Business (AS & A Level) · Oct / Nov 2021 · Paper 21 · Question 2

Tin Mines (TM) TM is a private limited company in the primary sector. Tin is found underground and is extracted by mining. TM operates seven mines in country C. There are several job roles at each mine including skilled engineers, managers and miners. TM has recently discovered a new source of tin in a remote area of country C. TM has permission to develop a tin mine but will have to construct transport links. It will need new buildings such as offices, warehouses and employee housing. The Human Resources Director is developing a workforce plan to recruit miners and managers for the new mine. TM’s Financial Director has produced a cash flow forecast for the new mine for the next five years. This is shown in Table 2.1. Table 2.1: Cash flow forecast for the new mine ($m) Year 2022 2023 2024 2025 2026 Opening balance X –80 –95 –85 5 Sales 0 0 25 105 Y Development costs 60 15 0 0 0 Operating costs 0 0 15 15 15 Closing balance –80 –95 –85 5 240 The remote area of country C where the new tin mine will be located has a high level of unemployment and average incomes are low. TM intends to recruit employees from the local area and buy resources from local suppliers, if they are available. The market for tin is likely to be affected by increased demand for electric vehicles. The batteries in electric vehicles contain tin. The government of country C believes that the tin mine will be of great benefit to both the local community and national economy. However, tin mining can result in pollution of local water supplies. 5 10 15 20

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