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Coal Reserves of the Matewan
Quadrangle, Kentucky -A Coal Recoverability Study

U.S. Bureau of Mines Circular 9355


Table C-1.-Standard costing model (example)

CONTINUOUS MINER/ROOM & PILLAR (WITH RETREAT CAVING) - MINE COSTS
(24-42" MINING HEIGHT
ASSUMPTIONS: ALSO:
394 -RAW TONS PRODUCED/UNIT-SHIFT - THE CM MINE IS SET UP WITH TWO COMPLETE PRODUCTION UNITS.
240 -DAYS WORKED/YEAR - PRODUCTION EMPLOYEES EQUIPMENT IS SCHEDULED FOR TWO SHIFTS/DAY, FIVE DAYS/WEEK, WITH
240 -DAYS WORKED/YEAR - AUXILIARY EMPLOYEES GENERAL AND PREVENTATIVE MAINTENANCE AND BELT MOVES SCHEDULED
2 -NUMBER OF CONTINUOUS MINER UNITS FOR THE THIRD SHIFT EACH DAY, FIVE DAYS/WEEK.
2 -SHIFTS/DAY PRODUCTION - REPAIR, SUPPLY, AND SUPPORT EQUIPMENT WILL BE SHARED BETWEEN
5 -DAYS/WEEK PRODUCTION EMPLOYEES PRODUCTION UNITS.
5 -DAYS/WEEK AUXILIARY EMPLOYEES - ALL SURFACE SITE MAINTENANCE (SUCH AS, SNOW REMOVAL AND ROAD
3 -SHIFTS/DAY - PRODUCTION PLUS MAINTENANCE MAINTENANCE) WILL BE DONE BY THE SURFACE MINING OPERATIONS.
35% -BURDEN RATE - HOURLY AND SALARY - PRODUCTIVITY IS ASSUMED TO BE A FUNCTION OF MINING HEIGHT AND
110% -BLACK LUNG TAX (SAME AS $1.10/TON) MINING HEIGHTS ARE ASSUMED TO BE SEAM THICKNESS
$548 -OP. SUPPLIES/UNIT/SHIFT - UNDERGROUND MINING CONFIGURATIONS LESS THAN 42" B15
$0 -EQUIPMENT RENT/UNIT/YEAR 4", OF OUT-OF-SEAM DILUTION. CONFIGURATIONS GREATER THAN 42"
$15,508 -GENERAL UTILITIES/MONTH CONTRIBUTE 2", OF DILUTION (UNDER IDEAL CONDITIONS).
$700 -AUTO EXPENSES/SALARIED EMPLOYEE (PER MONTH)
$0.30 -PROPERTY INSURANCE/$l00 OF CAPITAL VALUATION
$0.05 -$/TON PROFESSIONAL SERVICES (PERMITTING, ENGINEERING, ETC)
$362 -GENERAL EXPENSES/UNIT-SHIFT (CONTRACT SERVICES. MISC. EXPENSES)
$2.50 -$/TON ROYALTY RATE
$0.15 -$/TON RECLAMATION TAX (SMCRA)
$0.60 -$/TON DEPLETION
$90,000 -OVERHEAD ALLOCATED/YEAR
$0.06 -RECLAMATION PROVISION (COST/CLEAN TON)
$1.00 -S/TON RAIL LOADOUT COSTS
$2.85 -PREPARATION PLANT COST/RAW TON OF COAL
$0.65 -TRUCK HAULAGE COST ($/RAW TON)
80%-% COAL RECOVERED FROM WASH PLANT
0%-% RAW MINED COAL DIRECTLY SALEABLE (WITHOUT WASHING)
13%-% FACTOR FOR HOURLY PAYROLL (FOR O.T.& PERS. DAYS 9 <= FIVE DAYS/WEEK WORK SCHED.)
18%-% FACTOR FOR HOURLY PAYROLL (FOR O.T.& PERS. DAYS 9 SIX DAYS/WEEK WORK SCHED.)
18%-% FACTOR FOR HOURLY PAYROLL (FOR O.T.& PERS. DAYS 2 SEVEN DAYS/WEEK WORK SCHED.)
$27.00 -COAL SALES PRICE/CLEAN TON (BASED ON QUALITY)
128,640 -TOTAL EMPLOYEE-HOURS/YEAR
18.82 -CLEAN TONS/EMPLOYEE-SHIFT
23.52 -RAW TONS/EMPLOYEE-SHIFT
$29.24 -COST IN CAR

