A spokesman for Xstrata, which recently announced it was axing 600 jobs in its Australian coal operations in response to the industry downturn, told ILN a decision on the massive thermal coal project would not be made by the board until at least next year.

“Feasibility studies into our Wandoan Project continue, to enable an investment decision once relevant approvals have been completed and market conditions permit,” the spokesman said.

“Following the Queensland land court's recommendation to award a mining lease for the project, we are working towards the final grant of this lease by the Queensland government.

“We anticipate this in early 2013.”

Xstrata global chief executive Mick Davis said in August the proposed 60 million tonne per annum Wandoan thermal coal mine in the Surat Basin remained ''a very, very important component of Xstrata's growth potential going forward but it is not part of the current phase of expansion”

It could be disastrous for other coal developments in the Surat Basin being proposed by MetroCoal and Stanmore Coal if Xstrata decided to shelve the Wandoan project, which was expected to contribute to the investment in infrastructure and services to the region.

Wandoan, which would employ about 1400 people during the construction phase, would also be a significant employer of operational staff.

Last week, ILN reported that the Queensland Resources Council estimated that up to 5000 jobs have been lost in the Queensland coal industry this year.

While Xstrata Coal’s third-quarter thermal coal production was up, the company saw a dramatic plunge in coking coal production as lower prices cut its earnings from July 1, 2012.

“In response to industry-wide pressures, including low coal prices, high input costs and a strong Australian dollar against the US dollar, Xstrata Coal has initiated a planned restructuring of its business in Australia, including the reduction of around 600 contractor and permanent positions,” it said last month.

“Australian coking coal production was down 0.8 million tonnes, or 33 per cent, on the third quarter of 2011 mainly due to engineering issues with the new thin seam longwall in operation at Oaky Creek No. 1, which are being resolved by the supplier.

“In addition, the timing of longwall moves at Oaky Creek North and Tahmoor operations further reduced volumes compared to the same period of 2011.”