Aug 23 (Reuters) - Global miner South32 Ltd said on
Tuesday it would not proceed with a $700 million upfront
investment to extend its Dendrobium metallurgical coal mine in
New South Wales, citing scant potential returns.
The decision comes more than a year after an Australian
planning body blocked the company's planned extension of the
mine, located in the Illawarra region, due to concerns over its
potential irreversible impact on Sydney's water resources. (https://reut.rs/3dP471k)
"While our work on the project demonstrated the potential to
meaningfully extend the life of the Dendrobium mine, expected
returns ... are not sufficient to support an investment relative
to alternatives considered for the complex," South32 said in a
The company said it would continue to optimise the
Dendrobium mine and the broader Illawarra metallurgical coal
complex, including the transition of its Appin mine to a single
longwall from fiscal 2025.
Longwall configuration is a form of underground mining where
a long wall of coal is mined in a single slice.
Investments at Appin include planned work worth $260 million
to install additional ventilation capacity to enable mining in
its Area 7 section until at least 2039, South32 added.
(Reporting by Shashwat Awasthi; Editing by Aditya Soni)