time. N.P.C.'s model projects a growth in coal demand of 3 percent a year, so the figures for years beyond 1970 reflect average capital costs for each year, assuming that new mines are added to meet the demand growth and replace worked-out mines. Since the model projects a 30-year life for each mine, capital costs should presumably stabilize toward the end of the century at something over $10 a ton of annual capacity for the original investment in underground mines and over $9 a ton for surface mines. Since values are expressed in constant 1970 dollars these two figures should give rough estimates of capital investment requirements per ton of annual output in that year. These figures are deficient in several respects. An important deficiency is the failure to specify the hypothetical mine sizes used in constructing the model's investment figures.

We have other fragmented data on capital investments required for entry into coal mining. An unpublished Bureau of Mines study develops data for hypothetical eastern underground mines operating in a 72-inch seam. The estimate assumes the investments will be made to expand existing mines rather than to develop mines de novo. Hence the figures omit capital costs involved in digging a shaft or slope. Also since the model assumes the coal will be used as raw fuel for a coal gasification plant, the data exclude costs of erecting a cleaning plant. Based on 1972 costs, a mine with an annual output of 1.13 million tons would cost $6.56 a ton of annual output to erect and an additional $6.56 a ton for deferred capital costs. At 3.12 million tons of annual capacity, the total investment would be $15.3 million or $4.91 a ton of annual capacity with an additional $15.7 million required for deferred capital investment. Including investment to construct a cleaning plant and to dig a shaft or slope would approximately double the capital cost.

Taken alone, the capital investment required for different sized mines means little. It takes on added meaning, however, in light of the Bureau of Mines' finding that the optimum scale plant (lowest average mining cost per ton) was an underground mine with an annual output rating of 3.8 million tons. This