BHP will close Muswellbrook's Mt Arthur coal mine in 2030 after it failed to find a buyer for the mine, which employs 2000 people.
The company advised the stock exchange on Thursday that the decision followed a two-year review of its energy coal assets including Mt Arthur, the state's largest coal mine.
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The mine's existing approval expires on June 30, 2026, however, the company had been seeking to extend the mine's life until 2045.
It will now seek approval to continue the mine until 2030.
"That gives us eight years to form a plan in consultation with our people and the community on how we manage this process to ensure the best outcome for everyone, and the best post-mining land use," the company said in a statement to the stock exchange on Thursday morning.
The company acknowledged that Mt Arthur Coal had been financially challenged for a number of years.
"Despite a recent price strengthening, it is a complex pit to operate," the statement said.
"New approvals and significant capital investment to develop into new areas would be required to keep the mine running beyond 2030."
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Mt Arthur general manager Adam Lancey acknowledged the significance of the announcement to the Upper Hunter community and the region's economy.
"We know this is significant news for many, especially those in and around Muswellbrook, and comes at a time when many of us are thinking about the future for our region."
"Nothing is changing right now. BHP will continue to safely operate Mt Arthur Coal, as we have been doing since 2001.
"Starting in the coming weeks, we will commence a program of broad consultation with our people, local suppliers and businesses, Indigenous groups, governments and community leaders. Through this process, we will develop a plan together on the most appropriate post-mining land use, and how we can help further strengthen and diversify the local economy.
"We will also commence the regulatory process with the New South Wales and Australian governments to seek relevant planning approvals to allow the mine to operate through to 2030.
"Our commitment to you, the people of Mt Arthur Coal and the Upper Hunter, is that we will work with you to get this right and create a positive legacy for the region.
Matthew Kelly
Matthew Kelly has worked as a journalist for more than 25 years. He has been working as a general reporter at the Newcastle Herald since 2018. In recent years he has reported on subjects including environment, energy, water security, manufacturing and higher education. He has previously covered issues including the health and environmental impacts of uncovered coal wagons in the Hunter Valley, the pollution of legacy of former industrial sites and freedom of information issues.
Matthew Kelly has worked as a journalist for more than 25 years. He has been working as a general reporter at the Newcastle Herald since 2018. In recent years he has reported on subjects including environment, energy, water security, manufacturing and higher education. He has previously covered issues including the health and environmental impacts of uncovered coal wagons in the Hunter Valley, the pollution of legacy of former industrial sites and freedom of information issues.
