BHP Billiton has committed $US845 million ($832.47 million) to opening a new mine at its Illawarra Coal business in NSW.
BHP would build a new mining area at Appin Mine to replace production at its West Cliff Mine, the company said on Friday.
The new mining area is expected to be operational in 2016.
"The investment sustains Illawarra Coal's production rates and recognises the value of its high quality metallurgical coal resources," BHP metallurgical coal president Hubie van Dalsen said in a statement.
"It is also good news for local jobs and the economy in the region."