Located on Balaclava Island, 5 kilometres away from Port Alma and about 40km north of Gladstone, the terminal project is targeting throughput of up to 35 million tonnes per annum.

The project includes the development of a 13.5km rail spur from the North Coast railway line near Raglan to a higher-ground coal stockpile area, and an overland conveyor from this site to a ship-loading facility designed for vessels of up to 110,000 tonne capacity.

Landowner Gladstone Ports has given Xstrata the rights to build, own and operate the project on Balaclava Island and the adjacent mainland area.

The BICET project is expected to cater for Xstrata’s Oaky Creek and Rolleston mines in the Bowen Basin, but could also be used as an alternative terminal for its giant joint venture Wandoan coal project in the Surat Basin, which is targeting 22Mtpa of thermal coal exports.

Construction between 2012 and commissioning in 2014 is expected to create 800 jobs while 100 long-term jobs are anticipated when the terminal becomes operational.

Queensland coordinator-general Keith Davies said the scale, potential effects and complexity of the approvals for the project required a rigorous environmental impact statement.

Dredging work in the approach channel north of the island, and within a state marine park, along with possible impacts on graziers, recreational fishers, salt mining operations and existing port activities present some of the challenges.

Public comments on the draft terms of reference can be made to the Queensland government between February 26 and April 11.