Glencore chief executive Ivan Glasenberg has hinted that funds would not be sanctioned for the 22 million tonne per annum thermal coal project if a proposed $9 billion Glencore-Xstrata merger goes through, according to the Australian Financial Review.

Any delays to Wandoan would be disastrous for the emerging Surat Basin, with junior mine developers Stanmore Coal, Cockatoo Coal and MetroCoal all planning operations that would sit around the massive Wandoan development and share $1 billion of rail infrastructure to the Wiggins Island coal export terminal.

In March, Xstrata Coal claimed victory in its battle to develop Wandoan after Queensland’s Land Court recommended the state government approve the project’s mining lease.

Land Court president Carmel MacDonald recommended mining leases 50229, 50230 and 50231 be granted over the application area.

However, the recommendation was subject to Xstrata undertaking rigorous groundwater monitoring and making mutually sustainable arrangements with landowners who would be potentially affected by adverse impacts on the availability and quality of groundwater as a result of the mining operations.

The recommendation followed a Land and Environment Court hearing in August in which eight landowners and Friends of the Earth Australia opposed the project on the grounds it could contribute to climate change.

The Wandoan project is a joint venture between Xstrata (75%) and its Japanese partners Itochu (12.5%) and Sumitomo (12.5%) but the companies are investigating options for introducing an additional partner to take a stake in the project.

Xstrata managing director Mick Davis previously referred to the Wandoan project as a world-class development and a growth engine for the company which could be in production by 2015.