China to buy $A70b of Australian coal

Mining magnate Clive Palmer says his company has secured Australia's biggest export
deal with a $US60 billion ($A69.39 billion) agreement to sell coal to China.
The Resourcehouse chairman on Saturday said the company's proposed China First coal
mine and infrastructure project in central Queensland had reached a 20-year
agreement with one of China's largest power companies, China Power International
Development, the flagship company of China Power Investment Corporation (CPI).
"This deal with CPI is Australia's biggest ever export contract," Mr Palmer said in
a statement.
Mr Palmer also said he had awarded Queensland's largest engineering, procurement and
construction management contract (EPCM) for $US8.013 billion ($A9.27 billion) to
Metallurgical Corporation of China Ltd (MCC).
"MCC will manage a syndicated group consisting of Sino Coal International
Engineering Group, China Communications Construction Company (First Harbour) and
China Railway Group Limited (CREC) to build Australia's largest coal mine along with
the required export infrastructure," he said.
"The $US8.0 billion ($A9.25 billion) China First Project has been developed by China
First Pty Ltd, which is a fully-owned subsidiary of Resourcehouse."
Resourcehouse executive director Phil McNamara, in the statement, said: "The
contract with CPI was to supply 30 million tonnes per annum (MTPA) for approximately
$US3 billion ($A3.47 billion) per annum over 20 years".
Putting aside political differences to stand alongside Queensland Premier Anna Bligh
to announce the deal, Mr Palmer told reporters in Brisbane on Saturday it would
create thousands of jobs in Queensland and most likely restore the state's AAA
credit rating.
The coal will be mined from the Galilee Basin region near Alpha, west of Emerald. A
private 495-kilometre rail line will be built and new jetties and ports erected at
Abbott Point, near Bowen.
The royalties from the sales are expected to tip more some $700 million into the
government's coffers per annum from 2014, while creating 7,500 direct jobs and
50,000 to 60,000 indirect jobs.
Mr Palmer - who is a life member of the state opposition Liberal National Party
(LNP), a former state director of the National Party, and who is suing Ms Bligh for
defamation - said the Export-Import Bank of China had financed a $US5.6 billion
($A6.48 billion) loan but emphasised the project was 100 per cent Australian owned.
"When you need a lot of money there is no better place to get it than in China," Mr
Palmer told reporters.
"This is Australia's largest single, non-syndicated, finance deal and the interest
from China highlights the strength of the project and the benefits for Queensland
and Australia in developing a new world class coal region such as the Galilee Basin.
"There will be four underground mines and two open cut mines."
Ms Bligh said there was some environmental red tape to negotiate before the project
was signed off, but unlike the Traveston Dam debacle, she did not next expect any
last minute problems.
"It is world demand which is making it a commercial opportunity," Ms Bligh said.
"It will create tens of thousands of jobs in construction and in operation of the
mine, port and rail over that time."
She said the project would revive and revitalise Central Queensland's economy.
More than 100 million extra tonnes of coal could be exported every year from
Queensland with a total of $25 billion of new projects under consideration by the
state government.
The project is expected to start later this year.