The proposed 210-kilometre railway line will link up Wandoan in the south and the town of Banana on the line to the Port of Gladstone, with first coal exports on the line to either Gladstone or Balaclava Island likely to take place in 2014.

Xstrata’s $3 billion Wandoan open cut coal mine – which is expected to export 30 million tonnes of coal a year – along with four other coal producers with tenements around the Surat will be the users of the line.

Up to 1000 workers will be employed during construction of the railway, with a further 44 positions required to operate and maintain the infrastructure, Queensland Premier Anna Bligh said.

“This proposed project comprises a 210-kilometre multi-user, open-access rail line to allow for the transport of coal from the Surat Basin to the Port of Gladstone for export,” she said.

“It will enable the development of significant coal resources – estimated at 4 billion tonnes – in the Surat Basin and generate up to an estimated $300 million in royalties per year.”

Coal will be transported from the Surat Basin along QR National’s Moura line and the proposed Moura Link rail project, to the proposed Wiggins Island Coal Export Terminal at the Port of Gladstone.

Gladstone is being prepared to handle the expected extra increases in coal exports, and Xstrata is also looking at building a new coal port at Balaclava Island near Port Alma, about 40km north of Gladstone.

The company proposing to build the rail link, Surat Basin Railways, has three shareholders – Xstrata, Queensland Rail and the Australian Transport and Energy Corridor – and expects construction to begin next year.