Almost half of the upgraded reserves are in the proven category.

“These additional reserves will ensure the longer term potential for the mine in providing future extraction areas to give a possible mine life in excess of 20 years at a production rate of 3 million tonnes per year,” the company said.

Indicated and measured resources increased 120% to 100Mt from the last JORC statement in April 2010.

The company aims to ramp up roadway development at its two Wollongong mines after completing a recent strategic review.

Overall production for the current financial year is expected to be around 1.7Mt, but Gujarat seeks to hit 2.5Mt run-of-mine for the next year after the $A90 million Joy longwall is commissioned at its NRE No.1 colliery by early 2012.

“It is essential that the development of main access roadways be given top priority so that future longwall areas can be established with ongoing benefits for productivity, safety and operational efficiency,” Gujarat said.

“This sets the mining operations up for longer term growth and efficient mining.”

Gujarat is overhauling surface infrastructure at the historic NRE No.1 mine and recently awarded a contract to Elton Conveyors to upgrade conveyor installations, stockpiling and truck load-out facilities.

This work is expected to cost around $30 million and will prepare the mine for the higher production once longwall mining kicks off, plus provide better controls over dust and noise.

The total $120 million investment into the former South Bulli Colliery is expected to transform it into one of the largest underground coal mines in the country.

The bolstered underground coal carrying capacity will reach 4000 tonnes per hour to the surface stockpiles, complemented by load-out facilities rated at 2000tph.

Gujarat said these improved rates will provide “potential” to lift ROM production beyond its announced business plans of just more than 3Mt per annum.

The New South Wales coking coal producer exports all of its ROM production to its parent company in India and aims to hit total output of 6Mtpa from its two mines by the 2014-15 financial year.

Gujarat shares are up 0.5c this morning to 90c.