BHP to keep NSW coal assets
Friday, June 17th, 2022
The company told shareholders that it would seek the relevant approvals to continue mining beyond its current mining consent that expires in 2026 and would proceed with a managed process to cease mining at the asset by the end of the 2030 financial year.
The decision follows BHP’s review of its lower grade metallurgical and energy coal assets that was announced in 2020 and which resulted in the divestment of our interests in Cerrejón and BHP Mitsui Coal (BMC) in January and May this year, respectively.
BHP noted that a trade sale process for NSWEC was conducted, however, the process did not result in a viable offer. Assessment of the resource economics, geotechnical profile and future investment requirements determined that continued mining in the near term and moving to a closure in 2030 provides the optimal financial outcome when compared to alternate options.
“We thoroughly reviewed potential options for NSWEC including divestment and future investment requirements. 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,” minerals Australia president, Edgar Basto said.
The miner said this week that a continuation of mining to the end of 2030 would afford eight years to work with its staff, state and federal governments and local communities in the Hunter Valley region on a transition approach that supports long-term community sustainability.
Plans to continue operating NSWEC to 2030 are subject to obtaining relevant approvals to enable mining beyond the current consent, which only provides approval for mining until 2026.
Work is under way to prepare the application for the relevant approvals with the New South Wales and Australian governments to support mining until 2030. This will also include plans for closure of the asset, including rehabilitation and determining the most appropriate post-mining land use.
It is expected that continued work on rehabilitation will take 10 to 15 years following the cessation of mining. The provision for closure of the mine as of the end of December 2021 was approximately $700-million.