon Press
2017
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| Online Access: | http://hdl.handle.net/20.500.11937/59406 |
| _version_ | 1848760471978508288 |
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| author | Foo, N. Bloch, Harry Salim, Ruhul |
| author_facet | Foo, N. Bloch, Harry Salim, Ruhul |
| author_sort | Foo, N. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Investment in mining projects involves significant uncertainty. Project investment is usually high risk, irreversible and challenged by major economic factors. Mining commodity prices in particular always show greater volatility than any other primary products. The variation of these prices is critical in the investment decision of whether the project should go ahead, be abandoned or be delayed. This paper examines the impact of mineral price uncertainty on mining investment decisions using examples of projects in the Asia-Pacific region. Applying the mean reversion (MR) model, the commodity trigger value for investment decisions in each project is determined in the context of operational flexibilities. The findings indicate it is sometimes better to wait for a more suitable time to invest. |
| first_indexed | 2025-11-14T10:16:19Z |
| format | Journal Article |
| id | curtin-20.500.11937-59406 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T10:16:19Z |
| publishDate | 2017 |
| publisher | Pergamon Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-594062020-11-24T04:30:38Z The optimisation rule for investment in mining projects Foo, N. Bloch, Harry Salim, Ruhul Investment in mining projects involves significant uncertainty. Project investment is usually high risk, irreversible and challenged by major economic factors. Mining commodity prices in particular always show greater volatility than any other primary products. The variation of these prices is critical in the investment decision of whether the project should go ahead, be abandoned or be delayed. This paper examines the impact of mineral price uncertainty on mining investment decisions using examples of projects in the Asia-Pacific region. Applying the mean reversion (MR) model, the commodity trigger value for investment decisions in each project is determined in the context of operational flexibilities. The findings indicate it is sometimes better to wait for a more suitable time to invest. 2017 Journal Article http://hdl.handle.net/20.500.11937/59406 10.1016/j.resourpol.2017.11.005 http://creativecommons.org/licenses/by-nc-nd/4.0/ Pergamon Press fulltext |
| spellingShingle | Foo, N. Bloch, Harry Salim, Ruhul The optimisation rule for investment in mining projects |
| title | The optimisation rule for investment in mining projects |
| title_full | The optimisation rule for investment in mining projects |
| title_fullStr | The optimisation rule for investment in mining projects |
| title_full_unstemmed | The optimisation rule for investment in mining projects |
| title_short | The optimisation rule for investment in mining projects |
| title_sort | optimisation rule for investment in mining projects |
| url | http://hdl.handle.net/20.500.11937/59406 |