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Oaktown mines 1 and 2, located in Knox County, will together produce 5 million tons per annum for domestic power plants.
Vectren said the new mines have ready access to rail and are within 50 miles of eight power plants.
The mines received approval from the Indiana Department of Natural Resources last week to begin mining operations – paving the way for initial construction work.
The mines will employ 425 miners.
Vectren continues mining operations at its Prosperity underground mine in Pike County and will continue operations at Cypress Creek mine in Warrick County until mid-2009.
All of Vectren's 2008 production has been committed.
