The Wandoan Project comprises opencut thermal coal mines and related local infrastructure and is expected to produce in excess of 20 million tonnes of coal per year, generating employment for 500 people during construction and 300 staff when operational.

The Wandoan Project will proceed through a staged development process that currently targets first coal in late 2011.

Initial investigations indicate that beyond the $500 million expected to be spent over the life of the mine, the flow-on economic benefits for the surrounding region through employment, training, and component and service contracts are expected to be considerable.

The joint venture proposal was recently declared a significant project under the State Development and Public Works Organisation Act 1971.

Chief executive of Xstrata Coal Peter Coates said the significant project declaration was a positive step forward for Xstrata Coal.

“A decision to proceed with the project is not expected before 2009, and would be dependent upon the resolution of engineering studies, geological investigation, infrastructure requirements, community and environmental considerations and marketability of the product," Coates said.

Deputy Premier, Treasurer and Minister for Infrastructure Anna Bligh said the Wandoan Project was also the initial driver for the construction of the rail connection known as the Southern Missing Link.

“Xstrata Coal is a member of the Surat Basin Railway (SBR) Consortium that is planning to build the SBR connecting Wandoan to the existing Moura-Gladstone line," she said.

“This new $1 billion-plus rail connection will see coal from the Surat Basin region transported for export through the proposed Wiggins Island Coal Terminal.”