Risk Mitigation for Coal Operations ù Quality and Washing Perspectives

Coal mining operations require the expenditure of appreciable start up and working capital in order to produce saleable coal for domestic or export markets. The competitive nature of the coal business restricts margins, and so it is imperative that downside risks, in terms of production outcomes, are minimised. The major risks identified for a coal mining operation, aside from sales volumes and coal price, are generally thought to be confined to the geology of the deposit and the mining process. However, the impact of product quality and yield can be very significant. If product coal is inferior to projections, then it will need to be sold at a discounted price and this can dramatically impact on margins. Equally, if yield is five to ten per cent less than planned, then this will have a huge effect on profitability. This paper will look at issues relating to in situ moisture and density, resource quality evaluation, modelling of washability and dilution, and simulation techniques, and how best practice approaches can be incorporated into mine planning and feasibility studies. Risks are best modelled and understood by adopting a detailed approach that is fully documented and auditable. This is particularly needed for multi-seam and multi-product operations. Once a well defined systematic approach is established the potential risks can be evaluated by testing different scenarios, carrying out sensitivity analyses, variability modelling and examining extreme operating conditions. These have been discussed in the paper, along with some related issues such as the cost of quick fixes and the value of spending a little more in the coal preparation area.