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The optimisation rule for investment in

Nam Foo, Harry Bloch

2026enmining investmentreal optionsprice uncertaintycommodity pricesAsia-Pacificoptimization models

Abstract

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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.

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Cite This Work

@article{1844ada2-f090-42f7-92fd-ac1619c41a03,
  title={The optimisation rule for investment in},
  author={Nam Foo and Harry Bloch},
  year={2026},
  language={en}
}
TY  - JOUR
TI  - The optimisation rule for investment in
AU  - Nam Foo
AU  - Harry Bloch
PY  - 2026
LA  - en
ER  -

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