"This proposed Boulder Steel project heralds a new era for the region as the home of the only new steel mill in the country right now," Bligh said on Friday.

"The proposal would generate a whole new industry base in central Queensland and improve the skill base of the labour pool.”

Financing is yet to be secured for the project, which aims to produce semi-finished steel in bloom and round billet form for export to the Middle East for further manufacturing.

Australia-listed Boulder Steel entered into a memorandum of understanding for the project with Arabia for Business Strategy in late May, a company owned by a member of the Saudi Arabian royal family.

A letter of intent was also signed between the two companies in June for the development of a 500,000 tonne per annum rail and heavy beam plant in Saudi Arabia to take all the billet and bloom output from Boulder’s proposed facility.

Boulder Steel general manager and executive director Carl Moser told International Longwall News the first hot metal from the Gladstone plant was expected to be produced in 2013 and the company was currently negotiating with Queensland coal suppliers.

He said the project would probably use iron ore from WA.

Boulder Steel’s project is expected to create 600 long-term jobs in its first stage of development and another 550 in second-stage development.

The construction workforce for stage one is expected to peak at 1500 and average 900 over two years.

Boulder Steel is also expecting 1800 full-time jobs will be created indirectly in other sectors as a result of the stage one development.

Bulk earthworks construction for the project is expected to take place in the last quarter of 2010.

In the first stage, the plant is intended to produce 2.1 million tonnes per annum of steel billets and blooms, while stage two will bring the total output to 5Mtpa.

The draft terms of reference for the project have been released for public comment as it awaits state environmental approval.