Massey Energy has started development of a metallurgical coal mine at its West Virginia-based Rowland Reserve, which has 56 million tons of low and mid volatile metallurgical coal.
Between $100m and $160m will be spent on developing the mine and associated processing plant and facilities.
Once complete it will form part of a new mining group on the Rowland Reserve which is expected to annually generate two million tons of metallurgical coal, with a staff of 500 miners.
Massey chairman and CEO Don Blankenship said the required permits for developing the slope and shaft into the primary deep mine in the Beckley seam are now in hand.
"We believe the current and forecast shortage of metallurgical coal makes this the right time to proceed with the development of this high-quality coal reserve," Blankenship said.
"Further, we are confident that this investment will be significantly accretive, enabling us to deliver increasing shareholder value when production begins."