Coal production has started at Rio Tinto's Kestrel Mine Extension, a US$2 billion dollar project near Emerald in central Queensland.

The extension will add 20 years to the life of the Rio Tinto managed Kestrel Mine, the company's only underground coal operation.

Kestrel Mine general manager operations John Coughlan said "After four years of construction, seeing the longwall cutting coal is an exciting milestone and marks the start of a long future for Kestrel Mine. We process high quality coking coal for export using the longwall method and expect to see our first shipment from this new area of the mine leave Australia in coming weeks.

"Over the coming year and a half we'll see a gradual transition of production as our existing operation, known as Kestrel North, winds down and the new Kestrel South operation ramps up. Kestrel South is expected reach full capacity by the end of 2014 and produce an average of 5.7 million tonnes per annum over the next 20 years."

The Kestrel Mine Extension project involved the construction of a new longwall, infrastructure such as a 7.9 kilometre overland conveyor and upgrades to the existing Coal Handling and Preparation Plant. This will allow a new series of underground panels to be mined to the south of the existing operation.

"Our new 375 metre longwall was fully assembled for testing on the surface before being pulled back apart to go underground. This longwall will deliver a range of safety and production improvements, including automation" Mr Coughlan said.

"Not only will this 20-year extension provide a secure future for our workforce of more than 400 employees and long term supply for our customers, it will allow Kestrel Mine to continue its significant contribution to the community. In 2012, our operation purchased goods and services from 169 suppliers in the region, injecting over $130 million into the local economy. Since 2003, more than $2 million has been invested in local community projects through the Kestrel Mine Community Development Fund and the Kestrel Mine Aboriginal Community Development Fund."

Kestrel Mine's main export customers are in Japan, Korea, Taiwan, Europe, India and China. Rio Tinto Coal Australia manages Kestrel Mine on behalf of the joint venture partners Queensland Coal Pty Limited and Mitsui Kestrel Coal Investment.