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Xstrata seeks to sell 20% of AU$ 6 billion coal project

World Coal,

Xstrata is offering to sell 20% of the proposed AU$ 6 billion (US$ 6.4 billion) Wandoan coal mining project in Queensland, Australia.

The project, which is 75% owned by Xstrata, is awaiting a mining license from Queensland Land Court before construction of the mine can begin. Wandoan has received conditional environmental approval from the federal Government, despite opposition from environmental groups and farmers. The project’s minority partners are two Japanese companies, Itochu Corp. and Sumitomo Corp., which each own 12.5%.

Wandoan is just one of a number of potential projects that has attracted miners keen to capitalise on the huge demand for coal and other minerals in Asia.

The Wandoan coal project, if approved, will be one of the largest new mining projects in the country with a projected output of 30 million tpa of thermal coal – equivalent to 7% of Australia’s current total annual raw coal production. It is estimated to create around 1300 new jobs.

At this stage it is unclear if Xstrata’s proposed merger with Glencore will affect the sale of the 20% stake in Wandoan. Xstrata has appointed Macquarie Capital to handle the sale.

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