The joint venture partners – Coal & Allied, Wesfarmers, Mitsui and Taipower – reached an agreement after completing a feasibility study into an expansion of the existing thermal coal mine at Muswellbrook, and with increasing capacity in the Hunter Valley coal chain after this year’s introduction of a long-term port access framework.

The expansion will include an upgrade to the site’s coal handling and preparation plant to allow for two-stage washing, together with the upgrading of infrastructure and the purchase of additional mining equipment.

“This investment is an important component of Coal & Allied’s plans to expand production at all of its operations in the Hunter Valley,” Coal & Allied managing director Bill Champion said.

“We have secured additional port and rail capacity for this expansion, which is scheduled for completion in the first quarter of 2012.”

A feasibility study for a second-stage expansion to increase production to the currently consented rate of 10.7Mtpa ROM is underway.

Coal & Allied manages the mine on behalf of the joint venture participants.

Bengalla’s saleable production in the September quarter was 25% lower than the previous quarter, and 24% lower year-on-year. Its production in the September quarter was affected by less favourable coal seam sequencing, the company said.

Overall, Coal & Allied spent $1.6 million on exploration and evaluation-related activities during the quarter. This included the start of the feasibility study into the Mount Pleasant project located next to the Bengalla mine.