“This declaration is recognition of the significant complexity of the project, the substantial benefits it may bring and the need to carefully assess its impacts and how they could be mitigated if the project is approved,” he said.

Jensen said pre-drainage work would be required due to the gassy target seams and that coal seam gas would also be exploited.

Infrastructure and Planning Minister Stirling Hinchliffe expects the future mine, located 7km northeast of Moura, to create more than 600 jobs during construction and at least 500 for operation.

“A number of these jobs will be filled from the local communities of the Banana Shire and Dawson region,” he said.

“The project, if it proceeds, will deliver around $965 million to Queensland in royalty payments over its 30-year life.”

Belvedere is a joint venture between Vale and Aquila Resources. The terms of reference for the project’s environmental impact statement are yet to be submitted.

Prefeasibility studies for the project are looking at two longwalls producing up to 7 million tonnes per annum of metallurgical coal from two seams, while Aquila says potential production could be 9Mtpa.

Should the project go ahead, first exports could start in 2014 through Wiggins Island.

Vale also has an option to acquire the remaining 24.5% stake of the project held by Aquila.

The Brazilian mining giant first purchased a majority stake in the project back in 2007 but holds the option to acquire 100% at fair market value as of December.

Belvedere holds 3.87 billion tonnes of resources, including 1.53Bt indicated and 2.34Bt inferred.

Shares in Aquila gained 11c today, closing at $8.09.