The Optimisation Problem
The customer's value-chain consisted of multiple mines with three main mining areas of operations each with separate ROM, product stockpiles and barge loading facilities. The customer had plans to expand their operations in the medium term. Coal is road transported to one of three processing plants and then barged. The operation is characterised by multiple seam complexity, a large number of unique sale contracts, large inventories, and cost drivers such as price penalties and royalties, with low sale prices. An optimisation of product strategy was needed to improve margins and cash flow.
BlendOpt was used to model and explore a product portfolio and blending strategy that improved margin projections in alignment with the customer's sales and marketing strategy for the short and long-term, over the customer's baseline.