Course Introduction

1. Kontrak Kuliah
2. Pengenalan Mining Business

1
 Course Introduction

1. Kontrak Kuliah
2. Pengenalan Mining Business

2
 Short Description
• Introduction, characteristics of Mining
industry, Eelements of feasibilty study
• A review of mining company activities:
exploration techniques and reserve
calculation, mining techniques, and
processing techniques
• Time value of money, cash flow
• Various techniques of mining valuation.
• Mine investment analysis.
3
 Jadwal Kuliah (Course Outline)
Minggu Pokok Bahasan Instruktur
ke
1 Pendahuluan Husni Usman
- Kontrak Kuliah
- Pengenalan Valuasi Tambang
2 Characteristics of Mining industry
3 A review of mining company activities
4 A quick guide to financials, Eelements of feasibilty
study
5 Time value of money/rumus-rumus dasar investasi,
cash flow
6 Valuation Methods
7 Presentasi tugas kelompok: FS (Studi Kelayakan)
8 UTS
 References

• The Mining Valuation Handbook by V.

Rudenno, 2009
• Mine Investment Analysis by D. Gentry
and T. O’Neil, 1984
• Economic Evaluation and Investment
Decision Methods, F. Stermole and J.
Stermole, 2006
• Engineering Economy by H. Thuesen, W.
Fabrycky and G. Thuesen, 1971
5
 Basic Definitions

Three basic definitions are closely related:

Mine: an excavation made in the earth to extract minerals.

Mining: the activity, occupation, and industry concerned

with the extraction of minerals.

Mining Engineering: the art and science applied to the

process of mining and the operation of mines.

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 Implicit Assumptions for a Mine

• Motivation: Profit & Generation of Wealth

• Acceptable Investor Return

• Social, Environmental & Legal Responsibilities

Mine Valuation – Spring 2013 7

 Basic Participants of the Mining Industry

• The term "Mining Industry" is often used to refer exclusively to

operating companies engaged in the actual extraction of minerals
and ores.

• In reality, the industry is comprised of numerous companies and

government entities with diverse, often well-defined and highly
specialized missions.

Mine Valuation – Spring 2013 8

 Basic Participants of the Mining Industry
(Continued)

• Mining Companies (Majors, Mid-tier, Juniors)

• Operators vs. Producers
• Exploration & Resource Companies
• Consultants
• Contractors
• Vendors
• Product/Mineral End-Users
• Lending & Financial Entities
• Government
• Labor Unions
• Universities & Research Organizations
• NGOs & Activist Groups
• Professional Societies
• Land Owners & Lessors
Mine Valuation – Spring 2013 9
 Groups Impacted by the Mining Industry

 Stockholders & Investors

 Employees (past & present)
 Communities (local & regional)
 Society in General
 Future Generations
 Government

 Other

Mine Valuation – Spring 2013 10

 Mining Business

Exploration Geology (find and define it)

Mine Planning

Mine Operations

Mineral Processing

Extractive Processes/Metallurgy

Sell
The typical organization in mining
business:
• Geology to characterize and update the
knowledge of the deposit;
• Mining engineering to devise the best
exploitation method and designs;
• Metallurgy to define the processing route and
metallurgical parameters;
• Finance to account for the firm’s financial
position (and ultimately the discount rate to
be used in decision making); and
• Marketing and sales to provide the market
input such as expected volumes and prices.
Fak. Teknik, UNV. SYIAH
KUALA
• Jurusan Teknik Kebumian/Fak. Teknologi Mineral
(Future)
– Teknik Geofisika (S1)
– Teknik Pertambangan (S1)
– Teknik Geologi (S1)
– Teknik Energi/Perminyakan (Future)

• Jurusan Teknik Mesin dan Industri

– Teknik Mesin (S1,S2)
– Teknik Industri (S1, S2)
– Teknik Metalurgi dan Material (Future) (UI dan ITS)
Fak. Teknik Pertambangan &
Perminyakan, ITB
• Teknik Geofisika (S1, S2 & S3)
• Teknik Perminyakan (S1, S2 & S3)
• Teknik Pertambangan (S1, S2 & S3)
• Teknik Metalurgi (S1, S2 & S3)
• Teknik Geothermal (S2)
The Accreditation Board for Engineering and
Technology (ABET) Programs in USA