Waratah Coal’s $7.5 billion new thermal coal project is expected to create more than 6000 construction jobs and 1,500 mine site jobs, the company’s CEO Peter Lynch told MINING DAILY.
According to Lynch, the impact on the Australian economy overall is estimated at an additional 45,000 jobs.
Yesterday, the Board of Waratah Coal announced that it would be proceeding with the development of Australia’s largest thermal coal mine in Queensland’s Galilee Basin.
The venture will include 490 kms of standard gauge, heavy haul railway line and a 40 million tonne per annum, two-berth export terminal at Abbot Point near Bowen.
A key feature of the project is a right to mine 1.4 billion tonnes of coal which now forms the new project known as ‘China First’.
Last week, Waratah Coal entered into a Memorandum of Understanding (MOU) with the Metallurgical Corporation of China (MCC) in order to develop the project.
Under the MOU, MCC will provide or arrange, from Chinese sources, 10% of the estimated $7.5 billion capital cost, around $750 million for 10% of the project.
Lynch said once the mine is complete, it will help the Chinese meet their burgeoning electricity requirements.
“We are very much targeting the needs of the growing Chinese electricity market,” he said.
“As the demand for electricity continues to grow, the Chinese reliance on imported thermal coal will also grow. A lot of their electricity growth is occurring on their South-Eastern coastline and it is not necessarily easy for them to access their own coal reserves. This is where we step in.
“Australian coal prices can compete quite well with China’s domestic coal in certain geographic areas.”
Lynch said Waratah coal expects to make a significant return on its investment.
MCC has already guaranteed that it will purchase 30 million tonnes of coal per annum, estimated at $3 billion (per annum) and $70 billion (estimated) over the life of the project.
“Within just six months a relatively small company like Waratah Coal, who previously had a modest capital base, has acquired funding and has sales in place for a project that has a net present value of more than $US8 billion.”