BHP Billiton and its joint venture partner, Mitsubishi Development, approved USD 4.2 billion for the development of the Caval Ridge Coal mine and the expansion of Peak Downs, in the northern Bowen basin in Queensland, Australia.

The partner firms would each contribute USD 2.1 billion to add eight million tons a year of new export metallurgical coal capacity, which could be expanded at a later stage. The first coal is expected in 2014 and would be transported by conveyor to the new plant, as the project lies to the immediate south of the new Caval Ridge Mine.

“This investment in Caval Ridge mine was foreshadowed in March of this year, When BHP announced investments in the new 4.5 million-ton-a-year Daunia mine, the life extension of the Broadmeadow mine, and the 11 million-ton-a-year expansion of the Hay Point coal terminal, said BHP metallurgical coal president Hubi van Dalsen.

In March BHP earmarked USD 9.5 billion to expand its iron-ore and coal operations in Australia with the miner and its partner jointly investing USD 5 billion into three new Queensland coal operations. Meanwhile, Queensland Premier Anna Bligh has welcomed the investment decision, saying it was a boost to the state's jobs and economy. Bligh said the environmental restrictions placed on the project were the most detailed and prescriptive set of restrictions for a coal mine in Queensland to date.