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This study researched the concept of small coal operators combining to form a coal cooperatives as a means of providing services and to improve their economic position in coal markets. A small coal operators attitude survey was completed in Appalachia, along with actual interviews of numerous operators in two case study areas--Clearfield, Pennsylvania, and Beckley, West Virginia. A profile of small operator facilities and operations was developed along with suggested coal cooperative configurations in the two case study areas. A general administrative services co-op was suggested for the Beckley area and a capital intensive coal processing/transloading co-op for the Clearfield area. From a review of the vast experience in U.S. agricultural cooperatives a step-by-step procedure for forming a coal co-op is detailed from the idea stage to the first Board of Director's meeting. An extensive economic analysis is included to demonstrate potential member benefit-costs. Recommendations are made to operator, state, regional and federal sectors to develop demonstration coal cooperatives to further prove out the concept.