The small underground coal mining company formed in 2010 to re-open and operate the Terrace Mine at Reefton on the South Island of New Zealand.

Production at the mine stopped in June 2009, when its previous owner Solid Energy put it into care and maintenance after increasing production costs made it uneconomic for the state-owned miner.

Crusader announced Friday that following a period spent refurbishing surface works and infrastructure, it started underground development in November and made its inaugural sale of coal sometime “earlier this year”

The company said a small group of miners had been sourced from the local community to operate the mine, including some of the recently retrenched miners from Solid Energy’s Spring Creek, near Greymouth.

It has been using a mechanical mining method that utilizes a small hydrolic driven cutter to extract small, low profile roadways.

The roadways provide access for hydro mining equipment to extract coal on retreat, Crusader said in the statement.

“Hydraulic mining is the best method for extraction of coal from thick, steeply dipping seams such as the Reefton No.4 seam,” Crusader said.

The seam is up to 14m thick and dips at a grade of 1 in 3.5.

Crusader said the thermal coal from the mine had energy in excess of 6400k/cal with low ash and moderate sulfur.

Terrace project manager Bernie Lambley said he believes the future for New Zealand mining is bright.

“Whilst more challenging than other mining areas, there are still a lot of opportunities on the west coast,” Lambley commented.

“Bigger is not necessarily better and I think small, efficient operations with the ability to adapt to local conditions are the future for the west coast coal industry.

Crusader said it expects shipments to steadily build as it approaches its first production panel next quarter.

The company did not specify who was purchasing its product, or how much the initial shipments were.

The mine is expected to produce 70,000 tons per annum from an estimated resource of 2Mt over a 15-year life expectancy.

“We look forward to developing Terrace mine to its full potential and to pursuing further opportunities within the industry,” Lambley concluded.