!•• -^^ \ iV^. ■^ "^0^ ^o\y vO ,0 ^y^-^^. ^;- ^. A V -^^ -^^0^ ■ G^ ^5 'o . . ' -V ^ ■iy . <". ^ %.^' :;^'v \/ -' .0-' ^*.° ^-^^^ ^y^m.' .<^°'^ "-t^iK^/ ^o-n^ '>:^^/ <.Ho^ i^^e^^o' .o^_, .^'^^j! ^"•^^. .« ^■^^ o% .^ ^ - t^ o"^ .H o A .f. -'.^T'- ,0^ ^' "^0^ .<^ '\ ">> ♦ > .H o / <.^' .V ^0 , o - » , ''o r^ ^,» V v- c^ .Hq^ -^^0^ .<2^' ^^-V V > ^o-n.. 4 o ,<{> ^^ -SIP,* ^ "^^ V ^^ °^ '.^ '• ^^ -p^ A C o ^v;^ < '^^ 0^ x^ -r, IC 8682A Bureau of Mines Information Circular/1976 Basic Estimated Capital Investment and Operating Costs for Underground Bituminous Coal Mines Mines With Annual Production of 1.06 to 4.99 Million Tons From a 72-Inch Coalbed Revision of Information Circular 8632 fcWTO^ UNITED STATES DEPARTMENT OF THE INTERIOR Information Circular 8682A Basic Estimated Capital Investment and Operating Costs for Underground Bituminous Coal Mines Mines With Annual Production of 1.06 to 4.99 Million Tons From a 72-Inch Coalbed Revision of Information Circular 8632 By Sidney Katell, E. L. Hemingway, and L.JH. Berkshire Process Evaluation Group— MMRD, Morgantown, W. Va. UNITED STATES DEPARTMENT OF THE INTERIOR Thomas S. Kleppe, Secretary BUREAU OF MINES Thomas V. Falkie, Director As the Nation's principa] conservation agency, the Department of the Interior has responsibility for most of our nationally owned public lands and natural resources. This includes fostering the wisest use of our land and water re- sources, protecting our fish and wildlife, preserving the environmental and cultural values of our national parks and historical places, and providing for the enjoyment of life through outdoor recreation. The Department assesses our energy and mineral resources and works to assure that their development is in the best interests of all our people. The Department also has a major re- sponsibility for American Indian reservation communities and for people who live in Island Territories under U.S. administration. l^i ■Ui This publication has been cataloged as follows: Katell, Sidney Basic estimated capital investment and operating costs for underground bituminous coal mines: mines with annual production of 1.06 to 4.99 million tons from a 72-inch coal-, bed, by Sidney Katell, E. L. Hemingway, and L. H. Berkshire. [Washington] U.S. Bureau of Mines [1976] 41 p. illus., tables. (U.S. Bureau of Mines. Information circu- lar 8682A) Revision of information circular 8632. 1, Bituminous coal— Costs. 2. Coal mines and mining— United States— Cost of operation. L U.S. Bureau of Mines. II. Hemingway, E. L., jt. auth. IIL Berkshire, L. H^.jt. auth. IV. Title. (Series) TN23.U71 no. 8682A 622.06173 U.S. Dept. of the Int. Library For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 Catalog No. I28427:8682A m l«* r^ CONTENTS ^ Page ^«^ti5tract 1 Introduction i N^ General mining plan 2 \ Summary 5 ^Appendix A,--l .06-MM-tpy mine 6 sj Appendix B.--2.04-MM-tpy mine 15 Appendix C. — 3.18-MM-tpy mine 24 Appendix D.--4.99-MM-tpy mine 33 ILLUSTRATION 1. General mining plan 3 TABLES 1. Acreage required to provide coal resources necessary to sustain a 20-year mining operation 3 2. Summary of estimated capital investment, operating cost, and selling price by annual output capacity 5 A-1 . Capital investment summary, 1 .06-MM-tpy mine 6 A-2. Manning table, 1. 06-MM-tpy mine 8 A-3. Depreciation schedule, 1 .06-MM-tpy mine 9 A-4. Power and water cost, 1. 06-MM-tpy mine 10 A-5. Estimated anntial production cost, 1 .06-MM-tpy mine 11 A-6._ Estimated development cost, 1 .06-MM-tpy mine 12 A-7.- Estimated working capital and total capital investment, 1 .06-MM-tpy mine 12 A-8. Summary of discounted cash flow, 1. 06-MM-tpy mine 13 A-9. Discounted cash flow, 1 .06-MM-tpy mine 14 B-1 . Capital investment summary, 2.04-MM-tpy mine 15 B-2. Manning table, 2.04-MM-tpy mine 17 B-3. Depreciation schedule, 2.04-MM-tpy mine 18 B-4. Power and water cost, 2. 04-MM-tpy mine 19 B-5. Estimated annual production cost, 2.04-MM-tpy mine 20 B-6. Estimated development cost, 2.04-MM-tpy mine 21 B-7. Estimated working capital and total capital investment, 2.04-MM-tpy mine 21 B-8. Sunmary of discounted cash flow, 2.04-MM-tpy mine 22 B-9. Discounted cash flow, 2.04-MM-tpy mine 23 C-1 . Capital investment summary, 3.18-MM-tpy mine 24 C-2. Manning table, 3.18-MM-tpy mine. 26 C-3. Depreciation schedule, 3.18-MM-tpy mine 27 C-4. Power and water cost, 3.18-MM-tpy mine 28 C-5. Estimated annual production cost, 3.18-MM-tpy mine 29 C-6. Estimated development cost, 3.18-MM-tpy mine 30 C-7. Estimated working capital and total capital investment, 3 . 1 8-MM-tpy mi ne 30 ^ 11 TABLES— Continued Page C-8. Summary of discounted cash flow, 3.18-MM-tpy mine 31 C-9. Discounted cash flow, 3.18-MM-tpy mine 32 D-1 . Capital investment summary, 4.99-MM-tpy mine 33 D-2. Manning table, 4.99-MM-tpy mine 35 D-3. Depreciation schedule, 4.99-MM-tpy mine 36 D-4. Power and water cost, 4.99-MM-tpy mine 37 D-5. Estimated annual production cost, 4.99-MM-tpy mine 38 D-6. Estimated development cost, 4.99-MM-tpy mine 39 D-7. Estimated working capital and total capital investment, 4.99-MM-tpy mine 39 D-8. Summary of discounted cash flow, 4.99-MM-tpy mine 40 D-9. Discounted cash flow, 4.99-MM-tpy mine 41 BASIC ESTIMATED CAPITAL INVESTMENT AND OPERATING COSTS FOR UNDERGROUND BITUMINOUS COAL MINES Mines With Annual Production of 1.06 to 4.99 Million Tons From a 72-Inch Coalbed Revision of Information Circular 8632 by Sidney KatellJ E. L. |Hemingway,2 ^nd L. H. Berkshire^ ABSTRACT This study estimates capital investment, operating costs, and sell- ing prices for four underground bituminous mines producing coal with annual production ranging from 1.06 to 4.99 million tons. It is assumed that the mines have a 20-year life. Wages and union welfare payments are considered as of December 6, 1974, under the Bituminous Wage Agreement of 1974, and costs for material and equipment are based on 1975 indexes. Initial capital investment ranges from $20,799,800 for the 1.06- million-ton-per-year (MM tpy) mine to $84,027,500 for the 4.99-MM-tpy mine. Total capital investment ranges from $32,506,800 to $122,983,500 for the same mines. Corresponding selling prices for the coal range from $12.87 to $11.64 per ton, assuming a 15-percent discounted cash flow rate of return after Federal income taxes. INTRODUCTION Growing public concern about the increasing demand for energy has brought about a renewed interest in coal production in the United States. Because cost is an important factor in determining the extent to which coal will be used to satisfy this energy requirement, the Bureau of Mines is preparing a series of reports that provide estimated capital invest- ment and operating costs for hypothetical mines that may be utilized in the production of synthetic fuels or for electric utility plants. ^ Chief, Process Evaluation Group. 