The company signed an agreement with Illawarra Coal Holdings Pty Ltd, a BHP Billiton arm, for the acquisition of the mine, the company said in a filing with the Bombay Stock exchange (BSE).

The acquisition is being made through its Australian subsidiary, Gujarat NRE FCGL Pty Ltd.

"Gujarat NRE is delighted with the acquisition. Apart from providing quality infrastructure and mining equipment for company''s southern coal fields production strategy, including a private rail link, it gives the company additional coking coal reserves," Gujarat NRE Coke chairman Arun Jagatramka said.

The mine is fully operational and it will produce premium grade hard coking coal. The mine would provide a cheaper and faster option to access the NRE Avondale Colliery.

Gujarat NRE, a leading manufacturer of metallurgical coke, had recently rolled out plans to set-up two 15 MW power plants at Bhachau in Gujarat and Dharwad in Karnataka.

"The acquisition also means that Avondale should be able to come into production much sooner than we had anticipated, " he added.

Tis iss Gujarat NRE''s third acquisition in Australia after NRE No 1 Colliery and NRE Avondale Colliery, it said.

With the acquisition the company''s production of coal is expected to go up to around two million MTPA from one million MTPA in the short-term, it said.