Coal find near Avondale could be worth billions

Coal located near Avondale could be worth billions.
Coal located near Avondale could be worth billions. Daniel Burdon

A COAL find potentially worth billions of dollars near Avondale and a hook-up with mining heavyweight Gina Rinehart will "have people sitting up and taking notice", said Queensland Resources Council CEO Michael Roche.

Mr Roche said there had already been some discoveries in the Bundaberg region, and companies needed to plan how and where coal would be exported.

"We can expect to see more exploration. What they have found is coking coal, it is the higher-priced coal," he said.

His comments came as it was revealed yesterday that International Coal had struck a substantial underground supply in Avondale, with the find already supported by Ms Rinehart.

Mr Roche said the Maryborough Basin - which could be opened up by the International Coal find - would get its turn, but it would be some time before a mine was operating there.

International Coal yesterday told the ASX it had a resource of up to 28.5 million tonnes of high-grade coking coal in what it dubbed its Bundaberg Project. By multiplying the potential cache by the current coal prices of $170 per tonne, means the find could be worth $4.84 billion.

International Coal's discovery has been tested against some of Queensland's highest-quality coal - including samples from Peak Downs, Moranbah North and Saraji.

Chief executive Glenn Simpson said he was "chuffed" with the results, but this was more of a starting point than a finish line.

"Obviously this is an early stage. We have more drilling to do to prove (the coal) to a higher level," he said. "It's an excellent result."

Ms Rinehart's Queensland Coal Investments was already spending $3 million to buy 51% of the project while International benefited from QCI's expertise, he said.

"QCI has been a very good partner to date," Mr Simpson said. "They have put a lot of work into stakeholder relationships."

He said he expected there would be overtures from other investors whose curiosity had been piqued by the latest Bundaberg figures.

Mr Simpson was reluctant to discuss how or when a mine would be developed, and instead said he was happy to stick with the figures being "a very positive result".

"You're always hoping for an excellent result and you're always very optimistic about a result," he said.

Topics:  avondale coal gina rinehart

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