Investment Valuation of Loadpro Utilization to Support Coal Hauling Using Discounted Cash Flow Method

Abstract

Pit A in the Samba Mine Operation has significant coal reserves, approximately 20 million metric tons, based on Life of Mine (LOM) data. However, current conditions show that actual fuel consumption constantly exceeds the set limit, which is problematic as fuel is one of the largest operating costs in the mining industry. To address this, this study aims to evaluate the financial feasibility of using a new coal transportation equipment, Loadpro, which has a lower capacity and fuel consumption than the current equipment. The research method used is the Discounted Cash Flow (DCF) method with Incremental Cost analysis to assess financial feasibility. The results showed that the use of Loadpro resulted in positive financial parameters, namely NPV of Rp. 1.1 billion, Profitability Index (PI) of 1.24, IRR of 23%, and Payback Period of 2.02 years. Sensitivity analysis shows that coal production is the factor that most affects the fluctuation of NPV. Through scenario analysis and Monte Carlo simulation, the worst case scenario resulted in an NPV of -Rp. 781.7 million, while the best case scenario gave an NPV of Rp. 2.2 billion, with an 11% probability that the NPV < 0. The implication of this study is that the use of new equipment can significantly improve operational cost efficiency at Samba Mine Operation, although there remains a risk in coal production that must be managed properly.