RAG American Coal Holding, Inc. Outsources IT Functions to Andersen Consulting and Mincom Alliance; Company Looks for Cost Savings, Innovation

Business Wire, April 6, 2000

Business Editors

DENVER--(BUSINESS WIRE)--April 6, 2000

In a move that could represent the mining industry's growing willingness to outsource non-core functions, Andersen Consulting and Mincom have formed a unique alliance to provide information technology and business services to U.S.-based mining company RAG American Coal Holding, Inc. (RAG). The three-year outsourcing agreement was announced today.

RAG, a subsidiary of German mining conglomerate RAG GmbH, expects to realize significant savings over its current information technology (IT) costs through its agreement with Andersen Consulting and Mincom.

Global pressures have depressed commodity pricing and escalated competition, which has forced down mining industry earnings over the past decade. RAG is one of a growing number of mining companies beginning to embrace effectiveness measures, such as IT and business process outsourcing, as part of its enhanced strategic focus on efficiency and core competencies.

Under the $16 million agreement, Andersen Consulting and Mincom will manage the design and implementation of Mincom's enterprise applications and other software. The companies will focus on finding innovative technology applications to improve RAG's business. Andersen Consulting also will create IT processes for functional areas such as human resources, inventory, financial services, among others.

"We feel this arrangement between Andersen Consulting and Mincom enables us to make better use of technology in enhancing our business processes, which will help us realize significant cost savings," said Jim Roberts, CEO of RAG American Coal Holding, Inc. "We must aggressively find ways to take advantage of eCommerce-driven opportunities. Our relationship with Andersen Consulting and Mincom helps us do exactly that."

"We're coupling Andersen Consulting's mining industry knowledge, IT outsourcing expertise and eCommerce insight with Mincom's mining industry-focused software, which allows us to provide the very best IT services possible," said Michael Rappeport, a partner in Andersen Consulting's Mining Industry Practice. "This model can be leveraged across the rest of the mining industry and to other natural resources companies."

According to Rappeport, Tequinox, a Mincom subsidiary, will provide the test and development environment for the software and long-term technology infrastructures, including servers and help-desk functions.

"This is a great example of a mining company that intends to use this solution and delivery model not only as a critical administrative tool, but also to its competitive advantage," according to Mincom President Brett Roveda. "Our teaming arrangement will enable this long-term client to move ahead with its plans for succeeding in the market, having entrusted its information technologies to the right partners."

Andersen Consulting is a $8.9 billion global management and technology consulting organization whose mission is to help its clients create their future. The firm works with clients from a wide range of industries to bring about far-reaching change by aligning their people, processes and technology with their strategy. Andersen Consulting has more than 65,000 people in 48 countries. Its home page address is http://www.ac.com.

Mincom, Inc. designs and delivers total enterprise applications solutions for capital-intensive industries, serving customers in over 40 countries worldwide. Mincom has provided IT outsourcing services since 1979, and has now established an ASP division devoted solely to delivering that expertise. Tequinox offers a full range of IT and business process outsourcing. The Enterprise-ASP package provides all software and hardware, implementation, integration to best of breed applications at both the enterprise and desktop levels, and vertical specialists. The Tequinox Support Center operates 24 x 7, with industry specialists and service delivery managers dedicated to customer satisfaction. The North American headquarters for Tequinox is in Denver, CO. For more information, go to http://www.mincom.com.