Multitek Indonesia: Jurnal Ilmiah Volume: 19 No.
2 Desember 2025.
Hal.
ISSN: 1907-6223 .
ISSN: 2579-3497 (Onlin.
http://journal.
id/index.
php/multitek https://doi.
org/ 10.
24269/mtkind.
INVESTMENT FEASIBILITY OF A SAND AND GRAVEL
QUARRY USING THE BENEFIT COST RATIO
METHOD A CASE STUDY OF PT.
ARKATAMA MINING,
JAYAWIJAYA REGENCY.
INDONESIA
Obed Patiung1*.
Mapuay Menasye Theo Afasedanya1 Mining Engineering Department.
Amamapare Polytechnic Jl.
Heatubun Kwamki Baru.
Timika Central Papua Email : obedpatiung85@gmail.
com, mapuayafase87@gmail.
*Alamat Korespondensi: obedpatiung85@gmail.
Dikimkan: 26 November 2025.
Direvisi: 9 Desember 2025.
Diterima: 18 Desember 2025.
Abstract The Wouma District in Jayawijaya Regency has significant potential for sirtu .
and and grave.
deposits, particularly along the Uwe River.
PT.
Arkatama Mining is one of the mining companies utilizing these resources for construction and mining activities.
However, the economic feasibility and actual reserve quantity of sirtu have not been thoroughly studied.
This research aims to analyze the economic feasibility of sirtu mining using the Benefit Cost Ratio (BCR) method.
Data collection involved field measurements, interviews, and company document analysis.
Results show that the mining area covers 4,320 mA with a sirtu resource volume of 38,880 mA.
The BCR value obtained is 2.
6, indicating that the project is economically feasible and profitable.
The study recommends environmental monitoring and operational efficiency improvements to ensure sustainable mining Keywords: Benefit Cost Ratio.
Mining Feasibility.
Sirtu.
Economic Analysis.
Investment
INTRODUCTION
This study investigates the economic viability of establishing and operating a sand and gravel .
quarry in the Jayawijaya Regency.
Indonesia, by applying the Benefit-Cost Ratio method.
This approach allows for a comprehensive assessment of the project's financial attractiveness, taking into account both the expected monetary benefits and the associated costs over its operational lifespan .
The primary objective is to determine if the projected benefits outweigh the costs, thereby justifying the investment for PT.
Arkatama Mining.
A thorough financial analysis, including considerations of Net Present Value.
Internal Rate of Return, and Payback Period, will further delineate the project's profitability and capital recovery timeline .
Such an analysis is crucial for nascent mining sectors, like those in Cambodia, where a scarcity of geological data necessitates robust financial modeling to guide investment decisions .
Moreover, evaluating the financial feasibility of such ventures is paramount in ensuring sustainable resource extraction and regional economic development .
This research aims to bridge this gap by providing a detailed financial feasibility study that combines the Benefit-Cost Ratio with other robust financial metrics to offer a holistic perspective on the project's investment potential .
This comprehensive approach is essential for mitigating investment risks and optimizing resource allocation in the context of fluctuating market demands and operational complexities inherent in the mining industry .
The use of discounted cash flow methods, such as Jurnal Ilmiah Multitek Indonesia.
Vol 19.
No 2.
Desember.
ISSN : 1907-6223
Net Present Value, is critical in evaluating long-term mining projects by accounting for the time value of money, which is particularly relevant given the extended operational horizons of quarrying activities .
This methodology enables a more accurate appraisal of investment opportunities in resourceintensive industries, where initial capital outlay is substantial and returns accrue over an extended period .
Furthermore, integrating a cost-benefit analysis within this framework allows for a direct comparison of economic feasibility, ensuring that proposed benefits demonstrably exceed aggregated costs over the project's lifecycle .
The Net Present Value method, a frequently employed financial analysis technique, is particularly useful for assessing investment feasibility by comparing the present value of future cash inflows against the initial investment .
This method, alongside the Internal Rate of Return and Payback Period, provides a robust framework for capital budgeting decisions in the mining sector .
Additionally, the payback period offers insight into the time required for an investment to generate cash flows sufficient to recover its initial cost, which is crucial for assessing liquidity and risk .
Moreover, these financial metrics collectively inform strategic decision-making, ensuring that investments in natural resource exploitation align with both economic objectives and longterm sustainability goals, especially in regions with significant resource endowments .
Such comprehensive analyses are particularly vital for attracting investors to the solid minerals sector, as demonstrated by studies evaluating large-scale dimension stone production .
