Australian miner South32 has withdrawn its guidance for the Dendrobium coal mine extension in New South Wales after the state's Independent Planning Commission (IPC) blocked the extension project earlier this month.

The company had previously planned to make its final investment decision in the first half of this year. However, South32 is now assessing the impact of IPC's decision on its coal supply agreement and cost estimates, Kallanish notes.

South32 aims to increase metallurgical coal extraction from the current 5.2 million tonnes/year of run-of-mine (ROM) coal. It plans to extract an extra 78mt of ROM coal from two additional mining areas while extending the Dendrobium mine life by 25 years. 

Coal from the Dendrobium mine and South32's nearby Appin mine produces a premium-quality coal blend used for steelmaking. The coal blend is partly delivered to the BlueScope Steelworks in Port Kembla, New South Wales. The rest is shipped via seaborne transport to GFG Alliance's Whyalla Steelworks in South Australia, or exported internationally.

South32 delivered nearly 4.1 million tonnes of coal in the half-year through December and expects to produce a total of 8mt by the end of the 2021 fiscal year.