Located 25km west of Rolleston, next to the Rolleston mine, the open cut project is targeting production of 1.5 million tonnes per annum.

It received conditional approval to operate up to October 31, 2039.

U&D had not yet made an announcement on the news by yesterday, with the approval signed off on Tuesday.

The project is based on using the nearly complete Wiggins Island Coal Export Terminal.

In May, Sojitz Corporation signed a non-binding agreement over potentially acquiring a 50% stake in the MDS project.

Sojitz owns 96% of the Minerva coal mine located 65km north-west of MDS and believes the project offers strategic expansion opportunities.

For U&D any deal offers the use of Sojitz transportation infrastructure to develop its coal resource.

If the deal is finalised Sojitz will carry U&D through the mine planning phase, and will then offer a free-carry through the design, construction and commissioning of the mine, including the initial box cut until the mine is ready to start production.

The diversified firm will also provide all the capital equipment required for the mining operations.

In return it will get access to the Orion Downs lease and a 50% operated interest in the mine.

U&D will be required to pay 50% of budgeted cost of coal per tonne of coal sold.

The project hosts 16.82 million tonnes of resources with most in the measured category (13.32Mt).

U&D is also proceeding with its Broughton coal project, having now defined a development scenario baed on a 2-3MTpa capacity over 12 years.

U&D will now complete its pre-feasibility studies over the Elphinstone and Hynds seams, and will also assess the potential of the Girrah seam.

Total resources are 121Mt with 17.8Mt in the measured category.

The environmental impact statement for the mine is now 50% complete.

The EIS will be lodged before the end of 2015.

Broughton is U&D's second flagship project and is located 30km northwest of Nebo in the northern Bowen Basin, immediately south of Rio Tinto's Hail Creek operations.

Hail Creek is liked by rail to the Dalrymple Bay port.