Change District


Northern Mining & NSW Energy

NSW South Western




Western Australia


South32 joins major international peers in divesting from coal

March 27, 2024

As global mining companies jostle to position themselves for maximum profit in a changing commodity landscape, coal mines in Australia continue to change hands.

Multinational mining company South32 announced in February a deal to sell its Illawarra Metallurgical Coal business unit for US$1.65bn – around $2.5bn in Australian money. Comprising Appin and Dendrobium Mines, plus South32’s stake in the consortium operating Port Kembla Coal Terminal, Illawarra Met Coal is a major player in NSW’s southern coalfields.

Though the announcement was not expected, the decision to sell the mines does not come as a surprise. Media speculation over the latter half of last year touted the possibility of the assets changing hands, with South32 CEO Graham Kerr commenting that ‘everything’s for sale at the right price.’ And South32’s investor publications make the company’s strategy for the future clear: the company is pursuing investments in metals and minerals it thinks will bring strong returns as the world’s industry and energy systems transition away from fossil fuels. South32 is particularly interested in opportunities to develop zinc, copper, and other base metal assets globally. When Illawarra Met Coal changes hands, the company will have fully divested from coal.

The announcement also serves to underscore a broader trend observed in the portfolio strategies of major diversified mining multinationals in the years since Rio Tinto completed its divestment from coal in 2018. In 2021, Anglo American spun-off its South African thermal coal operations into a separate company now operating as Thungela, leaving Anglo with a slimmed-down coal portfolio of high quality metallurgical coal projects in Queensland. Meanwhile, BHP’s decisions to manage Mount Arthur to closure in 2030 and sell its Blackwater and Daunia Mines reflect a similar desire to focus on only the highest-grade coking coals while developing newer operations in copper and potash. And Glencore has signalled an intention to spin-off its coal operations, pending its acquisition of Teck Global Resources’ metallurgical coal mines in Canada.

This is not to say that Australian coal mines have been left wanting for interested buyers. Australia’s pure play coal producers are awash with cash after recent windfall profits and lining up to buy. Last year, this saw Whitehaven emerge the winning bidder for Blackwater and Daunia. The prospective purchaser for Illawarra Met Coal is GEAR M, an entity majority owned by major Indonesian company Global Energy and Resources (70%), with Australian coal trading company M Resources holding a 30% stake. Both companies are established players in Australian coal, with heavy involvement in the fast-growing Stanmore Resources.

Mining companies are not renowned for being worker-friendly, but new ownership can be an opportunity to reset relationships for constructive dialogue and better working conditions.

In particular, South32 has aggressively embraced the labour hire employment model and is well-known in the Southern District for pitting contracting companies against each other to deter bargaining and drive down wages and conditions.

With approximately 1000 permanent employees and 1600 labour hire and contractor workers across Appin and Dendrobium, the District will be pushing for certainty for labour hire and contractors and a greater commitment to permanent jobs from the new owners. The sale also reopens the possibility that expansion plans for Dendrobium mine could be back on the table, after South 32 abandoned them last year.

Whoever owns the assets, the Union will continue fighting for permanent jobs in a strong industry.

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