Coal Mine Valuation

Coal Mine Valuation is a lengthy and complex process that most mining operations or landowners usually receive consultation for. Land owners who possess agricultural lands that are currently not in production are being used for free grazing or mining leases. The actual coal pits that are used for mining are exempt by most state statutes because of the taxes paid on minerals themselves. Lands that are not used for agricultural reasons or only to draw minerals are valued as industrial lands. The process of valuing industrial land is same as that of residential land.

Coal Lands

The procedure of removing coal from the ground and preparing it consists of labour, materials, interests marketing and land amortization lays aside funds for replacement of the land when mined. Other considerations include funds to meet accident lawsuits and any other contingencies. Coal is generally mined for its energy generating properties. Here, in Australia, underground coal mines are known as colliery. In Australia, every state mines coals. Almost 75% of Australias annual coal production is exported to eastern Asia. Yet 85% of Australias electricity comes from coal power generation.

Royalty Value

Royalty Value may vary for example, in Australia, the royalty value one receives for coal ranges from 1.5% for 5 years in South Australia, 1.6% in Tasmania, 10% in Queensland and as high as 18% in Northern Australia. The sale price of coal mined land deals are affected by the amount and quality of the coal, the current commodity pricing, accessibility, the cost of mining and marketing. Today there are many artificial and legal restrictions that have discouraged the coal land mining process.

Financial modelling

Since the costs of coal mining can be prohibitive new techniques have been developed to produce fairly accurate financial modelling, price forecasts and cost forecasts for mining. These financial models are even taught among the best institutions and organizations and are usually available for training online. Financial modelling is a mathematical model that aids in determining the financial success of a business, investment or portfolio. Many financial institutions have combined mining and petroleum portfolios into a single resource division and teach the similarities and the differences in these types of mining operations. Before attempting to invest in a coal mining operation smart businesses invest in a financial modelling program through consultants or by learning the financial modelling themselves.

Learn At a Click

You will also find websites offering speciality courses, mining speciality courses and financial modelling programs. These financial organizations can also provide auditing and consultation on mining operations through financial modelling. Whether you plan on learning financial modelling for coal mine valuation yourself or hiring a company to provide the analysis for you an in-depth study and assessment of the land and business proposal should be done before any investment is made. Speculative business operations such as coal mining can have large R&D expenses and should only be conducted after a thorough financial modelling has been done.

Coal mine valuation is a specialty financial modeling process that allows consideration of all the various aspects of coal mining including labour, start up costs, equipment future analysis of the commodity’s price and many other aspects.
 

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