Earlier this month, Blackham announced it had made applications for exploration licences in the Scaddan region, 60km north of Esperance, on the basis that Wesfarmers, which previously held the tenements, failed to lodge an extension of term application for exploration licences prior to the expiry date of February 19.

In an announcement today, Blackham said Wesfarmers' objections to its applications to date, which were filed earlier this week, claimed that Wesfarmers should be granted preference over Blackham on a number of grounds.

However, after considering legal advice Blackham said Wesfarmers' grounds for the objections were either not relevant or not valid.

Wesfarmers, which held the land subject of the applications from 1980 to February 19 this year, believes its previous tenure expired "due to an administrative oversight" and that previous investigations into the economics of the lignite resource showed the resource was "currently uneconomic" owing to "the nature of the resource, the location of the deposits and the prohibitive cost of processing infrastructure".

However, according to Blackham, Wesfarmers' two mining lease applications were lodged 17 days and 27 days, respectively, after Blackham's applications.

Blackham believes the lignite resources at Scaddan have real potential for development.

"There is no public evidence to suggest the objectors have seriously reviewed the economics of the project over the past six years when the crude oil price has risen from $US17 per barrel to a high of $US78/bbl," Blackham said.

"There is no evidence to suggest Wesfarmers have even considered modern 'coal to oil' or 'clean coal' processing from the Scaddan lignite deposits."

Another objection supplied by Wesfarmers was on the grounds that it has four existing mining leases in close vicinity to Blackham's applications which, if granted to Blackham, would prevent Wesfarmers from being able to "economically develop a project" on their existing leases.

However, Blackham said from Wesfarmers' own submissions to the Department of Industry and Resources, Wesfarmers' existing leases contained only 69 million tonnes of lignite resources, compared with 604Mt contained within Blackham's applications.

"Blackham does not consider that Wesfarmers' existing leases are significant in determining the economics of what could be a 20 to 40-year mine life project," Blackham said.

In reply to Wesfarmers' objection that Blackham had failed to comply with requirements of the Mining Act and Mining Regulations, Blackham said it had fully complied with requirements under the Act and was fully entitled to have its applications progressed.

"In such circumstances, Blackham believes that the principles underpinning the Mining Act militate in favour of the turnover of land and seek to encourage expenditure on the definition and development of the State's energy resources," the company said.

Blackham intends to launch a scoping study on the resources with an aim to accelerate the development of the project if it is granted the applications.

The company said it "looks forward to progressing its applications over these tenements as soon as possible.

"The company is aware of the need for these matters to be handled in a transparent, open and fair manner."

Blackham said it had not yet obtained copies of all of Wesfarmers' objections but had been informed by the Department of Industry and Resources that the grounds of all the objections were the same or substantially similar.

Shares in Blackham fell 4c to 54c in morning trade.