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The Valuation Of Exit Option In A Lignite Mine Using Monte Carlo Simulation, Marcin Pawlak, Tomasz Wiśniewski

Journal of Sustainable Mining

This study aims to demonstrate the application of simulation techniques to the valuation of real options. The nature of the paper is methodological and empirical. The purpose of the valuation of the option to close a lignite mine in Poland is to demonstrate the methodology and advantages of employing Monte Carlo simulation in the valuation of real options. Close to actual numerical data reveals a complex optimization problem in the context of strategy selection by decision-makers. Numerous factors (extraction costs, reclamation costs, the write-off for the reclamation fund, etc.), their interpenetration and multilevel influence on the decision to close the …