The acquisition is expected to be completed on Wednesday and Xstrata said the Lossan project was surrounded by a group of licences it acquired from First Coal Corporation in early August.

The project hosts 240 million tonnes of resources with 186Mt in the measured and indicated categories, with these figures based on the Canadian standard NI 43-101 as opposed to the often-used JORC code.

Covering about 3800 hectares, the Lossan acquisition will give Xstrata almost 100,000 hectares of total tenure in the Peace River coalfield.

In 2006, Cline had a $57 million capital expenditure estimate on the Lossan project.

Back then Cline was aiming to produce 250,000 tonnes per annum of pulverised coal injection coal and other metallurgical coal for export, while it also flagged a ramp-up option to 1Mt per annum.