Case Study
Mining Division of Major Canadian Power Generator with More Than 90 Facilities Across Canada, the U.S., and Western Australia Delivers $25M Annualized Unit Cost Improvement
$25M
Annualized Unit Cost Improvement
Strategic Imperative
To achieve an annualized $25M unit cost improvement by positioning the Mining Division as a low-cost provider of coal, thereby enhancing company margins in the power generation and distribution business and sustaining a lower cost structure year after year
Client Background
- Major Canadian power generator with $3B in annual revenue, $9B in assets, and more than 90 operating facilities across Canada, the United States, and Western Australia
- Mining Division operated Canada’s largest surface strip coal mine near Edmonton, covering 12,140 hectares
- Mine extracted approximately 13 million tonnes of coal annually to support the parent power-generation business
- Mining performance depended on production planning, maintenance scheduling, equipment availability, workforce utilization, and supervisory control
- Low-cost coal supply was central to sustaining enterprise margins and year-after-year lower cost structure improvements
Key Issues & Barriers
- Mine management lacked accountability, goal alignment, and proactive problem-solving, increasing repair costs and missed mine plans
- Supervisors lacked sufficient skills and training in mine management practices and newly installed operating software
- Process breakdowns created overproduction costs, stockpile growth, and inadequate maintenance planning and scheduling
- Inter-departmental communication gaps increased equipment downtime, mine-plan non-adherence, and workforce underutilization across crews
- Planning, staffing, work provisioning, and performance measurement were not effectively linked across mining operations
Key Implementation Components
- Implemented an optimized mining operating model for process improvement, performance measurement, goal alignment, and stronger management discipline
- Established goal translation with dashboards and scorecards aligning mine objectives to supervisor and crew performance
- Defined roles and designed an effective structure to strengthen accountability across mining management and supervision
- Implemented best practices for mine management and supervision, reinforcing proactive problem-solving and goal alignment
- Enhanced production planning by linking planning, staffing, work provisioning, and performance measurement across mining workflows
- Developed safety program and training to strengthen mine-management capability and support sustained operating discipline
Benefits & Results
$25M
Annualized Unit Cost Improvement
33%
Repair/Supplies Cost per BCM Reduction
31%
Fuel Cost per BCM Reduction
30%
Maintenance Contractor Spend per BCM Reduction
11%
Labor Cost per BCM Reduction (Bank Cubic Meter)