Federal Government approves Newlands mine expansion

A MAJOR expansion of Glencore's Newlands mine north-west of Mackay has won approval from the Federal Government but its future remains unclear.

Newlands already pumps out 10.5 million tonnes of coal per year, and although Glencore is planning to develop three new open-cut mines as part of its extension, these will be about lengthening the life of the mine, not increasing the amount of coal it exports.

Glencore expects Newlands' underground operations will stop making money for the company after 2015 while its current open-cut operations will run out of steam come 2023.

Early announcements from Glencore suggest these new underground and open-cut elements could be mining by 2017.

Workers needed to build and operate the extension are expected to be pulled from the current Newlands workforce.

There is some hand-wringing about Newlands' future, with its owners undergoing enormous corporate changes in the past year.

The groundwork on the extension was done by Xstrata, which was absorbed into Glencore in May.

Since then, Glencore shelved Xstrata's billion dollar port project north of Gladstone and later conceded its Wandoan mine in south-west Queensland was now on hiatus.

However, Glencore has shown it will spend if the deal is right - it forked out $1 billion for Rio Tinto's ageing Clermont mine in late October.

Before construction can begin Glencore still requires an environmental authority and mining lease to be issued by the Queensland Government.