Research On Investment Decision-making Of Overseas Copper Project Based On The Theory Of Real Options

Gnerally speaking,a grwoing number of Chinese mining enterprises have been "going abroad" to invest in copper mine development projects.However,the mounting investment flow into copper resource development projects was not resultful as expected,even incurring a ROI much lower than that of other countries.Overseas copper mine development projects are characterized by high investment,high risk and long lead time,and the project process is full of uncertainties.The high degree of uncertainty in overseas copper project investment not only improves the project risk,but also increases the opportunity value of project investment.Enterprises can take flexible measures to choose the most beneficial action plan to maximize the value under specific circustmances.The traditional mining investment decision theory fails to fully consider the impact of uncertainty factors,which may be the cause of investment decision errors.In contrast,Real Options Theory fully takes the uncertainty factors and the value of management flexibility into consideration,and the uncertain value can be evaluated by the relevant option pricing method.Therefore,this paper takes "the investment decision of overseas copper mining projects based on real options theory"" as the research topic,introduces the real option theory and method into the investment decision-making of overseas copper mining projects.According to the investment characteristics and uncertain factors of overseas copper mine projects,this paper deeply studies its real option characteristics and value,defines the investment decision-making ideas and framework,and constructs the real option valuation model of overseas copper mining projects through the Black Scholes option pricing model.Further,the actual value of the project can be fully evaluated by combining the traditional net present value with the real option value,and on this basis,the idea and plan of overseas copper mine project investment decision-making based on the real option theory is established to improve the rationality and accuracy of the project investment decision.In addition,this paper takes the case study of Z Company's Kakura copper mine project investment for empirical analysis and test,carries out the real option value sensitivity analysis,and the relevant empirical results are obtained.The research contents and results of this paper effectively make up for the shortcomings of traditional investment decision-making methods,improve the theoretical research on investment decision-making methods of mineral resources projects,and contribute to the scientific application of real option method in overseas copper mining investment.Based on the real option theory,this paper constructs the valuation model and investment decision-making plan of overseas copper mine projects,which provides a new scientific and reasonable decision-making idea for mining enterprises,and also gives specific methods and empirical cases that can be directly used for reference.