Study on methods of the coal resources investment decision based on real option

It is significant for scientific and rational decision-making method of coal resources investment (for short CRI) to evaluate reasonably the value of coal resources investment, to make the best coal resources investment program, and to timely manage the risks and flexibility in investment process. On the basis of analyzing the option characteristics of CRI, CRI could be regarded as a multi-stage compound real option. The paper gives a general review of studies on theory and methods of the CRI decision based on real option, previous researches have focused on evaluate the value of CRI based on B-S-M theory with unchanged interest rates, the continuous underlying asset price and the zero convenience yield, and avoided the formation mechanism of the value of the CRI options and their impact factors. Prospect future researches in the formation mechanism of the value of the CRI options, the variable models of coal price, and the multi-factor decision-making method of CRI, and the management strategy of CRI based on real options, and so on.