Case Study: ITM Coal Operations, Indonesia
Whittle Consulting’s (WCL) Enterprise Optimization (EO) solution is an integrated approach to maximizing the Net Present Value (NPV) of a mining business by simultaneously optimizing up to 10 different mechanisms across the mining value chain. The EO methodology which WCL has developed over the last 14 years draws from the manufacturing industry (Theory of Constraints) and cost accounting (Activity Based Costing) as well as incorporating advanced mining techniques such as cut-off grade optimization. The principles behind EO are to accelerate cash flow through the business by applying a holistic planning approach over the whole value chain rather than conventional ‘silo’ based decision making. The EO methodology and techniques are underpinned by sophisticated in-house proprietary software and has proven to be an excellent strategic planning tool for mining businesses having consistently identified significant value uplifts to projects and operations alike.
This paper presents the findings from the Enterprise Optimization Study for PT Indo TambangrayaMegahTbk (ITM) in Indonesia and demonstrates the applicability of the WCL EO methodology at the strategic level – across nine coal mining operations producing detailed life of mine plan requirements for each mine. The applicable modelling techniques and optimization mechanisms were successfully applied to nine open pit coal operations and produced an overall 14% increase in NPV above ITM’s best business case (referred to as the “base case”).Figure 1 below shows the result of EO on net cash flows, which brings forward cash flows that enables further business opportunities that are able to be funded sooner.
- ITM Coal Operations, Indonesia