TWO CONT. MINER UNITS
(24-42" MINING HEIGHT)
RAW TONS PER YEAR 378,240
CLEAN TONS 302,592
DIRECT COSTS COST/TON
PAYROLL $2,484,775 $8.21
BURDEN $869,671 $2.87
FUEL & LUBES $88,932 $0.29
EXPLOSIVES $0 $0.00
OTHER PRODUCTION SUPPLIES $526,132 $1.74
REPAIR PARTS/MAINT.SUPL. $417,720 $1.38
UTILITIES $186,094 $0.62
EQUIPMENT RENTAL $0 $0.00
AUTO EXPENSE $58,800 $0.19
PROFESSIONAL SERVICE $15,130 $0.05
RECLAMATION PROVISION $18,156 $0.06
TRUCKING $245,856 $0.81
GENERAL EXPENSES $347,603 $1.15
TIPPLE COST $1,077,984 $3.56
DEPRECIATION $446,769 $1.48
TOTAL DIRECT COSTS $6,783,621 $22.42
INDIRECT COSTS
DEPLETION $181,555 $0.60
MINE DEV. AMORTIZATION $185,243 $0.61
OVERHEAD $90,000 $0.30
INSURANCE $14,865 $0.05
TOTAL INDIRECT COSTS $471,663 $1.56
TAXES $836,458 $2.76
ROYALTIES $756,480 $2.50
COST IN CAR $8,848,222 $29.24
EQUIPMENT OPERATING COST CALCULATIONS
PRODUCTION # UNITS # UNITS # UNITS HRS WORKED TOTAL R&M TOTAL F&L TOTAL DEPR R&M F&L DEPR
EQUIPMENT 1ST SHIFT 2ND SHIFT 3RD SHIFT PER SHIFT PER DAY PER DAY PER DAY PER HOUR PER HOUR PER HOUR
CONTINUOUS MINERS 2 2 0 8 $848.00 $123.20 $960.00 $26.50 $3.85 $30.00
SHUTTLE CARS 4 4 0 8 $416.00 $112.00 $420.16 $6.50 $l.75 $6.57
ROOF BOLTERS 2 2 0 8 $176.00 $48.00 $247.68 $5.50 $1.50 $7.74
SCOOPS 2 2 0 8 $136.00 $32.00 $98.88 $4.25 $1.00 $3.09
SURF-4cy LOADER 1 0 0 4 $20.00 $17.44 $20.60 $5.00 $4.36 $5.15
GRADER 1 0 0 1 $4.00 $3.16 $4.79 $4.00 $3.16 $4.79
DAILY TOTAL 12 10 0 $1,600.00 $335.80 $1,752.11
ANNUAL TOTAL $384,000 $80,592 $420,505
AUXILIARY # UNITS # UNITS # UNITS HRS WORKED TOTAL R&M TOTAL F&L TOTAL DEPR R&M F&L DEPR
EQUIPMENT 1ST SHIFT 2ND SHIFT 3RD SHIFT PER SHIFT PER DAY PER DAY PER DAY PER HOUR PER HOUR PER HOUR
UTILITY SCOOP 1 1 1 8 $96.00 $24.00 $74.16 $4.00 $1.00 $3.09
PERSONNEL CARRIERS 3 3 1 1 $17.50 $3.50 $8.05 $2.50 $2.50 $1.15
ROCK DUSTER 1 0 0 1 $1.00 $0.25 $0.96 $1.00 $1.00 $0.96
SPARE SHUTTLE CARS 2 2 0 1 $26.00 $7.00 $26.26 $6.50 $1.75 $6.57
DAILY TOTAL 7 6 2 $140.50 $34.75 $109.43
ANNUAL TOTAL $33,720 $8,340 $26,264
ANNUAL GRAND TOTAL $417,720 $88,932 $446,769

