VALUATION METHODOLOGIES UPGRADE BY TOWARD SUSTAINABLE MINING

Abstract

The valuation methodologies for mining assets need to be improved in line with the current requirements of responsible mining, sustainable mining, and environmental and social governance. The commonly used discounted cash flow method for the valuation of mining assets and its improved Real Options method, Monte Carlo simulation analysis, have a significant impact on the factors that affect the stability of investments, and the benefits to stakeholders from obtaining social consent are required to be reflected in the investment agreement. We have studied the requirements for responsible and sustainable mining and their financial impact with the current methodology for the valuation of minerals using content analysis, and identified areas for improving the valuation methodology. This methodology has become important in incorporating good practices of companies implementing responsible and sustainable mining internationally into the methodology for the valuation of mineral assets.