2 Mining engineer. ^ Economist. Three studies that presented capital investment and operating costs for coal mines, based on rates in effect under the Bituminous Wage Agree- ment of 1971, were published in 1974^. This report is the first of a new series that updates the previous publications to reflect wage and union welfare rates, which went into effect December 6, 1974, under the Bituminous Wage Agreement of 1974. Costs for material and equipment are based on January 1975 cost indexes, and selling prices are based on a 15-percent discounted cash flow (DCF) rate of return after Federal income taxes. Mines are assumed to have a 20-year life. This study presents basic capital investment and production costs for four hypothetical underground bituminous coal mines with a 72-inch working height and with annual production ranging from 1.06 to 4.99 million tons of coal. Since costs are affected by many factors, any particular mine, in reality, will have to be considered in relation to its own special situa- tion and requirements. This publication. Information Circular 8682A, modifies areas in which results of various calculations were carried forward incorrectly in Information Circular 8682. GENERAL MINING PLAN It is assumed that the mines operate 5 days per week, 220 days per year, and have a 20-year life. Continuous miner- sections produce 344 tons of coal per unit per shift. Acres of surface needed to produce the required tonnages are calculated assuming 1,800 tons of coal per acre-foot with 6 feet of mining height and 57-percent recovery. The following table shows the acreage requirements. TABLE 1 . - Acreage required to provide coal resources necessary to sustain a 20-year mining operation Production, MM tpy Acres required, 57-percent recovery 1.06 3,442 2.04 6,639 3.18 10,326 4.99 16,228 iKatell, Sidney, and E. L. Hemingway. Basic Estimated Capital Investment and Operating Costs for Underground Bituminous Coal Mines: Mines With Annual Production of 1.06 to 4.99 Million Tons From a 72-Inch Coal bed. BuMines IC 8632, 1974, 41 pp. . Basic Estimated Capital Investment and Operating Costs for Under- ground Bituminous Coal Mines: Mines With Annual Production of 1.03 to 3.09 Million Tons From a 48-Inch Coal bed. BuMines IC 8641, 1974, 31 pp. Basic Estimated Capital Investment and Operating Costs for Coal Strip Mines. BuMines IC 8661, 1974, 31 pp, The general mining plan involves driving main entries along the center axis of the property with production headings on the right and left. In the 1.06- and 2.04-MM-tpy mines, all mining is concentrated on one side of the main heading, the plan being to mine one side of the main entries on the advance and the other side on the retreat. In the 3.18- and 4.99-MM-tpy mines, production headings were driven both ways off the main headings to reduce development time and to reach full production with the number of units required. The main headings have 11 entries, and the production headings have 8 entries, 14 feet wide on 95-foot centers. The production panels are on the 8-entry system, 16 feet wide on 95-foot centers. Production panels are 2,600 feet long plus an additional length for development of the bleeder system. Figure 1 is a diagram of the general mining plan. Coalbed outcrop Bleeders Direction of mining Production heading :B I e e d e r s ; Production heading : B I e e d e r s 'r Direction of mining Prod uction heading Bleeders: Production headi ng- FIGURE 1. - General Mining plan. Each loading unit will consist of a continuous miner, a loading machine, two shuttle cars, and a roof bolter. The shuttle cars will dump into a ratio feeder at the tailpiece of the unit belt conveyor. Unit manpower consists of 10 men and a foreman. Each unit is equipped with a power center to reduce high voltage to equipment requirements. A recti- fier converts alternating current to direct current where necessary. Coal is transported to the surface by belt conveyors. The main head- ing conveyors are 42 inches wide, and the production headings and panels are 36 inches wide. The estimated development cost covers the period of time needed to establish the outside facilities and the time required to place all under- ground mining units in operation within the basic mining plan. Time needed to develop the surface area depends on topography and the location of existing roads, railroads, navigable rivers, or plant site. The development period was estimated conservatively at 1 year for the 1 -MM-tpy mine, 1-1/2 years for the 2- and 3-MM-tpy mines, and 2 years for the 5-MM- tpy mine, but could vary with the location. The following detailed equipment of equipment that will be used in the Continuous miner Hp: 600. Drive: Motor. Loading machine Loading rate: 25/30 tons per minute (tpm). Hp: 160. Drive: Motor. Shuttle car Hp: 135. Drive: Motor. Ratio feeder Can accept 15+ tons of coal discharge at desired rate. Self-tramming. Equipped with lumpster. Auxiliary fan To provide more effective ventilation at working face. Triple duty rock duster To dust main heading, faces, and back area. Hp: 30. list describes the principal pieces mines: Roof bolter Dual boom. Hp: 50. Equipped with dust collector. Supply motor To haul supplies to working faces. Hp: 80. Drive: Motor. Mainl ine belt power center ~I00 kV-A. Section belt power center 150 kV-A. Section rectifier 200 kW. Rectifier for track haulage 1 ,000 kW. Main ventilation fan Type: Dual. Size: 8 ft. 350,000 cfm at 6-inch water' gage. Information supporting the cost figures in this study is included in tables that make up appendixes A, B, C, and D for the 1.06-, 2. 04-, 3. 18-, and 4.99-MM-tpy mines, respectively. The following tables are included for each of the mines. Table No , 1 2 3 4 5 6 7 Capital investment summary Manning table Depreciation schedule Power and water cost Estimated annual production cost Estimated development cost Estimated working capital and total capital investment Summary of discounted cash flow Discounted cash flow SUMMARY This study furnishe:5 cost analyses for four hypothetical underground bituminous mines that produce 1.06, 2.04, 3.18, and 4.99 million tons of coal per year. A summary of the total capital investments, operating costs, and selling prices is given in table 2. TABLE 2. - Summary of estimated capital investment , operating cost, and selling price by annual output capacity MM tpy Initial , Deferred Total . . , Per ton of production, 1.06 2.04 3.18 4.99 $20,799,800 11,707,000 Per year. Per ton. , 12 percent DCF 1 5 percent DCF 20 percent DCF 32,506,800 30.67 9,744,200 9.19 11.92 12.87 14.49 Capital investment $36,943,000 18_j_615,000 55,558,000 27.23 $54,853,800 26,164,500 81,018,300 25.48 Production cost $84,027,500 38,956,000 122,983,500 17,335,600 8.50 25,988,100 8.18 Selling price per ton 11.15 12.08 13.68 10.74 11.63 13.17 24.65 40,500,300 8.12 10.71 11.64 13.25 APPENDIX A.