The mine and station - owned by power company Truenergy - were idled last Wednesday after "major subsidence" saw millions of litres of water pour into the opencut mine and a landslide that damaged conveyors and disabled two of the station's four generators.

Immediately launching recovery plans at the mine, Truenergy worked on diverting the river to restore flow downstream and draining the water so repairs could be made to the mine.

Managing director Richard McIndoe announced yesterday that work to divert the river was successfully completed on Wednesday after crews worked a 24-hour roster to dig a 400m channel with a base width of 25m.

"Completion of the river diversion required an extensive and urgent mobilisation effort as well as close coordination and collaboration with the West Gippsland Catchment Management Authority, Southern Rural Water, the Department of Primary Industries, the Department of Sustainability and Environment, the EPA and LaTrobe City," he said.

McIndoe thanked the involvement of nearby power station owners who assisted in the challenging diversion project - including Loy Yang, which released water downstream from the subsidence to bolster the affected river flow; and Hazelwood, which supplied labour and equipment towards the effort.

With the Yallourn power station reaching 50% capacity on Tuesday, one day ahead of schedule, the company is hoping to have it at full capacity by December and is mining coal in areas unaffected by the landslide.