Economic Investment Appraisal Cost and benefit analysis of the BHP Ravensthorpe project Winnie Kwok.

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Presentation transcript:

Economic Investment Appraisal Cost and benefit analysis of the BHP Ravensthorpe project Winnie Kwok

BHP Ravensthorpe Project Background –The nickel industry –The Ravensthorpe project Financial Analysis Cost Benefit Analysis

The Nickel Industry Nickel is mainly used in making stainless steel Recently the demand has exceeded the supply

The Nickel Industry Firms can’t easily increase supply 2 types of nickel ores: sulphide and laterite Laterite is abundant but difficult to process

The Ravensthorpe Project BHP is investing $1.9 billion in a new technology for processing laterite ore. Production capacity Successful technology – 44.5 M tones/annum Unsuccessful – 29.5 M tones/annum

Financial Analysis Estimate the expected financial return, with consideration to the following: Capital expenditure Operating cost Tax Depreciation/amortisation Royalties ……

Cost Benefit Analysis Estimate the expected cost/benefit, with consideration to the following: wages environment social discount rate infrastructure – housing …….

Questions/comments?