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Colossal coal deal links China and Australia

AUSTRALIAN mining magnate Clive Palmer announced a massive coal deal with China yesterday that will require building Australia's largest thermal coal mine.

The project, called "China First," will mine 1.4 billion tons of coal in the Galilee Basin, southwest of Mackay in central Queensland in east Australia.

Palmer revealed it would cost US$5.1 billion and employ 6,000 people to get up and running by 2013. It will require 490 kilometers of new rail lines and extensive port construction.

Palmer said his company, Waratah Coal, had entered into a memorandum of understanding with China's Metallurgical Corporation of China to develop the project.

"MCC has agreed to be the engineering, procurement and civil contractor of the project by providing a fixed price, lump sum construction price for the entire project," Palmer said. "They have also agreed to arrange debt funding of up to 60 percent of the total capital cost."

MCC has guaranteed it will purchase 30 million tons of coal per annum.


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