Xstrata prepared to back Wiggins development

<p>Xstrata Coal has flagged its interest in helping to fund the Wiggins Island development at the port of Gladstone as coal producers become increasingly concerned with unclogging Australia’s coal chains.</p> <p><em>The Australian</em> reported this morning (Tuesday, June 26) that Xstrata said it was prepared to invest capital, along with other coal producers, to fund the port expansion.</p> <p>The Queensland Government, through its wholly-owned Central Queensland Ports Authority, intends to fund Wiggins Island, keeping Gladstone as the largest government-owned coal terminal in Australia.</p> <p>The new terminal, worth about $1bn in its first stage, could eventually take the total port capacity to 130mtpa.</p> <p>But the Queensland Government seems to have no plans to seek investment form coal producers.</p> <p>Other coal company-owned terminals at Hay Point and Newcastle have battled continued heavy congestion that stretches back to mid-2006 and is often seen as a being the result of the coal industry’s unwillingness to back its market forecasts.</p> <p>Significant rail upgrades and the 210 km missing link north of Wondoan will also be needed before Wiggins Island is feasible.</p> <p>Regardless of whether it invests in the port infrastructure, Xstrata is pressing ahead with mine and rail improvements.</p> <p>Xstrata is part of the Australian Transport and Energy Corridor consortium that is funding the rail link, part of the long-mooted inland rail corridor.</p> <p>Xstrata yesterday launched a pre-feasibility study into a plan to build three open-cut thermal coal mines west of Wandoan, 380 km from the port but adjacent to the missing link.</p> <p>The company hopes to begin exporting 20-30m tonnes of coal from the mine by 2011, making it what is believed to be the biggest coal operation in Australia.</p> <p>Environmental approval and community consultation will begin next month, with a final decision expected in two years.</p> <p>Meanwhile, Xstrata’s said it had overcome supply problems that had disrupted its lead shipments through the port of Townsville.</p> <p>The ABC reports that Xstrata was confident it would return its Mount Isa operations to normal in July.</p> <br />