Financial Evaluation For Kunming Steel’s1.2Million Tons Oxide Pellets Project

Since the reform and opening-up policy, with the rapid economic development, China’s iron and steel industry has made great progress. Especially in recent years, some national strategies, such as "demand pull","Western Development" and "to increase infrastructure investment" so on, increase the iron and steel production, steel varieties and economic benefits. However, the iron and steel metallurgy project has a larger uncertainty because of its big investment, complicated building and many influencing factors. Then, it is very important to investment, financing and decision-making through using scientific and rational approach to analyze the factors and evaluate the economic benefits of the iron and steel metallurgy project.Firstly, this paper analyzed the design programs of the Kunming Iron and Steel1.2million tons oxide pellets project and estimated the total cost of project finance on the basis of the basic theory of project management and project financial evaluation of the general theory and methods. In the paper, several key parameters were included, such as the scale of production, estimates of the total investment project, the project cash flow estimates, the project capital cost estimates and financing and so on.Secondly, the paper analyzed the economic benefits of the project. The paper thought that the project had a good earnings and debt repayment capability.Thirdly, the paper analyzed the uncertainty and estimated the sensitivity of the project factors for the Kunming Steel’s1.2million tons oxide pellets project.In all, the paper showed that the project had a certain ability to resist risks through the financial evaluation of the project, and the project is economically feasible.