Coal Mining Break-Even Analysis: $308K Monthly Revenue Target

Fixed costs $166.2K/mo Overhead plus base staff

Contribution margin 80.7% What stays after variable

Break-even revenue $205.9K/mo Monthly revenue target

Break-even timing Month 1 Model break-even point

Break-even calculator

Test how monthly revenue, variable expenses, and fixed costs shape break-even for a coal mining operation.

Lean Base Full

Monthly revenue Revenue sets how much contribution is left after variable costs. $ Low sales High sales Variable expenses Use direct mining, haulage, and compliance costs that move with output. $ Low costs High costs

Money available to cover fixed costs $14,638,298 $16,524,167 revenue - $1,885,869 variable expenses

Margin ratio

89%

Covers fixed costs

Yes

Fixed monthly costs These monthly overheads stay on the books even when output dips. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which coal mining expenses are fixed, and which move with production or sales?

Cost classification

Break-even is reliable only when fixed overhead, per-ton spend, and capacity-linked labor are kept separate. If you treat every mine expense as per-ton spend, Month 1 break-even can look cleaner than the operating risk really is.

Expense	Cost	Break-Even Treatment	Common Mistake
Mine Site Lease	Fixed	Include $50,000 per month in fixed overhead from Month 1 through Month 60.	Spreading lease expense per ton and hiding the monthly cash floor.
General Administrative Overhead	Fixed	Include $15,000 per month as fixed overhead regardless of tonnage.	Linking back-office spend to production volume when it stays open every month.
Site Security Services	Semi-fixed	Model the $8,000 monthly base, then step it up only when the site scale or coverage plan changes.	Treating security as a smooth per-ton charge instead of a staffing and coverage step.
Office & Non-Production Utilities	Semi-variable	Start with the $12,000 monthly charge, then separate any usage-linked portion if activity changes materially.	Classifying all utilities as fixed and missing usage drag during higher operating intensity.
Heavy Equipment Operators and Maintenance Technicians	Semi-fixed	Step labor up with crew count: operators rise from 10.0 FTE in the first year to 14.0 FTE by Year 5.	Modeling these roles as fully variable even though headcount changes in blocks.
Direct Fuel, Explosives, Labor, Loading and Hauling, Water Treatment	Variable	Apply per-ton amounts by product; for example, Thermal Standard totals $6.50 per ton before revenue-based items.	Blending per-ton mining inputs with fixed overhead and losing margin visibility.
Transportation & Logistics	Variable	Apply as a revenue-linked charge; Year 1 is 5.0% of revenue, or about $8.6 million on $172.8 million.	Using a flat monthly freight number even when shipment value changes.
Regulatory & Environmental Compliance	Variable	Apply as 2.5% of Year 1 revenue, or about $4.3 million, then follow the model’s declining percentage schedule.	Treating compliance as only fixed monitoring and missing sales-linked permit and environmental load.

How does break-even change from lean output to base production and full capacity in coal mining?

Scenario table

Lean output just covers the $249.5k monthly fixed load, so the business sits on the line. As tons rise, the same fixed cost is spread over more revenue, and the profit cushion widens fast.

Planning assumptions only; actual break-even can move with tonnage, price mix, compliance cost, and downtime.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean thermal run-rate	$308k	$59k	$249.5k	81.0%	$0	Operating break-even; any slip turns negative.
Base first-year mix	$14.4M	$2.8M	$249.5k	80.8%	$11.4M	Strong cushion; fixed cost is easily covered.
Full Year 5 mix	$18.6M	$3.3M	$249.5k	82.4%	$15.0M	Widest cushion; fixed cost is diluted further.

What would actually push this mine below break-even?

Stress test

The mine has a wide monthly cushion, but the sharpest pressure comes from lower contracted tonnage, diesel-linked haul costs, and fixed overhead creep. Even in the stress cases below, the plan stays above break-even.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$309,000/month	$14.09M cushion	Large cushion; break-even is far below plan.
Revenue shortfall	Sales fall 10% to about $12.96M/month.	$309,000/month	$12.65M cushion	Sales can dip and still clear fixed cost.
Fixed-cost pressure	Fixed overhead rises 20% to $299,400/month.	$370,000/month	$14.03M cushion	Overhead can rise, but the cushion stays wide.
Margin pressure	Variable spend rises $5 per ton across 154,167 tons/month.	$1.26M/month	$13.13M cushion	Fuel and hauling cost spikes are the first real squeeze.
Combined pressure	Sales fall 20%, fixed overhead rises 20%, and variable spend rises $5 per ton.	$1.32M/month	$10.19M cushion	All three shocks still leave room, but the buffer shrinks fast.

Can this mine clear break-even before you sign the lease and buy the fleet?

Founder checklist

Go only if Year 1 sales, margin, and cash can carry the opening-month load. The model reaches break-even in Month 1, but only if buyers, staffing, and capital spend line up with the forecast.

1Sales path1.85M tons

Confirm buyers for 1,850,000 tons in Year 1 at $80, $90, $150, $140, and $75, because the lease only works if that volume is real from launch.

2Fixed load$249.5K/mo

Verify fixed overhead stays near $249,500 per month, including wages, because that is the cash floor before any ton covers a dollar of variable cost.

3Unit margin$6.5-11.5/ton

Check realized prices stay above direct cost at $6.50 to $11.50 per ton, so the spread can pay the fixed load.

4Variable load7.5%

Keep transportation at 5.0% of revenue and regulatory plus environmental compliance at 2.5%, because a higher load cuts the margin cushion fast.

5Crew ramp21 FTE

Keep Year 1 staffing at 21 FTE and Year 2 at 22 FTE only if production is already scheduled, because hiring early adds $142.5k a month before output catches up.

6Cash cushion$2.171M

Hold at least $2.171 million of opening cash and stage the $13.4 million capital spend from Month 1 to Month 12, because the model’s minimum cash lands in Month 1.