CANBERRA, AAP – The first sod has been turned on a new coal mine which has an expected operating life of nearly 80 years.

The Olive Downs coal mine is a new project to produce metallurgical coal, used for steel making, located near Moranbah in central Queensland.

The federal government provided a $167.5 million loan to support the mine’s first stage of development, including rail and transmission lines, water pipelines, access roads and a coal-handling preparation plant.

It expects to increase Australia’s export capacity, deliver more coking coal to international buyers, and generate up to $10 billion in economic activity in the next eight decades.

Construction will create around 700 jobs and an estimated 1000 positions will be required at full production, expected to start in 2023.

Deputy Prime Minister Barnaby Joyce says city dwellers needed to understand Australia’s security is underpinned by its ability to pay for it through iron ore, coal and gas exports from the regions.

“We’re happy to be at a coal mine because we believe in it … we’re going to make sure that we show those people in central Sydney, central Melbourne that if we lose one of our nation’s biggest exports, we become poorer,” he told reporters at the mine site.

“If we’re poor, we’re weak, and if we’re weak, we’re vulnerable … and if you don’t believe me, about 2000 kilometres off the coast of Queensland – a place called the Solomon Islands – the Chinese want to build a naval base there.”