Determining the efficiency of a surface coal mine operation is an essential
activity, which can help in deciding on the optimal use of input resources,
including effective capital allocation, in generating a desired quantity of
coal of a specific quality.
Mines operate today in challenging conditions, with diminishing
reserves of high-quality coal, remote location of new coal deposits,
infrastructure problems, environmental legislation, and the effects of
climate. All these have an impact on the performance of a mine. Given such
challenges, a company has to be technically efficient compared to other
existing coal producers in order to generate profits. It can use the
measurement of its efficiency to evaluate its productivity, benchmarking
this against the best-performing mines and determining optimal variables
in order to minimize slack and achieve the desired outputs.
This paper discusses the use of Data Envelopment Analysis (DEA) in
evaluating the efficiency of a surface coal mine supply chain for the coal
export market. The supply chain is considered to be composed of subprocesses
that are modelled as a multistage system. Numeric examples will
be used to illustrate the application of DEA.
was first presented at, A Southern African Silver
Anniversary, 2014 SOMP Annual Meeting, 26–30
June 2014, The Maslow Hotel, Sandton, Gauteng.