South32 will not make approximately US$700 million investment in Australian coal project

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(Kitco News) – South32 (ASX, LSE: S32) announced on Monday that it would not make an investment in the Dendrobium Next Domain (DND) project at the Illawarra Metallurgical Coal complex in Australia.

The company said that while its work on the project has demonstrated the potential to significantly extend Dendrobium’s mine life, the expected returns from the initial capital expenditure estimate of around $700 million are not sufficient to support an investment compared to the alternatives considered for the complex.

Importantly, South32 has noted that with this decision it will now focus on continuing to optimize Dendrobium and the wider Illawarra metallurgical coal complex to extend mine life in trusted domains.

CEO Graham Kerr commented: “Our decision today follows a thorough analysis of alternatives for Dendrobium as well as the anticipated returns on the initial capital investment that would be required.

“Over the past 18 months, we have made significant progress in actively reshaping our portfolio and this move increases our ability to direct capital to other opportunities. This includes our world-class development options in North America which have the potential to support a significant growth profile to produce metals critical to a low-carbon future, serving strategically important supply chains. »

South32 is a globally diversified mining and metallurgical company producing bauxite, alumina, aluminum, energy and metallurgical coal, manganese, nickel, silver, lead, copper and zinc in Australia, Southern Africa and South America.






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