Central Queensland Coal Project Assessments

The latest developments and project assessments for major Central Queensland coal mines.

Owner: Hancock Prospecting Pty Ltd

Location: 40 kilometres north-west of Alpha

Estimated cost ($billion): 7.5

Project status: N/A

Project details: Hancock Prospecting Pty Ltd proposes to establish a mine in the Galilee Coal Basin, Central Queensland, to service international export markets for thermal coal.

In addition to the mine, the project would involve construction of a railway, potentially in excess of 400 km depending upon the final option, to transport processed coal to an expanded facility at Abbot Point or new export terminal to be established at Dudgeon Point.

New major water and power supply infrastructure would be necessary to service the mine and port.

The company’s coal tenements are situated approximately 40 km north-west of Alpha, approximately 450 km west of Rockhampton and contain a measured, indicated and inferred resource in excess of three billion tonnes.

The proposed open-cut mine is expected to be developed in stages and have an initial export capacity of 30 million tonnes per annum (Mtpa) with a mine life in excess of 30 years.

The coal port would be developed initially to handle 30 Mtpa and would be designed to expand capacity to 80 Mtpa in the future. Initial exports are targeted for 2013.

The project is expected to cost approximately $7.5 billion and provide total employment for 2,500 people during construction as well as 1,600 permanent positions during the operational stage.

Operation: BMA Bowen Basin Coal Growth

Owner: BM Alliance Coal Operations Pty Ltd

Location: 30 kilometres north, south and south-east of Moranbah

Estimated cost: $745 million

Project status: N/A

Project details: BM Alliance Coal Operations Pty Ltd, the proponent, proposes to develop the Bowen Basin Coal Growth Project.

The project involves the production of an additional 20 Mtpa of coal products through progressive development of four principle components:

• a new open cut: Daunia Mine

• a new open cut: Caval Ridge Mine

• a large expansion of the existing open cut and underground Goonyella Riverside Mine

• construction of a new larger capacity airport in the vicinity of Moranbah.

The mines are located approximately 30 kilometres north, south and south-east of Moranbah and 170 kilometres south-west of Mackay.

The proponent is manager and agent on behalf of the Central Queensland Coal Associates Joint Venture governed by an overarching strategic alliance between BHP Billiton and Mitsubishi Corporation known as BHP Billiton Mitsubishi Alliance (BMA).

The project is expected to require a multi-billion dollar capital investment and generate approximately $120 billion in gross export income over the next 20 years.

It is anticipated that 2,450 jobs will be created during construction of the project and more than 1,240 jobs during the mines operating life of more than 30 years.

Mine life will be influenced by such factors as technology developments and the coal price.

Operation: Clermont Coal Mine

Owner: Clermont Joint Venture

Location: 10 kilometres north of Clermont

Estimated cost ($million): 950

Project status: EIS complete

Project details: The Clermont Coal Mine project involves the development and operation of an open-cut mine to produce thermal coal for the export market.

The project is proposed to be a conventional truck/shovel operation, with production commencing in first-quarter 2010, and extending for approximately 20 years.

The mine is located 10 kilometres north of the township of Clermont in Central Queensland, approximately 11 kilometres south-east of the Blair Athol coal mine in the Bowen Basin.

The Clermont Joint Venture is the proponent for the project, which brings together Rio Tinto Coal Australia Pty Limited (50.1%), Mitsubishi Developments Pty Limited (31.4%), J-Power Australia Pty Limited (15%) and JCD Australia Pty Ltd (3.5%).

The project is managed on behalf of the Clermont Joint venture by Rio Tinto Coal Australia Pty Limited.

Key features include:

• Annual production of 12.2 (Mtpa) of thermal coal for export through Dalrymple Bay

• Mine life of 17 years, from proven reserves in excess of 190 million tonnes of coal

• Proposed production to replace similar quality coal from Blair Athol in the market

• Development scheduled to coincide with wind-down of Blair Athol in 2009-10

• Utilisation of existing load-out facilities and rail spur line at Blair Athol, with product being transported from the Clermont mine to Blair Athol via overland conveyor

• Direct employment for 400 people during the construction phase and 380 during operations, with associated major economic activity in the region

• Total capital investment of $950 million

• Expected annual contributions of $500 million in export earnings and $100 million in rail freight charges and royalties.

On 9 January 2006 the Clermont Joint Venture announced its commitment to development of the project.

Construction commenced later that month, with first coal shipments planned for second-quarter 2010.

Operation: New Acland Coal Mine: Stage 3 Expansion

Owner: New Acland Coal Pty Ltd

Location: 35 kilometres north-west of Toowoomba

Estimated cost ($million): 500

Project status: EIS active

Project details: New Acland Coal Pty Ltd (NAC), the proponent, proposes to develop the New Acland Coal Mine Stage 3 Expansion project.

