IC 8661 Basic Estimated Capital Investment And Operating Costs For Coal Strip Mines

This Bureau of Mines study estimates typical capital investments, operating costs, and selling prices for two bituminous coal strip mines in the Eastern and Interior provinces and a subbituminous coal operation in the Northern Great Plains province. The annual productions were based on tonnage required to fuel a 250-MM-scfd, high-Btu gas plant. The annual tonnage for the Eastern province mine is 4.8 million tons; for the Interior province mine, 6.72 mi 11 ion tons; and for the Northern Great Plains province mine, 9.2 million tons. It is assumed that the mines have a 20-year life. Wages and union welfare payments are considered as of May 12, 1974, under the terms of the Bituminous Wage Agreement of 1971, and costs for material and equipment are based on 1973 and early 1974 indexes . Initial capital investment varies: $45,358,600 for the 4.8-million- ton-per-year (MM tpy) mine in the Eastern province, $54,603,000 for the 6.72 MM tpy mine in the Interior province, and $29,871,000 for the 9.2 MM tpy mine in the Northern Great Plains province. Total capital invest-ments for the Eastern province mine, the Interior province mine, and the Northern Great Plains province mine are $61,070,000, $76,753,000, and $56,286,000, respectively. Corresponding selling prices for the coal, per ton, are $4.79, $4.23, and $2.66, assuming a 12-percent discounted cash flow rate of return after Federal income taxes. These studies are considered typical for the areas involved. Costs will vary depending on specific locations in these areas.