An Activity-Based Costing Approach to Calculate Unit Cost Under Dumping Area Relocation in Coal Mining Operations

This study examines the unit cost of overburden removal under a planned dumping-area relocation in an open-pit coal mining operation. The study addresses a practical issue faced by PT XYZ, where the planned relocation of dumping activities is expected to alter haul distances and cycle times during the 2027–2029 planning period. In current practice, the cost implications of such changes are assessed primarily through aggregated budget figures and truck requirement estimates. Although these indicators are useful for high-level planning, they provide limited visibility into how costs are generated across individual overburden removal activities. As a result, operational changes may be reflected in planning assumptions, but their cost implications remain difficult to interpret at the activity level and are therefore less informative for managerial decision-making. The results show that Plan B consistently generates a lower overburden removal unit cost than Plan A throughout the planning period. This difference is driven primarily by the overburden hauling component, while the other cost components remain broadly unchanged. Thus, Plan B is not more efficient because all activities become less costly, but because its hauling configuration is more efficient and directly reduces the most influential cost component in the comparison. The same pattern is reflected in the projected business results. Because revenue assumptions remain unchanged across both scenarios, the lower cost structure under Plan B results in a more favorable projected margin and profit outcome. The threshold-based assessment further indicates that Plan B can absorb a limited additional cost penalty before its total overburden removal cost converges with that of Plan A.