The project approval from NSW Planning Minister Frank Sartor gives Excel a permit for construction and operation of the mine.

Of the mine’s annual output of 13Mt, 8Mt has been tagged for domestic power generation, with the remaining 2Mt to be exported.

The mine will become the major supplier of fuel to the Macquarie Generation power stations at Bayswater and Liddell in the Hunter Valley.

Wilpinjong has a 19-year contract with Macquarie commencing in January 2007, with up to 7Mtpa to be supplied, to a total of approximately 120Mt over the contract term. The mine has an additional three-year contract with Macquarie commencing in 2006 for a further 500,000tpa.

Contractor Thiess has been awarded the contract for construction of the mine infrastructure, including a coal handling and preparation plant and train loading infrastructure, and to operate the mine for the first five years.

Construction of the project will employ about 200 people this year, with an operational workforce of about 100 people thereafter.

Friday’s approval follows a two-year period in which Wilpinjong has completed an exploration program, preparation of a conceptual project development plan, and extensive environmental assessment studies.

Wilpinjong has also made an application to the Minister for Mineral Resources for the grant of a mining lease. Excel said the grant of project approval was the major outstanding pre-condition for the grant of the mining lease and Wilpinjong expects the mining lease to be granted in the near future.