Towards sustainable mining (Part I): Valuing investment opportunities in the mining sector

The new wave of technological innovations for sustainable development of geotechnical systems

“…Nevertheless mining complex functioning on the principles of sustainable development is associated with unprecedented conditions: the increasing of mining operations depth; the reduction of large-scale deposits of solid minerals with high quality of raw materials; the decrease of valuable components of in the content in ore and increase of harmful impurities; the increase of rebellious ore share; the accumulation of large volumes technogenic formations, comparable to volume of accumulated metals with of promising deposit reserves; the displacement of mineral resource development sites in hard-to-reach areas with undeveloped infrastructure and unfavorable natural and climatic conditions; the leaving of significant volumes of natural and man-made reserves in the depths of the Earth located in complex technogenically altered geomechanical, gas-hydrodynamic and mine technical conditions; the growth of the requirements to the quality of products by the world market; the increase in specific energy costs and others. In this connection sustainable development should be understood not only as a classic definition, implying such a kind of development that allows to ensure the existence of society without threatening to future generations to meet their needs [14][15][16][17][18]. Sustainable development of mining complex should be understood as a set of strategic initiatives to ensure the exploitation of each developing subsoil area for indefinite period time on the basis of the initial design in the stages of transition to a new technological structure of field development.…”

Measurement of Resilience and the Time Value of Resilience

“…This work is not relevant to the present subject. 2) Espinoza and Rojo [7] discuss limitations of the traditional TVM, net present value (NPV), analysis of long-term projects, such as mines. A challenge is that far future cash flows are so discounted, particularly when using constant and higher risk adjusted discount rates (RADR), that risks related to far future events are poorly reflected.…”

Sustainability in the Minerals Industry: Seeking a Consensus on Its Meaning

“…In regard to quantifying the investments and capital gains in the mineral sector to determine the financial feasibility of a new project, two common methods are used: the Net Present Value (NPV) and the Internal Rate of Return (IRR). These are based on the reduction in the future cash flow using a single factor (Risk Adjusted Discount Rate), which grows exponentially with time [121,122]. However, methods based on NPV have produced high variability in the valuation of mines, comparable to that of prices of commodities.…”

“…However, methods based on NPV have produced high variability in the valuation of mines, comparable to that of prices of commodities. Despite this and other limitations, the NPV method has been the most commonly used in the mineral sector [121]. Considering these restrictions, the Decoupled Net Present Value (DNPV) has been recently proposed, which splits the risk from the time value of money, allowing to better estimate the real costs of mineral extraction, while maintaining a level of simplicity.…”

“…Considering these restrictions, the Decoupled Net Present Value (DNPV) has been recently proposed, which splits the risk from the time value of money, allowing to better estimate the real costs of mineral extraction, while maintaining a level of simplicity. Indeed, with this new method, it is possible to account for other types of risks that are not associated to the market-for instance, climate change-in the valuation of a particular mineral resource [121].…”