Previous scholarly works have extensively explored financial management principles in private firms, highlighting cash flow as a critical determinant of financial health and value generation for stakeholders .
However, conventional discounted cash flow methods often overlook managerial flexibility in adapting to market fluctuations, prompting the exploration of alternative valuation approaches like real options to enhance investment decisions in mining projects .
While much of the literature focuses on financial planning and control, the ultimate aim of financial managementAicash managementAioften receives less attention, despite its critical role in achieving profitability, liquidity, and efficiency .
This gap in traditional financial evaluation can lead to suboptimal decisions, particularly in sectors like mining where future uncertainties are high and opportunities for adaptive management are significant .
This has led some researchers to advocate for the use of real options analysis, which can more sophisticatedly allocate investment risk by considering the value of managerial flexibility in uncertain environments .
Despite this, capital budgeting still heavily relies on methods like Net Present Value.
Internal Rate of Return.
Modified Internal Rate of Return.
Discounted Benefit-Cost Rate, and Discounted PayBack Time, especially for assessing the magnitude and long-term implications of investments .
RESEARCH METHOD
Research Location The Benefit-Cost Ratio method, employed in this study, offers a robust framework for evaluating the economic efficiency of projects by comparing the present value of total benefits to the present value of total costs, providing a clear indicator of investment desirability.
This quantitative approach enables decision-makers to ascertain whether a project yields a positive return on investment, thereby contributing to informed capital allocation strategies .
This method is particularly valuable in resource-intensive sectors such as mining, where significant upfront investments necessitate rigorous financial scrutiny to ensure long-term sustainability and profitability .
Moreover, the accurate prediction of cash flows is paramount for project managers to identify potential issues and mitigate project failures, making cash flow management an indispensable component of successful project implementation .
Furthermore, this method provides a standardized metric for comparing diverse projects, allowing for objective prioritization of investments based on their economic viability and potential for wealth creation.
The discounted cash flow method is widely adopted for assessing project feasibility by summing all discounted expected cash flows over a determined period, thereby providing a comprehensive valuation .
This study was conducted at the mining site of PT.
Arkatama Mining in Wesakin Village.
Wouma District.
Jayawijaya Regency.
The research employed a quantitative approach utilizing both primary and secondary data.
Primary data collection included:
Jurnal Ilmiah Multitek Indonesia.
Vol 19.
No 2.
Desember.
ISSN : 1907-6223
Field measurements using GPS (Garmin 78.
and roll meter to determine mining area coordinates and dimensions A Direct observation of mining operations and equipment A Interviews with company management and operational staff A Time-motion studies using stopwatch to determine equipment cycle times Secondary data was obtained from:
A Company documents including investment records and operational reports A Literature studies from relevant journals and technical references A Government regulations and mining standards Figure 1 : Research Location Data Analysis Method The sirtu resource volume was calculated using the geometric method with the formula:
V=P x L x T a.
Where:
V= Volume .
A) P = Length of mining area .
L = Width of mining area .
T = Thickness/depth of deposit .
Benefit Cost Ratio Analysis The BCR was calculated using the formula:
ycNycuycycayco ycayceycuyceyceycnyc BCR = ycNycuycycayco ycaycuycyc a.
Where:
Total Benefit = Resource volume y selling price per mA Total Cost = Investment cost Operational cost The criteria for economic feasibility were:
A BCR > 1 : Project is economically feasible Jurnal Ilmiah Multitek Indonesia.
Vol 19.
No 2.
Desember.
ISSN : 1907-6223
BCR < 1 : Project is not economically feasible BCR = 1 : Break-even point
RESULTS AND DISCUSSION
Sirtu Resource Characteristics The mining area of PT.
Arkatama Mining covers 4,320 mA .
432 hectare.
with the following A Length: 108 meters A Width: 40 meters A Depth: 9 meters Using the geometric calculation method:
V = 108 y 40 y 9 = 38.
880 mA The sirtu deposit consists of mixed sand and gravel materials derived from sedimentary rock formations in the area.
The deposit characteristics indicate alluvial origin from the Uwe River sedimentation Production Analysis and Mine Life Based on field observations, the company operates with the following schedule:
A Working hours: 07.
00 - 17.
00 WIT = 10 hours A Effective working time: 9 hours A Delay time: 3,3 hours Equipment efficiency calculation:
ycycuycycoycnycuyci EaycuycycycOeyccyceycoycayc ycycnycoyce Efficiency = yceyceyceyceycaycycnycyce ycycuycycoycnycuyci ycycnycoyce ycu 100% a.
