The Economic Reality of Iron Ore Production amid Diversification: A Case of Niomco (National Iron Ore Mining Company)
Journal Title: IOSR Journal of Economics and Finance (IOSR-JEF) - Year 2018, Vol 9, Issue 1
Abstract
The study projects on average, the profitability of Nigeria’s iron ore company, NIOMCO (National Iron Ore Mining Company) in Kogi State, amid her current economic status. In attempt to project the profitability surrounding the company’s operations, the Net Discounted Present Value was employed, over a projection of five years. Interestingly, the outcome of the projection revealed that, selling at the current global market price of iron ore ($62.59), considering Nigeria’s current inflation rate and Dollar to Naira market exchange rate will not be profitable to NIOMCO, with ‘all things being equal’ within a projected period of five years. Therefore, it recommends that the entity be privatized to foreign investors with adequate financial and technical capacity to saddle the operations of the entity throughout five years and a tax holiday of five years should also be granted, as a coping strategy to willing investors. It also recommends that, a new price be set, at least to cover running expenses, if it must be sustained, as Nigeria journeys through a period of economic vulnerability, as she seeks to diversify her economy.
Authors and Affiliations
Osemenam Uche M. Sc. Unn, Thomas . B. Afeni Ph. D. Wits
Keywords
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- EP ID EP414451
- DOI 10.9790/5933-0901016166.
- Views 216
- Downloads 0
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