BHP wins approval to run Mt Arthur to 2030, eyes hydro future

BHP (ASX: BHP) said on Wednesday it had received approval from the New South Wales government to continue operating its Mount Arthur thermal coal mine until June 2030, extending the site’s life by four years beyond the original closure date.

The decision gives BHP, the world’s largest mining company, more time to extract between 13 and 15 million tonnes of thermal coal from what is currently NSW’s largest coal mine. The miner had announced in 2022 that it would wind down operations at Mount Arthur by 2030 — 15 years earlier than initially planned — after failing to find a buyer and as the mine approaches the end of its economic viability.

As part of its exit strategy, BHP has partnered with renewable energy and infrastructure firm ACCIONA Energía to explore converting the 7,000-hectare site into a pumped hydro energy storage facility. The proposal aligns with community calls to repurpose the site for long-term regional benefit.

“The community has told us they want to see Mt Arthur repurposed when mining ends,” BHP president Australia Geraldine Slattery said in a statement. “This study will examine the role pumped hydro at the Mt Arthur site could play in the region’s future.”

Preliminary studies suggest the project could support about 1,000 construction jobs in the Upper Hunter region, stimulate local economic activity in Muswellbrook, and provide enough power for up to 500,000 homes in New South Wales each day.

Life beyond coal

ACCIONA Energía, which operates more than 14 GW of generation capacity worldwide and is expanding rapidly in Australia, will lead a 12-month due diligence program to assess the project’s technical and commercial viability. The company already manages 600 MW of operating assets in Australia and has 1.3 GW under commissioning.

BHP also announced a A$30 million ($19m) community fund to support the Upper Hunter region’s transition beyond coal. The fund will be co-managed with local stakeholders and focus on job creation, economic empowerment, and industry diversification.

Pumped hydro systems provide dispatchable electricity by storing energy in the form of water at elevation. When demand spikes, the water is released downhill through turbines to generate power. 

BHP said that Mount Arthur’s topography and catchment potential make it well-suited for such a transformation.