Zeta Mining: walking the dragline

McCarthy, Scott (2014). Zeta Mining: walking the dragline. Ivey Publishing.

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Title Zeta Mining: walking the dragline
Abstract/Summary Zeta Mining, one of the world's largest producers of metallurgical coal, operates a number of mines in the Bowen Basin, Central Queensland, Australia. The company has invested about AU$8 billion in the region. Before extracting the coal, the overburden of dirt, rock and other geological waste has to be removed, and this is usually done by draglines, which are imported from the United States and constructed on site, requiring a significant investment in time and money. In 2012, Zeta’s chief financial officer tasked the Bowen Basin project evaluation director to decide whether to "walk" one of the 3,400-tonne draglines six kilometres to another mine or to employ external contractors to remove that mine's overburden. To do so, the director was required to perform an incremental comparison analysis using net present value methodology. The CFO will then use the analysis and any other relevant factors in making a final decision.

Learning Objective:
• To perform an incremental comparison analysis using net present value methodology.
• To create the solution in Excel or by hand.
• To introduce sensitivity analysis.
Keyword 9B13N025
Publisher Ivey Publishing
Series Ivey Cases
Date 2014-06-02
Author McCarthy, Scott
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Generic Document
Collection: UQ Business School Publications
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Created: Mon, 23 Jun 2014, 09:40:25 EST by Scott Mccarthy on behalf of UQ Business School