Allied Coal Holdings closed the mine last year, with 190 job losses, after strata control problems made ongoing longwall mining commercially non-viable.

Thin Seam Mining, a small contracting operation, which operates nearby Gibson's Colliery as a bord and pillar mine, is believed to have negotiated a five-year lease to recover remaining reserves in the mine.

The lease contains a reserve of almost 100 million tonnes of coal which could be continuously mined for the next five years using pillar extraction.