WA Environment Minister Bill Marmion will ultimately decide whether the 2-2.5 million tonnes per annum Coolimba coal mine will go ahead, but the EPA has recommended against the development.

The authority feared the mine would cause an unacceptable direct loss of a rare flora species and could draw down too much groundwater from the Lake Logue nature reserve to the northern and western side of the proposed site near Eneabba.

The Geraldton Iron Ore Alliance is appealing the EPA decision.

While the Coolimba power generation project has been approved, Sigiriya Capital has terminated the term sheet it struck with Aviva in September which could have allowed investment to flow into this development.

“Sigiriya cited the status of the Central West Coal EPA approvals and the Oakajee port and rail project as key reasons for not proceeding,” Aviva said.

“Aviva’s investment in the Coolimba power project was written off at the end of 2009 and the board does not consider the project to be a material asset of the company.”

Aviva reaffirmed its primary focus of exploring and developing gold and base metal projects through its West Kenya joint venture, with gold drilling results expected to flow from May to July.

The company is also advancing its thermal coal project in Botswana which holds more than 1.3 billion tonnes of resources, including 895Mt for an open cut with a strip ratio of 1:1.

Aviva shares are unchanged at 25.5c.