ABSTRACT
Marginal cost is the difference between two time streams of minimum total cost, each corresponding to a different level of demand. Since the buyer will wish to minimize his delivered costs, marginal costs need to be measured at the point where the coal is going to be used. Thus the minimum total cost which is relevant includes transport as well as production. It is system costs which are relevant, in other words the minimum total cost of producing and transporting coal to all customers in all time periods with and without the change in demand to be costed. System costs are not necessarily local and immediate. There are as many marginal costs as there are separate types of coal, centres of demand and periods of time to be considered. This makes for complexity and to explore some of the problems a study was carried out to determine the feasibility and cost of changing the output of a particular pit.
