PERTH (miningweekly.com) – The Queensland government has approved the proposed A$1-billion Olive Downs metallurgical coal mine being developed by Pembroke Resources.

The Stage 1 project is expected to require a capital spend of A$450-million and will produce 4.5-million tonnes a year of steelmaking coal, which will be exported through the Dalrymple Bay Coal Terminal.

At full production, the mine could produce up to 15-million tonnes a year of metallurgical coal, with a mine life of nearly 80 years.

Premier Annastacia Palaszczuk on Tuesday said that the mine would create 1 000 operational jobs and 500 jobs during construction.

“The project will contribute an estimated A$8-billion to the local economy and more than A$10-billion to the Queensland economy.”

Minister for State Development, Manufacturing, Infrastructure and Planning Cameron Dick said metallurgical coal produced in the Bowen basin was in high demand for use in steel production in Asia.

Dick said that the project maximised the use of existing road, rail, power and water infrastructure in Queensland’s most established coal region and would operate alongside 25 existing mines.

“The proposed project includes coal handling and crushing facilities at the mine’s Olive Downs South and Willunga precincts, a rail link to transport coal to the Dalrymple Bay Coal Terminal and a water pipeline and power transmission line,” he said.

Pembroke MD and CEO Barry Tudor has welcomed the approval, pointing out that there was no alternative to coking coal in the primary steel production process for the foreseeable future, meaning Olive Downs would be a major supplier to the world’s leading steel producers.

Tudor said Pembroke had been working consistently and collaboratively with stakeholders, regulators and potential customers over the past three years noting that, while large, it was a relatively straightforward coking coal project in an existing mining basin.

“We now need to receive a mining lease before we can start construction, but we anticipate starting mining in 2020 and shipping first coal soon after.”

“[The] approval is not only a sign of confidence in this project, but also an acknowledgement of Pembroke’s adherence to the highest of standards throughout the approvals process.”

Subject to Commonwealth government approval, Pembroke Resources expects to start construction in 2020.