Increasing profitability for one Hunter Valley mine
3 MINUTE READ
A major coal mining operation was hampered by a mix of issues that were dragging down profitability. Some were easy to define, some were much harder to quantify. Secora worked in tandem with the mine’s business improvement team to instil a new Lean culture for identifying and tackling these issues – and paved the way for a later surge in revenue.
THE PROJECT
This was a wide-ranging project for business and profitability improvement.
WHO WE WORKED WITH
We worked with all organisational levels of this tier-one thermal coal mining company. We reported upwards to the General Manager and Asset Leadership team but mainly worked side-by-side with the Business Improvement team, and through them reached the Maintenance, Wash Plant and Operations teams who could give us a valuable perspective on life at the coalface.
THE CHALLENGE
The mine owner had identified some areas of coal recovery, operator skill level and equipment use that were not performing to expectations. An improvement project targeting multiple fronts was required.
Secora was tasked with optimising:
the entire value chain from geology, exploration and sales & marketing, through to drill and blast
the mine’s investments in technology by harnessing them to greater effect
the training of senior managers in business improvement processes.
WHAT WE DID
Secora worked across a range of roles in the project, including establishing a Project Management Office and providing execution support.
We helped the internal team to identify the priorities within the 16 business improvement projects being undertaken. Each project had an impact on the key focus: ‘every tonne of coal being sold for the maximum revenue’. Several of the initial projects also spawned supplementary projects.
Outcomes included:
reducing edge loss during blasting: by finessing the amount of explosives packed at the edges of the blast site, more coal was retained instead of being blasted off
finding new methods to deliver a higher proportion of high-yield material to the wash plant rather than low-yield
supplementing blasting with in-situ coal recovery teams
implementing an effective way to use GPS tracking to monitor the location of machinery on site
training the Business Improvement Team in Lean methodologies and associated techniques such as Kanban boards
more clarity around governance roles, which helped streamline business administration
executive coaching to nurture the client’s executive capability development.
In the context of steeply climbing coal prices, the results were fortuitously timed. For the following financial year, a significant percentage of the parent company’s annual profit was contributed by a single line at this mine.
THE RESULTS
Within 12 months of Secora’s engagement there was a net improvement in coal recovery.
Previously the mine was losing 26% of coal between the geological model and port sales; this figure was cut to 8-10%.
The good result can be attributed to Secora taking a holistic view – including not just the physical operations of the mine, but also the surrounding environment: its technology, management and culture. By gaining the acceptance of the existing teams, Secora’s input was more quickly taken up and any potentially disruptive aspects of change management were softened.