Coal is extracted from the Katoomba Seam using the bord and pillar partial extraction method, supplying coal to both domestic and export markets.

The mining system is the partial-pillar extraction system, which has been designed such that remnant pillars that remain within and between panels are long-term stable. Subsidence analysis results have proven this method of extraction results in extremely low levels of subsidence. Unlike full extraction mining, partial extraction minimises subsidence through leaving a proportion of the resource in situ. This provides support to the overlying strata, minimising the breakage and falling of the overburden and maintains the integrity of the above aquifers. Within future mining areas maximum vertical long-term subsidence is predicted to not exceed 100 millimetres (mm) (but may typically range from 40 - 50 mm), and is considered to be negligible. Modelling based on these results provides great confidence that further mining in the Clarence Colliery holding using the partial pillar extraction method will have negligible impacts.

Clarence Colliery will undertake mining operations within the 700 West Area, 800 Area and 900 Area. The mining system at Clarence is inherently flexible and progress within mining areas is largely driven by machinery availability and variations in geological conditions. To this end, mine sequencing is subject to change.

Coal from the underground operations is brought to the surface via the main ROM conveyor which is located to the south of the administration building. Coal is then run through a rotary breaker and crusher to reduce the size of the coal to 50 mm or less where it is conveyed to the ROM stockpile.

An understack coal reclaim system can either direct coal to the train loading bin or the CHPP for processing. The ROM stockpile is approximately 4 ha in size and has the capacity to store 300,000 tonnes of coal.

Material from the ROM stockpiles is fed into the CHPP where it is washed and then either sent to the washed coal stockpile or the product stockpile. During the washing of the coal, fines material (less than 0.05 mm) are collected and are run through a thickener and into Belt Filter Presses which compress the slurry into cakes which are stored on site to be blended with product coal for sale.

Coal entering the product stockpile is run through a screening plant which separates the coal into the following sizes: 25 - 50 mm, 15 - 25 mm, and < 15 mm loading onto trucks for domestic sale, along with the cakes of the fine material. The Domestic Product Stockpile has an area of approximately two hectares.

Coal which is sent to the washed coal stockpile is not sorted by size. The washed coal stockpile has an area of approximately four hectares and has a storage capacity of 300,000 tonnes of coal. Coal from the wash coal stockpile is collected via under stack coal reclaim system and transported to the train loading bin adjacent to the train loader which is located on the rail loop line which is accessed off the Main Western Rail Line. This coal is predominately then sent to Wollongong (Port Kembla) for export.

Coal from the product stockpile is loaded onto semi-trailers and truck-and-trailer units with a front end loader for transport from the site. Clarence Colliery are approved to transport up to 200,000 tonnes per annum (tpa) of coal products by road in total, with a maximum 100,000 tpa transported to the west, via the Darling Causeway and the Great Western Highway haulage route. All loading and haulage within the site is undertaken within the product stockpile area and dedicated haul roads within the Pit Top.