Coking coal may have only two more decades in the steel-making process before green alternatives such as hydrogen replace it, according to Australian coal and metals miner South32 Ltd.
“Beyond the next couple of decades, there will be innovations that occur in the steel space, particularly in green hydrogen, that we think will change medium to long-term the dynamic on” metallurgical coal, South32’s Chief Executive Officer Graham Kerr said on Thursday.
The Perth-based company wouldn’t be investing in new metallurgical coal projects, and would wind down its business in the fuel that’s currently key to steel-making once existing mines were depleted, Kerr said.
In the latest sign that some miners are turning away from funding projects to ramp up metallurgical coal output, on Tuesday South32 said it had abandoned plans to further develop the Dendrobium Next Domain project south of Sydney.
South32 said the $700 million investment required for Dendrobium’s expansion couldn’t be justified, and it would instead focus on “metals critical to a low carbon future.”
Kerr elaborated in Thursday’s interview that the company was looking to redirect the $700 million into North America for investments in base metals, in particular, copper, zinc and silver, as well as manganese oxide for batteries.
The company, which has a diversified metals portfolio including aluminum and nickel in Australia, Southern Africa and South America, on Thursday announced a surge in underlying profit for the 12 months to June 30 to $2.6 billion. That was up from $489 million in the year before and in line with analyst estimates.
