A scathing Felix said the money would be paid immediately after which the Moolarben coal project would have access to the land and exercise its rights under its mining leases.

“This should put the matter to rest and we expect Ulan Coal will work with us as neighbours for the next 21 years,” Felix managing director Brian Flannery said.

“The legal action by Ulan was unprecedented, unnecessary and costly.”

The Warden's Court decision to award compensation to Ulan was on the basis of its loss of land use covered by Moolarben's mining leases.

Now with the access granted construction works at Moolarben are expected to begin in August.

The Moolarben coal project is located next to the Ulan coal project, 40km east of Mudgee, and has two 21-year mining leases.

The Moolarben project has a planned opencut and underground thermal coal operation of about 10 million tonnes a year.

The development of a longwall is also planned to commence within three years of the opencut commissioning.

Moolarben is now awaiting the decision from the NSW Court of Appeal over its mining leases.

Xstrata had appealed an earlier decision refusing it the right to challenge the validity of Moolarben’s mining leases granted by the minister for mineral resources.

Meanwhile, earlier this week Felix Resources said it had several parties showing interest in a possible takeover of the company.

Felix is keeping mum on the players, saying the interest was “preliminary, incomplete, non-binding and conditional”