Wandoan Seeks $100M from Xstrata as Condition to Open Town for Coal Mining

The small Australian town of Wandoan, located near Chinchilla, is seeking $100 million from mining giant Xstrata as a condition for the town to open its doors to the firm's coal mining venture.

Swiss miner Xstrata, proponent of the $6-billion venture, bought 40,000 hectares of grazing land where it will set up its mining operations. In a social impact management statement, Xstrata said the project would create 1,300 jobs during the construction phase and 800 when it operates.

Besides providing jobs to local residents who number only 380, Xstrata said the firm estimates it would spend an average of $16 million yearly in Wandoan through purchase of goods and services that would support the proposed coal mine operations.

Xstrata plans to build a 30,000-hectare open cut coal mine in the town and is going through the application process. Among the agencies it as to deal with is the Western Downs Regional Council which has given its list of demands to Xstrata.

Wandoan, located 400 kilometres northwest of Brisbane, has been identified as one of the seven towns in Australia expected to become boomtowns because of the resources sector. The Xstrata mine is expected to produce 30 million tonnes of thermal coal yearly.

Wandoan Mayor Ray Brown said the $100 million payment the town seeks from Xstrata would be used to build roads, sewerage and water-related facilities and upgrade the local airport to accommodate fly-in, fly-out workers the mining firm is expected to bring in.

With a headcount of only 380, the $100 million bill boils down to an average benefit of $260,000 for each resident who are mostly cattle grazers and wheat growers.

Besides Wandoan, the six other towns on the list of Australian boomtowns are Gladstone in Queenstown which hosts the fourth-largest coal export facility in the world, Emerald where BMA's open-cut and underground mining operations are located, Newcastle which is the base of the world's largest coal export facility, Dalby which is a centre for coal mining as well as wheat, cotton and sorghum production and livestock raising, Chinchilla where the Kogan Creek power station and coal mine owned by CS Energy are found and Moranbah which hosts the Peak Downs Mine, Goonyella Riverside Mine, Broadmeadow Mine and the Moranbah North Mine.