Reducing coal mine overheads

Situation

Our client, an international coal mining company, planned to close two assets, reducing production volumes by 40%. The client engaged our team to reduce overheads in line with the reduction in production. We were also asked to develop a roadmap for implementing the changes required. This involved working with the client to establish the value provided by support functions and identify opportunities to improve their efficiency.

What we did

• Developed a roadmap that included departmental organisation charts and detailed cost reduction initiatives, with key implementation milestones, risks and mitigating actions, and an assessment of ease of implementation.
• Identified opportunities to reduce support-function overheads by 36% and non-personnel costs by 60%.

Results

• A 46% reduction in overheads through organisational changes.

Implementing cost reduction initiatives