The South32 Ltd (ASX: S32) share price edged higher today. The company was in focus after news filtered through it has lodged an appeal against the New South Wales Independent Planning Commission (IPC) over its decision to block an extension of South 32’s Dendrobium coal mine.
By the market’s close, shares in the metals and mining company were trading at $2.99 – up 0.34%. Similarly , the S&P/ASX 200 Index (ASX: XJO) is 0.2% higher.
Let’s take a closer look at today’s developments.
Case background
Back in February, the IPC blocked a decision by the state Department of Planning to approve South32’s $956 million plan to extend the life of the Dendrobium coal mine to 2048 and extract an additional 78 million tonnes of coal from the site.
The commission cited the high likelihood of adverse impacts on the local environment. The commission stated it felt South32 could not manage the risk appropriately and any damage would be irreversible. It went on to say the benefits of the project did not outweigh these costs.
“[T]he level of risk posed by the Project has not been properly quantified and based on the potential for long-term and irreversible impacts — particularly on the integrity of a vital drinking water source for the Macarthur and Illawarra regions, the Wollondilly Shire and Metropolitan Sydney — it is not in the public interest,” the IPC’s Statement of Reasons for Decision read.
Conservative NSW politicians at the time, including Deputy Premier John Barilaro and Upper House MP and One Nation leader Mark Latham, decried the decision.
NSW Legislative Council resumes sittings tomorrow and One Nation will be fighting to:
1. Approve the South32 coal mine, essential for steelmaking and jobs in the Illawarra
2. Protect mining jobs and create new work in the Hunter
3. Expose Matt Kean’s 100% renewables rort.
— Real Mark Latham (@RealMarkLatham) February 14, 2021
https://platform.twitter.com/widgets.js
“The decision by the IPC to reject South 32’s Dendrobium coal expansion will be recorded as one of the most destructive decisions since the IPC’s formation,” Mr Barilaro said at a press conference soon after the decision was handed down.
South32 appeal
In a statement yesterday, South32 said it would appeal the decision.
“South32 has commenced proceedings in the Land and Environment Court of New South Wales, seeking a judicial review of the Independent Planning Commission’s (IPC) assessment of the Dendrobium Mine Extension Project,” a spokesperson for the company said.
“This is one of a number of options we are pursuing in relation to the project, and we continue to work with all relevant stakeholders and look at potential alternative mine plans.”
“We have a long history of operating safely and responsibly in the Illawarra region and the proposed Dendrobium Mine Extension would provide major economic and social benefits for the Illawarra region and for New South Wales,” the spokesperson added.
The news was also reported by mainstream outlets such as the Australian Broadcasting Corporation (ABC) and The Australian.
The ABC is also reporting that one of the other options South32 is pursuing includes direct lobbying of the state government.
South32 share price snapshot
Over the past 12 months, the South32 share price has increased by around 60%. The company recently announced its results for the quarter, which also sent its share price higher.
South32 has a market capitalisation of around $14.2 billion.
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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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