The pit will be mined for about three months and is the first step in a multi-part plan to expand the mine's production to capitalise on strong coal prices.

Hillsborough CEO David Slater said the mine is aiming for production figures of 850,000t before progressing further to reach 1 million tonnes per annum.

Mining from current operations will be expanded 26% from 500,000tpa to 630,000tpa - of which 230,000t will be available to the export market.

A series of projects at the mine are expected to come online during 2008 to accommodate the increased production rate, including the 4 South Underground Mine that will resume production after being on care and maintenance for three years after development.

Hillsborough said production from the underground mine, which has a higher sulfur content than coal produced in opencut operations at the site, will be blended to produce an intermediate-grade sulfur content product.

It is confident the product will be sought after by customers because of the common use of combustion systems designed to remove sulfur.

Reopening of the mine is expected to be completed by mid-2008 with the purchasing of equipment for the mine to be sourced from the used market.