Wilkes-Barre, Pa.Paper - Capitalization of Mine Development (with Discussion)

The word ".development," as used in connection with mining, is a rather general term and in most instances must be qualified or explained before the exact thought in the mind of the user is made clear. For instance, by the development of a mining district is often meant its entire facilities of mineral production, such as railroads, towns, mine plants, etc. In speaking of the development of a property its prospecting by test pits or diamond drill borings may be referred to; or it may be the mines, strip pits or quarries from which the coal, ore or rock is won. Rut, as a rule, when the development of an individual mine is spoken of the idea in mind is the system of underground workings by means of which the mineral is recovered and transported to the surface. It is this character of development that is considered here. The discussion will be confined to the ordinary room-and-pillar system of mining practically horizontal coal seams that is used in most bituminous coal mines in this country, and to only two phases of this subject; viz., what is properly included under the head of "Development" as it appears on the books of a coal company or the inventories of an examining engineer, and how its " value " should be determined by the accountant or engineer. No absolute rule or definite agreement covers these points, yet these questions are far more than academic. Development is often an important part of a mining company's assets, affecting the amount of its invested capital (and hence its rate of taxation under present Federal income tax laws) as well as the value of its total assets and the amounts chargeable to cost of coal and to depreciation. Mine Development Account Perhaps the majority of mine accountants will agree that the mine development account is that capital account which shows the extraordinary expenditures incurred in opening and expanding the underground workings of a mine until it has reached its normal production, the expenditures being those made for shafts, slopes, rock tunnels, drift mouths and such relatively permanent work; also payments over and above ordinary mining costs made for driving entries, air courses and break-through; for