South32 cancels US$700M investment in Australian coal project
South32 has announced it will not proceed with an investment in the Dendrobium Next Domain (DND) project at the Illawarra Metallurgical Coal complex in Australia. South32 noted that with this decision, it will now focus on continuing to optimize Dendrobium and the broader Illawarra Metallurgical Coal complex to extend the mine life within approved domains.
The company alleged that while its work on the project demonstrated the potential to meaningfully extend the life of the Dendrobium mine, expected returns from the ~US$700M up-front capital expenditure estimate are not sufficient to support an investment relative to alternatives considered for the complex.
South32 CEO Graham Kerr commented, “Our decision today follows an extensive analysis of the alternatives for Dendrobium together with the anticipated returns from the up-front capital investment which would be required.
“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.”
South32 is a globally diversified mining and metals company producing bauxite, alumina, aluminium, energy and metallurgical coal, manganese, nickel, silver, lead, copper and zinc in Australia, Southern Africa and South America.
