Minister for Mineral Resources Ian Macdonald today granted a mining lease which will allow mining to commence at a new underground coal mine near Narrabri.

The lease has been granted to Narrabri Coal Pty Ltd, a subsidiary of Whitehaven Coal Mining Ltd, following approval of the mine from the NSW Government in November.

The mine will be located 21 kilometres south of Narrabri.

"This lease is great news for the Narrabri community - it’s a $120 million project which will mean significant employment growth with many economic benefits for the North West," Mr Macdonald said.

"The mine will provide around 80 construction and 113 operational jobs.

"Every mining job in the State’s North West supports at least another three indirect jobs and is a huge economic injection to centres like Narrabri.

"The mine will have the capacity to produce up to 2.5 million tonnes of coal a year for up to 50 years.

"This lease demonstrates the Iemma Government’s commitment to the responsible development of the State’s mineral resources, while providing employment opportunities and economic benefits to rural NSW."

There are currently three open cut mines in the area, two of which are operated by Whitehaven Coal Mining.

"Coal mined from the lease area will be used for the export market and will be transported by rail to Newcastle for export," Mr Macdonald said.

"Stringent controls have been imposed on the mining operation to protect the environment through the development consent and mining lease conditions."

Construction on the underground mine is expected to commence at the end of this month with coal production set to begin in the first half of 2009.

Media contact: Lyndall Derrig 0400 462 447