Valuation process in mining industry


Basically, each evaluator has a different perspective on the value of an asset. The different perspective this can occur between the seller and buyer, between the assessors and the assignor and even among the assessors themselves. Therefore, the principles of assessment to be important to be studied in depth in the process of assessment 

Some principles of the assessment related to the assessment of mining assets include: 

The Highest and Best Use

This principle should be the first step in assessing the mining assets. Principles of the moment has been prepared, is the analysis of the subject land in empty (vacant land). There are four things that underlie this principle, namely, legally allowed to (legally permissible), allows physical (Physical possible), financial terms feasible (Financially feasible) and Max productivity

A valuer before the assessment is usually examine the first Analysis backup after the data assets that are valued, because productivity can be measured from the mining condition and the amount of reserves and other factors such as geological studies, geotechnical, hydro geological systems, mining, transport systems, processing system and the consecutive purifying affect the value 

6.2 Supply and Demand (Supply and Demand) 

This principle must be viewed in the perspective of economic widely. The level of consumption and absorption market both regional, national and international criticism to be withdrawn. Mining assets correlate directly with the products so that the value of mining assets into a mutually dependent. 

6.3 Principles of External (Externalities) 

In principle these external factors are very influential on the value of mining assets. External factors, this can be a factor of economic, political, social, cultural, environmental and related regulations. 

The existence of eforia reform mining laws, the policy of export-import tax, the limitations of labour, environmental damage is associated with several examples of external factors that can affect the value. Mining assets as foreign exchange, with the coverage of activities related to each other between the upstream and downstream industries is influenced by factors externalities 

6.4 Principles of Balance (balance) 

Principles of balance in close relation with the corporate governance (Good Corporate Governance), and how to use available resources to empower optimally, so that the maximum output by taking into account the sustainable development (sustainable development). Rendering a good environment, an example of how to manage mining assets that either. Exploitation of overused land mines can damage the ecosystem, especially in an environment where the business is run. 

6.5 The Principles (substitution) 

No different from other types of property, the price of a property tends to be determined by the price will be paid for the property and substitute the same kind. Almost all properties using this principle in the assessment. However, to get a comparable property and similar in the mining sector was difficult because each has different characteristics

Source: UJP Pangaloan