Preparation of Coal Reserve/Resource Estimates - A Consultant's Perspective

STAGG, ALAN K. and SMITH*, GREGORY C.; Stagg Engineering Services, Cross Lanes, WV

Tonnage estimates prepared for a single property by different entities may show differences of a factor of three or more. These differences can be attributed to two key factors - the definition of what actually constitutes reserves and mining criteria used to define them. In preparing coal resource estimates, many industry personnel and consultants use their own version of the classification system provided for by the U.S. Geological Survey in its Circular 891 titled "Coal Resource Classification System of the U.S. Geological Survey." Misuse of the terms defined in the circular is common, particularly with regard to the terms, as defined, of reserves, marginal reserves, resources, measured, indicated, and inferred.
Mining criteria, principally minimum bed thickness, maximum in-bed parting content, and projected mining recovery rates, are key factors in the preparation of meaningful tonnage estimates. Reserve studies are inherently time sensitive and should reflect market conditions at the time the study is prepared. Coal that can be economically mined in today's steam coal market, generally in the range of $22.00 to $25.00 a ton for plain 'vanilla', central Appalachian steam coal, is significantly different from that which could be mined when prices were in the range of $30.00 to $40.00 a ton.

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