The expansion, known as the RX1 project, will enable Mt Arthur Coal’s run-of-mine thermal coal production to increase by four million tonnes per annum (mtpa) to approximately 24mtpa.

RX1 is expected to deliver first production in the second half of 2013.

BHP Billiton Energy Coal president Jimmy Wilson said that the emergence of demand for coal in the key growth markets allows the company to get product to market quickly, ahead of further coal preparation plant expansions.

"The RX1 project will take advantage of existing port capacity and future expansion options will be supported by Mt Arthur Coal’s large, low-cost resource and the ability to expand the coal processing facilities," Wilson said.

BHP Billiton owns 100% of Mt Arthur Coal through Hunter Valley Energy Coal.