The State Electricity Commission of Victoria is Australia's largest single coal producer. Approximately 19 Mt of coal will be produced in 1989 from the SEC V's newest mine, Loy Yang Open Cut (LYOC), which com- menced overburden stripping operation in October 1982. When the adja- cent Loy Yang Power Station is completed in the late 1990's, LYOC will supply between 35 to 45 Mt/a, depending on power station performance and demand of coal for non-power generation uses. LYOC has been a major challenge for the SECV. It is the biggest single open pit coal mining development undertaken in Australia, with a whole of life capital cost approaching A$1 billion. The mine has supplied a very rapidly growing demand for coal from the expanding power station while developing in breadth, length and depth. Coal demand has consistently been above the figures anticipated during the initial planning because of the substantially improved performance of the 500 MW units of the Loy Yang A Power Station. The superior performance of the LYOC and power station has generated additional electrical energy during the first 5 years of power station operation compared with the initial planning targets- at almost no additional capital cost. This has been a major benefit to the SECV. LYOC will continue to present major challenges for the SECV, particularly in achieving overburden removal and coal reserve targets as development of the open cut continues to full depth over the next 15 years.