Delta is to be appointed as operator of the mine and will supply coal extraction equipment, an experienced management team and workforce to produce coal from the mine.

The Agreement is based on a $A per tonne arrangement and has a 20 month project supply schedule for 1.45 million tonnes.

Contract negotiations began in 2015, with a letter of intent executed in December 2015.

The current plan is to produce coal in July 2016 with the first shipment of coal from the mine scheduled for Q1 FY2017.

The current plan is to commence producing coal from July 2016 with expected first shipment in current financial quarter.

Wollongong Coal operations manager Rhys Brett said: “This is good news for workforce employed at the mine, and also provides an impetus to leverage synergy from the two entities to deliver economic benefits to the Illawarra region.”

Wollongong Coal will focus on the future approvals and longer-term management and workplace arrangements at Wongawilli.

During the recent period, the mine has undergone operational preparedness works and negotiations to identify roles and responsibilities.

Delta CEO Neville McAlary said: “The platform is now set for the project team and experienced workforce to seize a real opportunity.

“Delta is confident that the required production levels can be achieved at Wongawilli.

“It is a real benefit that Delta has recently overhauled relevant equipment for the project and this will supply the experienced workforce with both safety and production fundamentals.”

It is understood that coal from the mine will be traded into the Asian steel production market that has an increasing demand for Australian coking coal.