Illawarra Mercury reported the company intended to call tenders for the supply of rail transport.

"Production schedules of this type of coal will undergo a profound change over the next 12 months, as output from the Elouera Mine decreases due to depleted reserves," a spokesman told Illawarra Mercury. "This decrease is balanced against increasing volumes from Dendrobium as the mine moves towards longwall production around September 2004."

Dendrobium will be a low cost underground longwall operation capable of producing 5.2 Mtpa of raw coal resulting in 2.6 Mtpa of coking coal and 1Mtpa of thermal coal. The main customer for the coking coal is the BHP Steel Port Kembla steelworks located seven kilometres from the mine site.

In other Dendrobium news, the first three underground crews comprising of 27 employees were recruited in June this year. The new recruits have come from as far afield as Port Hedland and also closer to home from other Illawarra Coal mines.

This brings the number of Dendrobium employees to a total of 59, in addition to the Walter Construction Group underground workforce of 69. The Dendrobium crews will be developing the roadways which lead to Mining Area 2, coined Nebo Mains.