Xstrata has given authorisation to Xstrata Coal to go ahead with the ATCOM East Project in South Africa, offering a commitment of $407m to the project.

The ATCOM East Project will be incorporated into the Xstrata Coal South Africa (XCSA) ATCOM infrastructure and annually generate 5.7 million tonnes of run of production and 3.1 million tonnes of saleable thermal product for local and export markets yearly.

Xstrata Coal chief executive Peter Freyberg said the project would be a key element in the development of Xstrata Coal’s South African operations.

ATCOM East was earlier part of the Douglas Tavistock Joint Venture (DTJV) between BHP Billiton Energy Coal South Africa (84%) and XCSA (16%).

In February 2008, Xstrata accepted the separation of the DTJV and XCSA will obtain complete ownership of its 16% share of reserves and mobile machinery on 1 December 2009.