Australian mining company South32 has announced it will not proceed with a plan to extend the life of its Dendrobium coal mine under Sydney’s drinking water catchment.
Key points:
- South32 has notified the Australian Stock Exchange that it will not proceed with an extension
- The company planned to extract an additional 78 million tonnes of metallurgical coal from the underground operation in the NSW Illawarra.
- Instead, the company will seek to extend the life of the mine within the approved domains
The company planned to mine an additional 78 million tonnes of metallurgical coal from the underground operation, west of Wollongong, by 2048.
On Tuesday morning, South32 notified the Australian Stock Exchange that it would no longer proceed with the project and would instead seek to extend the life of the mine within the approved domains.
Its original extension application was rejected by the Independent Planning Commission in 2021 and its revised plan was later given State Significant Infrastructure status by the New South Wales Government.
It was under study for the approval of the state planning minister.
South32 chief executive Graham Kerr said he made the decision after extensive analysis of alternatives for the mine.
“Over the past 18 months, we have made significant progress in actively reshaping our portfolio, and this decision increases our ability to direct capital to other opportunities,” Kerr said.
“This includes our world-class development options in North America.
“[It has] the potential to underpin a significant growth profile to produce critical metals for a low-carbon future, serving strategically important supply chains.”
The company says mining at its upcoming Appin mine is expected to continue until at least 2039.
The Dendrobium mine began operations in 2002 and supplies coal to BlueScope Steel’s Port Kembla plant and Whyalla Steel.
Under its current licence, the mine has consent to continue operating until 2030.
South32 had applied for planning permission to extend the life of its Dendrobium mine in the Illawarra. (ABC Illawarra: Kelly Fuller)
The proposal puts “a lot at risk”
Deidre Stuart from Protect Our Water Catchment said South32’s announcement was a relief as it had been a long struggle.
“This is great news, the original Dendrobium proposal should never have been allowed to catch,” said Dr Stuart.
“There has been a lot of work by a lot of people, the community groups that have tried to raise awareness about the impacts of mining in the basin.
“There was a big risk here.”
Dr Stuart said the State Government should use this opportunity to create legislation to prevent any future mining in the catchment.
Independent MP Justin Field said he was pleased the community had raised legitimate concerns about the project.
“It would be really risky for water catchments, and of course the climate impacts were pretty substantial as well,” Field said.
“That’s carbon and emissions left in the ground, so that’s a good thing.
“We hope it creates the opportunity to accelerate investment to turn our steel industry green.”
surprised union
The District Vice President of the Construction, Forestry, Maritime, Mining and Energy Union said the decision would affect around 500 direct jobs and hundreds of other support roles.
“We had expected the project to move forward, so this morning was very unexpected news for us and our members,” said Bob Timbs.
“The life of the mine at the moment will not go beyond 2028 unless they can explore and open other mining avenues in the current footprint.
“They’ve said their expected returns don’t support the investment and that’s fair enough, but that’s bad news for us, bad news for our members and bad news for the Illawarra.”
Timbs predicted younger members would begin to consider their exit strategy, but said the company’s decision did not mean the end of coal mining locally.
“By no means, there’s still a lot of coal in the area to mine … it’s certainly not the end of the coal industry in the southern coalfields,” he said.
“We have six years ahead of us and with any luck there could be some extensions or expansions of the mine that could take it beyond 2028.
“So we have plenty of time to help our members.”
Continuous supply for BlueScope
During an Independent Planning Commission hearing in 2020, BlueScope Steel told the panel that the mine extension was “critical” to the survival of its Australian operations, as South32 supplied two-thirds of its steel requirements. coking coal
On Tuesday, a BlueScope spokesman said he welcomed the company’s new leadership.
“BlueScope currently purchases a mix of coal from [Illawarra Metallurgical Coal’s] IMC’s Dendrobium and Appin coal mines under a long-term contract until 2032,” the spokesperson said in a statement.
“We welcome South32’s announcement that they will continue to optimize Dendrobium and the wider IMC complex to extend mine life within approved domains.
“This supports the continued supply of metallurgical coal to BlueScope’s Port Kembla Steel.”
Illawarra Bulletin – Local news to your inbox
ABC Illawarra will deliver a summary of the week’s news, stories and photos every Thursday. Register here.