Hancock Prospecting has proposed to develop the Galilee Basin, in Queensland’s central west, into the largest coal mine of its type in Australia with plans to spend $2.5 billion on rail and $2 billion on port development. A further $3 billion has been earmarked for construction of the 30 million tonne per annum open cut thermal coal mine.

The port will initially operate at a coal capacity of 30Mtpa. But the rail and port facilities will be designed to transport, load and ship up to 80Mtpa as demand dictates and to cater for neighbouring Galilee Basin and downstream producers.

A prefeasibility study will consider a new dedicated rail system, as well as the use of the existing rail infrastructure. The system will be designed to operate diesel-electric trains with coal being transported seven days a week, 24 hours a day, for up to 52 weeks per year.

If approved, construction will start in 2010 with first coal shipped in 2013.

However, the Perth-based company is not the only shark circling the prospective coal location, with ambitious junior explorer Waratah Coal already putting forward plans to develop a 25Mtpa coal mine as well as a 500km rail and a new port at Shoalwater Bay, worth $5.3 billion.

Last month Australian Environment Minister Peter Garrett blocked Waratah’s rail and port plans citing environmental concerns.

The minister rejected the proposal under the Environment Protection and Biodiversity Conservation Act 1999 and encouraged Waratah to look at other options. Garrett’s calls were backed by Queensland Premier Anna Bligh.

“I have carefully considered the advice from my department on the broader proposal and agree that the plan to run a rail line through Shoalwater and build a coal port in the location proposed is clearly unacceptable,” Garrett said.

“I wish to make it abundantly clear that I have rejected this proposal because of the impacts the route of the rail line and the location of the coal port would have on the environment.

“This decision does not prevent an alternative proposal being lodged, that does not have unacceptable impacts on heritage values, for consideration under the act. I would encourage Waratah Coal to consider alternative sites for the port.”

This is the third time a proposal has been deemed “clearly unacceptable” under the EPBC Act.

Hancock’s prefeasibility study, launched this week, saw a further two port locations put forward, Abbot Point and Dudgeon Point.

Within each potential port option are two further rail possibilities, to include the use of existing infrastructure or the development of a completely new line.

The Abbot Point option would include 484km of new track from mine to port, while Dudgeon Point covers 401km of new track.

The second option for each port is 100km of new rail to connect to Queensland Rail’s existing line at Blair Athol, to make a total track distance of 525km for Abbot Point and 401km to Dudgeon Point.

Each port option will have up to two rail loops of about 5km in length, with the possibility of longer loops available if larger trains are determined to be the most suitable option for the coal transport.

Hancock now awaits the federal government’s verdict on these new port options.

The Galilee Basin project has already been declared “significant” by the Queensland government, which does not give it an automatic green light, but demonstrates the perceived value in terms of export income for the Australian economy, employment and growth, and as such the desire to see it come to fruition.

The “significant” tag also means the project will be required to undergo stringent environmental impact assessment by both the state and federal governments and provide an environmental impact statement (EIS) in the project approval process.