Another giant Galilee project: report

CHINA’S Meijin Energy is reportedly advancing a 30-60 million tonnes per annum thermal coal project in Queensland’s Galilee Basin – a region already crowded by major projects and subject to question marks over possible rail and port infrastructure.

Blair Price

A Meijin company official told The Australian the China Stone project was targeting production from 2014 or 2015, and held a JORC-compliant resource of 3.7 billion tonnes.

The project is operated by Meijin subsidiary Macmines AustAsia.

A 12-18 month feasibility study will reportedly start this year with construction targeting 2013.

The private company reportedly bought its Galilee acreage from a prospector in 2007, received Foreign Investment Review Board approval for this transaction and has been “quietly drilling” ever since.

Meijin’s plans for rail development are unclear.

There are three well-known plans to build rail lines of around 500km each to link projects in the undeveloped basin to export through Abbot Point.

These include Adani Group’s rail for its Carmichael project, targeting 60 million tonnes per annum, and the rail for the up to 60Mtpa anticipated from Hancock Coal’s projects, led by Gina Rinehart.

Rival billionaire Clive Palmer is behind a separate rail proposal to link the up to 40Mtpa China First project shared by his company Waratah Coal and Metallurgical Corporation of China.

While a combined Galilee rail development linking all the planned mines in the region would reduce total costs and face less skilled labour challenges, no deal has been made among the competing project owners.

However, Bandanna Energy and AMCI’s South Galilee project, targeting 15Mtpa product coal from 2015, is based on third-party rail access.

“All three of these proponents have indicated to AMCI that they will provide such access and discussions to date indicate that a commercially acceptable agreement will be reached with one of those proponents prior to completion of a definitive feasibility study,” Bandanna had previously said on this issue.

Vale also has its Degulla project in the region, and the Brazilian mining giant previously indicated it could target 20-40Mtpa.

Vale Australia operations director Steve Badenhorst told The Australian that the company was trying to find common ground on issues like a rail corridor, “so we don’t have three corridors that go to Abbot Point”.

Meijin is China’s largest private coke producer and is owned by Chinese billionaire Yao Junliang.

There is a lack of publicly available information on Meijin’s China Stone project, including its location in relation to other projects in the basin.

However, it appears that Cullen Resources “relinquished” its Forrester coal project, based in tenement EPC 1030, north of a mining development licence application by Rinehart’s Hancock Prospecting, in 2007 according to information provided by Intierra.