Aussie junior Waratah Coal takes Queensland by storm

It’s a coal exploration company that many investors in Toronto may never have heard of, but Waratah Coal (WCI-V, WGO-A) is certainly making a big splash in Australia.

The Aussie junior, which listed on the TSX Venture Exchange in December 2006, is undertaking the first major coal port development on the east coast of Australia in the last 25 years.

In July, the premier of Queensland endorsed Waratah’s A$5.3-billion (US$4.6 billion) proposal for a thermal coal mine in the Galilee basin linked by a new 495-km rail line to a purpose-built export facility on the Queensland coast. Premier Anna Bligh designated the Galilee mine and infrastructure project of “state significance” — a classification that is only given to critical infrastructure projects and is designed to help fast-track construction.

In an interview with The Northern Miner, chief executive Peter Lynch explained that the designation will halve the time it takes for the company to nail down approvals, partly because Waratah will be assigned a project manager by the government whose job it is to make sure the timeframe for approvals is as timely as possible.

Lynch said the proposed port was the most attractive natural deepwater port location on the coast of Queensland and the new facility would be built to accommodate the new, 350,000-deadweight tonne Chinamax class bulk carriers.

Waratah will build a heavy haul, standard gauge rail system to support 21,000-tonne train units. The system will be equipped with dual gauge rail from the Bowen basin mining camp to the port to accommodate third-party users.

Lynch notes that all the major coal companies have operations in the Bowen basin and Waratah already has had a number of calls from people who are interested in purchasing the third-party access tonnage.

The Bowen basin is home to projects owned by BHP Billiton (BHP-N, BLT-L), Anglo American (AAUK-Q , AAL-L), Xstrata (XSRAF-O, XTA-L), Rio Tinto (RTP-N, RIO-L), Vale (RIO-N), and MacArthur Coal (MCC-A).

“They just can’t get coal to the market in the quantity that is being demanded by the market, so there are huge bottlenecks in the infrastructure,” Lynch said.

Waratah’s proposed train would be 3 km long with six locomotives and 180 wagons that could carry 21,000 tonnes of coal. The 500-km trip to the coast would take about seven hours and 27 minutes, Lynch says. By comparison, trains currently used in the region are narrow-gauge ones that carry a maximum of 7,000-10,000 tonnes.

“We’re looking to establish the infrastructure as a standalone business, and we’ve been in discussions