Gujarat bought 6.25 million Resource Pacific shares at $A1.30 per share and signed a deal to purchase 500,000 tonnes of semi-soft coking coal per year for 10 years from Resource Pacific’s Newpac bord and pillar operation in the Hunter Valley.

Resource Pacific managing director Paul Jury said the deal diversified the company’s “market spread to one of the fastest growing Asian economies”

Funds from the share placement will be used to expand Newpac, which is currently being developed into a longwall mine set to produce four million tonnes per annum by January 2007.

Gujarat has been highly active in Australia this year. In July it bought its second coal mine in Australia for $A80 million. The NSW operation consisted of the old Avondale colliery and part of Huntley colliery and was re-named NRE No. 2 colliery after Gujarat purchased it..

The lease is in close proximity to the company's NRE No. 1 colliery, previously known as the Bellpac1 Colliery, which Gujarat purchased in December 2004.