— 1.06-MM-TPY MINE TABLE A-1 . - Capital investment summary. Item Continuous miner Loading machine Shuttle car Roof bolter Ratio feeder Auxiliary fan Mantrip Jeep^ Mechanic Jeep Personnel Jeep Trickle rock duster Triple duty rock duster Supply motor Supply car 36-inch rope-type belt conveyor Mainline belt power center (300 kV-A)... Section belt power center (150 kV-A).... Section power center (1,000 kV-A) Section rectifier (200 kW) Section switch house Sectional i zing switch house High voltage (HV) cable (300 mill "ion circular mill aluminum {MCM AL}) PLM^ coupler Section cable and coupler Rectifier for track haulage Trol 1 ey wi re Track (60-1 b) Fresh water lines Pumps and 1 i nes Telephone (page phones) Conveyor fire protection Automatic controls and alarms Scoop tractor Battery charger All service mask Breathi ng apparatus Self rescuer Stretcher set Safety 1 ight Methanometer Fire chemical car Lamp (including accessories) Dust sampler Site preparation Ventilation fan (dual) 1 .06-MM-tpy mine Quantity Total cost 6 $1,809,600 6 483,800 12 889,500 8 425,000 6 270,000 7 26,300 6 105,000 3 41,300 4 50,000 8 35,000 7 271,000 3 94,000 25 78,100 25,740 ft 1,771,500 5 93,800 5 62,500 6 172,500 6 15,000 6 56,300 7 65,600 12,000 ft 120,000 15 14,600 - 46,600 1 25,000 24,740 ft 77,400 24,740 ft 247,400 24,740 ft 92,800 - 19,000 - 9,000 - 25,000 - 50,000 7 245,000 7 26,200 12 1,500 12 9,400 250 9,400 8 1,300 100 4,400 100 37,500 4 15,000 250 13,000 20 7,500 - 40,000 " 120,000 TABLE A-1. - Capital investment summary, 1.06-rf1-tpy mine - Continued Item Concrete portal Bulk rock dust facility Substation and distribution...... Bathhouse, office, and lamp house, Shop and warehouse , Powder and cap house Front-end loader Forklift , Bulldozer , Uti 1 i ty truck , Pickup truck Oil storage Water tank Supply yard Mine drainage treatment plant Exploration Total direct Field indirect Total construction Engi neeri ng Overhead and administration Quantity Total cost Contingency. Fee Estimated development cost. Interest during development Gross estimate Credit for coal mined during development at $10 per ton Land acquired at $2,500 per acre Net estimate, 75,000 20,000 100,000 350,000 187,500 5,000 63,000 44,000 100,000 9,000 6,000 12,000 12,000 15,000 37,500 65,000 ,175 183 ,800 ,500 9,359 187 477 ,300 ,200 ,300 10,023 1,503 ,800 ,600 11,527 230 ,400 ,500 11,757 8,593 20,351 ,900 ,700 7BM 1,017,600 11,275 ':7m ,000 10,094 8,600 ,200 ,000 18,694,200 ^Reference to specific trade names in this report is done to facilitate understanding and does not imply endorsement by the Bureau of Mines. TABLE A- 2. - Manning table, 1.06;-MM-tpy mine Personnel Total Wagesi per day Cost per year Cost per ton Underground: Continuous miner operator... Loading machine operator Machine operator helper Shuttle car operator Roof bol ter 14 14 14 28 28 14 14 14 140 4 9 6 6 6 3 9 6 3 52 3 2 6 11 1 1 3 14 1 1 3 1 1 3 1 3 3 1 1 1 4 43 $55.00 51.98 51.98 49.23 55.00 47.03 49.23 55.00 47.58 47.03 47.03 47.03 49.23 47.03 49.23 55.00 55.00 45.38 47.85 49.50 $172,128 162,826 162,826 308,713 344,256 147,580 154,357 172,128 Bra tt iceman Ut i 1 i ty man Mechanic (section) Supply motorman 1,624,800 42,398 94,968 63,311 63,311 65,743 31,657 99,324 73,568 36,916 $1.53 Bel tman Trackman Wi reman Mason (precision) Pumper Utility crew Roving mechanic Fireboss (union) Outside: Lampman Front-end loader operator... Shop mechanic 571,196 30,568 21,318 66,572 .54 Salary: Superintendent General mi ne foreman Assistant mine foreman 118,458 30,000 20,000 48,000 196,000 21,800 15,200 45,000 22,500 9,200 29,700 19,800 43,500 31,500 15,800 11,000 15,800 39,600 .11 Maintenance superintendent.. Mine maintenance foreman Draftsman Survey crew Safety director Safety inspector Dust sampler Office manager Timekeeper and bookkeeper... Purchasing supervisor Warehouseman 614,400 .58 Total labor and supervision... 246 2,928,900 2.76 1 Figures in this column are other shifts are reflected for the day shift. Shift differentials for in the cost per year. TABLE A-3. - Depreciation schedule, 1 .06-MM-tpy mine Item Exploration , Mine drainage treatment plant Supply yard Water tank , Oil storage Pickup truck , Utility truck Bulldozer Forklift Front-end loader , Powder and cap house Shop and warehouse , Bathhouse, office, and lamp house. Substation Bulk rock dust facility. Concrete portal s . . . , , Ventilation fan. , Site preparation. Coal mine safety equipment. Underground equipment Interim equipment replacement Subtotal Depreciation for field indirect, engineering, overhead and administration, contingency, fee, cost of development, and interest during development, less credit for coal mined at $1 per ton Total Straight-line depreciation, years Yearly doll charge, ars n, 090, 200 ^.'^l.O.l per ton. 10 TABLE A-4. - Power and water cost, 1.06-MM-tpy mine Number of units Operation Hp per unit Hp, total load Hr per day, full load KW, total load Total kW-hr revquirement 5 4 Continuous miner. . Continuous miner. . 600 600 3,000 2,400 10 5 2,238 1,790 22,380 8,950 5 4 Loading machine. . . Loading machine. . . 160 160 800 640 10 5 597 477 5,970 2,385 10 8 Shuttle car Shuttle car 135 135 1,350 1,080 10 5 1,007 806 10,070 4,030 5 4 Roof bolter Roof bolter 50 50 250 200 12 6 187 149 2,244 894 5 4 Ratio feeder Ratio feeder 125 125 625 500 10 5 466 373 4,660 1,865 5 Auxiliary fan 30 150 18 112 2,016 5 4 Mantrip Jeep Mantrip Jeep 15 15 75 60 4 2 56 45 224 90 3 Mechanic Jeep 15 45 15 34 510 4 Personnel Jeep 7.5 30 15 22 330 7 Rock duster 30 210 12 157 1,884 3 Supply motor 80 240 12 179 2,148 10 36-inch conveyor. . 850 15 634 9,510 1 Ventilation fan. . . 500 24 373 8,952 Extra for pumps, tools, lights, etc 400 10 298 2,980 Total 92,092 NOTE. - Power: $0.02 x 92,092 x 220 = $405,200 r 1,059,500 = $0.38 per ton. Water: 3,000 gal per unit per shift at $0.10 per M = 3,000 X 14 X 220 x 0.10 t 1,000 = $900. gal n TABLE A-5. - Estimated annual production cost, 1.06-MM-tpy i.,ine Direct cost: Production: Labor Supervision. Maintenance: Labor , Supervision, Operating supplies: Mining machine parts Lubrication and hydraulic oil Roof bolts and timber Rock dust Ventilation Bits Cables Miscellaneous Power Water Payroll overhead (40 percent of payroll).. Union welfare^ Indirect cost: 15 percent of labor, supervision, and supplies Fixed cost: Taxes and insurance, 2 percent of mine cost Depreciation Total Annual cost Cost per ton $2,002,200 532,400 2,534,600 312,300 82,000 394,300 669,800 266,000 328,600 139,800 201 ,400 127,200 63,600 159,000 1,955,400 405,200 900 1,171,600 1,105,900 732,600 353,500 1,0 90,200 r;443.70ff 9,744,200 $1.89 .50 2.39 .29 .08 .37 .63 .25 .31 .13 .19 .12 .06 .15 1.84 .38 1.11 1.05 .69 .33 1.03 9.19 lEffective Dec. 6, 1974, under the Bituminous Wage Agreement of 1974. 