Developments In Linear Programming Applications At Cyprus Minerals Company

The mining business in general, and coal mining in particular, is exposed to frequent and significant swings in the business cycle. Marginal coal production enters the market place in a nearly perfect competition. It must be priced aggressively if market share is to be gained. The minimum price acceptable from the standpoint of the producer is reached at the point where total variable cost are recovered. Competition occurs as companies move to reduce their variable costs in an effort to cover some portion of their fixed costs at reduced market prices. Production planning and scheduling plays a critical role in reducing costs. Multiple scenarios based on changing market conditions require that competing firms have tools available to evaluate the economic impact of transportation, blending, and processing options. In certain applications, significant cost savings can occur as a result of blending or altering preparation levels. Linear programming provides a tool with which to evaluate options and acts as a like between the mine plan and marketing decisions.