Xstrata Copper's shift to underground from open pit mining has extended the life of its Ernest Henry mine for 12 years. It also provides ongoing economic security for the Cloncurry community where the mine is located, said Myles Johnston, the general manager of the mines.

Mr Johnston said that the major shaft underground mine and magnetite processing plant will create and sustain 330 jobs during the construction period and 400 full-time jobs beginning 2013. Another 100 full-time jobs are expected to be created with Xstrata's recent acquisition and development of the Mount Margaret Mining Project, which the firm bought from Exco Resources this year.

He added that the Mount Margaret venture, once approved, would add more to Ernest Henry's production output by the second half of 2012.

Xstrata is investing $589 million to extend Ernest Henry's operations to 2024.

For the first phase of the mine's underground operations, ore harvest is expected to decline to 3 million tonnes a year which would produce 25,000 tonnes of copper and 35,000 ounces of gold in concentrate.

By 2013, the mine is expected to harvest 6 million tonnes of ore which would produce 50,000 tonnes of copper and 70,000 ounces of gold in concentrate.

The Ernest Henry operations contributed $1.34 billion to the Queensland economy and created jobs for 4,000 people in 2010, disclosed Steve de Kruijff, the chief operating officer of Xstrata Copper North Queensland.

"Ernest Henry's Mining's transition is part of our long-term operational plan that will see significant investment in north Queensland to focus on exporting mineral concentrates, along with the development of necessary infrastructure to increase rail and port capacity," Mr de Kruijff said in a statement.

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