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econometric formulation that relates the mine mouth prices of coal for each supply curve to a set of independent variables. The independent variables include capacity utilization of mines, mining capacity, labor productivity, the user cost of capital of mining equipment, the cost of factor inputs (labor and fuel), and other mine supply costs.
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Processing the Coal After coal comes out of the ground, it typically goes on a conveyor belt to a preparation plant that is located at the mining site. The plant cleans and processes coal to remove dirt, rock, ash, sulfur, and other unwanted materials, increasing the heating value of the coal.