The development of a coal project must pass through a number of phases, taking it from a preliminary evaluation through to detailed mine planning. For each phase the cost of data acquisition and associated mining studies increases exponentially for linear improvement in confidence levels. Within each mine planning phase there are four main activities. These are the economic ordering of reserves, the development of optimum mining strategies, mine design and scheduling and finally the estimation and analysis of costs. The development of the optimum mining strategy is one of the most critical aspects of a mining evaluation and the application of economic criteria at this stage of the project is vital to the successful generation of an optimised mine design. A recommended method is the concept of Economic Ratio (ER) which expresses the likely cost of mining from a given location in a deposit in terms of the value of the product likely to be recovered. The most economic mining strategy will be to mine areas from low economic ratio to high economic ratio within the constraints of reasonable equipment application. When selecting equipment a particular machine should not be selected solely on comparison with other machines in isolation, but the total application must be analysed._x000D_
In the final selection the decision should be based on whether or not it has a beneficial effect on overall project economics. The economic assessment must take into account the time value of money, so the real cost can be determined with adequate provision for capital and operating costs over different time spans.