At some time in the mining life of an open cut coal deposit, consideration is usually given to determine the point at which underground mining becomes an economic proposition or even necessary. This can occur anywhere from the pre-feasibility project stage to decades after commencement of mining. Options which can be considered include the extension of the life of the open cut by use of larger equipment, the utilisation of highwall mining techniques and the introduction of low capital start-up or full underground development. The primary focus is always the minimisation of the total unit cost (including capital )of clean product. The transition point at which an undergound mining operation becomes more economic than an open cut operation is not a simple evaluation and depends on many factors, particularly on the nature of the deposit itself. The main general determining factors of the transition point are related to the three factors of mining resource, the mining method that can be used and mining cost issues. Mining resource issues include geography, geotechnics, strip ratio, geology and the size of the deposit. Mining method issues include highwall mining, extending the life of an open cut, the environment, available roof support technology, product yields and the availability of appropriate workforces. The mining cost factors discussed include capital and operating costs and the impact of productivity and management. All these factors impact to a varying extent on the transition point.