Wesfarmers Ltd. (WES.AU) said Tuesday thermal coal production capacity from its 40%-owned Bengalla mine in New South Wales will increase to 9.3 million tons a year from 7.8 million tons after its joint venture partners approved the expansion.

The expansion, based on existing mine reserves, will cost Wesfarmers A$56 million and include a throughput capacity upgrade of the coal preparation plant, purchase of additional mining equipment and upgrades of mine infrastructure.

The expansion is scheduled for completion in the first quarter of calendar year 2012.

The company said rail and port capacity had been secured to support the increase in export thermal coal sales, with incremental sales to be allocated primarily to Bengalla's existing portfolio of power utility customers.

Rio Tinto Ltd. subsidiary Coal & Allied Industries Ltd. owns 40%, Mitsui & Co. owns 10% and Taipower owns 10%.

-By Gavin Lower, Dow Jones Newswires; 61-3-9292-2095; gavin.lower@dowjones.com
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