Longwall mining accounts for more than 75% of underground coal production in Australia. It is a popular underground coal mining method worldwide, mainly due to its high extraction ratio, high productivity and increased safety due to improved powered support units. A longwall system requires significant capital investment, and it is necessary to minimise the financial risk associated with this investment. Minimisation of this financial risk requires a sound knowledge of the relationship between underlying operational/technical constraints and associated costs. A discrete simulation model using the Flexsim 3D virtual reality environment has been developed to assist management evaluate the impact of technical and operational constraints on longwall productivity. Using such a model, any set of operational scenarios can be evaluated to establish the optimum operational parameters for a longwall system.