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New South Wales limits Drayton South coal project to underground operations

While the New South Wales government renewed Malabar Coal Ltd.'s exploration license E5460 to develop a coal reserve, the government is planning to introduce amendments to state mining and planning policies to ban open pit mining at the Drayton South area, The Sydney Morning Herald reported Dec. 1, citing state Planning Minister Anthony Roberts.

"This will bring certainty to the community and local industry, including the internationally renowned equine operations in this area," Roberts said, adding that the move will protect the valuable horse studs in the area.

Anglo American Plc, which agreed to sell its stake in the Drayton and the Drayton South coal projects to Malabar in May, saw its mine expansion project rejected four times by the state Planning Assessment Commission.

In addition, Malabar voluntarily relinquished a portion of the exploration license that intruded on the horse studs for zero compensation, the company said Dec. 1.

The renewal will give Malabar the opportunity to develop and submit a proposal for a different, underground-only mine on the site, with the proposal to now be named project Maxwell.

If approved, the project is expected to generate A$1.7 billion in royalties over the initial 30-year period, with A$600 million per year in export income for the state. The mine will also pay A$55 million per year in wages and A$100 million per year in taxes, the company said.