Spend a Little to Make a Lot

Organization: The Australasian Institute of Mining and Metallurgy
Pages: 4
Publication Date: Jan 1, 1995
With the continued drop in export coal prices (as measured in US$) delivered to the Pacific Rim market, and a fixed annual 12 per cent increase in overburden, Usibelli Coal Mine Inc was faced with the need to reduce mining costs substantially or else forfeit its foreign coal contractual commitment which amounted to about half of annual mine output. Management made a difficult and fortuitous decision to proceed with an engineered plan to switch from a two seam, extended bench dragline operation to a two seam, cast blast and spoil side operation. While down-sizing and cut-backs became the rule in all departments of the mine, the drilling and blasting budget was more than doubled. Most will agree that this is contrary to what usually happens when a mine is faced with down sizing. The more common scenario would have management target the drilling and blasting budget for decrease as a first priority to cutting cost, and then later witness a decrease in equipment performance leading to an increase in the production cost per tonne. Although Usibelli Coal Mine more than doubled its annual drilling an blasting budget three years ago, the overall stripping cost has be, reduced by more then 37 per cent.
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