Description : Investment in coal resource development is affected by a variety of uncertain factors. Investors can make a flexible, strategic decision to achieve the value of risk implicated in those uncertain factors. Therefore, based on real-option theory, we identified key uncertain factors that affect a coal resource investment project, and revealed the formation mechanism of option value in coal resource developing investment project. Then, a multi-factor decision making model was established for a coal resource development investment project with random changes of coal price, interest rate, convenience yield and production cost. Finally, we tested the model and analyzed relevant parameters by applying living data. Our results indicate this model reflects the value of risk implicated in uncertain factors for coal resource development investment, and is able to determine a critical point of decision making change when coal price and production cost varym respectively. By means of parameters analysis, the convenience yield has a positive effect on the project value. The interest rate has a negative effect.
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