Continental Coal has commenced development of the Penumbra underground coal mine, located in the Ermelo coalfield, south of the town of Ermelo in Mpumalanga province, South Africa.

The company said that the development of the mine is part of its plans to significantly increase export-quality coal production in the coming years.

Continental Coal CEO Don Turvey said the commencement of pre-production activities at Penumbra reinforces the strategic importance of the Mashala acquisition to the company and its shareholders.

The Penumbra mine is Continental’s third coal mining operation, producing ROM coal at a rate of 750,000t a year and is expected to deliver first coal from the fourth quarter of 2011.