12 TABLE A-6. - Estimated development cost^, 1.06-MM-tpy mine Item Total cost Cost per ton Total labor and supervision Operating supplies Power Payrol 1 overhead Union welfare Indirect cost Fixed cost Total $3,166,600 1,296,600 281,900 1,266,600 1,172,600 654,000 755,400 1.15 .25 1.12 1.04 .58 .67 8,593,700 7.62 lEstimated development cost covers the period of time required to place all units in operation within the projected mining plan. NOTE. - Cost per ton = $7.62. Tonnage *= 1,127,500. Credit for coal mined at $10 per ton = $11,275,000. TABLE A-7. - Estimated working capital and total capital investment , 1 .06-M'^-tpy mine Estimated working capital: Direct labor 3 months. Operating supplies 3 months. Payroll overhead 3 months. Indirect cost 4 months. Fixed cost 0.5 percent of insurance base. Spare parts Mi seel 1 aneous Total worki ng capi tal $732,200 488,900 292,900 244,200 88,400 230,000 29,000 2,105,600 Total estimated capital investment: Total mine cost (insurance, tax base) 17,676,600 Interest during development 1 ,017,600 Subtotal 18,694,200 Working capital 2,105,600 Estimated capi tal i nvestment 20,799,800 Estimated deferred capital investment 11 ,707,000 Total capital investment and deferred investment... ^32,506,800 iThis is an average cost of f)3n.67 per ton of annual production. 13 TABLE A-8, - Summary of discounted cash flow, 1.06-MM-tpy mine Present Present worth worth capital Present worth Capital factor at investment cash flow value Year investment Cash flow 15 percent at 15 percent at 15 percent $20,799,800 $-20,799,800 1. ^20,799,800 $-20,799,800 1 157,000 3,560,300 .8696 136,500 3,096,000 2 157,000 3,560,300 .7561 118,700 2,691,900 3 157,000 3,560,300 .6575 103,200 2,340,900 4 157,000 3,560,300 .5718 89,800 2,035,800 5 321 ,000 3,396,300 .4972 159,600 1,688,600 6 157,000 3,560,300 .4323 67,900 1,539,100 7 157,000 3,560,300 .3759 59,000 1,338,300 8 157,000 3,560,300 .3269 51,300 1,163,900 9 157,000 3,560,300 .2843 44,600 1,012.200 10 8,396,000 -4,678,700 .2472 2,075,500 -1,156,600 11 157,000 3,560,300 .2149 33,700 765,100 12 157,000 3,560,300 .1869 -29,300 665,400 13 157,000 3,560,300 .1625 25,500 578,500 14 157,000 3,560,300 .1413 22,200 503,100 15 321,000 3,396,300 .1229 39,500 417,400 16 157,000 3,560,300 .1069 16,800 380,600 17 157,000 3,560,300 .0929 14,600 330,800 18 157,000 3,560,300 .0808 12,700 287,700 19 157,000 3,560,300 .0703 11,000 250,300 20 -10.548,60a 14,265,900 .0611 -644,500 871,600 23,266,700 800 14 TABLE A-9. - Discounted cash flow, 1.06-MM-tpy mine 15 percent - 20 years R = $23,266,700 - 6.259i = $3,717,300 less depreciation 1,090,200 Depletion + net profit = 2,627,100 Depletion = 10 percent of sales Federal income tax = net profit Depletion + net profit = cash flow - depreciation Sales = 1/0.55 (1/2 operating cost + cash flow - depreciation) = 1/0.55 (4,872,100 + 2,627,100) Sal es $1 3,634,900 Operating cost 9,744,200 Gross profit 3,890,700 Depletion 1,363,500 Taxable income 2,527,200 Federal income tax 1 ,263,600 Net profit 1,263,600 Annual cash flow = net profit + depreciation + depletion = $1,263,600 + $1,090,200 + $1,363,500 = $3,717,300 Selling price per ton = $13,634,900 f 1.059,500 = $12.87 lUniform series present worth factor. 15 APPENDIX B.— 2.04-MM-TPY MINE TABLE B-1 . - C apital investment summary, 2.04-MM-tpy mine Item Quantity Total cost~ Continuous miner T\ $3,317,600 Loading machine 11 886,600 Shuttle car 22 1,630,200 Roof bolter 13 692,900 Ratio feeder 11 495,000 Auxiliary fan 13 49,400 Mantrip Jeep 9 157,500 Mechanic Jeep 4 55,200 Personnel Jeep 6 75,000 Trickle rock duster 14 61,600 Triple duty rock duster 12 466,800 Supply motor 5 156,500 Supply car 50 155,000 42-inch rope-type mainline belt conveyor 9,000 ft 720,000 36-inch rope-type belt conveyor 26,561 ft 1,832,700 Mainline belt power center (300 kV-A) 5 95,000 Section belt power center (150 kV-A) 7 87,500 Section power center (1,000 kV-A) 11 316,300 Section rectifier (200 kW) 11 27,500 Section switch house 11 103,100 Sectional izing switch house 10 93,800 HV cable (300 MCM AL) 13,100 ft 131,000 PLM coupler 17 16,600 Section cable and coupler - 85,300 Rectifier for track haulage 2 50,000 Trolley wire 31,300 ft 98,600 Track (60-1 b) 31,300 ft 313,000 Fresh water line 31,300 ft 117,400 Pumps and lines - 25,000 Telephone (page phones) - . 10,000 Conveyor fire protection - 27,500 Automatic controls and alarms - 75,000 Scoop tractor 12 375,000 Battery charger 12 30 ,000 All service mask 36 4,500 Breathing apparatus 24 18,800 Self rescuer 450 16,900 Stretcher set 12 1,900 Safety light 200 8,800 Methanometer 200 75,000 Fire chemical car 8 30,000 Lamp (including accessories) 450 23,600 Dust sampler 35 13,100 Site preparation - 37,500 Ventilation fan (dual) - 115,000 16 TABLE B-1 . - Capital investment summary, 2.04-MM-tpy mine - Continued Item Quantity Total cost Concrete portal 5 87 , 500 Bulk rock dust facility 1 25,000 Substation and distribution 1 87,500 Bathhouse, office, and lamp house 1 390,000 Shop and warehouse 1 250,000 Powder and cap house 1 7, 500 Front-end loader 1 62,500 Forklift 1 25,000 Bulldozer 1 100,000 Utility truck 1 5,000 Pickup truck 1 3,800 Oil storage 1 18,800 Water tank 1 18,800 Supply yard 1 18,800 Mine drainage treatment plant - 37,500 Exploration - 125,000 Total direct 14,437,400 Field indirect 288,700 Total construction 14,726,100 Engineering 294,500 Overhead and administration 751 ,000 15,771,600 Conti ngency 2,365,700 18,137,300 Fee 362,700 18,500,000 Estimated development cost 11 ,795,900 30,295,900 Interest during development 1 ,514,800 Gross estimate 31,810,700 Credit for coal mined during development at $10 per ton. 15,251 ,000 16,559,700 Land acquired at $2,500 per acre 16,597,500 Net estimate 33,157,200 17 TABLE B-2. - Manning table, 2.04-MM-tpy mine Personnel Underground: Continuous miner operator.. Loading machine operator... Machine operator helper Shuttle car operator Roof bolter Bratt iceman Utility man Mechanic (section) Supply motorman Beltman Trackman Wi reman Mason (precision) Pumper Utility crew o Roving mechanic Fireboss (union) Outside: Lampman Front-end loader operator.. Shop mechanic Salary: Superintendent General mi ne foreman Assistant mine foreman Section foreman Maintenance superintendent. General shop foreman Mine maintenance foreman... Chief mine engineer Draftsman Survey crew Safety director Safety inspector Dust sampler Office manager Timekeeper and bookkeeper.. Purchasing supervisor Warehouseman Total labor and supervision 1 Figures in this column are for other shifts are reflected in Total Wages 1 per day Cost per year Cost per ton 27 27 27 54 54 27 27 27 270 6 18 9 9 12 3 18 9 3 87 3 3 9 15 1 1 3 27 1 1 3 1 1 3 1 3 3 1 1 1 4 56 428 the day the cost $55.00 51.98 51.98 49.23 55.00 47.03 49.23 55.00 47.58 47.03 47.03 47.03 49.23 47.03 49.23 55.00 55.00 45.38 47.85 49.50 $332,244 314,304 314,304 595,941 664,488 284,901 297,971 332,244 3,136,397 