Analyst says Wandoan coal project could be sold
Photo: A resource analyst says selling the Wandoan site to another company makes sense in the current economic climate. (ABC TV News - file image)
A resources analyst says the current economic climate could prompt Glencore Xstrata to offload the Wandoan coal project in Queensland's southern inland.The company will lay off nearly 500 workers at its mines in central Queensland and New South Wales, blaming lower coal prices and rising production costs.
It is awaiting government approval for the Wandoan project but has yet to make a final investment.
Gavin Wendt from the investor advisory service MineLife says selling the site to another company makes sense in the current economic climate.
Awaiting market"There are always markets for good projects and Wandoan is a good project because Xstrata one of the biggest coal companies, or the biggest, is developing it," he said.
"Longer term that won't have changed, the coal doesn't disappear, the quality of the coal doesn't deteriorate."
"If it is developed, the Wandoan coal mine could become the biggest of its kind in the southern hemisphere.
Mr Wendt says another alternative is that Glencore Xstrata waits until economic conditions improve before investing further in the project.
"What I can say with absolute assurance is that in time the market will turn around again," he said.
"We will see a greater rate of growth in coal consumption and we will see prices pick up once again.
"We will see operations that are currently parked, they will be considered and they will be developed."