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U.S. Department of Energy
Office of Scientific and Technical Information

Causes and effects of escalating prices for deep-mine machinery. [1950 to 1981]

Technical Report ·
OSTI ID:6356617
This report examines the issue of escalating deep-coal-mine machinery prices in the 1970s. Producer price trends, mining investment costs, mine asset values, and discussions with used-equipment brokers all indicated that deep-mining-equipment prices escalated faster than miner wages and general prices during the 1970s. Causes of this price escalation include increased demand for mining equipment, regulation, general price inflation, and overcapitalization. Consequences of higher deep mine equipment prices were also examined. These consequences include changes in the capital-labor mix, the output per worker, coal supply, and the cost of production. Because of changes in coal price, regulation, and marketing arrangements in the 1970s, the effect of machinery price increases was difficult to examine, but it appears small. Also examined is the effect on mine cash flow of the Accelerated Cost Recovery System of the 1981 Economic Recovery Tax Act. This law changes mine depreciation patterns and will have a substantial impact on coal-mine rate of return.
Research Organization:
Oak Ridge Associated Universities, Inc., TN (USA)
DOE Contract Number:
AC05-76OR00033
OSTI ID:
6356617
Report Number(s):
ORAU-210; ON: DE83010354
Country of Publication:
United States
Language:
English