The Shenhua Watermark open-cut mine near Gunnedah will employ 300 mineworkers and cost $1billion to build if the Chinese-backed company gets mining approval from the state government.
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China Shenhua stunned its rivals in mid-2008 when it agreed to pay about $600million to explore and develop the Watermark area, two years after BHP Billiton agreed to pay $230million for access to the nearby Caroona project.
Little has been heard publicly from Shenhua since then, but a briefing yesterday from Watermark project manager Joe Clayton revealed the company is well advanced on its mine development and coal export plans.
The parent Shenhua Group is a conglomerate of coal, electricity, port and railway companies established in 1995 by the Chinese government.
Mr Clayton, who moved to Watermark from Centennial Coal’s Anvil Hill project, said that if all went well, Watermark could start producing coal in late 2013.
It would produce 5million tonnes in its first year and reach full production of about 10million tonnes a year in 2015.
With export coal bringing about $115 a tonne, Watermark’s coal could be worth as much as $1.2billion a year.
This compared with development costs, Mr Clayton said, of about $1billion.
Watermark is yet to have state government development approval and Mr Clayton said consultants Hansen Bailey had begun work on the necessary environmental assessments.
He said the plan was to lodge a development assessment midway through next year with hopes of approval by mid-2012.
Because of the need to lock in export space for its coal, Shenhua needed to complete the first three years of coal haulage arrangements by August this year.
Mr Clayton said Shenhua had finished two of its three stages of drilling and was working with consultants GHD on a final feasibility study and overall mine design.
