Queensland's Galilee Coal Mine Project to Include 900-Megawatt Clean Coal Power Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)-- Waratah Coal (Brisbane, Australia), an Australian mining and exploration company, has announced that it intends to build a power plant with clean coal technology as part of the Galilee coal mine project. The Galilee project, developed by Australian billionaire Clive Palmer, will be located in central Queensland. The coal mine is situated about 30 kilometers northwest of the Outback town of Alpha.

The 900-megawatt (MW) power station, which will be constructed next to the coal mine site, will be built in two phases, with the first phase of 450 MW estimated to cost $1.08 billion. The project also will consist of a 495-kilometer railway network, which will connect the project location to the two-berth port terminal at Abbot Point. The port will have a coal-handling capacity of 40 million to 50 million tons per year.

The proposed railway system will be able to support trains with a capacity of 21,000 tons. The port will be able to handle bulk vessels, including the newly introduced Chinamax class ship, which has a capacity of 350,000 dead-weight tonnage. The Galilee coal basin is estimated to have reserves of about 4.3 billion tons. The open cut mine will have an initial production capability of 25 million tons. The total cost of the Galilee project with the power plant is expected to reach $6.45 billion. Subsequent to environmental clearances, this project will be the first coal mining initiative in the Galilee basin.

In June, Waratah Coal completed the prefeasibility study for this project. The Environmental Impact Study, which was commissioned in July 2008, is expected to be completed by June 2010. This will be followed by the completion of the feasibility study and report by mid-2010. Construction activity is scheduled to begin by late 2010. Company officials estimate that the first coal output from the mine will start by late 2012.

Palmer, the fifth-richest Australian, is seeking funds of about $2.15 billion from the Hong Kong stock exchange for this project. Earlier, China Metallurgical Group Corporation (Beijing, China) acquired a 10% stake in this venture.

While the technology for the power project has yet to be finalized, Waratah Coal is scouting for a suitable site in the Galilee basin for carbon dioxide sequestration. The power station, which will use rejected coal from the nearby mine as primary feed, is expected to deliver low-cost electricity to the Queensland power grid. Demand for power in Queensland is expected to rise at an annual rate of 3.8% during the next decade.

The move to use clean-coal technology for the power station at Galilee comes close on the heels of the Queensland government's announcement of the "Climate Q" program. The climate change program makes it mandatory for all thermal power plants in the state to opt for clean-coal technology. Under this scheme, no approvals are given for power plants unless they use carbon capture and storage, and the best emission technologies.

The Galilee project is expected to provide a much-needed economic boost to the Outback region. Waratah Coal officials have indicated that the project will create 1,000 jobs during the construction phase and 60 permanent positions. The Alpha population is expected to increase from the present 400 to about 1,400, leading to infrastructural development and economic growth. Industry experts have observed that Queensland's treasury will grow by $241 million annually from project royalties.

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