Significance and measurement of coal mine productivity

Abstract

Labor Productivity (LP), expressed in terms of tons per labor (man) shift, is commonly used in the coal mining industry as a general indicator of changes in the efficiency of the coal production process. However, labor productivity does not account for the changes of other principal factor inputs, such as capital investment, new technology and mining equipment, and quality of coal reserves. These factor inputs are embellished in Total Factor Productivity (TFP), a more precise indicator; the facets of which are outlined in the article. Therefore, Labor Productivity remains a traditional and convenient measure of the coal production process, but not only is it inaccurate, it often induces management to over-emphasize the role or contribution of labor.