Least cost surface coal mining

Long-term coal mining plans are often based on attainment of an average cost of coal. This is achieved by blending low- and high-cost coal production. Coal that is beyond the economic limit of the reserve is mined in a misguided effort to improve reserve recovery. Long-term contracts should be least cost-based and generate the best net present value from the economic reserve within the context of a rational mine plan. The selected economic reserve should he mined on a low- to high-cost basis to benefit from the time value of money.