A proposal to extend the life of Newstan Colliery near Fassifern by 15 years has been given state significant development status.
An environmental impact statement for the project, which would extract 25.9 million tonnes of coal and create up to 320 jobs, will remain on public exhibition until October 19.
The 125-year old mine has been on "care and maintenance" since 2014.
Project proponent Centennial Coal says the continuation project represents a logical continuation of the mining operations that would utilise existing mining tenements and established operational surface facilities.
"The low-impact and flexible bord and pillar mine design balances coal recovery with a need to limit surface subsidence. By using varying levels of extraction subsidence can be managed to protect surface features, which has been a key focus during development of the project," the company said.
The project would involve the clearing of about 0.35 hectares of remnant vegetation.
New ancillary infrastructure, including three new ventilation fans and a gas flaring facility at Awaba Colliery would be constructed.
The site's existing grid connection, proximity to major transmission lines and water sources would reduce the cost of transforming the facility for pumped hydro.
Modelling suggests the project could create up to 1,000 jobs during the construction phase.
A spokeswoman said the project, which is supported by the state and federal governments, was progressing.
The continuation project can be viewed on the Department of Planning's website.
