Xstrata is closer to moving ahead with the construction of the $6 billion Wandoan coal project located in Queensland, but is seeking another investor to come onboard project. The mining giant has appointed Macquarie Capital to handle the sale of 20% interest in the project while it waits for a land court ruling on a mining license.
As of now Xstrata Coal owns 75% of the project. The minority stake holders are Japan’s Itochu Corp and Sumitomo Corp. The deal, if it goes through, will ensure that Xstrata Coal retains the majority control of the Wandoan project while it gains another joint venture partner to help with the project.
The Wandoan coal project is likely to produce 22 million tonnes of thermal coal per year. This will be used in power generation facilities. Actual production could rise to 63 million tonnes at a later date. Wandoan is located in the resource rich north eastern state of Queensland in Australia and ranks amongst the biggest new mining projects planned for Australia.
The construction and operations at Wandoan will generate nearly 1,300 new jobs in the region along with improvements in infrastructure. It will boost both local businesses and government royalties, but there are certain environmental concerns over the vast project which need to be addressed first.