South32 Drops $700 Million Investment Plan in NSW Coal Project
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South32 has abandoned a nearly $700 million investment plan to further develop a metallurgical coal mine in New South Wales (NSW), Australia, after recent studies showed that potential returns from the move will be inadequate.
The company planned to make the investment in the Dendrobium Next Domain (DND) project at Illawarra Metallurgical Coal operations.
The project was aimed to extend the life of the Dendrobium mine by enabling operations in new areas within the existing mining lease.
However, the global miner dropped the plan after assessing recent studies and analysis of alternatives.
“Our decision today follows an extensive analysis of the alternatives for Dendrobium together with the anticipated returns from the up-front capital investment which would be required,” said South32 CEO Graham Kerr.
“Over the past 18 months we have made significant progress actively reshaping our portfolio and this decision increases our capacity to direct capital towards other opportunities. This includes our world class development options in North America that have the potential to underpin a significant growth profile to produce metals critical to a low carbon future, servicing strategically important supply chains,” added Kerr.
South32 will now aim to optimize Dendrobium and the broader Illawarra Metallurgical Coal complex within approved domains.
Activities related to Appin Mine will also remain unaffected. This work includes expanding ventilation capacity to enable mining in the current area 7 at least until 2039.
The $260 million investment is subject to South32 board approval.
Earlier this year, South32 announced estimated capital expenditure (capex) of around $1.7 billion to develop Hermosa project in the U.S.
Source: NS Energy
About South32
South32 is a globally diversified mining and metals company. Its purpose is to make a difference by developing natural resources, improving people’s lives now and for generations to come. They are trusted by their owners and partners to realize the potential of their resources. They produce bauxite, alumina, aluminium, metallurgical coal, manganese, nickel, silver, lead, and zinc at its operations in Australia, Southern Africa, and South America. With a focus on growing their base metals exposure, they also have two development options in North America and several partnerships with junior explorers around the world.
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