Roughly 2000 jobs could be lost after BHP announced it would cease operations at the NSW Hunter Valley Mount Arthur coalmine in 2030.
BHP will seek to extend operations at the mine near Muswellbrook – which is approved to operate until 2026 – for a further four years after which it will be closed.
The company has been seeking to divest some of its lower-grade coal assets for several years but was unsuccessful in finding a buyer for the Mount Arthur operation.
It said continued mining in the near term, winding towards a closure in 2030, would provide the “optimal financial outcome” compared with other options.
“Continuation of mining to the end of FY2030 will afford eight years to work with our people, state and federal governments and local communities in the Hunter Valley region on a transition approach that supports long-term community sustainability,” the company said in a statement.
Production started at the mine in 2002 and in 2020 it shifted exclusively to producing coal for export.
The price of coal has surged due to recent global factors and in turn driven up the price of electricity.
BHP Minerals Australia president Edgar Basto said the company reviewed all options, including further investment in the asset.
“Seeking approval to continue mining until 2030 avoids closure in 2026 and enables BHP to balance the value and risk of those considerations and our commitments to our people and local communities,” Mr Basto said.
BHP is preparing applications to continue mining at the site beyond 2026.
Work to rehabilitate the area is expected to take 10-15 years once mining ceases.