All miners safely evacuated to the surface after the fire started in the goaf area behind the longwall face at around 7.30pm (AEDT).

"It is understood the fire is located behind the operation's longwall and is continuing to burn at this time," Xstrata said.

"The possible cause of the underground ignition is yet to be determined.

"Site based emergency management systems were immediately enacted once the incident was identified, with all employees working underground at the time removed safely from the mine and accounted for.

"Xstrata Coal is continuing to work with the local authorities as it manages the situation."

The fire was possibly triggered by a spontaneous combustion incident but Xstrata is not speculating on the cause.

Few details have emerged, but ILN understands that men at the face first heard a bang and then saw an orange glow in the goaf behind them which was the fire.

The mine commissioned its new longwall equipment in June and raw coal production capacity was estimated to be around 4 million tonnes per annum in December.

The new mine was designed to replace the nearby Beltana operation, a longwall production leader for several years which was scheduled to cease mining last month.

Ramp up activities have been underway for months, as Blakefield South aimed to hit its goal rate of 6.5Mtpa run-of-mine production by the end of 2011 to yield about 4.5Mtpa of export thermal coal.

Blakefield South was designed to mine nine panels in total, and the first panel was previously due for completion around February.

Xstrata has stood down the workforce but they will be paid until the mine can be re-opened according to the ABC.

The mine did not have an Air Liquide Floxal nitrogen generator to inertise its goaf areas and would have used a Tomlinson boiler for this purpose.

ILN is seeking additional comment from Xstrata on the gas monitoring in place at the mine.