Abstract: Determing compensation standard is the key in setting eco-compensation mechanism in mineral exploitation.In this paper，real options binary tree model is applied to calculate the total project value which is regarded as the amount of development opportunity cost of eco-compensation.Moreover,based on a case study of a manganese factory in Huayuan County of Hunan province,the annual amount of development opportunity cost is determined,and the policy recommendations of strengthening the collection of taxes and fees and making environmental protection advertisement are put forward,which will make a significant difference in the deep research of mineral eco-compensation and sustainable development.

Key words: real options binary tree model, eco-compensation, development opportunity cost