Together with state owned power generation group Stanwell Corporation, the Brisbane-based company is proceeding with a feasibility study after a prefeasibility study was completed in October. Expected to cost $5 to $10 million, the study is expected to be completed in the second half of next year.

The company, which enjoys strong relationships with major steel mills in Asia, Europe and the Americas, said the success of the project will rely on secure off-take agreements being reached with steel producers.

“Customers value the company’s commitment to remaining an independent coal supplier in a climate of increasing industry consolidation. There is strong customer interest for a Queensland coke project, especially one based on new sources of coking coal and managed by an independent supplier,” Macarthur Coal said in an announcement.

The project would employ modern and proven heat recovery coke-making technology to produce a superior quality blast furnace coke for the export market. The company said the enhanced quality of the coke produced would allow increased use of less expensive PCI coal – the production of which Macarthur Coal has virtually cornered out of Queensland.

Locating the facility adjacent to the Stanwell Power Station would allow the company to take advantage of existing infrastructure including rail, water and power facilities. Importantly, surplus heat generated by the combusted coal gasses within the coke plant will be captured and used to produce electricity within the power station.

The site is also ideally located adjacent to the coal-rich Bowen Basin.