The consortium, comprising Korea Electric Power Company (KEPCO) and four of its generator subsidiaries - Kosep, Komipo, Kowepo and Kospo - plus Korea Resource Corporation (KORES) and Hanwa Corporation, will purchase 10% equity in Moolarben.

The consortium has also agreed to negotiate and enter into offtake agreements for no less than 2.8 million tonnes per annum of coal at 17% ash for the life of the mine. Prices will be at market levels.

Moolarben has planning approval to produce 10Mtpa, with previous announcements indicating sales of 9Mtpa with future underground expansion capable of adding 4Mtpa.

The opencut mine is expected to produce first coal by the end of 2008, with development of a longwall planned to commence within three years of the opencut commissioning.

The Korean consortium will join Japanese trading house Sojitz which paid $90 million for a 10% stake plus contributing to the capital cost of developing the mine in July last year. Felix continues to hold 80% of the joint venture.

The transaction in subject to approvals with the deal expected to be completed in February this year.

Felix also announced that it was yesterday granted mining leases 1605 and 1606 for 21 years.

The leases cover a substantial part of the underground reserves and opencut No. 1.

Felix said 18ha of crown land subject to native title negotiations with the East Wiradjuri people will be subject to a separate lease.

New South Wales Minister for Mineral Resources Ian Macdonald has also awarded two new exploration licences at the Moolarben project – covering 1145ha contiguous with the existing tenements.

In this area, four holes have already been drilled which intersected the Ulan seam at shallow depths.

Felix said an exploration program to quantify the additional resources would commence this year.