South32 will no longer invest in its proposed Dendrobium Next Domain Project at Illawarra Metallurgical Coal, after it was found the project would not be economically viable
South32 announced it would not invest in the project; which had promised to extend the life of the company’s Dendrobium Mine in Coastal New South Wales, and extract an additional 78 million tonnes of metallurgical coal
“While our work on the project demonstrated the potential to meaningfully extend the life of the Dendrobium mine, expected returns from the ~US$700M upfront capital expenditure estimate are not sufficient to support an investment relative to alternatives considered for the complex,” South32 said.
South32 Chief Executive Officer, Graham Kerr, said that the decision was made following an extensive review of recent studies.
“Our decision today follows an extensive analysis of the alternatives for Dendrobium together with the anticipated returns from the upfront capital investment which would be required,” Mr Kerr said.
“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.”