64,037 189,936 94,968 94,968 132,430 31,657 198,648 110,748 36,916 954,308 30,568 32,197 99,858 162,623 30,000 20,000 48,000 378,000 21,800 15,200 45,000 22,500 9,200 29,700 19,800 43,500 31,500 15,800 11,000 15,800 39,600 796,400 5,049,700 $1.54 .47 ,08 39 2.48 shift. Shift differentials for per year. 18 TABLE B-3. - Depreciation schedule, 2.04-MM-tpy mine Item Exploration Mine drainage treatment plant , Supply yard Water tank Oil storage Pickup tfuck , Utility truck Bulldozer Forklift , Front-end loader , Powder and cap house , Shop and warehouse , Bathhouse, office, and lamp house, Substation Bulk rock dust facility , Concrete portal s , Venti 1 ati on fan Site preparation , Coal mine safety equipment Underground equipment , Interim equipment replacement...., Subtotal , Depreciation for field indirect, engineering, overhead and administration, contingency, fee, cost of development, and interest during development, less credit for coal mined at $1 per ton , Straight-line depreciation, years Yearly dol charge, lars ,800 ,900 ,900 ,900 800 ,000 ,000 ,500 ,30C 800 ,500 ,500 ,400 ,500 ,400 ,800 ,900 ,000 ,700 ,000 Total 6 3 1 1 1 1 10 2 6 12 19 4 2 4 5 1 59 ,272 233 1,652,900 106.100 1,759,000 i$0.86 per ton. 19 TABLE B-4. - Power and water cost, 2.04-MM-tpy-mine Number of units Operation Hp per unit Hp, Total load Hr per day, full load KW, total load Total kW-hr requirement 5 9 18 9 9 9 9 4 6 9 5 3 2 7 1 Continuous miner. . Loading machine.. . Shuttle car Roof bolter Ratio feeder Auxiliary fan Mantrip Jeep Mechanic Jeep Personnel Jeep Rock duster Supply motor 42-inch conveyor. . 36-inch conveyor. . 36-inch conveyor. . Ventilation fan. . . Extra for pumps, tools, lights, etc 600 160 135 50 125 30 15 15 7.5 30 80 125 100 50 5,400 1,440 2,430 450 1,125 270 135 60 45 270 400 375 200 350 500 500 15 15 15 18 15 18 6 15 15 12 12 15 15 15 24 10 4,028 1,074 1,813 336 839 201 101 45 34 201 298 280 149 261 373 373 60,420 16,110 27,195 6,048 12,585 3,618 606 675 510 2,412 3,576 4,200 2,235 3,915 8,952 3,730 Total 156,787 NOTE. - Power: Water: $0.02 X 156,787 x 220 = $689,900 - 2,043,400 = $0.34 per ton. 3,000 gal per unit per shift at $0.10 per M gal = 3,000 X 27 X 220 x 0.10 t 1,000 = $1,800. 20 TABLE B-5. - Estimated annual production cost, 2.04-MN-tpy mine Annual cost Cost per ton Direct cost: Production: Labor Supervision, Maintenance: Labor Supervision, Operating supplies: Mining machine parts Lubrication and hydraulic oil Roof bolts and timber Rock dust Ventilation Bits Cables Mi seel 1 aneous Power Water Payroll overhead (40 percent of payroll).. Union welfare^ Indirect cost: 15 percent of labor, supervision, and suppl i es , Fixed cost: Taxes and insurance, 2 percent of mine cost Depreciation Total $3,710,500 $1.82 714,400 .35 4,424,900 2.17 542,800 .27 82,000 .04 624,800 .31 1,287,300 .63 510,800 .25 633,500 .31 265,600 .13 388,200 .19 245,200 .12 122,600 .06 306,500 .15 3,759,700 1.84 689,900 .34 1,800 2,019,900 .99 2,101,400 1.03 1,321,400 .65 632,800 .31 1,759,000 .86 2,391,800 1.17 17,335,600 8.50 ^Effective Dec. 6, 1974, under the Bituminous Wage Agreement of 1974 21 TABLE B-6. - Estimated development cost^, 2.04-MM-tpy mine Item Total cost Cost per ton Total labor and supervision. Operating suppl ies Power , Payrol 1 overhead Union welfare Indirect cost , Fixed cost , Total $475015,800 1,75 3,900 38il,300 1,708,100 1,570,900 884, 600 991 , 300 $2.95 1.15 .25 1.12 1.03 .58 .65 11,795,900 7.73 ^Estimated development cost covers the period of time rt squired to place all units in operation within the projected mining p'lari'. NOTE. - Cost per ton = $7.73. Tonnage = 1,525,100. Credit for coal mined at $10 per ton = $15,251,00 0. TABLE B-7. - Estimated working capital and total capita l 2.04-MM-tpy mine Estimated working capital : Direct labor 3 months. . . Operating supplies 3 months... Payrol I overhead 3 months . . . Indirect cost 4 months... Fixed cost 0.5 percent of insurance base... Spare parts Mi seel 1 aneous Total working capital Total estimated capital investment: Total mine cost (insurance, tax base) Interest during development linvestment. $1,262,400 939,900 505,000 440,500 158,200 424,800 55,000 3,785,800 31,642,400 1,1 514,800 Subtotal 33,1 57 ,200 Working capital 3,7^35,800 Estimated capital investment 36,943,000 Estimated deferred capital investment 18^1^5^000 Total capital investment and deferred investment... ^55,55£ '^000 iThis is an average cost of $27.23 per ton of annual producti on . 22 TABLE B-8. - Sunrnary of discounted cash flow, 2.04-MM-tpy mine Present Present worth Present worth worth capital cash flow Capital factor at investment vaiue at Year investment Cash flow 15 percent at 15 percent 15 percent -1/2 $14,777,200 $-14,777,200 1.07238 $15,846,800 $-15,846,800' 22,165,800 -22,165,800 1. 22,165,800 -22,165,800 1 233,000 6,432,300 .8696 202,600 5,593,500 2 233,000 6,432,300 .7561 176,200 4,863,500 3 233,000 6,432,300 .6575 153,200 4,229,200 4 233, OOC) 6,432,300 .5718 133,200 3,678,000 5 537,000 6,128,300 .4972 267,000 3,047,000 6 233,000 6,432,300 .4323 105,400 2,780,700 7 233,000 6,432,300 .3759 87,600 2,417,900 8 233, OOO 6,432,300 3269 76,200 2,102,700 9 233,0 00 6,432,300 ,2843 66,200 1,828,700 10 13,580,fJ00 -6,914,700 .2472 3,357,000 -1,709,300 11 233, 000 6,432,300 .2149 50,100 1,382,300 12 233 ,000 6,432,300 .1869 43,500 1,202,200 13 233 ,000 6,432,300 .1625 37,900 1,045,200 14 23-J,O00 6,432,300 .1413 32,900 908,900 15 537,000 6,128,300 .1229 66,000 753,200 16 2?;3,000 6,432,300 .1069 24,900 687,600 17 233,000 6,432,300 .0929 21,600 597,600 18 2 33,000 6,432,300 .0808 18,800 519,700 19 ?.'33,000 6,432,300 .0703 16,400 452,200 20 -20, 150,300 26,815,600 .0611 -1,231,200 1 ,638,400 41,718,100 6,600 23 TABLE B-9. - Discounted cash flow, 2.04-MM-tpy mine 15 percent - 20 years R = $41,718,100 T 6.259I = $6,665,300 less depreciation 1 ,759,000 Depletion + net profit = 4,906,300 Depletion = 10 percent of sales Federal income tax = net profit Depletion + net profit = cash flow - depreciation Sales = 1.0/0.55 (1/2 operating cost + cash flow - depreciation) = 1/0.55 (8,667,800 + 4,906,300) Sales $24,680,200 Operating cost 17,335,600 Gross profit 7,344,600 Depletion 2,468,000 Taxable income 4,876,600 Federal income tax 2,438,300 Net profit 2,438,300 Annual cash flow = net profit + depreciation + depletion = $2,438,300 + $1,759,000 + $2,468,000 = $6,665,300 Selling price per ton = $24,680,000 t 2,043,400 = $12.08 lUniform series present worth factor. 24 APPENDIX C.