Sept. 16 (Bloomberg) -- Australia's Queensland state is studying a A$400 million ($307 million) expansion of the world's fifth-largest coal export port amid rising demand in Asia.

The Central Queensland Ports Authority is may build another coal terminal at the Port of Gladstone, with an initial capacity of 20 million tons, said Leo Zussino, the port authority's chief executive. The proposed terminal at Wiggins Island may eventually have 70 million tons of capacity, he said.

``We're currently working out with coal miners to facilitate the environmental impact study and engineering,'' said Zussino in an interview at the Coaltrans conference in Brisbane, Queensland, yesterday. Miners Macarthur Coal Ltd. and AMCI Inc. have shown interest, he said.

The Queensland government is already expanding capacity at Gladstone port to more than 70 million tons a year by 2010, from the 43.5 million tons it handled for the year ended June 30. Surging coal demand driven by China's consumption has caused congestion at ports and on railways in Australia, the world's biggest exporter of the fuel.

Construction could start from July 2007, with the terminal operational by December 2009, should a decision be taken to build the Wiggins Island terminal, Zussino said.

Rio Tinto Group, the world's third-largest miner, Wesfarmers Ltd., and other coal producers export through the port in central Queensland.

The government plans to invest about A$2.1 billion in coal transport systems and ports. It wants to increase shipments out of the state, the world's largest exporter of coal, by as much as 62 percent to 235 million tons a year in 2010, from 145 million tons for the year just ended June 2005.

To contact the reporter on this story: Tan Hwee Ann in Brisbane at hatan@bloomberg.net

Last Updated: September 15, 2005 19:52 EDT