The project involves the progressive expansion of the existing New Acland Coal Mine and associated infrastructure to increase coal production from 4 Mtpa to 10 Mtpa for the domestic and export markets.

The mine is located 14 kilometres north/north-west of Oakey and 35 kilometres north-west of Toowoomba.

NAC is a wholly owned subsidiary of New Hope Corporation Limited, a company listed on the Australian Securities Exchange.

The project is expected to require a capital investment of approximately $500 million and generate around $8.5 billion in sales over the project’s estimated life of approximately 25 – 30 years.

It is anticipated that 360 jobs will be created during construction and over 400 jobs (direct and indirect, full and part-time) during the mine’s operating life.

The proponent is proceeding under a modified project proposal following the unsuccessful bid to secure the long-term coal supply contract to the Tarong Power Station. This means the original project’s scope remains the same; however, the mine’s development timeframe may be extended beyond that which was originally proposed.

Operation: Rolleston Coal Project

Owner: Xstrata

Location: 20 kilometres west of Rolleston

Estimated cost: N/A

Project status: EIS complete

Project details: Rolleston Coal Mine is an open-cut steaming coal mine operated by Xstrata 20 kilometres west of Rolleston in the Southern Bowen Basin.

The mine commenced operation in October 2005, along with Queensland Rail’s 110 kilometre Bauhinia Regional Railway from the mine to Blackwater.

It is anticipated that the mine will operate for more than 20 years, generating at least $8 billion in sales.

The production rate at the mine will increase from 4 Mtpa to 8 Mtpa during the next two years, with the potential to increase to 12 Mtpa by 2010 with the expansion of the Wiggins Island Coal Terminal.

Operation: Wandoan Coal Project

Owner: Xstrata Coal Queensland Pty Ltd, ICRA Wandoan Pty Ltd and Sumisho Coal Australia Pty Ltd

Location: five kilometres west of Wandoan

Estimated cost ($billion): N/A

Project status: EIS active

Project details: The Wandoan Coal Project is a joint venture proposal by Xstrata Coal Queensland Pty Ltd, ICRA Wandoan Pty Ltd and Sumisho Coal Australia Pty Ltd.

It is located five kilometres west of the township of Wandoan in the Dalby Regional Council area in central Queensland.

Xstrata Coal Queensland Pty Ltd will manage the operation of the project for the Wandoan Joint Venture.

The project would comprise a number of open-cut coal mines, with an estimated mine life in excess of 30 years.

The project would initially produce approximately 30 Mtpa of run-of-mine thermal coal from resources that exist over mining lease applications 50229, 50230 and 50231.

A combination of truck and shovel, dozer and dragline mining equipment will be used to develop the project.

The coal will be crushed, processed and blended on-site before being transported by rail to a possible new coal terminal at Port Alma or the Port of Gladstone for export through the proposed Wiggins Island Coal Terminal, due to open in 2012.

The Wandoan Coal Project may also include water and energy supply arrangements for the mines and coal wash plant.

The Wandoan Coal Project is essentially an updated and refined version of the Wandoan project, which was declared a ‘significant project’ on 12 March 2007.

Much of the Wandoan Coal Project remains as was proposed under the Wandoan project; however, since March 2007, the proponent has made a number of changes to the project scope.

These changes include an increase in coal output and further refinements to the project’s water supply and energy options.

Since the declaration of the Wandoan Coal Project, the earlier Wandoan project declaration has been withdrawn at the request of the proponent.

Operation: Waratah Galilee Coal project

Owner: Waratah Coal Inc.

Location: 38 kilometres north-west of Alpha

Estimated cost ($billion): 5.3

Project status: Declared Significant Project

Project details: Waratah Coal Inc. proposes to establish a mine in the Galilee Coal Basin, Central Queensland, to service international export markets for thermal coal.

In addition to the mine, the project would involve construction of a railway, approximately 500 kilometres long, to transport processed coal to a new export terminal to be established in the Shoalwater Bay area.

New major water and power supply infrastructure would be necessary to service the mine and port.

The company’s coal tenements are situated approximately 38 kilometres north-west of Alpha, approximately 450 kilometres west of Rockhampton, and contain an inferred resource in excess of 3 billion tonnes.

The proposed open-cut mine is expected to be developed in stages and have an initial export capacity of 25 Mtpa with ability to double this output in the future.

The new coal port would be located either within or adjacent to the Shoalwater Bay Defence Training Area and be developed initially to handle 50 Mtpa with future expansion in 25 Mtpa increments.

Initial exports are targeted for 2012.

Waratah Coal Inc. is public company that was incorporated to develop coal projects in Australasia and is approximately 50% Australian owned.

It had a market capitalisation of A$220 million as at 3 April 2008.

The project is expected to cost in the order of $5.3 billion and provide total employment for 2,200 people during construction as well as 760 permanent positions during the operational stage.

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