IC 8720 Basic Estimated Capital Investment And Operating Costs For Underground Bituminous Coal Mines Developed For Longwall Mining - Mines With Annual Production Of 1.3 And 2.6 Million Tons By Longwall Mining From A 48-Inch Coalbed

The Bureau of Mines is developing estimates of capital investment, operating cost, and selling price for underground mines producing bituminous coal by various mining methods. This study estimates the required capital investment, operating costs, and selling prices for two hypothetical mines designed to produce 1.3 and 2.6 million tons per year (MM tpy)3 by using a longwall system in conjunction with a continuous-mining system. The coal properties being mined are assumed capable of sustaining a 20-year production period. Wages and union welfare payments used in this study are those in effect as of December 6, 1975, as set forth under the National Bituminous Coal Wage Agreement of 1974. Costs of materials and equipment are based on January 1976 indexes. Initial capital investment is $34.6 million for the 1.3-MM-tpy mine and $63.5 million for the 2.6-MM-tpy mine. Capital requirements, including deferred investments, were estimated to be $50.8 and $92.2 million, respectively. These figures translate into total capital investments of $38.51 and $34.91 per ton of annual production. Assuming a desired 15-percent discounted cash flow (DCF) rate of return, with Federal income taxes at 50 percent, the required selling prices would be $13.41 and $12.27 per ton for the 1.3- and 2.6 -MM- tpy mines.