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BHP Group Ltd on Thursday said it will continue to run its coal business in New South Wales, Australia, as it could not find any buyers for the business.
Shares in the diversified miner were 2.4% lower in London on Thursday morning at 2,480.50 pence each.
BHP will keep New South Wales Energy Coal and is seeking approval to continue mining beyond its current mining consent that expires in 2026. BHP did say, however, that it will look to wind down the asset by the end of 2030.
‘The decision follows BHP's review of its lower-grade metallurgical and energy coal assets that was announced in August 2020 and has also resulted in the divestment of our interests in Cerrejon and BHP Mitsui Coal in January and May 2022 respectively,’ the miner explained.
Cerrejon was a joint venture in Colombia with peers Glencore PLC and Anglo American PLC. Glencore snapped up the whole JV in January.
Meanwhile, at the start of May, the sale of BHP's 80% interest in the metallurgical coal joint venture BHP Mitsui Coal, to Brisbane, Australia-based coal miner Stanmore Resources Ltd was sealed.
BHP stressed it sought to find a seller for New South Wales Energy Coal but did not receive a ‘viable offer’.
‘Assessment of the resource economics, geotechnical profile and future investment requirements determined that continued mining in the near term and moving to a closure in 2030 provides the optimal financial outcome when compared to alternate options,’ BHP continued.
The miner did clarify that continued work at the project will require relevant approvals from the Australian state, and it has started work on obtaining the go-ahead.
The provision for closure of the mine at the end of 2021 was about $700 million.
New South Wales Energy Coal asset comprises the Mt Arthur coal operation, which is located near Muswellbrook, New South Wales.
BHP has just recently hived off its petroleum business to Perth, Australia-based oil and gas firm Woodside Energy Group Ltd. The merger created one of the 10 largest independent energy producers in the world. Woodside shareholders hold 52% of the new company, which was renamed from Woodside Petroleum, while 48% is held by BHP shareholders.
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