Xstrata Coal has just released plans for the Rolleston Coal mine expansion and, along with seven other coal companies, has signed a $953 million deal with QR National for one of the largest rail developments in Australia.
Xstrata Coal has just released plans for the Rolleston Coal mine expansion and, along with seven other coal companies, has signed a $953 million deal with QR National for one of the largest rail developments in Australia.

Rail deal lifts coal fortunes

XSTRATA Coal has released the draft Terms of Reference for its anticipated Rolleston Coal Expansion Project, outlining for the first time the company's plans for the agricultural properties that surround the existing mine.

The release coincides with Monday's $953 million agreement between QR National and eight Bowen Basin coal companies, including Xstrata, which has likely secured the next big growth of Queensland's mining industry.

While Golden Triangle landholders are fighting for the future of their farms, Bowen Basin coal companies are continuing to plough full steam ahead after securing one of the largest rail development deals in Australia - the Wiggins Island Rail Project.

Xstrata's proposed mine expansion will require diversions of Sandy and Meteor creeks located on Springwood, a property owned by the Tyson family since the 1800s which currently supports three generations.

Xstrata's draft TOR concedes drainage flats and low terraces have formed adjacent to Meteor Creek, which in flood times can be filled with up to 15m of water.

Possible alignments will be assessed during the Environmental Impact Statement phase, the document stated.

The Rolleston mine is set to expand from the currently approved 10 million tonnes per annum of run-of-mine coal up to a whopping 20 mtpa.

On Monday, QR National announced it had been appointed in a $900 million agreement with a consortium of coal companies to upgrade the rail link from the Bowen Basin to Gladstone, which would service the first stage of the Wiggins Island Coal Export Terminal.

Xstrata, Aquila Resources, Bandanna Energy, Caledon Resources, Wesfarmers Curragh, Northern Energy Corporation, Yancoal Australia and Cockatoo Coal will all pay commercial rates to transport their product on the line to Gladstone before it is shipped from the proposed port.

"The Wiggins Island Rail Project will be one of the largest rail expansions in Australia," QR National chief executive Lance Hockridge said.

"It represents a significant commitment to the future growth of the Queensland coal industry

"We're delighted to assist these companies with their expansion plans, as part of the continuing growth of the coal sector in Queensland."

The first stage of the proposed WICET is expected to add over $3 billion to Queensland's export income.

It will raise Gladstone's overall export capacity to about 100 million tonnes. The WIRP will support the 27mtpa of coal exported through the WICET stage one.

It will contribute to a 30% increase in coal transported from the southern Bowen Basin.

In a recent statement, Bandanna Energy labelled the commercial agreement "a rail solution for its Golden Triangle projects".

"QRN's expenditure of A$900+ million for infrastructure is a very strong vote of confidence in WICET and the shipper's source mines," Bandanna managing director Dr Ray Shaw said.

"With this agreement a key piece of the coal supply chain for Bandanna's Golden Triangle projects has now been resolved."

Also on Monday, another one of the eight companies, Aquila Resources, announced it had completed the Definitive Feasibility Study for its open-cut Washpool Project north west of Blackwater.

The capital expenditure for the project is expected to be $335 million plus 10% contingency of $33 million.

The study anticipated production "ramping up" to meet mechanical completion of stage one of WICET and concluded the mining lease approval remained on schedule for March 2012.

The rail project is due to start early next year and will involve the construction of a 13km balloon loop near Gladstone port, a duplication of track along the Blackwater rail system to Gladstone, as well as upgrades to sections of the North Coast Line, Moura rail network and Bauhinia branch line.

Only two of the eight coal companies involved in the rail deal are actually major producers of coal, so for the other six, this deal is likely to underpin their push to securing production.

Xstrata's draft TOR will be available for public review and comment from Monday, September 5 until Friday, October 14.

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