The company said the study indicated that current resources at the coal-to-liquids project provided it with 70 years of feedstock while current technology would allow the project to produce at least 15,000 barrels of liquids (diesel and naphtha) per day.

Blackham added the project had an estimated capital cost of about $US2.5 billion ($A3.8 billion) with operating costs expected to be about US47 a barrel.

Managing director Bryan Dixon said the shallow depth of the project’s coal resources allowed it to be easily extracted using conventional open cut methods and that the company was looking to implement proven technology in the plant design.

“We will now step up our pre-feasibility studies for the project so as to continue our development plans,” he added.

Blackham also claimed the study had determined the proposed plant would be capable of capturing 80-85% of its emissions for controlled disposal.

The Scaddan energy project is about 60km north of the town and port of Esperance, and 7km east of the Esperance to Kalgoorlie highway, gas pipeline and railway line.

Blackham holds a 70% stake in the project and Wesfarmers Premier Coal holds the remaining 30%.