Investment Feasibility Analysis of a Coal Project Related to Improvement Production Capacity

DOI

10.2991/icebef-18.2019.122How to use a DOI?

Keywords

increasing production; financial analysis; coal mining contractor; balance sheet; scenario analysis

Abstract

Indonesia is currently becoming one of the strongest emerging market in terms of economic growth. This achievement requires supporting facility such as transportation infrastructure, manufacture, etc. Such rapid growth will not last long if not sustained by an adequate supply of electricity. In order to meet the target, the government established some power plants which one of them is Naga coal-fired station in Aceh. In the end of 2017, PT. Bagan Ekuitas Losari (BEL) has successfully signed a Memorandum of Understanding (MoU) with PLTU Naga to provide an amount of 600.000 tons per year. Therefore, PT. Tirta Bara Unity (TBU) as a mining contractor of PT. Bagan Ekuitas Losari was assigned to enhance the yearly production capacity of coal from 120.000 tons to 600.000 tons with overburden removal of 192.000 bcm to2.600.000 bcm with stripping ratio of 4.1. For such increasing, the question is how TBU can finance the project with a limited cash flow due to the high number of long-term receivables. Should they provide fully owned capital, fully rent, or lease from financial institution? How’s the financial analysis that can be indicator of the chosen alternative? By identifying and analyzing all aspect, particularly in terms of financial aspect, the best decision can be determined.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

TY  - CONF
AU  - Odus Natan
AU  - Erman Arif Sumirat
PY  - 2019/05
DA  - 2019/05
TI  - Investment Feasibility Analysis of a Coal Project Related to Improvement Production Capacity
BT  - Proceedings of the 1st International Conference on Economics, Business, Entrepreneurship, and Finance (ICEBEF 2018)
PB  - Atlantis Press
SP  - 569
EP  - 575
SN  - 2352-5428
UR  - https://doi.org/10.2991/icebef-18.2019.122
DO  - 10.2991/icebef-18.2019.122
ID  - Natan2019/05
ER  -