The company paid $45 million to acquire the 93 hectares of associated mining lands around NRE No.1 colliery, the termination of any royalty payment liability to the company under an agreement with Bellpac for the acquisition of the mining lease; the termination of remediation obligations with Bellpac; and outstanding legal obstacles to its development plans.

The acquisition of the mining land and settlement of litigation are major achievements by the company as it is now able to ensure the smooth and continuous operations at NRE No.1 Colliery for the life of the mine, Gujarat chairman Arun Kumar Jagatramka said.

“The acquisition of the adjoining lands associated with the NRE No.1 colliery not only brings a valuable asset into the books but also overcomes any potential obstacle as the company continues to ramp up to introduce longwall operations at NRE No.1 during the current year, and progressing to reaching the ultimate goal of achieving a production target of 3Mtpa from this mine and 6Mpta as a company,” Jagatramka said.

The company is in the process of setting up longwall mining operations at NRE No.1 and plans to produce another 3Mtpa from its nearby NRE Wongawilli mine.

The mining land acquired was crucial not only for current operations but also for the proposed future development as the company would require this land for operational logistics including coal handling and stockpiling.

Ownership of the adjoining areas also ensures that Gujarat would not require approval or negotiation of access agreements with the various land owners for the proposed use.

A surface longwall minibuild for NRE No.1 mine was completed last month.

The New South Wales coking coal producer aims to have the new longwall cutting coal in December, with surface testing of the equipment expected to take several months.

To further prepare the mine, Gujarat achieved 1303 metres of development driveage in the Wonga East area during the recent quarter.

Two Sandvik MB670 continuous miners are developing the Wonga Mains roadway and completing driveage to install the longwall and associated coal clearance systems.

A new Joy 12CM30 continuous miner started driving the first maingate roadway in Wonga East (MG4) in March.

“Production is progressively increasing during commissioning with full productivity levels to be reached shortly,” Gujarat said.

“Mining of the longwall gateroads is due to be completed in December 2011 with longwall production to start shortly thereafter.”