Waratah Coal CEO and President Peter Lynch said drilling in the Galilee Basin to date has inferred thermal coal resources of more than 4 billion metric tons (mt). “The Galilee Basin is Australia’s biggest undeveloped coal province, with an ultimate resource potential in excess of 20 billion mt,” Lynch said. “We are currently in discussions with a range of prospective partners and potential third party users of the rail and port facilities.” He said demand for thermal coal, particularly from China, India and Southeast Asia is expected to increase over the next two decades. “The Galilee Basin project will have a huge resource of high quality thermal coal, which will support a low-cost, high production mine that will be viable even if prices retreat from current levels.

“This project will have the tonnage to support a new port and railway, we’re not looking to the government to pay for that. The projected export capacity is 50 million mt per year with the first coal shipment expected in late 2012.”

Under the arrangement, the company will undertake structural, engineering, and environmental studies within the proposed rail corridor and port area. Waratah Coal will establish infrastructure to meet operational requirements, including water and power supply infrastructure as well as construction camps. Lynch said the proposed port was the most attractive natural deepwater port location on the coast and the facility would be built to accommodate the new 350,000 deadweight mt Chinamax class bulk carriers.