He said the centre, which will house more than 200 staff including at least 12 research development personnel, was an example of how the state was adding value to its coal industry and exporting manufactured goods to China.

VLI, whose major shareholder is China’s Taiyuan Mining Machinery Group, operates both in Australia and in overseas markets, including China and the US.

It specialises in drilling, diesel and conveyor systems generating more than $60 million in exports and is experiencing compound annual growth rates of sales of 10%.

“This a positive step forward because it shows that China is seeing us as a manufacturing and engineering centre,” Hartcher told ILN.

“We want to move beyond simply being a source of raw materials for China.

“We wish to move into resource enrichment and to the ancillary industries such as engineering and drilling.

“The second important point about this is it also has a focus on safety which we regard ourselves as being world leaders in.”

Hartcher said NSW was keen to involve the Chinese industry more in the safety issue through organisations such as Coal Services because it believed it was a major area of export for the state.

VLI chief executive Brett Lynch said the centre of excellence was well-positioned to continue to service its growing client base and to build opportunities in Australia and Asia.

“This is great news for the local and domestic economy,” he said.

“Australia will remain home for VLI’s research and development centres covering underground diesel equipment, drill rigs and building material handling equipment.”

The NSW economy remains dependent on coal, despite challenging land use claims by agricultural interests, according to Hartcher.

“New South Wales is a coal state. Coal is essential for our economy,” he told ILN.

“Unlike most coal producers, NSW is first world and has universities and research centres of the highest international standard so we can enormously enhance the viability of coal for the years ahead in the work that we’re doing on low emissions development on cleaner coal technologies which most coal producing countries can’t do.

“No farmer can operate without energy and coal is 90% of our energy.”