| The coal mining industry of the Illinois Basin needs a new strategy to meet the challenges of a changing consumer market. Specifically, the escalating mining cost needs to be contained to promote growth and competitiveness. A comprehensive analysis was conducted to assess the influence of geology, mining and other functional elements on the cost of mining coal. Based on the findings broad policy recommendations are proposed.;The presentation begins with an evaluation of mineability and reserves from the viewpoint of cost optimization. These concepts were used in Chapters III, IV, and V to determine the mineability of potential reserves in the major coal seams.;In Chapter VI, an application of geostatistics to optimize cost is illustrated with the help of drilling programs.;Chapter VII examines the economic structure of the coal industry which provides background for the analysis.;Chapter VIII presents an analysis of mining cost estimated by using a translog cost function. A large database of cross sectional samples of 50 mines for a time series of six years was used. The results indicate that geologic variables are important components of cost. The impact of legislation, productivity, technology, and economies of scale are also discussed in this chapter. Mining, geology, and quality criteria are the variables proposed to select the reserves which can be mined profitably. |
