BHP Billiton's board has approved the development of the Caval Ridge mine project and the expansion of the Peak Downs mine located in the Bowen Basin of Queensland, Australia.
The total investment in the initial project is $4.2bn, of which BHP Billiton's share is $2.1bn.
According to the firm, the Caval Ridge mine is expected to produce 5.5Mtpa and the Peak Downs mine is expected to increase its production by 2.5Mtpa.
The work will include the construction of a new coal handling and preparation plant at Caval Ridge mine to process production from the Caval Ridge Mine and Peak Downs expansion.
Coal from the Peak Downs mine, which lies immediately south of the Caval Ridge mine, will be transported by conveyor to the new plant.
Caval Ridge mine project has received all the necessary regulatory approvals and is expected to produce its first coal in 2014.