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“Risk Management Analysis in the Mining Industry”

In: Business and Management

Submitted By bhadrasri
Words 2849
Pages 12
A Report on
“Risk Management Analysis in the Mining Industry”

Submitted by
D Veera Bhadra Anjaneyulu (1226114112)

Submitted to
Prof Kalpagam Uma Shankar
Visiting faculty of
Gitam School of International Business
Visakhapatnam

Introduction
The word "risk" comes from the Italian "risicare," meaning "to dare." Developing or acquiring a mine anywhere takes plenty of daring. Undertaking a mining project overseas borders on the foolhardy - unless you understand the risks and take steps to manage those risks.
Every business endeavor carries some risk, and the astute businessman, over time, develops a sense of the kinds of risk presented by a business proposition, and a set of strategies designed to deal with those risks. Mining anywhere in the world has its own particular set of risks, in the form of commodity prices, engineering puzzles, and geologic uncertainty. When a company pursues mining on a global scale, additional risks arise, and things like political risk and currency risk come to the fore.
Risk can be approached systematically, indeed scientifically, with statistical modeling and sophisticated mathematics. Few businesses make decisions based solely on the inevitability of mathematics, however. At the end of the day, a company must exercise its business judgment, based on its experience, and on what is most important to it, and make the hard decisions about how (or whether) to proceed.

1. Identifying Risks:
The Risk Baseline:
A mining company should think about its "risk baseline" “the risks associated with maintaining the status quo. If, for example, a company has nearly exhausted its existing reserves under development, it may be required to undertake a new mining project (or acquire an operating mine) simply to remain in existence. Similarly, if the major share of a company’s reserves is in a single country, the company may find it...

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