South32 has decided not progress the Dendrobium Next Domain (DND) project at its Illawarra Metallurgical Coal (IMC) operations in New South Wales.
The company stated that, following consideration of recently completed study work and extensive analysis, expected returns from the $US700 million up-front capital expenditure estimate were not sufficient to support an investment relative to alternatives considered for the complex.
South32 chief executive officer Graham Kerr said the company would now focus on continuing to optimise the Dendrobium coal mine and the broader IMC complex to extend the mine life within approved domains.
“This work includes existing plans for Appin, where we have been investing to support its transition to a single longwall from FY25, bringing further operating and capital efficiencies,” he said.
“Looking forward, our investments at Appin include planned work to install additional ventilation capacity to enable mining in the current Area 7 until at least 2039.
“Average annual saleable production of about 5.5 million tonnes with operating unit costs of $US105-$120/t is expected from the current configuration beyond FY23, with further improvements to be targeted to sustainably bring unit costs to the bottom of the range.
“Over the past 18 months we have made significant progress actively reshaping our portfolio and this decision increases our capacity to direct capital towards other opportunities. This includes our world class development options in North America that have the potential to underpin a significant growth profile to produce metals critical to a low carbon future, servicing strategically important supply chains.”
