With the continued drop in export coal prices (as measured in US$)
delivered to the Pacific Rim market, and a fixed annual 12 per cent
increase in overburden, Usibelli Coal Mine Inc was faced with the need to
reduce mining costs substantially or else forfeit its foreign coal
contractual commitment which amounted to about half of annual mine
output. Management made a difficult and fortuitous decision to proceed with
an engineered plan to switch from a two seam, extended bench dragline
operation to a two seam, cast blast and spoil side operation. While
down-sizing and cut-backs became the rule in all departments of the
mine, the drilling and blasting budget was more than doubled. Most will
agree that this is contrary to what usually happens when a mine is faced
with down sizing. The more common scenario would have management
target the drilling and blasting budget for decrease as a first priority to
cutting cost, and then later witness a decrease in equipment performance
leading to an increase in the production cost per tonne. Although Usibelli Coal Mine more than doubled its annual drilling an
blasting budget three years ago, the overall stripping cost has be,
reduced by more then 37 per cent.