In their other areas of overlap, APLNG and MetroCoal have agreed to look for mutually acceptable arrangements for co-development, MetroCoal said in a statement.

“In consideration for MTE [MetroCoal] supporting the grant of petroleum licenses within the overlapping area, APLNG and MTE have agreed, in relation to Norwood project Area, that at the appropriate time, they will negotiate mutually acceptable co-development arrangements,” it said.

“In the absence of reaching a mutually acceptable agreement in a timely manner, the parties will opt into the overlapping tenure regime as envisaged in the document sponsored by the Queensland Resources Council and titled ‘Maximising Utilisation of Queensland’s Coal and Coal Seam Gas Resources – A New Approach to Overlapping Tenure in Queensland’, which was lodged with the Queensland Department of Natural Resources and Mines on 17 May 2012.”

The Norwood area is the extension of the Pony Plains deposit, adjacent Xstrata's Wandoan Mining Lease application area.

As with MetroCoal’s Bundi project, the primary target is an underground mining resource based on the Macalister Upper Seam of the Juandah Coal Measures.

An inferred resource of 156 million tonnes has been identified, with an extensive exploration target to the west of Norwood and further drilling planned for the future, according to the company.

The inferred resource may form the base for a future mine. While the project is in its early exploration phase, MetroCoal has already begun the environmental impact statement process.