Australian mining company South32 has abandoned plans to expand its Dendrobium metallurgical coal mine in the Illawarra region of New South Wales.
In an announcement to the ASX, the mining company said the expected financial returns were not enough to justify the $1 billion investment the extension would require.
“Our decision today follows an extensive analysis of the alternatives to Dendrobium along with the anticipated returns on the initial capital investment that would be required,” said Chief Executive Officer Graham Kerr.
“Over the past 18 months, we have made significant progress actively reshaping our portfolio and this decision increases our ability to direct capital toward other opportunities.”
The Dendrobium project has been controversial after the NSW government overturned a 2021 decision by the state’s Independent Planning Commission to reject the expansion, which would have extended the mine’s life to 2048 and allowed South32 to mine. An additional 78 million tons of coal from two areas near the Avon and Cordeaux Dams.
The IPC found that the project could cause irreversible damage to the Sydney and Illawarra drinking water basins.
In December last year, Deputy Prime Minister Paul Toole and former Planning Minister Rob Stokes declared the expansion to be “significant state infrastructure” due to the mine’s role as a supplier of coal to the Port Kembla steelworks. .
The declaration would have allowed South32 to submit a new environmental impact statement for a reduced proposal to the state planning department.
The decision to overturn the CPI was heavily criticized by environment and climate groups, who accused the NSW government of being captured by the coal industry.
Secretary of Illawarra and the Sydney-based environmental group Protect Our Water Catchment Incorporated, Deidre Stuart, said the project was “never in the public interest” and that South32’s decision to pull out was an excellent result for the communities that had worked. to oppose.
“The state’s significant infrastructure declaration was an assault on good governance and communities,” he said.
“It is a great shame that many politicians have lined up across the political spectrum to undermine the original ruling of the planning commission. Thank God common sense has prevailed.”
Cate Faehrmann, an MLC for the Greens, said it was “unthinkable” that the expansion could ever have been approved because it would have put catchments at risk at a time of heightened threat to water security from the climate crisis.
Nic Clyde, a spokesperson for the Lock the Gate Alliance, asked South32 to focus on rehabilitating the land at Dendrobium as the mine reaches the end of its useful life.
“Gradual rehabilitation once the mine closes will provide continued employment for workers and protect the water catchment area from further degradation,” he said.
It also called on the state government to legislate to protect the Sydney Basin by ruling out any other new or expanded mining projects.
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