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The improvement of economic efficiency forecast evaluation methods for ore minerals mining

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Category: Economy and management

Last Updated on 17 November 2017

Published on 17 November 2017

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Authors:

K.Melnyk, Cand. Sc. (Econ.), Kyiv National Economic University named after Vadym Hetman, Senior Lecturer of the Corporate Finance and Controlling Department, Kyiv, Ukraine; This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract:

Purpose. The improvement of methods for evaluating expected economic efficiency of investment in ore minerals mining.

Methodology. The research is based on the use of the following methods: scientific generalization while formulating objectives and general conclusions; systematization, grouping and comparison while assessing advantages and disadvantages of the most common determination models of the investment discount rate; abstraction, analysis and synthesis to disclose methodological approaches to improvement of economic efficiency forecast evaluation of ore minerals mining investment.

Findings. It is defined that the forecast of the effectiveness of ore minerals mining should be based on identifying and evaluating investment return discounted indicators. However, it is necessary to consider the features of the mining enterprises’ investment process. Improved methods of investment return discounted indicators calculation in mining industry are suggested.

Originality. Improvement of the methods for economic efficiency forecast is as follows: 1) the cash flows arising from the development of mineral resources must be adjusted by the amount of cash flows related to the extraction of associated minerals; 2) inclusion of the amount of depreciation to incoming cash flows is advisable after the appearance of cash receipts from selling the main and related products of mining companies; 3) it is necessary to determine the amount of the mining investment risk premium using the special integral indicator.

Practical value. The proposed methodical approach will determine further appropriateness of ore minerals mining with the introduction of innovative technologies. It will provide reduction of the costs and increase in volumes of manufacturing mining products.

References:

1. Tereshchenko, O. O., 2015. Pragmatics of the discount rate during the financial crisis. Finance of Ukraine, 6, pp. 58‒71.

2. Ralko, O. S., 2015. Methods for determination of the discount rate. Naukovyi visnyk Mizhnarodnoho humanitarnoho universytetu. Seriya: Ekonomika i menedzhment, 11, pp. 150‒153.

3. Foye, J., Mramor, D. and Pahor, M., 2013. Respecified Fama French Three-Factor Model for the New European Union Member States. Journal of International Financial Management & Accounting, 24(1), pp. 3–25.

4. Fama, E. and French, K., 2012. Size, value, and momentum in international stock returns. Journal of Financial Economics, 105(3), pp. 457–472.

5. Chubuk, L., 2013. Methods for calculating discount and capitalization rates to valuate real estate in accordance with markets conditions, Bulletin of Taras Shevchenko National University of Kyiv. Economics, 10(151), pp. 51‒57.

6. The guide in the business finance world, 2016. Oschadbank’s tariffs [online]. Available at: <http://www.prostobiz.ua/depozity/tarify/(org)/oshchadbank> [Accessed 23 March 2017].

5_2017_Melnyk
2017-11-15  1.59 MB  877

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