An additional 300 million tonnes of coal has been identified by Xstrata within their current leases, and the mining giant is currently undertaking an environmental assessment that it hopes to lodge with the State Government by July this year.

Xstrata currently has four operations in close vicinity to each other at Ravensworth, those being Cumnock, Ravensworth West, Ravensworth Underground (formerly Newpac), and Narama.

Included in the proposal to go to the State Government would be the integration of three open cut mines under one consent agreement, which would allow for more efficient management of the operations.

Senior project manager for the Ravensworth Operations project, Benn Hiatt, said the proposal to go to the State Government would seek permission for the extraction of 16 million tonnes of coal per annum for the next 29 years.

The project will see a total capital expenditure of $750 million, and would provide around 500 full time equivalent jobs, of which approximately 200 would be newly created positions.

Xstrata has employed environmental planners, Umwelt, to carry out the environmental assessment.

Umwelt project manager for Ravensworth Operations, Tim Crossdale, said the environmental studies were in the preliminary stage and that he was working with Xstrata to make sure the mine had minimal impacts on surrounding areas.

Mr Crossdale said the nearest residents were approximately five kilometres from the mining operations, and consisted of people on rural residential blocks and people in the Camberwell village.

He said Xstrata Coal would be participating in the Camberwell cumulative impact study when it gets underway through the provision of information of their mining activities, and would be available for involvement in any forums or to answer any queries from those completing the study.

Xstrata’s plans come on the back of news that, despite the global economic slowdown, there is still a high demand for Hunter coal.

Rio Tinto, who owns Coal and Allied, and Xstrata this week sealed a supply deal with Japanese power station Chubu worth roughly $9 billion.

The price negotiated equates to between $US70 and $US72 a tonne, which, in Australian dollars, is between $109 and $112.

While this is a decrease in the benchmark price for Hunter coal over the past few years, it is still well above the current price of approximately $US61 a tonne for spot cargoes of coal. And the price is a massive increase on the price of coal before the recent boom times, which ranged from between $US25 and $US40.