Scotland’s second biggest coal producer has outlined plans to use its coal recovery expertise in Australia and has several other projects in its sights.

ATH said this week it was the preferred bidder on a 12 million tonne tailings washing project in Queensland, which if successful would start in 2009.

The unnamed project is still subject to client approval and would last for three years.

The proposal would allow ATH to build and operate a wash plant under an index linked contract, leaving the client responsible for the marketing and transportation of the coal.

ATH non-executive chairman David Port said the company was also embarking on the exploration and analysis of a separate coal tailings tip at another Australian mine, with a plan to break a deal to recover the coal from the tip.

Port believes these two projects will pave the way for a growing number of coal tip washing projects in Australia.

The migration south comes after the company recorded a profit fall to less than £500,000, despite record coal prices. The company recorded a £2.7 million profit before tax in 2007.

Scotland’s Sunday Herald reported that the company remained committed to domestic operations but believed it would be more profitable overseas.

ATH chief executive Tom Allchurch said the confirmation of ATH as a preferred bidder for the Australian contract was a “major breakthrough” into the Australian market for its coal tip washing process.