The Australian coal miner said yesterday the green light had been given for a feasibility study for a Duralie underground mine.

 

The company said extensive coal resources had been identified east and north of the current Duralie open cut mine, located 110km north Newcastle in New South Wales.

 

Minarco Asia Pacific has commenced the study and will focus on a continuous miner operation extracting coking coal from the Weismantel Seam.

 

Existing Duralie infrastructure and services meant Gloucester will need minimal capital investment of A$10 million.

 

The underground operation will allow the company to continue at its maximum raw coal output of 2.7Mtpa through to at least 2012, with further plans to extend production beyond 2012.

 

Gloucester has also committed $2 million to the first year of a staged three year exploration program to further delineate known open cut resources in the Grant, Chainy and Kara areas, between its existing open cut mines - Stratford and Duralie.

 

The new mine and exploration is aimed at doubling existing mineable reserves and extending the life of the company’s operations towards 2020.

 

Gloucester Coal closed at $3.04 at close of business yesterday, up 6.7%.