Your organisation only has one pot of money to finance investments. Traditional metrics of NPV and IRR don’t work for emissions reduction projects and a carbon price has significant limitations.

Investments in production will impact emissions and investments in emissions reduction may impact both production and operating costs as well as consuming some of the capital budget. Some assets are more profitable than others and some are easier to decarbonise.

• How do you find the optimum capital allocation strategy to satisfy corporate targets and constraints, including emissions reduction ambitions, and what is the impact vs BAU?
• What happens with different sets of macro-economic assumptions and how do they affect the optimised capital allocation strategy?
• How do you account for the non-linear relationships and interdependencies inherent in mining?

Using techno-economic modelling, scenario analysis and portfolio optimization techniques borrowed from the oil and gas industry it is possible to evaluate a vast range of available investment options across multiple assets under different sets of macroeconomic assumptions to inform and iterate on the optimised path to net zero. If you are interested in understanding how, vote for this session.