The opencut thermal coal mine is Xstrata’s first greenfield development and is expected to generate $3.4 billion of economic benefits during the next 20 years of operation.

The mine, located 275km west of Gladstone, was developed by Rolleston Coal, a joint venture between Xstrata Coal (75% shareholder and operator of the mine) and Sumisho Coal Australia and IRCA Rolleston, which each own 12.5%.

“Demand for thermal coal remains very strong and Rolleston’s low-ash high quality coal, further expansion potential, access to infrastructure and location mean this mine is ideally positioned to be a major driver of growth and value for our Australian coal business,” Xstrata chief executive Mick Davis said.

He said over the past four years Xstrata had invested more than $8.2 billion in mining operations in Australia, including close to $900 million in Queensland alone in the past year.

A critical component of the Rolleston project’s total capital cost was an investment of $250 million in the construction of a 110km rail line which links the coal mine with the existing rail network servicing the local Bauhinia Shire and the Port of Gladstone.

The Bauhinia Regional Rail Line represents the longest spur line to be built in Queensland since 1983 and carried the first coal train in October last year, two months ahead of schedule.

Under an arrangement between the two parties, Queensland Rail will own and operate the rail line 24 hours a day, seven days a week, with Xstrata paying access fees to transport its Rolleston coal.

In September 2005 Rolleston commissioned its first dragline and coal handling facility and the first coal was railed on October 3, 2005.

The mine will produce 6Mtpa for export from the Port of Gladstone and 2Mtpa for domestic use.

Xstrata Coal chief executive Peter Coates said further development of the mine would include the relocation of a second dragline to commence operations in the second quarter of 2007.

Coates said the mine would generate 150 long-term jobs at full production.