SPONGE IRON PLANT FEASIBILITY STUDY IN KALIMANTAN, INDONESIA

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Abstract

The abundance of mineral resources in Indonesia especially iron ore and the regulations supporting mineral and coal mining to producer search that aims to estimate the feasibility of an investment and the cost of investment development of iron ore pellets processing industry in Indonesia, to evaluate the feasibility of various analysis consists of market analysis, technical analysis, organizational analysis, and financial analysis. This study analyzed the risk of financial investments and taking into account the financial resources and ability to repay the cost of principal and payment of interest on the loan from the bank with an interest rate of 14%. Capital budgeting calculations were done, resulting NPV IDR 84,589,784,996 and IRR 39,18% making investment development of iron ore pellets processing industry can be said to be feasible because the IRR is above the MARR value that is equal to 20%. Sensitivity analysis showed that the factors that affect the investmentare the selling price of raw materials and finished product supporter and a price that will be sold to the market.

Original languageEnglish
Pages (from-to)4013-4020
Number of pages8
JournalARPN Journal of Engineering and Applied Sciences
Volume14
Issue number23
Publication statusPublished - 10 Dec 2019

Keywords

  • Capital budgeting
  • Feasibility study
  • Sponge iron

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