In a statement the company said the replacement area -Appin area 9 - would have a production capacity of 3.5 million tonnes per annum of metallurgical coal and would sustain Illawarra Coal’s production capacity at 9Mtpa.

“The investment sustains Illawarra Coal’s production rates and recognises the value of its high quality metallurgical coal resources,” BHP Billiton metallurgical coal president Hubie van Dalsen said.

“It is also good news for local jobs and the economy in the region.”

Appin area 9 will be operational in 2016 and will replace production at the West Cliff mine.

The project includes roadway development, new ventilation infrastructure, new and reconfigured conveyors and other mine services.

The development has received all necessary regulatory approvals and will include upgrades of the longwall machinery to increase the coal cutting rate in line with run of mine coal production at each longwall operation.

“Over the life of the project it is anticipated that a range of underground mining equipment would be replaced or upgraded as a component of general maintenance or to increase efficiency,” the company said in the project description for its Bulli seam operations.

The proposed longwalls at Appin West are located north of the Nepean River, immediately west of Appin area 7 and extend to the west, immediately adjacent to Appin area 8.

The main headings for the proposed longwalls are contiguous with Appin area 7.