Coal is mined by three methods: surface, underground, or in situ. The percentage of coal produced by each mining method can be identified from production statistics kept by the Energy Information Administration (EIA), a U. S. agency. According to the EIA, in 2002 745 surface mines produced 736 million tons (67% of total U. S. production) and 654 underground mines produced 357 million tons (33% of total U. S. production). For practical purposes, coal produced from in situ mining methods is nil.
Coal mine design and methods are chosen based on the reserve characteristics. Where the coal seam is near the ground surface, surface mining methods prevail over underground methods. Generally, surface mining methods are less expensive than underground methods when the strip ratio is less than an economic limit. Strip ratio is the quantity of overburden (expressed in cubic yards) that has to be removed to uncover 1 ton of coal. Companies change mining method from surface to underground when the strip ratio from an existing surface mine increases due to seam pitch, which in turn increases production cost. At the economic limit, the cost of production from surface methods equals underground methods.