Australian company South32 scraps Dendrobium coal mine extension plans in NSW
Australian mining company South32 has announced it will not proceed with a plan to extend the life of its Dendrobium coal mine beneath Sydney’s drinking water catchment.
The company had planned to extract an additional 78 million tonnes of metallurgical coal from the underground operation, west of Wollongong, until 2048.
On Tuesday morning, South32 notified the Australian Stock Exchange it would no longer pursue the project and will instead look to extend the mine life within approved domains.
Its original extension application was rejected by Independent Planning Commission in 2021 and its revised plan later received State Significant Infrastructure status by the New South Wales government.
It was under consideration for approval by the state’s planning minister.
South32 chief executive Graham Kerr said it came to the decision after an extensive analysis of alternatives for the mine.
“Over the past 18 months, we made significant progress actively reshaping our portfolio, and this decision increases our capacity to direct capital towards other opportunities,” Mr Kerr said.
“This includes our world-class development options in North America.
“[It has] the potential to underpin a
significant growth profile to produce metals critical to a low carbon future, servicing strategically important supply chains.”
The company says mining at its nearby Appin colliery is expected to continue at least until 2039.
The Dendrobium mine started operating in 2002 and supplies coal to BlueScope Steel’s Port Kembla plant and the Whyalla Steelworks.
Under its current licence, the mine has consent to continue operating until 2030.
Proposal put ‘great deal at risk’
Deidre Stuart from Protect Our Water Catchment said South32’s announcement came as a relief as it had been a long fight.
“It is great news, the original Dendrobium proposal should never have been allowed in the catchment,” Dr Stuart said.
“There has been a lot of work by a lot of people, the community groups who have tried to raise awareness of the impacts of mining in the catchment
“There was a great deal at risk here.”
Dr Stuart said the state government should take this opportunity to create legislation to prevent any future mining in the water catchment.
Independent MP Justin Field said he was really pleased for the community, which raised legitimate concerns about the project.
“It was really going to be really risky for the water catchments and, of course, the climate impacts were pretty substantial as well,” Mr Field said.
“This is coal and emissions left in the ground, so that is a good thing.
“Hopefully it creates the opportunity to speed up the investment of turning our steel industry green
The district vice president of the Construction, Forestry, Maritime, Mining and Energy Union said the decision would affect about 500 direct jobs and hundreds more support roles.
“We had expected the project to move forward so it was very unexpected news this morning for us and our members,” Bob Timbs said.
“The life of the mine at the moment won’t go past 2028 unless they can explore and open up other avenues of mining 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.”
Mr Timbs anticipated younger members would start to consider their exit strategy from the operation but said the company’s decision did not spell the end of coal mining locally.
“Not at all, there’s still a lot of coal in the area to be mined.. it’s certainly not the end of the coal industry in the southern coal fields,” he said.
“There’s six years in front of us and with a bit of luck there might be some further extensions or expansions to the mine that might take it out past 2028.
“So we’ve got a lot of time to assist our members.”
Continued supply for BlueScope
During a hearing of the Independent Planning Commission in 2020, BlueScope Steel told the panel an extension of the mine was “critical” to the survival of its Australian operations as South32 supplied two thirds of its coking coal requirements.
On Tuesday, a BlueScope spokesperson said it welcomed the company’s new direction.
“BlueScope currently procures a blend of coal from [Illawarra Metallurgical Coal’s] IMC’s Dendrobium and Appin coal mines under a long-term contract to 2032,” the spokesperson said in a statement.
“We welcome South32’s announcement that they will continue to optimise Dendrobium and the broader IMC complex to extend the mine life within approved domains.
“This is supportive of continued supply of metallurgical coal to BlueScope’s Port Kembla Steelworks.”