Micro-Price Optimization of Coal Processing Operations

The profitability of coal mining operations is highly dependent on the performance of the coal blending and processing facilities. Many companies have recognized this fact and have instituted optimization programs that require large amounts of coal characterization data, extensive operational information and complex costing models. Unfortunately, this brute force approach to optimization is often overwhelming in terms of time and cost and is generally too inaccurate to be of value in day-to-day field operations. A simpler and more practical approach involves the use of ?micro-price? optimization throughout the coal supply chain. This fundamental concept assigns unit values to each type product (particle or groups of particles) passing through the production units. True optimization occurs whenever all particles with positive worth are recovered and passed to market, while all particles with negative worth are rejected. This paper describes the fundamental workings of the micro-price concept as applied to coal blending and processing operations. Several examples are also included to demonstrate the economic gains that can be realized via the application of this concept.