Speaking at the opening of a trial mine at Rinehart’s Alpha project on the weekend, Ferguson said Alpha and the nearby Kevin’s Corner – which is also owned by Rinehart’s Hancock Coal – were expanding into new coal mining territory to meet growing demand.
“They are, in fact, trailblazers in the opening up of the Galilee Basin as a major new province – they have the potential to rival the Hunter Valley in New South Wales and the Bowen Basin in Queensland,” he said.
The trial pit is the first operating coal mine in the Galilee Basin, with 100,000 tonnes of thermal coal to be trucked to Jellinbah, railed to the port of Gladstone then shipped to Korean buyers.
If developed to its full potential, the mine is planned to reach 30 million tonnes per annum of coal production, starting in early 2014.
As well as Hancock, Clive Palmer’s Waratah Coal is planning a mine near Alpha of 30Mtpa, and Brazilian minerals group Vale and US mining investor AMCI have a joint venture in the Galilee Basin with ASX-listed Bandanna Energy.
Rinehart said the trial mine was designed to attract investor interest in the project and the $2 billion 500-kilometre rail track needed to take the coal to Abbot Point on the coast.
Hancock Coal’s projects, which would require about $15 billion in development capital, are believed to be attractive to large global mining companies eager to extend their footprint in Queensland coal.
“The whole idea (to fund the project) is to get equity participants into the project, who of course will get more comfort as we finish the bankable feasibility study and get through some more of the approvals,” she told the Australian.
“The test pit is showing what we say it is and what we believe it to be.
“After approvals, this could be the largest thermal coal mine in Australia and one of the largest in the world.”
The feasibility study is due for completion in March, with a final investment decision targeted for September.
Hancock has letters of intent from buyers in five Asian countries.