~3.18-MM-TPY MINE TABLE C-1 . - Capital investment summary, 3'.18-MM-tpy mine Item Quantity Continuous miner TT~ Loading machine 17 Shuttle car 34 Roof bol ter 17 Ratio feeder 17 Auxiliary fan 17 Mantri p Jeep 17 Mechani c Jeep 6 Personnel Jeep 8 Trickle rock duster 17 Tripl e duty rock duster 13 Supply motor 6 Supply car 70 42-inch rope-type mainline conveyor belt 9,000 36-inch rope-type secondary and panel belt... 36,000 Mainline belt power center (300 kV-A) 6 Section belt power center (150 kV-A) 14 Section power center (1,000 kV-A) 17 Section rectifier (200 kW) 17 Section switch house 17 Sectional izing switch house 10 HV cable (300 MCM AL) 16,000 PLM coupler 18 Section cable and coupler Rectifier for track haulage 3 Trolley wire 51,000 ft Track (60-1 b) 51 ,000 ft Fresh water 1 ine 51 ,000 ft Pumps and lines Telephone (page phones) Conveyor fire protection Automatic controls and alarms Scoop tractor 17 Battery charger 17 All service mask 36 Breathing apparatus 36 Sel f rescuer 650 Stretcher set 20 Safety light 300 Methanometer 300 Fire chemical car 10 Lamp (including accessories) 650 Dust sampl er 50 Site preparation Ventilation fan (dual) Total $b,127 1,370 2,519 906 765 64 297 82 100 74 503 187 217 720 2,412 112 175 489 42 159 94 160 18 89 75 159 510 191 31 11 30 93 595 62 3 28 24 4 13 120 38 33 20 50 120 cost WT 200 400 100 000 600 500 800 000 800 100 800 000 000 000 800 000 600 500 800 000 000 000 300 000 600 000 300 300 300 000 800 000 900 600 800 400 000 200 000 000 800 000 000 000 ft ft ft 25 TABLE C-1. - Capital investment summary, 3.18-MM-tpy mine - Continued I tem Quantity Total cost Concrete portal 5 Bulk rock dust facility 1 Substation and distribution 1 Bathhouse, office, and lamp house 1 Shop and warehouse 1 Powder and cap house 1 Front-end 1 oader 1 Forkl ift 1 Bull dozer 1 Utility truck 2 Pickup truck 2 Oil storage 1 Water tank 1 Supply yard 1 Mine drainage treatment plant Exploration - Total direct 20,462 Field indirect 409 Total construction 20,872 Engi neeri ng 41 7 Overhead and administration 1,064 Conti ngency Fee Estimated development cost Interest during development Gross estimate 44,269 Credit for coal mined during development at $10 per ton 2 0,946 Lane acquired at $2,500 per acre Net estimate 49,138,500 ~7F 37 93 500 312 8 63 44 100 18 12 25 25 18 37 187 22,354 3,353 25,707 514 26,221 15,940 42,161 2,108 23,323 25,815 500 800 000 500 800 000 000 000 000 000 000 000 800 500 500 900 300 200 400 500 100 100 200 100 300 100 400 100 500 000 500 000 26 TABLE C-2. - Manning table, 3.18-MM-tpy mine Wages^ per day Cost per year Cost per ton Personnel Underground: Continuous miner operator... Loading machine operator Machine operator helper. Shuttle car operator , Roof bolter Bratticeman Util ity man Mechanic (section) , Suppl y motorman , Bel tman. , Trackman Wi reman , Mason (precision) , Pumper , Util ity crew , Roving mechanic , Fireboss (union) , Outside: Lampman , Front-end loader operator... Shop mechanic , Salary: Superintendent , General mine foreman Assistant mine foreman Section foreman Maintenance superintendent., General shop foreman , Mine maintenance foreman Chief mine engineer , Draftsman , Survey crew , Safety director , Safety inspector , Dust sampl er , Office manager , Timekeeper and bookkeeper.., Purchasing supervisor , Warehouseman , Total labor and supervision. Total 42 42 42 84 84 42 42 42 420 12 27 12 12 18 3 24 12 4 JW 3 3 12 18 1 1 3 42 1 1 3 1 1 3 1 3 3 1 1 1 4 71 633 $55.00 51.98 51.98 49.23 55.00 47.03 49.23 55.00 47.58 47.03 47.03 47.03 49.23 47.03 49.23 55.00 55.00 45.38 47.85 49.50 $516,824 488,918 488,918 927,019 1,033,648 443,180 463,510 516,824 4,878,841 128,074 284,901 126,904 126,904 198,648 31,657 264,863 147,136 73,832 1,382,919 30,568 32,197 133,144 195,909 30,000 20,000 48,000 588,000 21,800 15,200 45,000 22,500 9,200 29,700 19,800 43,500 31,500 15,800 11,000 15,800 39,600 1.006.400 7,464,100 $1.53 .44 .06 32 2.35 1 Figures in this column are for other shifts are reflected in the day shift. Shift differentials for the cost per year. 27 TABLE C-3. - Depreciation schedule, 3.18-MM-tpy mine Item Exploration Mine drainage treatment plant Supply yard Water tank Oil storage Pickup truck Util ity truck Bulldozer Forklift Front-end loader Powder and cap house Shop and warehouse Bathhouse, office, and lamp house Substation Bulk rock dust facility Concrete portal s Venti 1 ati on fan Site preparation Coal mine safety equipment Underground equipment Interim equipment replacement Subtotal Depreciation for field indirect, engineering, overhead and administration, contingency, fee, cost of development, and interest during development, less credit for coal mined at $10 per ton Total Straight-line depreciation, years 20 10 10 10 10 5 5 10 10 10 10 20 20 20 10 20 20 20 5 10 20 20 Yearly dol charge, lars 9 3 1 2 2 2 3 10 4 6 15 25 4 3 3 6 2 81 1,832 308 ,800 ,900 ,500 ,500 ,400 ,600 ,000 ,400 ,300 900 ,600 ,000 ,700 ,800 ,800 ,000 ,500 ,900 ,500 ,000 2,331,500 143,000 12,474,500 i$0.78 per ton. 28 TABLE C-4. - Power and water cost, 3.18-MM-tpy mine Number of units Operation Hp per unit Hp, total load Hr per day, full load KW, total load Total kW-hr requirement 14 14 28 14 Continuous miner Loading machine Shuttle car Roof bol ter 600 160 135 50 125 30 15 15 7.5 30 80 200 150 8,400 2,240 3,780 700 1,750 420 210 90 60 420 480 600 750 500 500 15 15 15 18 15 18 6 15 15 12 12 15 15 24 10 6,266 1,671 2,820 522 1,305 313 156 67 45 313 358 447 560 373 373 93,990 25,065 42,300 9,396 14 14 14 6 8 14 Ratio feeder Auxiliary fan l^antrip Jeep P^echanic Jeep Personnel Jeep Rock duster 19,575 5,634 936 1,005 675 3,756 6 3 12 1 Supply motor 42-inch conveyor 36- inch conveyor Ventilation fan Extra for pumps, tools, lights, etc 4,296 6,705 8,400 8,952 3,730 Total 234,415 NOTE. - Power $0.02 x 234,415 x 220 = $1,031,400 r 3,178,600 = $0.32 per ton. Water: 3,000 gal per unit per shift at $0.10 per M gal = 3,000 x 14 x 3 X 220 X 0.10 f 1,000 = $2,800. 29 TABLE C-5. - Estimated annual production cost, 3.18-MM-tp.y mine Direct cost : Production: Labor , Supervision, Maintenance: Labor Supervision, Operating supplies: Mining machine parts Lubrication and hydraulic oil Rock bolts and timber Rock dust Ventilation Bits Cables Mi seel 1 aneous Power Water. Payroll overhead (40 percent of payroll) Union welfare^ Indirect cost: 15 percent of labor, supervision, and suppl i es Fixed cost: Taxes and insurance, 2 percent of mine cost Depreciation Total Annual cost $5,660,600 924,400 6,585,000 797,100 82,000 879,100 2,002,500 794,700 985,400 413,200 604,900 381 ,400 190,700 476,800 5,849,600 1,031,400 2,800 2,985,600 3,242,400 1,997,100 940,600 2,474,500 3,415,100 25,988,100 Cost per ton $1.78 .29 2.07 .25 .03 .28 .63 .25 .31 .13 .19 .12 .06 .15 1.84 .32 .94 1.02 .63 .30 .78 1.08 8.18 ^Effective Dec. 6, 1974, under the Bituminous Wage Agreement of 1974. 