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The biggest coal mine in NSW will close operations by 2030 after BHP was unable to find a buyer for the site, with more than 2000 jobs set to be axed.
BHP failed to secure an offer for the Mount Arthur mine in the Hunter Valley after searching for a new buyer for two years.
The open-cut mine near Muswellbrook employs about 2000 people and provides thermal coal to international customers.
It was once valued at a whopping $2billion, but that figure has been repeatedly slashed.
The Mount Arthur coal mine (pictured) in the Hunter Valley will close by 2030 after BHP failed to find a valid buyer
BHP is currently licensed to conduct operations at the mine until 2026.
But the company said it will try to acquire approval to extend operations until the end of the 2030 financial year.
‘Moving to a closure in 2030 provides the optimal financial outcome when compared to alternate option,’ BHP said in a statement to the ASX.
Minerals Australia President, Edgar Basto said: ‘Seeking approval to continue mining until 2030 avoids closure in 2026 and enables BHP to balance the value and risk of those considerations and our commitments to our people and local communities.’
NSW Minerals Council chief executive Stephen Galilee added that the decision to seek an extension would give those who rely on the mine years to work and plan for the future.
‘While the Mt Arthur mine is a large operation, it is just one of nearly 40 coal mines operating across NSW, and 17 operating in the local region.’
‘Fifteen other local coal mines in the Upper Hunter either have approvals already in place or are seeking approvals to continue mining to 2035 or beyond, with several seeking extensions to operate beyond 2040.’
NSW’s largest mine near Muswellbrook employs 2000 people and provides coal to international customers
BHP is only licensed to conduct operations at the mine until 2026. The company is seeking to extend that until 2030
BHP expects to spend $US700 million ($A999 million) on closing the mine and rehabilitating the site over the next 10 to 15 years, with final plans for the site yet to be determined.
‘We will work with our people, local business partners, Traditional Owners and local and state governments to operate safely and productively, prepare for closure and sustainable rehabilitation of the site, and ensure the pathway to closure is managed in a way that meets community and regulatory expectations,’ commented Adam Lancey, vice president of BHP’s NSW Energy Coal operation.
Under pressure from investors to respond to climate issues, BHP has been divesting its thermal coal and lower-grade coking coal assets.
Mr Basto said BHP had ‘thoroughly reviewed potential options’ for the Hunter Valley operation, including divestment and future investment requirements.
BHP had talked about seeking an extension for the Mt Arthur mine to operate until 2045 as part of the divestment process, although it never formally applied for that extension.
The operation reported operating losses in fiscal 2020 and 2021, and BHP said its review concluded that the mine’s ‘commercial viability’ was limited past the 2030s.
‘Or certainly not secure enough to warrant the significant capital investment and effort that would be required in the near term for mining beyond 2030,’ the company says on its website.
Carmel Flint, the national coordinator for the environmental group Lock the Fate, said the closure of the mine was a good sign
Lock the Gate Alliance national coordinator Carmel Flint said the environmental group was pleased that BHP was closing the mine, although it would have liked it to happen in 2026 rather than 2030.
‘This is a very significant step by BHP, and the absence of buyers for the mine sends an incredibly strong message that thermal coal is in decline globally, as customer countries act on climate change.’
Harriet Kater, Climate Lead (Australia) at the Australasian Centre for Corporate Responsibility, said that closing the mine instead of selling it was the right call.
‘Use of asset divestment as a tool to lower carbon footprints and avoid responsible closure is not acceptable,’ she said.
The Mount Arthur mine has been in operation since 2002.
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