Major metallurgical coal producer implements business continuity strategies to accommodate +50% volume increase while identifying $40 million annual cost savings

in Case Study

A major metallurgical coal producer near the US Gulf Coast supplying a high-quality, high-value met coal for the world market at nearly eight million short tons annually had slated a new mine operation for development that would double their production. 

PLG was engaged to identify operational and infrastructure risks of the client’s current supply chain and determine necessary improvements with new supply chain strategies to accommodate a 54% volume increase from a new mine location while improving their competitiveness.

Services Provided

  • Developed a business continuity plan to address potential risks in the supply chain from existing mine operations that currently rely on a single export port
  • Analyzed operating practices at the Port of Mobile to determine necessary upgrades to achieve best-in-class performance
  • Identified port operational upgrades to accommodate doubling of throughput with the potential development of a new mine
  • Developed options to diversify the current supply chain to minimize risks, evaluating truck, barge and rail
  • Developed a more robust supply chain platform to improve negotiation strength with current and potential supply chain partners, leveraging modal options and combining current and future volumes

Results

  • Developed multi-modal and flexible outbound logistics plant to accommodate the new mine volume
  • Identified a pathway to improve barge throughput capacity of its current operation and leverage rail volumes in future negotiations, which is projected to deliver $5 million annual savings upon contract renegotiation
  • Identified over $36 million annual savings versus current logistics while simultaneously mitigating supply chain risks

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