Articles

Financial Analysis for Land Reinforcement Project to Optimize Dump Capacity INL Pit Case: Coal Mining Company PT. XYZ East Kalimantan

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PT XYZ, a leading coal mining company in Indonesia located in East Kalimantan, boasts a production capacity of 55 million tonnes annually. Engaging in coal mining and sales for domestic and international clients across diverse industrial sectors, PT XYZ’s INL Area plays a pivotal role in its production for the next eight years, producing low-quality coal with an average calorific value of 4200 Kcal/kg GAR. As a cost leadership business, the company prioritizes cost efficiency, particularly in fuel consumption, notably for overburden movement. To enhance efficiency, PT XYZ explores the optimization of the distance from the mining front of the INL pit to the waste dump. A financial analysis case study compares two scenarios using a financial model: Scenario A, utilizing the recent waste dump with a cycle time of approximately 6.7 km, and Scenario B, proposing a new waste dump design with an investment in borepile reinforcement to accommodate overburden removal for the INL pit, resulting in a reduced cycle time of around 5 km. The financial model assesses feasibility parameters such as NPV, IRR, PI, and PBP between the scenarios, conducting scenario analysis to measure project success probability and identify significant variables affecting project feasibility. A Rsik Analysis on the project considers coal price realization and fuel consumption as key variables influencing the project’s value. The recommended option is Scenario B, presenting higher value for PT XYZ, with an investment in borepile reinforcement yielding a potential NPV of around $144.24 million, an IRR of 33%, and a PBV of 4.2 years.

Fuel Efficiency Improvement Initiatives for Reducing Mining Operation Costs Using Root Cause Analysis and SWOT Method A Case Study Pt. Falcon, 2nd BLOCK, East Kutai, East Kalimantan, Indonesia

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PT. FALCON is the one of Owner coal mining company which is doing of monitoring and controlling mining activity process by Contractors from the land clearing until coal hauling to the crusher plant. The contractor already starting mining activity in the 2nd BLOCK since January 2022 until currently. Based on historically data, fuel consumption during Jun 2022 – Jun 2023 still increasing.

Fuel is the main component of the operational in the coal mining industry. Sustainability of the operational is very influenced by the fuel inventory and the fuel price. Because fuel is the main component cost in mining activity (>50% from total mining cost), increasing of the fuel price will be very influencing to operational sustainability in the future, moreover if increasing of the fuel price not accompanied by coal price.

This project aims to find the root cause of the problem using the fishbone method to further determine the right way to make an action plan from solving the root of the problem. In addition, the analysis is also carried out using SWOT analysis to identify the Strengths, Weakness, Opportunities and Threats of the company, so that appropriate recommendations can be submitted to company management so that the company can develop and survive in the future.