Rio Tinto chief executive of energy Preston Chiaro said the opencut Clermont Mine would take advantage of the existing infrastructure and market position of Blair Athol, which is due to cease production in 2009.

“Even during this current time of pressure on capital projects, the Clermont Mine is a very attractive investment and will operate in the lowest cost quartile of Australian thermal coal producers,” Chiaro said.

When completed, Clermont will produce 12.2 million tonnes of high quality thermal coal each year, supplying Japanese power utilities and other customers.

The mine is expected to have a life of about 17 years, with first coal shipments expected in the second quarter of 2010, and full capacity being reached in 2013.

Rio Tinto Coal Australia managing director Doug Ritchie said Clermont would employ 400 people in the construction phase and approximately 380 during operations.

“As production at the Blair Athol Mine ramps down, Clermont will begin replacing this capacity, ensuring seamless transition for our customers,” Ritchie said.