Hundreds of workers have been left unsure of their future as South32 walks away from plans to extend the Dendrobium mine in Mount Kembla.
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Approximately 650 workers found out the project was not going ahead by text message just after 8am on Tuesday morning.
South Western District President of the Mining and Energy Union Andy Davey said this came as a blow after the support the workforce had put into the project.
"We were always telling South32 that we were there and would do anything to assist the [expansion] project," he said.
The plan would have seen the mine extend its operations for an additional 11 years until 2041 but South32 CEO Graham Kerr said with an expected $700 million investment, the mine did not stack up financially.
"Our decision today follows an extensive analysis of the alternatives for Dendrobium together with the anticipated returns from the up-front capital investment which would be required," he said.
As existing operations will continue, 19 people working on the mine expansion project will be deployed to other areas of the business or moved elsewhere by their contracting employer.
What the future holds for the other 650 is less clear.
Based on the current mining approvals, South32 says Dendrobium will continue to exploit the Wongawilli seam until at least 2028, with options to extend that to 2032.
But the diversified miner, which also operates the Appin mine, has been clear to the sector and investors that it sees its future in providing the minerals needed for future energy projects such as zinc, copper and aluminium, not coal.
Where this leaves workers, who could be out of a job in six years, is up for debate.
What does this mean for jobs?
Bob Timbs, South Western District Vice President of the Mining and Energy Union said workers who had mined coal for generations were unsure what would happen next.
"Mining has been part of our District's social and economic fabric for generations," he said. "We hope there will be opportunities for mineworkers affected by today's decision to take up further opportunities in the industry after 2028."
Coal from the Dendrobium mine currently feeds the steelworks in Port Kembla and is exported overseas.
In a statement, a BlueScope spokesperson said contracts were in place with South32 to supply the steelworks until 2032.
"We welcome South32's announcement that they will continue to optimise Dendrobium and the broader Illawarra Metallurgical Coal complex to extend the mine life within approved domains. This is supportive of continued supply of metallurgical coal to BlueScope's Port Kembla Steelworks."
But with the company currently pushing ahead with the reline of blast furnace No.6 using traditional steelmaking methods, there will be demand for coal at Port Kembla until at least 2040.
This would mean coal would need to be sourced from Queensland, placing additional pressure on already stretched freight rail capacity, RDA Illawarra CEO Debra Murphy said.
"Without a local source of metallurgical coal, BlueScope will be looking strategically at the next lowest-cost option to maintain ironmaking at Port Kembla: we want that to be from an Australian-based source and to have the opportunity for it to be delivered by cost-competitive, effective and direct rail freight to Port Kembla," she said.
"There is now a pressing need and a potential high-volume user for this planned rail connection and future expansion of Port Kembla only supports a case to revitalise the South-West Illawarra Rail Link."
Wollongong Ward One councillor Mithra Cox said the announcement was a wake up call that the Illawarra needed to accelerate the transition of its manufacturing sector from carbon-reliant industries.
"There are companies in Germany and in Sweden who are looking to be rolling green steel off their mills commercially by 2026 and if you don't invest now, it won't be viable until much later," she said.
If Wollongong and the wider region did not hasten the transition, supported by investment from government and the private sector, jobs would go offshore, Ms Cox said, with South32 indicating it would be reallocating the capital earmarked for the mine to projects in North America, for example.
"It is really important that we have an orderly plan. We've known for decades that this is coming. We can do it well, or we can do it badly."
The proposed mine extension would also have more direct impacts on the local environment.
Is this a win for the environment?
Campaigners from groups including Lock the Gate and Protect our Water Alliance highlighted the potential for subsidence from the mine to threaten the Sydney and Wollongong drinking water catchment, as well as impact on local wildlife and Indigenous sites.
Deidre Stuart, secretary for Illawarra based environmental group Protect Our Water Catchment said she was exhausted but relieved the project was not going ahead.
"This has been an enormous effort, for more than three years now," she said.
Concerns about the impact on the water catchment for millions of people led to the proposal being rejected by the Independent Planning Commission in 2021.
The NSW government then deemed the project to be state significant infrastructure, allowing the Planning Minister to have the final say, deputy premier Paul Toole said.
"The NSW Government's declaration of Dendrobium as State Significant Infrastructure in 2021 recognised the Dendrobium expansion proposal's projected economic benefits, including for the broader region and BlueScope's steel production."
South32 then revised the plan, reducing the size of the mine's footprint.
The NSW government said an independent economic study of the feasibility of the project would be prepared to inform the final decision of Planning Minister Anthony Roberts.
That decision is now moot, but with South32 walking away from the project at a time of record high coal prices, the status of the Illawarra as a coal mining region may be coming to an end.
A region in flux
Wollongong Lord Mayor Gordon Bradbery said technological changes and the growth of open cut coal mining in Queensland and the Hunter meant the underground coal mines of the Illawarra were less and less economically viable.
"A diversity of activities underpins the local economy, not just steel and coal, and that transition has been going on for a long time," he said.
In the Illawarra and South Coast, mining directly employs 1900 people, according to Australian Bureau of Statistics figures from February.
"The coal industry remains a major employer in NSW, and export volumes remain in high demand as evidenced by record prices," Mr Toole said.
Health care and social assistance, the region's largest employer by industry, employs 33,000.
Wollongong MP Paul Scully said the NSW government needed to follow through on commitments to those workers impacted by the transition away from the coal industry.
Mr Scully nominated monies set aside under the Royalties for Rejuvenation Fund, a commitment to local content in energy infrastructure and the delivery of the Illawarra Renewable Energy Zone.
Mr Toole said workers could be assured of their future.
"The company's commitment to mining Dendrobium provides certainty for the Illawarra workforce, while the Government's Royalties for Rejuvenation Fund will help the region diversify its economy over time."
Local industries that feed into the mining sector will also be hit, and David Bridge, CEO of Illawarra manufacturing and heavy industry grouping i3Net said the sector was disappointed by the decision of South32, but had experience managing industrial change.
"What we've witnessed over the last 10-15 years is a lot of businesses that are now in a stronger position, supporting clients outside the region and the state," he said.
As the mines that gave the region its name as the Coal Coast move into care and remediation at the end of their productive life, Ms Stuart said efforts would continue to rehabilitate the landscape scarred by more than a century of coal mining.
"All this disruption of the geological layers, there's a release of methane and carbon dioxide and that's going to keep going, even if all the coal mines were shut down today."
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