Located near Morriset in New South Wales, the mine will produce 3.5Mt in its first year and employ 171 people.

“This mine clearly provides the Group with greater flexibility in servicing the export markets whilst providing secure cash flow through supplying local power stations,” Centennial managing director Bob Cameron said.

"Given that buoyant market conditions for thermal coal are forecast to continue, the company’s profit and cash generation capacity is expected to be significantly enhanced by the commencement of the longwall operation.”

Cameron said Centennial had already secured substantial long term contracts for mine output totalling 3.3Mtpa with local power generators – Eraring and Vales Point.

With the mine having commenced longwall production, Centennial's is now focussed on the successful integration of the Mandalong South tenement, purchased from BHP Billiton in October last year.

Mandalong South contains an indicated resource of 136Mt of thermal coal, a 60% increment to the mines current resource base.