business profitability

Freeport Indonesia
1. Please analyze the situations that are faces by Freeport Indonesia using Situation Analysis (SA) approach.
2. One of the situations faced by Freeport Indonesia was tailings deposition. Golder Associates, an international engineering-consulting firm, were engaged by Freeport Indonesia to study this problem. Eight possible options to solve tailings deposition problem were provided (see Exhibit 7), then Freeport Indonesia were given recommendation to select Option 3.
a. If you were a consultant for Freeport Indonesia, would you give the same recommendation? Why?
b. Among those 8 options, are there any other option(s) that could be considered as alternative solution(s) to solve the tailings problem? (e.g. Options that are in ‘efficient frontier’). In what condition(s), these options could be considered? Please base your answer on SMART analysis.
Answer
1.
Problem
Impact
Timing
Trend
Priority
Effects on the glaciers
M
M
H
PA, DA, PPA
Overburden storage
H
H
M
DA, PPA
Tailings
H
H
M
DA, PPA
Effects on the culture of local people
M
M
M
PA, DA, PPA 2.
Simple Multiple-Attributes Rating Technique

Stage 1
Decision maker :

Stage 2
No
Option
Alternatives
1
Option 1
Run-of-River Deposition as Presently Employed
2
Option 2
Channel Across Ajkwa Sheetflow Area
3
Option 3
Levee and Spillway Containtment in Lower Ajkwa Area
4
Option 4
Mining from the Ajkwa River with Deposition in the Lower Ajkwa
5
Option 5
Mining from the Ajkwa River with Subaqueos Deposition in the Western Minajerwi Estuary
6
Option 6
Diversion of Otomona River at Mile 50, with Controlled Deposition by Earthen Dam
7
Option 7
Diversion of Otomona River with Pipeline to a Controlled Deposition Area
8
Option 8
Diversion of Otomona River at Mile 36 with Controlled Deposition

Stage 3

Stage 4
Option 1 and Option 2 are unacceptable, so I exclude those options. So the cost will be
No
Alternatives
Capital Cost