Assessing hard coal mining: an application with abandonment in the Czech Republic
by Miroslav Čulík; Petr Gurný
International Journal of Mining and Mineral Engineering (IJMME), Vol. 8, No. 3, 2017

Abstract: This paper aims to financially assess hard coal mining in a given region real option methodology. Hard coal mining in this mine resulted in a net loss for the owner during recent years due to the long-term unfavourable mining conditions and a drop in coal prices. Management plans to shut down the operation and abandon the project to reduce the loss. The goal is to assess whether shutting down the operation is the correct solution for this problem. In Section 4, the real option methodology procedure is described and applied to solve this problem. Results are subsequently commented and final solution is provided.

Online publication date: Tue, 15-Aug-2017

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