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Mount Arthur coal mine in NSW to close by 2030 after BHP fails to find a buyer

The largest colliery in NSW will close by 2030 after BHP failed to find a buyer for the site, and more than 2,000 jobs will be cut.

BHP accepted offers for the Mount Arthur mine in the Hunter Valley for two years, but did not receive a viable offer.

The open mine near Muswellbrook employs approximately 2,000 people and supplies thermal coal to international customers.

It was once valued at a whopping $2 billion, but that figure has been repeatedly lowered.

The Hunter Valley's Mount Arthur colliery (pictured) will close by 2030 after BHP failed to find a valid buyer

The Hunter Valley’s Mount Arthur colliery (pictured) will close by 2030 after BHP failed to find a valid buyer

BHP is currently licensed to operate operations at the mine until 2026.

But the company said it will seek approval to extend operations through the end of fiscal year 2030.

“Moving to a 2030 shutdown provides the optimal financial outcome compared to an alternative option,” BHP said in a statement to the ASX.

Edgar Basto, president of Minerals Australia, said: ‘By seeking approval to continue mining through 2030, it will avoid closure in 2026 and allow BHP to appreciate the value and risk of these considerations and our commitment to our people and local communities in bring balance.’

Stephen Galilee, chief executive of the NSW Minerals Council, added that the decision to seek an extension would give those who rely on the mine years to work and plan for the future.

‘While the Mt Arthur mine is a major operation, it is only one of nearly 40 collieries operating in NSW and 17 in the local region.’

“Fifteen other local collieries in the Upper Hunter already have approvals or are seeking approvals to continue mining through 2035 or beyond, with several seeking expansions to operate after 2040.”

NSW's largest mine near Muswellbrook employs 2,000 people and supplies coal to international customers

NSW’s largest mine near Muswellbrook employs 2,000 people and supplies coal to international customers

BHP only has a permit to operate in the mine until 2026. The company wants to extend that until 2030

BHP only has a permit to operate in the mine until 2026. The company wants to extend that until 2030

BHP expects to spend $700 million ($A999 million) over the next 10 to 15 years to close the mine and restore the site, with final plans for the site yet to be determined.

“We will work with our people, local business partners, traditional owners and local and state governments to operate safely and productively, prepare for site closure and sustainable recovery, and ensure the path to closure is managed in a manner that meets community and regulatory expectations,” said Adam Lancey, vice president of BHP’s NSW Energy Coal operation.

Under pressure from investors to respond to climate concerns, BHP has sold its thermal coal and sub-grade coking coal assets.

Mr Basto said BHP has “thoroughly explored potential options” for the Hunter Valley operation, including divestments and future investment requirements.

BHP had discussed seeking an extension for the Mt Arthur mine to operate until 2045 as part of the divestment process, although it never formally requested that extension.

The operation reported operating losses in fiscal years 2020 and 2021, and BHP said the assessment concluded that the mine’s “commercial viability” beyond the 2030s was limited.

“Or certainly not safe enough to justify the significant capital investment and effort required in the near term for mining beyond 2030,” the company says on its website.

Carmel Flint, the national coordinator of environmental group Lock the Fate, said the mine's closure was a good sign

Carmel Flint, the national coordinator of environmental group Lock the Fate, said the mine’s closure was a good sign

Lock the Gate Alliance national coordinator, Carmel Flint, said the environmental group was pleased that BHP closed the mine, although it would have preferred it to happen in 2026 rather than 2030.

“This is a very important step by BHP, and the absence of buyers for the mine sends an incredibly strong signal that thermal coal is declining globally as the client’s countries fight climate change.”

Harriet Kater, Climate Lead (Australia) at the Australasian Center for Corporate Responsibility, said closing the mine rather than selling it was the right decision.

“Using asset divestment as a tool to reduce the carbon footprint and avoid responsible closure is not acceptable,” she said.

The Mount Arthur mine has been in operation since 2002.

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