By Neville Judd
A leading U.S. coal producer is navigating today’s market uncertainty with a mine planning software platform that traces its origins to 1970. Utah-based Wolverine Fuels optimises its operations using Hexagon MinePlan.
“It’s very slick,” says Wolverine Fuels’ Senior Vice President, Patrick Barrett, of Hexagon MinePlan Schedule Optimiser (MPSO). The company uses MPSO to meet complex blending requirements while maximising net present value (NPV).
Wolverine Fuels produces between 6.5 to 10 million tons of thermal coal annually, serving the western U.S. power-generation industry, industrial customer segments, and export markets. The company operates two active longwall mining complexes, Sufco and Skyline, and is developing a third mine, Fossil Rock.
The fluctuating price of coal and market volatility present significant challenges. Wolverine Fuels needs to balance trade-offs between maximising NPV, meeting contractual obligations, and minimising operational costs and risks.
“Because of our limited footprint, to manage inventory, to make customer blends to meet their quality needs, we will actually send the product offsite, store it in a separate location, make the blend, put it on a truck or railcar, and send it to our customers,” says Barrett.
“Trying to do that without the use of software such as MinePlan Schedule Optimiser would require multiple resources that take a lot of time, a lot of spreadsheets, and would probably not give us the best optimal outcome.”
Model the entire mine-to-market process with MinePlan Schedule Optimiser
The challenges facing Wolverine Fuels are neither new nor uncommon. A mine’s ability to optimise its cutoff grade and material routing strategy, to meet quality/quantity targets, and to integrate its extraction plan with a haul plan and a dump plan is hugely important to the mine plan and, by extension, the value of the business.
MPSO is positively disrupting the mining landscape by handling all of these objectives in one product, allowing the evaluation of multiple alternatives, blends and mine sequences much faster than before. The program works with multiple material types, scheduling classes, reserve classification, and rock types, giving the engineer the opportunity to analyse details that may not have been reflected in the plans.
Wolverine Fuels used MPSO to model the entire mine-to-market process, including the extraction, processing, storage, and distribution of coal. The configuration of MPSO included economic parameters such as revenue, costs, cash flow, and discount rate, as well as technical and operational constraints like production, processing, storage, and transportation capacities.
Additionally, MPSO accounted for quality parameters such as ash, sulfur, moisture, and calorific value, along with the blending requirements for each customer destination.
Mastering external factors helps to maximise mine value
MPSO’s implementation brought significant benefits to Wolverine Fuels, enabling it to effectively manage external factors. Wolverine Fuels successfully met the quantity and quality targets for each customer destination while optimising the blending of coal from multiple sources. The company reduced costs and improved cash flow, maximising the value of the mine.
Patrick Barrett, Senior Vice President, Wolverine Fuels
By applying the appropriate discount rate and accounting for the time value of money, Wolverine Fuels could accurately calculate NPV. MPSO’s sensitivity analysis and trade-off analysis features allowed Wolverine Fuels to compare and evaluate different scenarios and alternatives. The company enhanced the robustness and flexibility of its plan by incorporating market and operational uncertainties and risks.
Wolverine Fuels’ experience with MPSO demonstrates the significant benefits of using advanced optimisation tools. By meeting quantity and quality targets, evaluating NPV, comparing different scenarios, and improving the reliability and flexibility of its mine plan, Wolverine Fuels set a benchmark for efficient and profitable mining operations.
“We run multiple scenarios,” says Barrett. “As we’re looking at various different ways to grow and expand and do things differently, at the touch of our fingers in an hour and a half, as opposed to months or weeks of spreadsheet data, it spits out a result. It gives us existing operations customers as well as new outputs and changes the way we would blend things, logistically move things, and absolutely generates the best output.
“It’s a fantastic tool. I don’t know what we’d do without it.”
- For our full interview with Patrick Barrett, click here.
- To read the case study, click here
Throughout 2025 we’ll be blogging about the challenges facing the mining industry. Drawing upon insights from thought leaders in our customer community and from within Hexagon, we’ll share how trusted partnerships and proven technology are addressing those challenges, helping to improve safety and cut costs while balancing the demands of productivity and sustainability.