The government said the projects were an important part of the development of the coal rich Galilee Basin in western Queensland.

One of the major constraints to activity in the basin is its lack of water, which the Government hopes will be solved by the $2.6bn Connors River Dam and pipelines proposal

The development will include a 49,500 megalitre dam and two pipelines.

The first pipeline will run 133km from the dam to Moranbah and the second will run 265km from Moranbah to Alpha.

Queensland Premier Anna Bligh said in a statement the projects would deliver water to the Bowen and Galilee coal basins as well as the Nebo, Moranbah and Alpha townships.

“This massive project will underpin the water supply needs for the development of this resource industry corridor and the towns that support it,” she said.

Abbot Point has been designated as the main coal port for the Galilee Basin, and there are at least two proposals for railways from Galilee to the port.

It is also being upgraded to cope with extra coalmines in the Bowen Basin.

Under the Bligh Government’s privatisation scheme Abbot Point was sold earlier this year for $1.8bn to Indian company Adani, which also owns coal tenements in the Galilee Basin.

A report examining funding models and options for both projects is expected to be completed by the end of this year, with the Government possibly in a position to approach the market in early 2012.

Source : www.miningaustralia.com.au