South32 backs coal closure

Alumina producer South32, which is a major buyer of Collie coal, said the state government's planned coal exit was consistent with its own plans.

The ASX company said it has been preparing for this outcome at its Worsley Alumina operation and expects it would provide the necessary certainty to help the people and businesses affected.

“As part of Worsley Alumina’s decarbonisation approach, South32 has planned for a scenario consistent with the state government’s coal exit timeline,” a spokesperson said.

“We recognise that transitioning our reliance on thermal coal to other low-carbon energy sources is critical, to allow us to meet our medium- and long-term greenhouse gas emission reduction targets and goals.”

Worsley Alumina is a major buyer of coal, using it to produce steam as part of the alumina refining process.

It is understood Worsley buys most of its coal from Premier Coal but also has a commercial relationship with Griffin Coal.

Premier is likely to close its operations around 2029, when state-owned utility Synergy shuts down its last coal-fired power station.

Worsley intends to move to gas as a transition fuel before adopting renewable energy.

In this regard, the company said it appreciated the government’s confirmation that its domestic gas policy would remain a key feature of its energy policy. 

“We look forward to working with the government to ensure that reliable and affordable gas will be available in a way that supports Worsley’s transition to renewable energy alternatives for its industrial processes,” the company said.

South32 plans to halve its operational greenhouse gas emissions (scopes one and two) by 2035, from an FY2021 baseline, and achieve net zero greenhouse gas emissions by 2050.

It supports more than 1,500 direct employees and 500 contractors through its bauxite mining and alumina refining operations in the South West and spend more than $A151 million on local businesses each year.