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| Capital Optimization – Power Station Coal Supply
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Context / Scope of project
A pre-feasibility study had been completed for a planned opencast coal mine, dedicated to providing long-term coal supply to a nearby power station. Before proceeding to the feasibility study, and against a backdrop of increasing national electricity prices and possible shortages, the power station and mine owners sought to identify capital optimization opportunities in the design of the mine and the interface with the power station which would lead to a reduction in the total cost of coal supply.
Client achieved:
In 10 weeks, PIP worked with combined power station and mine design teams to:
- Extend the life of supply, closing the gap between mine and power station life by 5 years
- Delay the mine’s up-front capex 13% or $260 million
- Increase the mine’s total throughput by 7%
- Optimise the mine and wash plant configuration to deliver better quality coal at a lower cost
- Develop a better understanding between mine and power station to address outstanding operational and quality problems and reduce supply risks
- In total, reduce the Net Present Cost (NPC) of mine capex by 14% or $285 million and reduced NPC of mine opex by 3% or $33 million
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What we did:
- Identified the capex and opex areas of highest potential savings
- Conducted extensive interviews with all key project team members (including contractors) from the mine and power station to understand underlying assumptions and design methodology
- Ran structured Idea Generation Sessions with the project team to identify alternative designs
- Evaluated and valued the benefits, costs and risks associated with implementing these ideas
- Allocated client idea owners and actively project managed the ideas, tracking progress and providing coaching to ensure ideas were processed timeously
- Captured processed ideas on summary forms and syndicated with various stakeholder groups
- Facilitated a process of idea approval by the joint parties
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