The optimisation rule for investment in mining projects

Foo, Nam; Bloch, Harry; Salim, Ruhul

doi:10.1016/j.resourpol.2017.11.005

Cited by 31 publications

(14 citation statements)

References 29 publications

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“…Hence, a relationship between TC/RC levels and copper supply and demand is known to exist and, therefore, is linked to its market price, so to some extent they move together coherently. Therefore, in that case, as related works on commodity price behaviour such as Foo, Bloch, and Salim [24] do, we have opted for the MR model, particularly the OUP model. Both GBM and MR are Markov processes which means that future values depend exclusively on the current value, while the remaining previous time series data are not considered.…”

Section: Models In Methodology Gbm (See Appendixmentioning

confidence: 99%

Looking for Accurate Forecasting of Copper TC/RC Benchmark Levels

2019

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Forecasting copper prices has been the objective of numerous investigations. However, there is a lack of research about the price at which mines sell copper concentrate to smelters. The market reality is more complex since smelters obtain the copper that they sell from the concentrate that mines produce by processing the ore which they have extracted. It therefore becomes necessary to thoroughly analyse the price at which smelters buy the concentrates from the mines, besides the price at which they sell the copper. In practice, this cost is set by applying discounts to the price of cathodic copper, the most relevant being those corresponding to the smelters’ benefit margin (Treatment Charges-TC and Refining Charges-RC). These discounts are agreed upon annually in the markets and their correct forecasting will enable making more adequate models to estimate the price of copper concentrates, which would help smelters to duly forecast their benefit margin. Hence, the aim of this paper is to provide an effective tool to forecast copper TC/RC annual benchmark levels. With the annual benchmark data from 2004 to 2017 agreed upon during the LME Copper Week, a three-model comparison is made by contrasting different measures of error. The results obtained indicate that the LES (Linear Exponential Smoothing) model is the one that has the best predictive capacity to explain the evolution of TC/RC in both the long and the short term. This suggests a certain dependency on the previous levels of TC/RC, as well as the potential existence of cyclical patterns in them. This model thus allows us to make a more precise estimation of copper TC/RC levels, which makes it useful for smelters and mining companies.

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Section: Models In Methodology Gbm (See Appendixmentioning

confidence: 99%

Looking for Accurate Forecasting of Copper TC/RC Benchmark Levels

2019

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“…Strengthening the social orientation in the activities of coal mining enterprises contributes to the search for integration ties with various sectors of the economy. In particular, one of the important directions in improving the welfare of the population is the provision of single-industry industrial areas with food [5][6][7][8][9].…”

Section: Introductionmentioning

confidence: 99%

Impact local markets on development single-industry towns of mining regions: exploring the case of Khakassia

et al. 2020

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It is well-known that the life quality of monoprophilic territories is largely influenced by city-forming enterprises. The article considers the degree of influence of the city-forming enterprises of the coal industry on the development of agriculture of the industry of mono-profile territories in the region. In particular, the direction of the social vector in the activities of coal mining enterprises with regard to support of the corresponding the life quality in single towns has been revealed. Therefore, the material obtained as a result of the study can be used in the development of social development programs of monoprophilic territories with city-forming enterprises of the coal mining industry.

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“…Third, the investment of renewable energy programs makes contribution to solving the problems of sustainable development since it changes the situation of the single dependence on the unsustainable resources. According to the above-mentioned particularity of renewable energy programs, the subsidies and investment schemes of traditional projects (Foo et al, 2018) are not suitable for the subsidy of renewable energy programs and cannot maximize the benefits of both the government and the enterprises which undertake the renewable energy programs.…”

Section: Introductionmentioning

confidence: 99%

Analysis on one-off subsidy for renewable energy projects based on time value of money

Yang

Jiang

Chen

et al. 2019

Journal of Renewable and Sustainable Energy

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Due to the incentive policies of governments, renewable energy plays an increasingly important role in the global energy supply system. Among the subsidy schemes, the one-off subsidy is mainly applied in the projects with a long investment period where the time value of money cannot be ignored due to the long payback period. In this article, a microeconomic model of enterprises with a discount factor is established. The impact of the one-off subsidy by the government is discussed in different periods. The results show that only when the investment period is long enough, the government would give the enterprise one-off subsidy and the given subsidy is positively correlated with the investment period. Besides, the enterprise is more willing to invest in the project when getting close to the end of the investment period and the subsidy increases with the growth of capital-output elasticity. This article analyzes the optimal period of giving the one-off subsidy under the condition of different internal rates of return (IRRs). Based on the extended framework of subsidy analysis by game theory, it is found that if IRR of the enterprise is larger than that of the government, the subsidy is suggested to be given at the beginning of the project.

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The optimisation rule for investment in mining projects

Cited by 31 publications

References 29 publications

Looking for Accurate Forecasting of Copper TC/RC Benchmark Levels

Looking for Accurate Forecasting of Copper TC/RC Benchmark Levels

Impact local markets on development single-industry towns of mining regions: exploring the case of Khakassia

Analysis on one-off subsidy for renewable energy projects based on time value of money

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