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Pembroke Resources has received a $175 million loan from the Northern Australia Infrastructure Facility (NAIF) to develop the Olive Downs coking coal project in Queensland.

Olive Downs is located in the Bowen Basin and is set to become one of Australia’s largest steelmaking coal mines.

It is expected to create up to 700 jobs during construction and 1000 ongoing jobs once it reaches peak production of 15 million tonnes of coal per year.

Initial production at the site is expected to be 4.5 million tonnes per year, with the mine having more than 500 million tonnes of coal reserves.

NAIF’s $175 million funding will assist with infrastructure during the first phase of construction at the mine.

According to Pembroke chairman and chief executive officer Barry Tudor, Pembroke is dedicated to managing its emissions with the Olive Downs project.

“Olive Downs will truly be a 21st Century mine built to 21st Century standards which is designed to meet and exceed the most stringent environmental obligations whilst creating local jobs,” Tudor said.

“As a new mine, without legacy issues, Pembroke’s Olive Downs Mine can be the vanguard for others in the industry.

We will proactively manage our greenhouse gas emissions and reduce our Scope 1 and 2 emissions using technology and innovation. Olive Downs sits in the lowest quartile of emissions intensity for global steelmaking coal mines.”

This includes rail and transmission lines, water pipelines, access roads and a coal handling preparation plant.

NAIF chief executive officer Chris Wade said the project will greatly strengthen the local economy.

“We are delighted to support a major job creating project in one of central Queensland’s key industries,” he said.

“With more than $3 billion in investment now committed to job creating projects, NAIF is supporting economic growth in northern Australia.

“Helping the Olive Downs project deliver many hundreds of locally-based jobs to the region is something we are delighted to do.”

Mine construction will take 18 months and will contribute $10 billion to Queensland’s economy across its lifespan.

The funding was passed by Minister for Resources, Water and Northern Australia Keith Pitt.

According to Pitt, metallurgical coal is an important commodity for Australia’s export market.

“Pembroke Resources’ Olive Downs project will create jobs and opportunities for central Queensland and the nearby town of Moranbah, and will generate royalties and export income for Queensland and Australia for many years to come,” he said.

“Metallurgical coal is crucial for steelmaking, and is an important commodity for Australia’s trading partners to help support their economic development.

“The NAIF investment will be an important contribution to a project which is expected to return more than $10 billion to the Australian economy over the mine’s lifetime, and provide jobs for people in Moranbah, Dysart and Mackay.”

Coal mined from Olive Downs will be transported by rail to Dalrymple Bay’s coal terminal to be exported to Asian markets.