There is a Stage 1 (27mt) and Stage 2 (32mt) from what I...

There is a Stage 1 (27mt) and Stage 2 (32mt) from what I understand. The below from The Australian (Jun 25) refers to Stage 2? Is stage 1 already in development?


MINING industry-owned Wiggins Island Coal Export Terminal has selected four miners for its second-stage expansion at Gladstone but it is unclear if key partner Xstrata will sign up as pressures mount on its $6 billion Wandoan coal development.

If the Swiss mining giant does not come on board, it could mean development of the Surat Basin coal region in Queensland and an associated $1.2bn Southern Missing Link railway planned by QR National is delayed by up to two years to 2018, analysts say.

It is understood that London-listed Xstrata and locally listed Stanmore Coal, Cockatoo Coal and Aquila Resources have been allocated capacity for the second stage of the Wiggins terminal.

The signing of capacity commitment deeds had been scheduled for last week but it is understood this has been pushed back to this week.

With the signing, the four parties will have to pay a combined $160 million for early works.

Xstrata, which has been allocated 22 million tonnes of the 32 million tonnes available through the expansion, will be liable for about $110m, sources say.


One source involved in the port deal confirmed Xstrata remained the big unknown but said all indications were it would go ahead with the $110m payment.

But Credit Suisse analysts say the high dollar, mining and carbon taxes, high costs, a recent slump in thermal coal prices, global uncertainty and Xstrata's coming merger with Glencore are making Wandoan look less likely.

"We believe that Xstrata may decide not to take up its 22 million tonnes a year of port allocation at WICET stage 2, thereby delaying the development of the Surat Basin until 2017-18," Credit Suisse's Paul McTaggart said.

"We also understand that Glencore is opposed to large-capex, greenfields projects in this current environment."

Credit Suisse is advising Glencore on its merger with Xstrata.

If the port is delayed, it would be the second recent pull-back in Queensland's planned port capacity, after Premier Campbell Newman's canning of reduction in the potential size of the Abbot Point coal port near Bowen.

Xstrata would not say if it was planning to pay the early works fee.

"The (Wandoan) mine development is continuing with detailed design to ensure it is aligned with the rail and port developments to trigger construction when their financing arrangements are complete," an Xstrata spokesman said.

The planned Wandoan mine, which is slated to export 22 million tonnes of thermal coal, would be the nation's biggest operating coalmine and had been seen as more likely to go ahead than the big thermal coalmines planned by Gina Rinehart and Clive Palmer in the Galilee Basin.

As well as underpinning the second stage of WICET, the giant mine is needed to justify QR National's planned 214km Southern Missing Link railway from Wandoan to Moura that would provide access to Gladstone.

Xstrata is expecting a mining licence for Wandoan in the third quarter and has been aiming for first production in 2016. The $2.5bn first stage of Wiggins, owned by eight miners, including Xstrata and Cockatoo, is aiming for first exports in 2014