Corporate Finance Core Principas & Applications (Third Edition). Chapter 8 Closing Cases Bethesda Mining Company

BETHESDA MINING COMPANY Bethesda Mining is a midsized coal mining company with 20 mines located in Ohio, Pennsylvania, West Virginia, and Kentucky. The company operates deep mines as well as strip mines. Most of the coal mined is sold under contract, with excess production sold on the spot market. The coal mining hard-hit by environmental regulations. Recently, however, a combination of increased dema coal and new sulfur coal. Bethesda has just been approached by to supply coal for its electric generators for the next four years. Bethesda Mining does not have enough excess capacity at its existing mines to guarantee the contract. The company is consid- ering opening a strip mine in Ohio on 5,000 acres of land purchased 10 years ago for $5.4 million. industry, especially high-sulfur coal operations such as Bethesda, has been nd for pollution reduction technologies has led to an improved market demand for high- Mid-0hio Electric Company with a request ased on a recent appraisal, the company feels it could receive $7.5 million on an aftertax basis itf it sold the land today. BETHESDA MINING COMPANY Bethesda Mining is a midsized coal mining company with 20 mines located in Ohio, Pennsylvania, West Virginia, and Kentucky. The company operates deep mines as well as strip mines. Most of the coal mined is sold under contract, with excess production sold on the spot market. The coal mining hard-hit by environmental regulations. Recently, however, a combination of increased dema coal and new sulfur coal. Bethesda has just been approached by to supply coal for its electric generators for the next four years. Bethesda Mining does not have enough excess capacity at its existing mines to guarantee the contract. The company is consid- ering opening a strip mine in Ohio on 5,000 acres of land purchased 10 years ago for $5.4 million. industry, especially high-sulfur coal operations such as Bethesda, has been nd for pollution reduction technologies has led to an improved market demand for high- Mid-0hio Electric Company with a request ased on a recent appraisal, the company feels it could receive $7.5 million on an aftertax basis itf it sold the land today