A West Coast mayor says the discovery of coal deposits will help reverse three decades of population decline and provide a major economic boost for the area.
Listed mining company Pike River Coal has struck one of the most valuable coal deposits in New Zealand, underneath a remote mountain range.
Tunnellers have spent two years cutting through hard rock to reach the mine, located nearly 2.3km under the Paparoa Range, northeast of Greymouth.
Their target is millions of tonnes of premium grade hard coking coal, essential to the steel-making process.
The Pike River mine is scheduled to produce its first 100,000 tonnes of coal by March and is then expected to produce an average of 1 million tonnes a year for at least 18 years.
All the coal will be exported.
The company expects the mine to raise about $490 million a year in revenue.
Greymouth's Mayor, Tony Kokshoorn, says the coal excavation will be a breakthrough for the West Coast.
Mr Kokshoorn said the mine will bring 150 jobs to the district, a welcome boost for the local economy.
"We were in the doldrums here on the West Coast for 30 years. We lost one quarter of our entire population, from 40,000 down to 30,000 people. But this has turned it around," he said.
Mr Kokshoorn said the West Coast is leading growth in New Zealand and is celebrating one of the lowest rates of unemployment.