Argus Media Limited

09/14/2021 | News release | Distributed by Public on 09/14/2021 00:30

Australia’s NSW court quashes Kepco’s coal mine appeal

Australia's New South Wales (NSW) Court of Appeal has quashed an appeal by South Korean state-owned utility Kepco that would have allowed it to build the 6.5mn t/yr Bylong thermal coal project in the state.

The Independent Planning Commission (IPC) rejected the project on environmental grounds in 2019, despite the NSW state government recommending in October 2018 that the project be approved, subject to stringent conditions. Kepco's appeal included assertions that the IPC had not considered what conditions could be imposed to minimise greenhouse gas emissions and other environmental impacts.

The Australian federal government has been reticent to approve new coal mines since the Federal Court of Australia ruled in May that ministers may breach their duty of care to protect Australian children if they fail to consider the effects of climate change when approving coal mines. But the federal minister for the environment approved a coking coal mine in the Illawarra region of NSW earlier this month.

Kepco will now review the decision before deciding on its next move, which could include an appeal to a higher court.

The Bylong project, which is owned by Kepco and sits northeast of the NSW mining town of Mudgee, has been waiting for approval for more than a decade. It is controversial because of its proximity to local communities and park land. But the reworked mine plan, which reduced the scale of the open pit, won qualified approval from the NSW government prior to the IPC's decision.

Kepco bought the project from UK-South African mining firm Anglo American in 2010 for A$403mn ($276mn) and has invested a total of A$700mn in it so far. Kepco expected to spend a further A$1.3bn building the 25-year mine life venture, if it had been approved.

Stronger thermal coal prices are stimulating renewed interest in near-term coal developments, despite uncertainty over the long-term outlook for thermal coal demand.

Argus last assessed the high-grade 6,000 kcal/kg NAR thermal coal price at $174.46/t fob Newcastle on 10 September, up from $151.90/t on 30 July and a low of $46.18/t a year ago. It assessed lower-grade coal at $108.67/t fob Newcastle for NAR 5,500 kcal/kg on 10 September, up from $92.93/t on 30 July and $35.04/t a year earlier.

By Jo Clarke

Thermal coal prices$/t