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Summonere
03-15-2010, 07:42 PM
What is the price for a ton of coal, and where do I look to find such current prices for, (1) coal still in the ground, (2) mined/refined/whatever-you-call-it-once-it's-dug-up coal?

Here's the deal. Friend of mine owns property in KY with, apparently, a lot of coal under it. She's been offered something like .75 cents to $1.00 per ton of coal. I see the U.S. EIA (randomly Googled) reports a price for Central Appalachia coal, as of 3/5/10, being $58.95. I assume that this price applied to already-dug-up coal, and that the price she's been offered is because the coal is still in the ground.

I, of course, wallow in ignorance about most things, including this, and cast my questioning lots among the fine and knowledgeable people here at AW.

Any ideas?

shaldna
03-15-2010, 09:05 PM
Ok, like everything else it depends where you get it from, and how much you buy.

If you are using it commerically and you buy in huge quanitites then you are looking at around 30-70 per tonne.

If you are buying domesitcally and in bulk then you can expect to pay around 110 per tonne.

However, if you are buying domestically in bags (25 kilo bags are about 7 a pop and there are 40 of them in a tonne) then expect to pay aroun 250-280 per tonne.

The price she would recieve would be lower than purchase price, I would expect it to be around 20 per tonne, assuming she is not minign it herself and not having to take overheads out of that.

PeterL
03-15-2010, 09:08 PM
It's in a range of about $10 to $60 a ton.
http://www.eia.doe.gov/cneaf/coal/page/coalnews/coalmar.html
The offer to your friend is not the price of coal; it is an offer to buy a some land with coal under it. You won't find relevant prices online, but there may be someone in that area who would know what the property is worth. The general method for valuing it would be the present value of the coal after extraction expenses plus the residual value of the land after the coal has been removed and any pollution cleaned up. If it would be a multi-year thing, then it might be a good idea to use Hoskold (sinking fund) valuation. That would be a determination of the amount of money put out at interest that would produce the same income as mining the coal.

If I got the offer, the first thoing I'd do would be to look for similar sales in the immediate area.