30 TABLE C-6. - Estimated development cost^, 3.18-MM-tpy mine Item Total cost Cost per ton $5,906,800 $2.82 2,408,800 1.15 523,700 .25 2,346,000 1.12 2,178,400 1.04 1,214,900 .58 1,361,500 .65 15,940,100 7.61 Total labor and supervision Operating supplies , Power Payrol 1 overhead , Union welfare , Indirect cost Fixed cost , Total , 1 Estimated development cost covers the period of time required to place all units in operation within the projected mining plan. NOTE. - Cost per ton = $7.61. Tonnage ^ 2,094,600. Credit for coal mined at per ton = $20,946,000. TABLE C-7. - Estimated working capital and total capital investment , 3.18-MM-tpy mine Estimated working capital : Direct labor 3 months. Operating supplies 3 months. Payrol 1 overhead 3 months . Indirect cost 4 months. Fixed cost 0.5 percent of insurance base. Spare parts Miscellaneous Total working capital $1,866,000 1,462,400 746,400 665,800 235,200 653,200 86,300 5,715,300 Total estimated capital investment: Total mine cost (insurance, tax base) 47,030,400 Interest during development Subtotal Worki ng capi tal Estimated capital investment Estimated deferred capital investment, Total capital investment and deferred investment.. 2,108,100 49,138,500 5,715,300 54,853,800 26,164,500 181,018,300 iThis is an average cost of $25.48 per ton of annual production. 31 TABLE C-8. - Summary of discounted cash flow, 3.18-MM-tpy iiiine Present Present worth Present worth worth capital cash flow Capital factor at investment value Year investment Cash flow 15 percent at 15 percent at 15 percent -1/2 $21,941,500 $-21,941,500 1.07238 $23,529,600 $-23,529,600 32,912,300 -32,912,300 1. 32,912,300 -32,912,300 1 308,000 9,508,900 .8696 267,800 8,268,900 2 308,000 9,508,900 .7561 232,900 7,189,700 3 308,000 9,508,900 .6575 202,500 6,252,100 4 308,000 9,508,900 .5718 176,100 5,437,200 5 747,500 9,069,400 .4972 371,700 4,509,300 6 308,000 9,508,900 .4323 133,100 4,110,700 7 308,000 9,508,900 .3759 115,800 3,574,400 8 308,000 9,508,900 .3269 100,700 3,108,500 9 308,000 9,508,900 .2843 87,600 2,703,400 10 19,433,500 -9,616,600 .2472 4,804,000 -2,377,200 11 308,000 9,508,900 .2149 66,200 2,043,500 12 308,000 9,508,900 .1869 57,600 1,777,200 13 308,000 9,508,900 .1625 50,100 1,545,200 14 308,000 9,508,900 .1413 43,500 1 ,343,600 15 747,500 9,069,400 .1229 91,900 1,114,600 16 308,000 9,508,900 .1069 32,900 1,016,500 17 308,000 9,508,900 .0929 28,600 883,400 18 308,000 9,508,900 .0808 24,900 768,300 19 308,000 9,508,900 .0703 21,700 668,500 20 -31,222,300 41,039,200 .0611 -1,907,700 2,507,500 61,443,800 3,400 32 TABLE C-9. - Discountfed cash flow, 3.18-MM-tpy mine 15 percent - 20 years R = $61,443,800 - 6.2591 = $9,816,900 less depreciation 2,474,500 Depletion + net profit = 7,342,400 Depletion = 10 percent of sales Federal income tax = net profit Depletion + net profit = cash flow - depreciation Sales = 1/0.55 (1/2 operating cost + cash flow - depreciation) = 1/0.55 (12,994,100 + 7,342,400 Sal es $36 , 975, 500 Operating cost 25,988,100 Gross profit 10,987,400 Depletion 3,697,600 Taxable income 7,289,800 Federal income tax 3,644,900 Net profit. 3,644,900 Annual cash flow = net profit + depreciation + depletion = $3,644,900 + $2,474,500 + $3,697,600 = $9,817,000 Selling price per ton = $36,975,500 t 3,178,600 = $11.63 lUmform series present worth factor. 33 APPENDIX D.— 4.99-MM-TPY MINE TABLE D-1 . - Capital investment summary, 4.99-MM-tpy mine Item Quantity Total cost~ Continuous miner 26 $7,841,600 Loading machine 26 2,095,600 Shuttle car 52 3,853,200 Roof bolter 26 1,385,800 Ratio feeder 26 1,170,000 Auxiliary fan 26 98,800 Mantrip Jeep 26 455,000 Mechanic Jeep 10 138,000 Personnel Jeep 10 125,000 Trickle rock duster 26 114,400 Triple duty rock duster 15 580,500 Supply motor 8 250,400 Supply car 100 310,000 42-inch rope-type mainline belt conveyor 9,000 ft 720,000 36-inch rope-type secondary and panel belts.. 60,000 ft 4,020,000 Mainline belt power center (300 kV-A) 6 112,800 Section belt power center (150 kV-A) 16 200,000 Section power center (1,000 kV-A) 26 748,800 Section rectifier (200 kW) 26 65,000 Section switch house 26 244,400 Sectional izing switch house ^ 12 112,800 HV cable (300 MCM AL) 21,000 ft 210,000 PLM coupler 22 22,000 Section cable and coupler - 136,500 Rectifier for track haulage 5 125,000 Trolley wire 69,000 ft 216,000 Track (60-1 b) 69,000 ft 690,000 Fresh water 1 ine 69,000 ft 258,800 Pumps and lines - 44,000 Telephone (page phones) - 18,000 Conveyor fire protection - 38,000 Automatic controls and alarms - 125,000 Scoop tractor 26 91 0,000 Battery charger 26 96,200 All service mask 36 3,600 Breathing apparatus • 50 40,000 Self rescuer 950 35,700 Stretcher set 40 8 ,000 Safety light 600 26,400 Methanometer 600 240,000 Fire chemical car 16 57,000 Lamp (including accessories) 950 49,400 Dust sampler 75 "^^'^nn Site preparation ~ 75,000 Ventilation fan (dual) - 120,000 34 TABLE D-1 . - Capital investment summary, 4.99-MM-tpy mine - Continued Item Quantity Total cost Concrete portal , Bulk rock dust facility , Substation and distribution , Bathhouse, office, and lamp house, Shop and warehouse , Powder and cap house , Front-end loader Forklift Bulldozer , Utility truck Pickup truck , Oil storage Water tank Supply yard Mine drainage treatment plant Exploration Total direct Field indirect , Total construction , Engineering , Overhead and administration Contingency. Fee Estimated development cost. Interest during development.. Gross estimate , Credit for coal mined during development at $10 per ton, Land acquired at $2,500 per acre 75. ,000 56 ,300 110 ,000 687 ,500 437. ,500 11 ,300 63. ,000 44 ,000 100 ,000 18 ,000 18 ,000 38 ,000 25 ,000 25 ,000 37 ,500 312 ,500 30 ,275 ,300 605 ,500 30 ,880 ,800 617 ,600 1 ,574 ,900 33 ,073 ,300 4 ,961 ,000 38 ,034 ,300 760 ,700 38 ,795 ,000 23 ,177 ,000 61 ,972 ,000 3 ,098. ,600 65 ,070 ,600 30 ,528. 000 34 ,542 ,600 40 ,570 ,000 Net estimate, 75,112,600 35 TABLE D-2. - Manning table. 4.99-MM-tpy mine Personnel Underground: Continuous miner operator.... Loading machine operator Machine operator helper ShuttJe car operator Roof bol ter Bratti ceman , Utility man Mechanic (section) Supply motorman^ Beltman Trackman Wi reman Mason (precision) Pumper Util ity crew Roving mechanic Fireboss (union) Outside: Lampman.. Front-end loader operator,... Shop mechanic Salary: Superintendent Assistant superintendent General mine foreman Assistant mine foreman Section foreman Maintenance superintendent... General shop foreman -. Mine maintenance foreman Chief mine engineer Draftsman Survey crew Safety di rector Safety inspector Dust sampl er Of f i ce manager Timekeeper and bookkeeper.... Purchasing supervisor Warehouseman Total labor and supervision Total 66 66 66 132 132 66 66 66 660 24 45 18 18 30 6 36 18 6 201 6 3 27 1 2 2 3 66 1 2 3 1 2 6 1 3 6 1 2 1 6 109 997 Wages 1 per day $55.00 51.98 51.98 49.23 55.00 47.03 49.23 55.00 47.58 47.03 47.03 47.03 49.23 47.03 49.23 55.00 55.00 45.38 47.85 49.50 Cost per year $812 768 768 1 ,456 1 ,624 696 7 28 812 77367 256 474 189 189 331 63 397 220 73 2,197 61 32 199 293 30 48 40 48 924 21 30 45 22 18 59 19 43 63 15 22 15 59 1,527 11,685 144 750 750 760 288 427 380 144 