BHP to wind down Australian coal mine after failing to agree sale

BHP will run down the life of the Mount Arthur thermal coal mine in New South Wales, Australia over the next eight years after failing to secure a buyer for the fossil fuel producing project.

The decision to wind down the Hunter Valley-based asset and close it in 2030, instead of extending the life of the mine through to 2045 and securing a buyer – as per previous plans – comes amid shareholder and broader environmental concerns in Australia.

In the short term, the world’s biggest mining company will benefit from near record prices for high-grade Australian thermal coal. Meanwhile, Europe’s decision to ban coal imports from Russia in August will further tighten the market, benefitting Australian producers.

BHP built the operation into one of Australia’s largest open pit mines 20 years ago. Today, around 2,000 people work on the site and so the decision to extend its life beyond 2026 will require government approval.

Edgar Basto, head of BHP’s Australian minerals unit, 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.”

Coal mining has been a key bone of contention in recent political conversations in Australia, partially due to the country’s dependence on fossil fuel exports which has resulted in regular domestic energy shortages.

@RGNonline