The expansion of the operation near Steamboat Springs includes the development of the mine’s new Sage Creek portal into the Wadge seam. The longwall will also be moved as part of this project, with development work expected to begin in May as permits are already in place for the panel.

Sage Creek will give Twentymile crews access to 105 million additional tonnes in the complex’s northern reserve block.

Coal from the area is high Btu with low sulfur content, and will supply coal to power plants, industrial and export customers, including a 16-year agreement with Hayden Generating Station.

Officials said longwall production is expected to commence in the new area during the second half of 2015.

“Peabody's 9 billion tonne reserve base allows us to serve long-term US customer demand as well as emerging export opportunities," Peabody chairman and chief executive officer Gregory Boyce said.

“This project builds upon nearly a half-century of Peabody operations in Colorado and a valued customer relationship with the Hayden Station.”

In 2010, the Twentymile operation created $730 million in direct and indirect economic benefits for the northwestern Colorado region. It shipped 7.7Mt that same year.

The 450-worker Twentymile complex originally opened in 1983 and was purchased by Peabody in April 2005 from RAG Coal International. The Wadge coal seam averages 9ft in thickness.