The eventual sale of Collie-based Griffin Coal to Indian power generator Lanco Infratech for $750 million drew attention to the region, and Wesfarmers consequently received unsolicited interest for its wholly owned Premier mine.

The mine produced about 2.8 million tonnes in 2010; traditionally around 80% of this coal is used for the state’s power generation needs.

The nearby BHP Billiton-led Worsley Alumina joint venture uses about 13% for its alumina refinery.

While the Griffin Coal sale posed significantly less risk to the state’s power requirements, Lanco also aims to invest in necessary rail and port infrastructure to meet its goal of quadrupling production to more than 15Mt per annum.

Executives from the Indian company recently met with WA Premier Colin Barnett.

“We feel that this is the right time to look at all options for the business, ranging from business as usual to building an export-based operation to a joint venture with another party right through to the potential sale of Premier Coal,” Wesfarmers Resources managing director Stewart Butel said.

Wesfarmers did not provide an indicative timeline, but revealed that expressions of interest in the mine had been called for. It said “all options” would be fully investigated before any final decision is made.

“By considering a range of options we hope to find out how other parties see the Premier Coal value proposition,” Butel said.

“The results of this process will then be evaluated in light of the options identified."

With the Gillard minority government pushing for a carbon pricing mechanism to kick off as early as mid-2012, higher electricity costs are also becoming an issue for state politicians.

The Keneally government in New South Wales is poised to lose the March 26 election by a landslide after unpopular moves to sell state electricity assets, and failures associated with the Cobbora project to secure cheap thermal coal.

The possible sale of the Premier mine during the booming export market for thermal coal would follow the backlash received by the Barnett government’s moves to increase electricity prices since winning office.

Previous WA Premier Alan Carpenter is the executive general manager of corporate affairs for Wesfarmers.

Wesfarmers shares are down 30c to $30.77.