Browsing by Subject "fosfaatti"

Mining is globally one of the fastest growing and developing industries (Vasara, 2019). It is important to find functional and reliable methods via academic research to solve societal issues in a rapidly evolving industry. Such a method is, for example, a valuation method for a producing mine which determines the value of the mine for the owner with sufficient accuracy. This thesis studied the theory of Hotelling's valuation principle and valuation method of Cairns and Davis (1998) and their role in the economic literature. In the empirical part of the thesis, the net present value of the Siilinjärvi phosphate mine was calculated, and sensitivity analysis was performed for the determined data using the studied valuation methods, instead of statistical analysis of the methods. The thesis answered the following questions: what are the effects of a valuation method and the available data on the net present value of a single producing mine? How are the above-mentioned impacts possibly reflected in social value of the mine and thus in social decision-making? In the analysis of the thesis, the base year was defined as 2020. Data was determined to describe the base year, and sensitivity analysis was performed relative to it. The estimated data described the production of phosphate concentrate, and the valuation was outlined accordingly. The net present value of the Siilinjärvi phosphate mine, calculated using the Hotelling valuation principle, was 663,27 million US dollars. The net present value obtained using the valuation method of Cairns and Davis was 378.23 million US dollars. Thus, the Hotelling valuation principle also produces higher social value than the valuation method of Cairns and Davis. And it is possible that using the Hotelling valuation principle, a single mining project would be approved, which would not necessarily be accepted using the valuation method of Cairns and Davis. The effects of the available data are transmitted to the net present value obtained by the valuation method and thus to the social value and decision-making. The magnitude of the effects depends, for example, on the method used and the magnitude of the error in the estimates. Future research could be testing the valuation method of Cairns and Davis with statistical means to allow the valuation method to gain empirical support. Also, the valuation method of Cairns and Davis valuation method could be extended to cover the ecological and social impacts of mining.