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The decision comes more than a year after an Australian planning body blocked the company’s planned extension of the mine, located in the Illawarra region, due to concerns over its potential irreversible impact on Sydney’s water resources.

“While our work on the project demonstrated the potential to meaningfully extend the life of the Dendrobium mine, expected returns … are not sufficient to support an investment relative to alternatives considered for the complex,” South32 said in a statement.

The company said it would continue to optimise the Dendrobium mine and the broader Illawarra metallurgical coal complex, including the transition of its Appin mine to a single longwall from fiscal 2025.

Longwall configuration is a form of underground mining where a long wall of coal is mined in a single slice.

Investments at Appin include planned work worth $260 million to install additional ventilation capacity to enable mining in its Area 7 section until at least 2039, South32 added.