With the ramp-up of the longwall, Gujarat plans to increase run-of-mine production from the 179,000 tonnes produced in the 2009 financial year to an annual production of 1.5 million tonnes.

The longwall equipment at the mine, which was last operating in March 2007, has now been refurbished and reinstalled at the new face.

Gujarat bought the mine, previously known as Elouera, from BHP Billiton in December 2007.

The company resumed production just two months later and transported its first load of coal from the mine to Port Kembla on April 28 last year.

Gujarat chairman Arun Jagatramka said the start of longwall mining at Wongawilli was excellent timing due to the “expected strong increase in demand for Australian hard coking coal, especially from the India market”

Jagatramka said the progress made at Wongawilli demonstrated the company’s ability to maximise the potential of a mine and achieve increased production targets.

That ability is what the company will bring to the table if it successfully takes over junior coal explorer Rey Resources, he said.

Gujarat launched a hostile takeover of Rey in June this year with a cash bid of A9c per share.

“The proven expertise and ability of Gujarat’s management team is what Gujarat can offer Rey shareholders in their early-stage Canning Basin coal projects,” Jagatramka said.

Gujarat also operates the NRE No. 1 colliery in NSW. The mine produced 670,000t last financial year.

Total production from both mines in the next 12 months is expected to hit 2.5Mt.

The company plans to introduce longwall mining at NRE No. 1 in 2012 and lift output to 3Mt per annum from the 300Mt JORC-compliant resources.

Gujarat was trading at 64c this morning after rising almost 5% yesterday.