Aug 23 (Reuters) – International miner South32 Ltd (S32.AX) mentioned on Tuesday it will not proceed with a $700 million upfront funding to increase its Dendrobium metallurgical coal mine in New South Wales, citing scant potential returns.

The choice comes greater than a yr after an Australian planning physique blocked the corporate’s deliberate extension of the mine, situated within the Illawarra area, as a result of issues over its potential irreversible influence on Sydney’s water assets. (https://reut.rs/3dP471okay)

“Whereas our work on the challenge demonstrated the potential to meaningfully lengthen the lifetime of the Dendrobium mine, anticipated returns … usually are not adequate to assist an funding relative to options thought of for the complicated,” South32 mentioned in an announcement.

The corporate mentioned it will proceed to optimise the Dendrobium mine and the broader Illawarra metallurgical coal complicated, together with the transition of its Appin mine to a single longwall from fiscal 2025.

Longwall configuration is a type of underground mining the place an extended wall of coal is mined in a single slice.

Investments at Appin embody deliberate work price $260 million to put in extra air flow capability to allow mining in its Space 7 part till at the very least 2039, South32 added.

Reporting by Shashwat Awasthi; Enhancing by Aditya Soni

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