Queensland approves Clive Palmer's $6.4-bn coal project

The Queensland government has approved the country's largest coal mining project proposed by Waratah Coal Pty Ltd, a company owned by Australian resource magnate Clive Palmer, on strict environmental conditions.

The approval for the company's $6.4-billion China First Galilee project near McKay in central Queensland by the state's co-ordinator general Barry Broe, is based on an extensive environmental impact assessment and public consultation, a government statement said.

The project further requires the clearance under the Commonwealth environmental protection and biodiversity conservation act and also from the federal government.

The state approval covers the development of new open cut and underground mines, associated infrastructure near Alpha in the Galilee basin, and a 470-km rail link between the mine and Abbot Point port.

The proposed mine is designed to produce 40 million tonnes per annum (Mtpa) of thermal coal for export over a lifespan of about 30 years.

The project is expected to create 3,500 jobs during construction and over 2,300 permanent positions.

 "I have stated a significant number of conditions and recommendations in my report that the proponent must implement fully,'' Broe said.

 "The conditions establish clear principles and procedures to manage matters including surface and groundwater impacts, rail line flooding, and social impacts,'' he further stated.

Waratah has agreed to offset the loss of values of the Bimblebox Nature Refuge and the coordinator-general has set conditions on this offset.

Queensland's deputy premier and minister for state development, infrastructure and planning Jeff Seeney said: ''This is a significant step in a long and rigorous process.''

"It is another major infrastructure decision for development of the Galilee Basin and I very much hope that the Commonwealth does not now hold up its approval and delay another vital project for the Queensland economy,'' Seeney further said.

Queensland's environmental groups are strongly against the proposed project as it involves clearing thousands of hectares of vegetation affecting the habitat of endangered bird species as well as over 220 plant species.

"We're horrified that the Queensland government could approve this massive, very destructive project," Greenpeace spokeswoman Louise Mattiesson told AAP.

"It just shows how weak the state's environmental laws are when it will bulldoze 14,000 hectares of bushland, including a nature reserve," she added.

Another group called for suspension of the project telling that the conditions were too weak and the government had prioritized mining interest over everyone else.

Brisbane-based Waratah Coal, a wholly-owned subsidiary of Palmer's Mineralogy Pty Ltd, holds nearly 17,000 sq. km of tenements in the prolific Galilee basin with four large coal mining projects with a cumulative capacity of 160 Mtpa, a 400 Mtpa railway line and a 240 Mtpa port.

Earlier in 2009, the company had entered into a deal with China's Metallurgical Group Corp (MCC) for project funding.

MCC contracted to lift three-fourths of the production from the Galilee project and agreed to provide up to $3.6 billion or about 70 per cent of the project cost together with Chinese financial institutions.