| Summary: | This modelling is the result of research about developing analysis of Sabour’s (2003) mathematic
model using marginal analysis concept to determine optimum production rate. The case study is
located at East Barito District, Central Kalimantan Province. This model is developed by adding
some relevant parameters to find mathematical model of optimum production rate. The solution
model is produced by integrating result of development of Sabour’s mathematical model with the
cash flow model for coal open pit mining. The values of production rates is determined by
literating and obtaining 4,563 ton/day. That condition will produce maximum NPV, which is USD
1,760,746,878. The solution model resulted is relevant to apply in case study area. The
considerations are: the input data are the same, the value of IRR is higher than discount rate
(56,58%) and also the value of NPV from solution model is higher than the value of NPV from
company projection (USD 1,760,746,878: USD 1,050,031,850)
Keywords: Marginal Analysis; Production rate; Cash flow; Coal; NPV
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