643 150 837 936 936 078 311 293 704 832 077 136 197 716 049 000 400 000 000 000 800 400 000 500 400 400 800 500 000 800 000 800 400 200 000 Cost per ton $1.53 .44 06 .31 2.34 1 Figures in this column are for the diay oth<,r shifts are reflected in the fina shift. Shift differenti column. als for 36 TABLE D-3. - Depr'eciation schedule, 4.99-MM-tpy mine Item Exploration Mine drainage treatment plant Supply yard Water tank Oi 1 storage Pickup truck Utility truck Bulldozer Forklift , Front-end 1 oader Powder and cap house Shop and warehouse Bathhouse, office, and lamp house, Substation ,. , Bulk rock dust facility Concrete portal s , Ventilation fan , Site preparation. Coal mine safety equipment Underground equipment Interim equipment replacement Subtotal Depreciation for field indir^ect, engineering, overhead and administration, contingency, fee, cost of development, and interest during development, less credit for coal mined at $1 per ton Straight-line depreciation, years Yearly doll charge, ars Total 157 3, 2, 2, 3, 3, 3, 10, 4, 6, 1, 21, 34, 5, 5, 3, 6, 3, 130, 2,736, 456, 600 800 500 500 800 600 600 000 400 300 100 900 400 500 600 800 000 800 600 900 000 3,461,700 213,400 13,675,100 i$0.74 per ton. 37 TABLE D-4. - Power and water cost, 4.99-MM-tpy mine Number Hp, Hp per KW, of Hp per total day, full total Total kW-hr units OjDeration unit load load load requirement 22 Continuous miner. . 600 13,200 15 9,847 147,705 22 Loading machine.. . 160 3,520 15 2,626 39,390 44 Shuttle car 135 5,940 15 4,431 66,465 22 Roof bolter 50 1,100 18 821 14,778 22 Ratio feeder 125 2,750 15 2,052 30,780 22 Auxiliary fan 30 660 18 492 8,856 22 Mantrip Jeep 15 330 6 246 1,476 10 Mechanic Jeep 15 150 15 112 1,680 10 Personnel Jeep 7.5 75 15 56 840 22 Rock duster 30 660 12 492 5,904 8 Supply motor 80 640 12 477 5,724 3 42-inch conveyor. . 300 900 15 671 10,065 20 36-inch conveyor. . 150 1,200 15 895 13,425 1 Ventilation fan... Extra for pumps, tools, lights. 500 24 373 8,952 etc 700 10 522 5,220 Total 361,260 NOTE. - Power: Water: $0.02 x 361,260 x 220 = $1,589,500 f 4,994,900 = $0.32 per ton. 3,000 gal per unit per shift at $0.10 per M gal = 3,000 X 22 X 3 x 220 X 0.10 t 1,000 = $4,400. 38 TABLE D-5. - Estimated annual production cost, 4.99-MM-tpy mine Annual cost Cost per ton Direct cost: Production: Labor , Supervision, Maintenance: Labor Supervision, Operating supplies: Mining machine parts Lubrication and hydraulic oil Roof bolts and timber Rock dust Ventilation Bits Cables Mi seel 1 aneous Power Water Payroll overhead (40 percent of payroll) Union welfare^ Indirect cost: 15 percent of labor, supervision, and suppl i es Fixed cost: Taxes and insurance, 2 percent of mine cost Depreciation Total $8,925,200 $1.79 1,430,000 .29 10,3,55,200 2.08 1,232,600 .25 97,200 .02 1,329,800 .27 3,150,000 .63 1,250,000 .25 1,550,000 .31 650,000 .13 950,000 .19 600,000 .12 300,000 .06 750,000 .15 9,200,000 1.84 1,589,500 .32 4,400 4,674,000 .93 5,099,200 1.02 3,132,800 .63 1,440,300 .29 3,675,100 .74 5,115,400 1.03 40,500,300 8.12 ^Effective Dec. 6, 1974, under the Bituminous Wage Agreement of 1974. 39 TABLE D-6. - Estimated development cost^, 4.99-MM-tpy mine Item Total cost $8,615,200 3,510,700 763,200 3,419,100 3,113,900 1,770,600 1 , 984,300 Cost per ton $2.82 1.15 .25 1.12 1.02 .58 .65 Total labor and supervision, Operating supplies Power , Payrol 1 overhead Union wel fare , Indirect cost , Fixed cost , Total , 23,177,000 7.59 1 Estimated development cost covers the period of time required to place all units in operation within the projected mining plan. NOTE. - Cost per ton = $7.59. Tonnage = 3,052,800. Credit for coal mined at $10 per ton = $30,528,000. TABLE D-7. - Estimated working capital and total capital investment , 4.99-MM-tpy mine Estimated working capital: Direct labor 3 months... fl;2,921,300 Operating supplies 3 months... 2,300,000 Payroll overhead 3 months... 1,168,500 Indirect cost 4 months... 1,044,300 Fixed cost 0.5 percent of insurance base... 360,100 Spare parts 1 ,005,700 Mi seel 1 aneous 115,000 Total working capital = .. 8,914,900 lotal estimated capital investment. Total mine cost (insurance, tax base) 72,014,000 Interest during development 3,098,600 Subtotal 75,1 1 2, 600 Working capital 8»914,900 Estimated capital investment 84,027,500 Estimated deferred capital investment 38,956,000 Total capital investment and deferred investment ^122,983,500 iThis is an average cost of $24.65 per ton of annual production. 40 TABLE D-8. - Summary of discounted cash flow, 4.99-MM-tpy mine Present Present worth Present worth worth capital cash flow Capital factor at investment value Year investment Cash flow 15 percent at 15 percent at 15 percent -1 $33,611,000 $-33,611,000 1.15 $38,652,700 $-38,652,700 50,416,500 50,416,500 1. 50,416,500 -50,416,500 1 456,000 14,939,700 .8696 396,500 12,991,600 2 456,000 14,939,700 .7561 344,800 11,295,900 3 456,000 14,939,700 .6575 299,800 9,822,900 4 456,000 14,939,700 .5718 260,700 8,542,500 5 1,145,000 14,250,700 .4972 569,300 7,085,400 6 456,000 14,939,700 .4323 197,100 6,458,400 7 456,000 14,939,700 .3759 171,400 5,615,800 8 456,000 14,939,700 .3269 149,100 4,883,800 9 456,000 14,939,700 .2843 129,600 4,247,400 10 28,914,000 -13,518,300 .2472 7,147,500 -3,341,700 n 456,000 14,939,700 .2149 98,000 3,210,500 12 456,000 14,939,700 .1869 85,200 2,792,200 13 456,000 14,939,700 .1625 74,100 2,427,700 14 456,000 14,939,700 .1413 64,400 2,111,000 15 1,145,000 14,250,700 .1229 140,700 1,751,400 16 456,000 14,939,700 .1069 48,700 1,597,100 17 456,000 14,939,700 .0929 42,400 1,387,900 18 456,000 14,939,700 .0808 36,800 1,207,100 19 456,000 14,939,700 .0703 32,100 1,050,300 20 -49,028,900 64,424,600 .0611 -2,995,700 3,936,300 96,361,700 4,300 3477-27d Xot«0 41 TABLE D-9. - Discounted cash flow, 4.99-MM-tpy mine 15 percent - 20 years R = $96,361,700 i 6.2591 = $15,395,700 less depreciation 3,675,100 Depletion + net profit = 11,720,600 Depletion = 10 percent of sales Federal income tax = net profit Depletion + net profit = cash flow - depreciation Sales = 1/0.55 (1/2 operating cost + cash flow - depreciation) = 1/0.55(20,250,150+11,720,600) Sales $58,128,600 Operating cost 40,500,300 Gross profit 17,628,300 Depletion 5,812,900 Taxable income 11,815,400 Federal income tax 5,907,700 Net profit 5,907,700 Annual cash flow = net profit + depletion + depreciation = $5,907,700 + $5,812,900 +$3,675,100 = $15,395,700 Selling price per ton = $58,128,600 r 4,994,900 = $11.64 -^Uniform series present worth factor. * U.S. Government Office: d^j7^^6 22-192/21 6 R3-I oV -^ '^j- '^0^ 4 O "oV" ^-*- o V .•^^ %-^^^ '^o^ .<^ vP' ^-O 5°*. o_ 'bK 'U-o^ , •' ,0' -^**'^-'/ V'^^^-\/ "°^*^-'\°' V^^rf^\/ "-^ 5-"^ °j{/yi^w: A^"^. \ V -i- ^^' ^C' »' .^ v^. .^ ^/ -^^ c, vr> A 0' V^ *^^f"'' > V -?>' ,f 0' >f' ^> Q> c, J-' ' o « o - , %> .^ o O. * o - ■' \^ .. -^ ^°-n^.