Mining giant Xstrata Coal has decided to develop the Ravensworth North open cut mine in New South Wales for $US1.36 billion ($A1.38 billion).
The project in the Upper Hunter Valley will produce eight million tonnes per annum of export thermal and semi-soft coking coal at full production levels, Xstrata said in a statement on Tuesday.
Ravensworth North is expected to have a mine life of about 26 years and will be within the existing Cumnock Coal and Ravensworth complex.
Construction is expected to commence in early 2011, subject to federal government environmental approvals and development consent by the NSW Department of Planning.
First coal is expected to be delivered in July 2012.
About 250 jobs will be created during construction and 550 full-time jobs are expected to be created during ongoing operations, Xstrata said.
Xstrata also on Tuesday said it would defer development of its Araguaia nickel project in Brazil as a result of market conditions. It was acquired as part of its takeover of Canada’s Falconbridge in 2006,
Xstrata has invested about $US50 million ($A50.6 million) in the project to date.
It will report an after-tax, non-cash impairment charge of about $US440 million ($A445.25 million) related to the Araguaia project as an exceptional item in its results for the 2010 calendar year.