Nam Foo, Harry Bloch
Investment in mining projects involves significant uncertainty, influenced by high risks, irreversibility, and economic factors, particularly commodity price volatility. This paper explores how mineral price uncertainty affects mining investment decisions in the Asia-Pacific region. Utilizing the mean reversion (MR) model, the study determines the commodity trigger value for investment decisions within the context of operational flexibilities. The findings reveal that companies may benefit from deferring investment until more favorable conditions arise, emphasizing the importance of strategic timing in response to volatile commodity markets. Ultimately, the research underscores the necessity for mining investors to maintain flexibility in their decision-making process, balancing the risks associated with irreversible investments and the uncertainties inherent in future economic conditions.
@article{1844ada2-f090-42f7-92fd-ac1619c41a03,
title={The optimisation rule for investment in mining projects},
author={Nam Foo and Harry Bloch},
year={2018},
language={en}
}TY - JOUR TI - The optimisation rule for investment in mining projects AU - Nam Foo AU - Harry Bloch PY - 2018 LA - en ER -
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