On the valuation of coal property

In the feasibility studies, which were made in Romania for all mine properties at mining field level, when investment statement year by year was made, we had to approach the problem of assessing certain values Duchene refers to as "Depenses anterieurs capitalises" and Raymond refers to "Approximate value of mineral property". The application of the assessment principle for the mining patrimony as a whole, or for part of it, and of the patrimonial model as it was recommended by Raffegeau has proved unacceptable. The most important part of mining patrimonies which represent sunk costs, in case of cessation of mining activity, possibly has only a potential utility value by flux as a whole, and function of the remaining ore reserves. In the paper we demonstrate that such a value can be established by treating the problem of continuing (possibly with rehabilitation) the mining activity or closing the mine as a "replacement problem", and applying to this effect, in an adapted form, the theory of assets replacement