Document Type

Closed Project

Publication Date

Fall 2003


Timothy Anderson

Course Title

Engineering Economic Analysis

Course Number

EMGT 535/635


This project presents the economic aspects of increasing Nickel production from mining refinery of Cerro Matoso S.A (CMSA), a sub-division of BHPBilliton, an Australian-British company. The Upgrading Project is an expansion of the ore preparation process and proposes the introduction of new equipments to increase Nickel output. With the increase in the age of the mine the quantity of nickel produced from a unit size material has gone down from 2.25% to 2.0%. The aim of the company is to improve the process of nickel production and increase the quantity of nickel produced from a unit size material. A thorough set of variables were evaluated such as nickel price, inflation, MARR and tax rates, to come up with the key output influenced by the most significant input variable. Three options of ore versus Nickel composition were considered as part of the analysis. The hypothesis of doing nothing is rejected, as installation of new equipments would give an economical advantage. Net present value and IRR were calculated, risk analysis techniques were used to evaluate the financial benefits.


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