TORONTO (miningweekly.com) – Peabody Energy, the biggest US coal producer, has approved an expansion at its Wilpinjong thermal coal mine in New South Wales, the company announced on Monday.

Peabody will spend about $90-million, including some $20-million this year, to increase production by between two-million and three million tons a year.

The production increase take effect from 2012, Peabody said.

The Wilpinjong mine is one of the lowest-cost operations in Australia, according to the company, and the expanded production will be exported using new port capacity from the recently commissioned Newcastle Coal Infrastructure Group (NCIG) terminal.

Late-stage licensing and mine engineering activities are moving forward, and the project is subject to final permitting and regulatory approval.

"The Wilpinjong expansion is among a number of organic growth initiatives to build our global platform for serving the fastest-growing economies and coal markets in the world," said CEO Gregory Boyce.

"Asian nations are forecast to account for more than 90% of global coal demand growth in the next two decades, and Australia will continue to build its position as the chief supplier of seaborne coal."

In 2009, Wilpinjong shipped 8,3-million tons of coal.

Peabody is working on a number of expansion projects at its Australian operations, and is targeting production from the country of between 35-million and 40-million tons a year by 2014.

Earlier this year, Peabody also approved a one-million-ton a year expansion of the Metropolitan metallurgical mine, also in New South Wales.