“The fact that Wandoan is forecasting production for export in 2014 is extremely positive in terms of the underlying confidence implied for the development and completion of the Surat Basin Railway,” NEC managing director Keith Barker said.
“This provides NEC with greater certainty in its Elimatta planning and approval process, which is ongoing.
“The conditional approval of Wandoan combined with the pending declaration of the state development area for the SBR, help to reduce the perceived level of uncertainty attached to the project by potential investors and development partners.”
NEC and other Surat Basin players are waiting for the Queensland government to declare a state development area for the SBR, allowing for 210 kilometres of railway development to link Wandoan with the Moura line, also known as the “Southern Missing Link”
NEC said the SBR joint venture, which consists of Xstrata, QR National and the Australian Transport and Energy Corridor, is working towards a financial close in the last three months of 2011.
The rail development is designed to sync in with the construction of the Wiggins Island Coal Export Terminal.
NEC said the Gladstone export facility could be ready to start Surat Basin shipments around the end of 2014 or early 2015.
Xstrata has forecast first Wandoan exports to start as early as 2014.
NEC’s Elimatta project is just 30km west of the Wandoan town and next door to Xstrata’s Wandoan project.
The Elimatta open cut project hosts 106 million tonnes of marketable reserves, with mine construction slated for late 2011.
NEC is on track to start production from its 500,000 tonnes per annum Colton hard coking coal project within its Maryborough project in 2012, and recently secured a port allocation for this amount from the first stage development of WICET.
Queensland coal producer New Hope is impressed with NEC’s assets and launched a hostile cash takeover bid at $1.50 per share last month.
As of the last update on October 22, New Hope has only become a 4.94% stakeholder of NEC.
NEC shares closed up 3.4% to $1.665 yesterday.
