Glencore has secured the first mining leases for its $7 billion Wandoan coal project in Queensland’s Surat Basin, after applying for them 10 years ago.
Queensland natural resources and mines minister Anthony Lynham approved the grant of three 27-year leases over 30,000 hectares for the project, which could produce up to 22 million tonnes of thermal coal a year once operational.
Glencore applied for the leases in 2007, with the project’s environmental impact statement approved by the coordinator-general in 2010 and the environmental approval granted by the Commonwealth Government in 2011.
The project was then place on hold, with doubts over its future development due to falling coal prices.
Glencore welcomed the new grant and said it will only bring on new large scale production volumes if it is confident in the current market conditions.
“Adding significant new tonnes to the market at this time would adversely impact the profitability of existing thermal coal production, potentially putting jobs at risk as the market adjusts downwards as a result of oversupply,” Glencore said.
Wandoan would be the first major coal project of this scale in the Surat Basin and still requires a rail link to the Port of Gladstone for export.
Glencore added that the project will need a multi-billion dollar capital investment for both the mine and its related rail infrastructure.