PAYROLL
# OF EMPS # OF EMPS # OF EMPS PAYROLL BASE RATE/HR RATE/HR RATE/HR
1ST SHIFT 2ND SHIFT 3RD SHIFT HRS/SHIFT RATE/DAY GRADE RATE 1st SHIFT 2nd SHIFT 3rd SHIFT
PRODUCTION EMPLOYEES +0.30/hr +0.40/hr
CONT. MINER OPER. 2 2 0 8 $561.40 5 $16.62 $17.39 $17.69 $17.79
CONT. MINER HELPER 2 2 0 8 $547.84 4 $16.21 $16.97 $17.27 $17.37
SHUTTLE CAR OPER. 4 4 0 8 $1,071.08 3 $15.84 $16.59 $16.89 $16.99
ROOF BOLTER OPER. 4 4 0 8 $1,122.81 5 $16.62 $17.39 $17.69 $17.79
SCOOP OPERATOR 2 2 0 8 $535.54 3 $15.84 $16.59 $16.89 $16.99
TOTAL-1ST. SHIFT 14 $1,902.53
TOTAL-2ND. SHIFT 14 $1,936.13
TOTAL-3RD. SHIFT 0 $0.00
TOTAL PRODUCTION PAYROLL 28 $3,838.66
OVERTIME FACTOR 0.13
TOTAL WITH O.T. PAY $4,337.69
ADJ ADJ ADJ
# OF EMPS # OF EMPS # OF EMPS PAYROLL BASE RATE/HR RATE/HR RATE/HR
1ST SHIFT 2ND SHIFT 3RD SHIFT HRS/SHIFT RATE/DAY GRADE RATE 1st SHIFT 2nd SHIFT 3rd SHIFT
AUXILIARY EMPLOYEES +0.30/hr +0.40/hr
SCOOP OPERATOR 1 1 0 8 $267.77 3 $15.84 $16.59 $16.89 $16.99
POCKETMEN 2 2 0 8 $535.54 3 $15.84 $16.59 $16.89 $16.99
SUPPLYMEN 1 1 0 8 $262.83 1 $15.55 $16.28 $16.58 $16.68
LAMPMAN/WAREHSE 1 1 0 8 $262.83 1 $15.55 $16.28 $16.58 $16.68
BELT MAINT/CLEANUP 2 2 2 8 $792.49 1 $15.55 $16.28 $16.58 $16.68
MECHANICS 2 2 4 8 $1,130.80 5 $16.62 $17.39 $17.69 $17.79
ELECTRICIANS 1 1 1 8 $423.05 5 $16.62 $17.39 $17.69 $17.79
SURF. UTILITY OPER. 1 0 0 8 $132.69 3 $15.84 $16.59 $16.89 $16.99
TOTAL-LST. SHIFT 11 $1,469.05
TOTAL-2ND. SHIFT 10 $1,360.37
TOTAL-3RD. SHIFT 7 $978.58
TOTAL AUXILIARY PAYROLL 28 $3,808.00
OVERTIME FACTOR 0.13
TOTAL WITH O.T. PAY $4,303.04
TOTAL HRLY EMPLS PER SHIFT 25 24 7
TOTAL HOURLY EMPLOYESS 56
TOTAL ANNUAL HOURLY PAYROLL $2,073,775

MINE MANAGEMENT AND STAFF
# EMPL # EMPL # EMPL BASE SALARY TOT SALARY
1ST SHIFT 2ND SHIFT 3RD SHIFT PER YEAR PER YEAR
GENERAL MANAGER 1 $57,000 $57,000
PRODUCTION FOREMEN 2 2 $42,000 $168,000
MAINT. FOREMEN 1 1 $40,000 $80,000
MINE ACCNT/PUR.AGENT 1 $40,000 $40,000
MINE CLERK 1 $18,000 $18,000
TECHS./SURVEYORS 2 $24,000 $48,000
TOTAL ANNUAL SALARY $411,000
NUMBER OF EMPLOYEES WITH CO. AUTOS 7
TOTAL SALARIED EMPLOYEES 11
TOTAL RAW TONS PROD. COAL PER YEAR 378,240 TAX DEFINITION: 1) Sales taxes are based on the
total capital cost/8 yr. ave. life + annual taxable items.
2) Severance taxes are based on the sold tons times their
realization, minus the cost of road transportation.
3) Real property taxes are based on 30% of the assessed
valuation times the amortization (property+buildings+
improvments) times the tax rate.
4)Tangible property tax is based on the total capital cost
times the property assessment rate times the tax rate.
5) Federal reclamation taxes are based on the sold tons
times the tax rate.
6) State mineral taxes on urvnined reserves (annual planned
production) is based on the sold tons times the coat value
(usually the royalty rate) times the tax rate.
7) Black Lung taxes are based on sold tons times tax rate.
%RAW SALABLE 0%
RAW TONS SALABLE 0
RAW TONS COAL TO WASHER 378,240
% REC 80%
CLEAN TONS WASHED COAL 302,592
TOTAL TONS COAL SOLD 302,592
COST TONS/ COST/
TIPPLE COST PER TON YEAR YEAR
RAIL LOADOUT (RAW COAL) $1.00 0 $0
PREP PLANT(WASHED COAL) $2.85 378,240 $1,077,984
TOTAL TIPPLE COST $1,077,984
TAX RATES: PER $100 OF ASSESSED VALUATION
STATE COUNTY STATE COUNTY STATE MINL
Real Prop Real Prop Tang Prop Tang Prop TAX
0.45 0.6365 0.45 0.6839 $0.21
Coal
Value/T
Prop
Assess
Black Lung
Tax
Constants: $2.50 30.00% $1.10
Severance
Tax
Sales
Tax
4.50% 5.00%
TAXES TAX TAXED COST/ COST
RATE PRODUCT YEAR PER TON
SALES 5.00% 1,652,146 $82,607 $0.27
SEVERANCE 4.50% 302,952 $356,586 $1.18
REAL PROPERTY $1.09 185,243 $604 $0.00
TANGIBLE PROPERTY $1.13 $4,954,900 $16,855 $0.06
RECLAMATION (SMCRA) $0.15 302,592 $45,389 $0.15
STATE MINL TAX (UNMINED) $0.21 302,592 $1,566 $0.01
BLACK LUNG TAX $1.10 302,592 $332,851 $1.10
TOTAL TAX/YEAR $836,458 $2.76

