Abstract:

Economic analysis of extractive industry is fundamentally different from the analysis of agriculture, manufacturing and services. The main reason is that mineral resources are exhaustible resources; in other words, in the mining industry an initial stock of reserves will exhaust over time. Consequently, if we start from the premise that the owner of a resource, like any other owner, is seeking for maximum gain, we must then take into consideration multiple factors specific to the mining industry. Therefore, this paper intends to present the matrix model for a mining enterprise, showing both its compounding elements and its matrix restrictions (in the first part), that will in the end help build a model for determining the optimal mining production (in the second part).