Australian state approves big new coking coal mine

MELBOURNE (Reuters) - Australia’s Queensland state gave final approvals for a large coking coal mine in the Bowen Basin on Tuesday as it acts to shore up jobs in the resources industry amid coronavirus-linked disruptions and ahead of a state election next month.

State Mines Minister Anthony Lynham said in a statement that preparation work for construction at the Olive Downs mine could begin immediately.

“It’s expected core construction activities at the mine site ... will begin in 2021 with mining starting as soon as construction is complete,” he said, giving no details on when that would be.

At peak output, Olive Downs should produce up to 15 million tonnes a year of metallurgical coal, Lynham said. This would be sent by rail to Dalrymple Bay Coal Terminal for export to markets in Japan, China, India and South Korea, among others.

The mine is expected to employ 500 people in construction and 1,000 during peak production.

Australia - the world’s biggest exporter of coal - said this week it expected export earnings from metallurgical coal to drop by a third to A$23 billion ($16 billion) in 2020-2021 on lower prices and weaker output from major miners. That is A$2 billion less than the government’s previous outlook.

The Olive Downs project is owned by Pembroke Resources, an Australian specialist steelmaking coal company that is backed by resources private equity firm Denham Capital.

A Pembroke representative was not immediately available to provide more details on the project.

Reporting by Melanie Burton; Editing by Tom Hogue