Underground Mining Optimisation

Mining Margin Optimisation: $150M up lift in gross profit through reducing downtime and operating costs to compete successfully in a softening market.

The Background

Our client needed to reduce its operating cost and improve its margin to compete in a softening coal market. Given its costs were largely fixed, the challenge was to increase production volumes with its current resources.

The two levers that management had at their disposal were to:

Decrease the Longwall downtime, and
Make the Longwall to cut the coal faster.

Whilst neither of these levers were particularly surprising, the challenge was to drive change required to shift these levers.

How the Siecap team helped

Working closely with the site Continuous Improvement team, the Siecap team:

Identified the areas that needed most improvement and then

Defined projects that would address the performance gaps in these areas

Value Driver Trees were developed that showed the interplay of the different levers on performance and each project had KPIs aligned to one or more of these levers. From this, project teams within the Longwall function were formed that, using short interval controls and KPI tracking drove the projects to deliver the projected results.

The Results

 Overall the work with the longwall section delivered $150M lift in annualised gross profit with only small changes to the available resources

It instilled within the management team that through a series of tightly managed projects real benefits could be delivered

It helped deliver 5 core improvement projects, 4 of which decreased longwall downtime and one of which increased the cutting rate

It introduced a range of new operating tactics for frontline management to adopt when faced with unplanned downtime in order to minimise the impact

Our Clients

We have delivered results for distinguished businesses and projects in Australia and abroad.