The sale includes mining equipment, associated landholdings and the responsibility for rehabilitation and closure of the mine once operations are complete.

The New South Wales mine, part of BHP's Illawarra Coal business, was officially closed in June 2005 as the company’s Dendrobium mine was commissioned and brought into full operation.

In September 2005, BHP entered an 18-month contract mining agreement with Delta Mining to take operational control of Elouera and extract about 1 million tonnes of coal from remnant coal reserves.

Gujarat NRE chairman Arun Jagatramka said the mine is in operation and capable of producing coking coal once the transaction is complete.

He said the mine will also provide a cheaper and faster option to accessing the existing resources within the company’s adjacent NRE Avondale colliery.

“Apart from providing quality infrastructure and mining equipment for Gujarat’s Southern Coalfields production strategy, including a private rail link, it gives the company additional coking coal reserves,” Jagatramka said.

“The acquisition also means that Avondale should be able to come into production much sooner than we anticipated.”

Elouera is the third coal mine to be acquired by Gujarat, after NRE No.1 Colliery and NRE Avondale Colliery.

Keep watching ILN for more information on the deal.