Blackwater Creek is located within Curragh’s existing mining leases and the completed diversion will allow access to around 47 million tonnes of run-of-mine coal (36.8Mt product coal).

The company said around 65% of the new resource was high-quality hard coking coal.

Regulatory approvals for the diversion have been obtained from the federal Department of Environment, Heritage and the Arts, the Queensland Environment Protection Authority and the Queensland Department of Natural Resources and Water.

Downer EDI has been selected to undertake the project works, which are expected to be completed in the last quarter of 2009.

Revegetation will occur progressively until December 2010, when it is expected the project will be completed.

Wesfarmers said the diversion would allow the Curragh mine to continue to export coal at a rate of 7Mt per annum through to 2025, with a consistent higher proportion of high-quality hard coking coal.

Shares in Wesfarmers remain at $20.47 in morning trade.