CAPITAL EQUIPMENT SELECTION

UNDERGROUND CONTINUOUS MINER - 2 PRODUCTION UNITS
(24-42" Mining Height)
Production Equipment No.
Units
Total Hrs.
Per Day
Unit Cost Depr. Term
(in hrs.)
Hourly
Deprec.
Annual
Str. Line
Deprec.
Total
Equipment
Costs
Annual
Development
Amortization
Continuous Miners 2 32 $600,000 20,000 $30.00 $230,400 $1,200,000 -
Shuttle Cars 4 64 $131,300 20,000 $6.57 $100,838 $525,200 -
Roof Bolters 2 32 $154,800 20,000 $7.74 $59,443 $309,600 -
Scoops 2 32 $61,800 20,000 $3.09 $23,731 $123,600 -
Surf-4cy Loader 1 4 $206,000 40,000 $5.15 $4,944 $206,000 -
Grader 1 1 $134,000 28,000 $4.79 $1,149 $134,000 -

Auxiliary Equipment
Utility Scoop 1 24 $61,800 20,000 $3.09 $17,798 $61,800 -
Personnel Carriers 3 7 $46,000 40,000 $1.15 $1,932 $138,000 -
Rock Duster 1 1 $38,500 40,000 $0.96 $231 $38,500 -
Spare Shuttle Cars 2 4 $131,300 20,000 $6.57 $6,302 $262,600 -
Feeder/Breakers 2 48 $109,800 20,000 $5.49 - $219,600 $63,245
Ventilation System 1 24 $96,000 87,600 $1.10 - $96,000 $6,312
Belt System 1 24 $873,000 87,600 $9.97 - $873,000 $57,403
Power Centers 2 48 $43,200 87,600 $0.49 - $86,400 $5,681

Surface Support and Facilities
Shop/Warehouse Facilities 1 24 $40,000 87,600 $0.46 - $40,000 $2,630
Office/Change Facilities 1 24 $36,000 87,600 $0.41 - $36,000 $2,367
Access/Haul Roads 1 24 $250,000 87,600 $2.85 - $250,000 $16,438
Site-Surface Development 1 24 $18,000 87,600 $0.21 - $18,000 $1,210
UG Compressors & Lines 2 48 $50,000 40,000 $1.25 - $100,000 $14,400
Water/Sewage Treat. Fac. 1 24 $60,000 87,600 $0.68 - $60,000 $3,945
Surf . Power Sub/Trans Line 1 24 $96,600 87,600 $1.10 - $96,600 $6,352

Surface Equipment
120' Stacker Conveyors 1 24 $80,000 87,600 $0.91 - $80,000 $5,260
Leased Coal Truck Haulage - - - - - - - -
Annual Depreciation/Amortization Costs $446,769 $185,243
Total Capital Equipment Costs $4,954,900

UMWA WAGES - 1988 CONTRACT, UNDERGROUND MINING

EFFECTIVE DATE
02/01/90

Grade 5 - Base Hourly Rate
$16.615
Grade 4 - Base Hourly Rate $16.210
Grade 3 - Base Hourly Rate $15.843
Grade 2 - Base Hourly Rate $15.620
Grade 1 - Base Hourly Rate $15.548

Training Rates
$14.974


UNION WORK CLASSIFICATIONS - UNDERGROUND MINING

GRADE 5
A. Continuous Mining Machine Operator E. Longwall Machine
Operator
B. Electrician
C. Mechanic F. Welder, First Class
D. Fireboss G. Roof Bolter
GRADE 4
A. Cutting Machine Operator G. Continuous Miner
Helper - Trainee
B. Dispatcher
C. Loading Machine Operator
D. Machine Operator Helper H. Roof Bolter
Helper - Trainee
E. General Inside Repairman
and Welder
I. Maintenance Trainee
(Max. 12 Mos.)
J. Electrician Trainee
(Max 12 Mos.)
F. Rock Driller
GRADE 3
A. Driller - Coal D. Faceman
B. Shooter E. Dumper
C. Precision Mason
(Construction)
F. Shuttle Car Operator
GRADE 2
A. Motorman D. Electrician Helper
B. Maintenance Trainee
(Max. 6 Mos.)
E. Mechanic Helper
C. Electrician Trainee
(Max. 6 Mos.)
GRADE 1
A. Beltman G. Pumper
B. Bonder H. Timberman
C. Brakeman I. Trackman
D. Bratticeman J. Wireman
E. General Inside Labor K. Labor - Unskilled
F. Mason
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