Perdaman Chemicals and Fertilisers has signed a supply deal to buy coal from the new owners of Griffin Coal's mines, paving the way for the development of its $US3.5 billion Collie urea project.

The deal, announced today by Griffin administrators KordaMentha, will see Perdaman buy up to 2.95 million tonnes of coal a year from India's Lanco Infratech, starting in 2014.

Perdaman is developing the urea manufacturing plant at Collie, which will produce 2mtpa of urea for domestic customers and export.

The group had signed a similar supply deal with Griffin before the group's collapse in January.

Perdaman chairman Vikas Rambal said: "Perdaman is very appreciative of the efforts shown by Griffin's administrators in finalising this contract during a difficult period for Griffin Coal".