The board of directors of Peabody Energy, a St Louis-based coal producer, has approved the expansion of the Gateway Mine in southern Illinois, which will extend the life of the operation by at least 16 years.

The mine has an additional 280 million tons of coal reserves available for expansion in favorable market conditions.

The project will advance underground operations north of the existing site and will increase annual capacity by 40% to 4.5 million tons within several years.

Capital investments for the expansion are expected to total approximately $175m, the company said.

Licensing and mine engineering activities are progressing, and the initiative is subject to permitting and regulatory approval.

Peabody Energy chairman and CEO Gregory Boyce said that this expansion demonstrates the strength of the company’s reserve base to capitalize on long-term growth opportunities in high-demand, low-cost regions.