output would require a capital investment of approximately $18 million on the stripped down basis referred to above, or $36 million including a cleaning plant and shaft or slope excavation costs. Later we elaborate the competitive implications of this investment level required to achieve optimum costs.

As previously indicated, the capital investment required for entry into coal mining varies substantially. But it probably fluctuates more for strip than for underground mining. This is because of the importance of stripping equipment in the initial capital cost and the variability of stripping ratios (roughly, overburden depth: coal thickness). The greater the stripping ratio, the more equipment required to uncover the coal deposit.

Again we have hypothetical investment requirements for model mines—this time for surface mines—in a Bureau of Mines study. Table C-3 summarizes the capital costs for twelve hypothetical strip mines based on costs effective in the latter part of 1969. None of the models includes a cleaning plant, although each operation provides for screening and crushing the raw coal.

The capital costs for the twelve hypothetical strip mines fluctuate substantially—from a low of $2.78 per ton of annual capacity to $16.00 for the Oklahoma mine operating in a very thin seam. Table C-3 demonstrates the significant impact on investment requirements of stripping ratios. The Southwestern United States mine (Arizona, Colorado, New Mexico or Utah) with an annual capacity of 5 million tons and an 8.8:1 stripping ratio requires a capital