Investment Analysis of Public Road Relocation Project within The Mining Concession Area at Pit Gurimbang, Job Site Gurimbang Mine Operation - PT. BC

Abstract

Gurimbang Mine Operation (GMO) is one of the mining concession sites under a Coal Contract of Work (CCOW) licence granted by the government to PT.BC. Mining at this location started in 2021 with 52 million MT of coal reserves that are expected to be depleted within 12 years (2021-2033). However, there are external challenges in the form of provincial roads crossing the GMO mining area, especially in Pit West and Pit South, resulting in approximately 3.5 million MT of coal reserves that cannot be mined. To support energy conservation on marginal coal reserves and maximise production, government support is required in allowing the relocation of the provincial road, enabling the entire coal reserves at the site to be exploited. This research aims to analyse the economic aspects and external factors affecting PT.BC's business environment related to the road relocation project. The research methods used include PESTEL analysis to measure the external impact on the business environment, as well as analysis of the company's tangible and intangible resources to evaluate PT.BC's ability to implement the project. In addition, Capital Budgeting was used to assess the financial feasibility of the project, and sensitivity analysis was conducted to identify economic parameters that have a significant impact on the feasibility of the project. The results show that the road relocation is financially feasible and necessary to maximise the coal reserves at the site. The implications of this study emphasise the importance of government support and effective resource management in overcoming operational challenges and ensuring the sustainability of mining operations.