10Oe3,3 = 9 ycu 100% = 74,4% Production calculation for backhoe Sumitomo SH 210-6:
A Bucket capacity (H) : 1.
10 mA A Swell factor (I) : 0.
A Cycle time (CT) : 0.
38 minutes A Efficiency Calculation (E) : 74.
yaycuyaycuya ycu 60 ycoycnycuycycyceyc/Eaycuycycyc a.
yaycN 0,74 ycu 0,67 ycu 1,10 ycu 60 ycoycnycuycycyceyc/Eaycuycycyc 0,38 = 86,5 m /hours Annual production calculation:
A Daily production: 86,5 mA/hour y 6 hours = 519 mA/day A Monthly production: 519 mA/day y 21 days = 10,899 mA/month A Annual production: 10,899 mA/month y 11 months = 119,889 mA/year Mine Life Based on field data, namely reserves and production targets, the life of a mine can be determined by :
ycIyceycycuycycycayceyc Mine life = a .
ycEycycuyccycycaycycnycuycu ycycaycyciyceycyc = 119.
= 0,32 years Jurnal Ilmiah Multitek Indonesia.
Vol 19.
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ISSN : 1907-6223
The calculated mine life is approximately 4 months based on current production rates and available Investment Costs The company's investment in mining equipment includes:
A 4 units of Backhoe Sumitomo SH 210-6: Rp 2.
A 6 units of Dump Truck Hino Dutro 130HD: Rp 1.
000,000
A Total Investment: Rp 4.
000,000
Operational Costs Detailed operational costs per year:
A Backhoe operational cost: Rp 33.
A Dump truck operational cost: Rp 5.
A Depreciation cost: Rp 63.
A Employee salaries: Rp 28.
A Total Operational Cost: Rp 131.
Revenue Analysis A A A Sirtu resource: 38.
880 mA Selling price: Rp 300.
000/mA Total Revenue: Rp 11.
000,000
Benefit Cost Ratio Calculation Based on company data, the sources of sandstone .
are as follows:
Benefit calculation - Sand and rocks recourses = 38.
880 m3 - Selling price of material = Rp.
- Hino dutro 130 HD Dump truck capacity ( 5 m.
= Rp.
000/ 5
= Rp.
000 m3 Benefit Value = total reserves x retail price a.
= 38.
880 m3 x Rp.
000/m3 = Rp.
Cost Calculation - Sand and rocks recourses = 38.
880 m3 - Annual production = Rp.
997 m3/years - Operating cost = Rp.
ycycuycycayco ycyceycycuycycycayceyc Total Production Cost = ycyycycuyccycycaycycnycuycu ycycaycyciyceyc ycu ycuycyyceycycaycycnycuyci ycaycuycyc AA .
= 119.
997 ycu 131.
= Rp.
454,37
Benefit Cost Ratio - Cost = Total production cost investment cost a.
= Rp.
454,37 Rp.
= Rp.
Jurnal Ilmiah Multitek Indonesia.
Vol 19.
No 2.
Desember.
Benefit Cost Ratio
ISSN : 1907-6223
ycycaycoycyce ycuyce ycayceycuyceyceycnyc a .
ycaycuycyc ycuyce ycycaycoycyce ycIycy.
= ycIycy.
= 2.
6 (BCR > 1 : Project is economically feasibl.
CONCLUSION The comprehensive comparison of this study's findings with relevant literature validates the economic feasibility conclusion while highlighting important strategic considerations.
The BCR of 2.
6 positions the PT.
Arkatama Mining sirtu quarry favorably within the range of successful small-scale mining operations in Indonesia and similar contexts.
The operational efficiency of 74.
4% demonstrates competitive equipment utilization, and the cost structure is consistent with industry norms.
However, the 4-month mine life emerges as a critical constraint that requires strategic attention.
While the high BCR ensures short-term profitability and capital recovery, sustainable business development will require resource base expansion through systematic exploration and permit acquisition in the Uwe River area.
The study would be strengthened by incorporating additional financial metrics (NPV.
IRR, payback perio.
, conducting sensitivity analysis for key parameters, explicitly accounting for environmental costs, and developing a comprehensive resource expansion strategy.
These enhancements would provide a more robust foundation for investment decision-making and long-term business planning.
Overall, the research demonstrates that sirtu mining in the Jayawijaya Regency can be economically viable when supported by appropriate equipment, efficient operations, and sound financial analysis.
The findings contribute valuable data to the limited literature on small-scale aggregate mining in Papua and provide a methodological framework that can be applied to similar operations in the region.
REFERENCE