The producer said the deep mine complex in Taylor County, near Grafton, had received all mandated federal and state approvals prior to halting development in late 2008, following legal challenges lodged by local anti-mining activist groups.

The challenges were overruled in March by the West Virginia Surface Mine Board, and by mid-month the state had reinstated the permit for the mine, to be operated by its ICG Tygart Valley subsidiary.

"We had planned to resume construction in mid-2011, but the strong market demand for Tygart No.1's metallurgical coal product, and growing evidence of improving thermal coal pricing, led us to accelerate the project," company president Ben Hatfield said.

"The construction and development timeline anticipates initial coal production in late 2011 and longwall startup in early 2014."

ICG plans to finance the construction of Tygart No. 1 via operating cash flow. The expected price tag is $US325 million, which includes $18 million spent prior to this year.

The company now expects capital expenditure for this year to increase by $15 million to $105-115 million.

At prime production levels, Tygart – expected to employ more than 300 – will produce 3.5 million tons of high-quality thermal and premium high-volatile metallurgical coal annually.

According to permit records, the producer anticipates Tygart’s lifespan to extend more than 12 years.

ICG has 13 active complexes in northern and central Appalachia as well as the Illinois Basin.