Southland District Council is welcoming the reopening of the Ohai coal mine.
State-owned company Solid Energy has found 50,000 tonnes of coal in a new seam at the old mine site.
It plans to extract the coal with an open-cast operation employing eight people.
The Ohai mine once employed about 300 people, but was wound down and finally closed two years ago.
Council chief executive David Adamson says although it's a small step, the reopening is good for the local and wider South Island economies.
He predicts the Ohai coal will be very popular because he says it is regarded in the south as the best coal in New Zealand, maybe even the world, for home heating.
Mr Adamson says a decision is also close on consents for a larger coal expansion at the nearby settlement of Nightcaps.
