- BHP Group Ltd (NYSE:BHP) will retain New South Wales Energy Coal (NSWEC) in its portfolio. The sale process of NSWEC did not result in a viable offer.
- The company said that moving to closure in 2030 provides the optimal financial outcome compared to alternate options.
- BHP will seek the relevant approvals to continue mining beyond its current mining consent expiring in 2026 and proceed with a managed process to cease mining at the asset by the end of 2030.
- The decision follows BHP's review of its lower-grade metallurgical and energy coal assets announced in August 2020. It has also resulted in divesting interests in Cerrejón and BHP Mitsui Coal in January and May 2022, respectively.
- Work is underway to prepare the application for the relevant approvals with the New South Wales and Australian governments to support mining until 2030.
- It will also include plans for the closure of the asset, including rehabilitation and determining the most appropriate post-mining land use, which is expected to take 10 to 15 years following the cessation of mining.
- The provision for closing the mine was approximately $700 million (31 Dec 2021).
- "The current $700 million provision for closure does not appear to match the enormous scale of the likely clean-up bill," Reuters reported citing Harriet Kater, Climate Lead (Australia) at the Australasian Centre for Corporate Responsibility.
- Price Action: BHP shares are down 3.21% at $59.96 during the premarket session on the last check Thursday.
- Photo by Michael Coghlan via Flickr
