The proposed project, located in the Taroom Shire, is expected to have a mine life of 30 years.

The Wandoan Project will be developed by Xstrata Coal Queensland, under the Wandoan Joint Venture between Xstrata (75%), Itochu (12.5%) and Sumisho Coal Australia (12.5%).

“A decision to proceed with the mine development is not expected before late 2009, following the resolution of the environmental and planning assessment process and a decision by the Government," Xstrata Coal chief executive Peter Coates said.

“A final commitment to proceed with the project will depend on port access at the time and the resolution of engineering studies, geological investigation, community and environmental considerations and the marketability of the product."

Coates added the project held ideal characteristics to be used in integrated gasification combined cycle (IGCC) and other low emission technologies.

In May 2007 Xstrata Coal Queensland lodged three mining lease applications, covering 32,000 hectares west of Wandoan town.

The first stage of the project will include feasibility studies and an environmental impact statement.

From July 9, Xstrata Coal will conduct a series of community information workshops at Wandoan, Taroom and Miles.

The joint venture proposal has been declared a significant project under the State Development and Public Works Organisation Act 1971.

The project has been flagged as the initial driver for the construction of the rail connection known as the Southern Missing Link.

Xstrata Coal, along with Australian Transport and Energy Corridor, Industry Funds Management, Queensland Rail and Anglo Coal, is a member of the Surat Basin Railway (SBR) Consortium that is planning to build the SBR connecting Wandoan to the existing Moura-Gladstone line.

The new $1 billion-plus rail connection will see coal from the Surat Basin region transported for export through the proposed Wiggins Island Coal Terminal.