Diversified miner BHP has teamed up with renewable energy and infrastructure company ACCIONA Energía to study the feasibility of transforming its Mt Arthur coal mine in New South Wales into a pumped hydro energy storage facility, as the site prepares for its planned closure in 2030.

The partnership comes as BHP advances its strategy to responsibly wind down mining at Mt Arthur, one of Australia’s largest thermal coal operations, following a 2022 decision to cease production based on the mine reaching the end of its economic life.

As part of the closure roadmap, the company has secured approval from the New South Wales government to continue operations until June 2030, with the current consent period extended by four years from July 2026.

The proposed pumped hydro project forms part of a broader vision to repurpose the 7 000 ha Mt Arthur site to support the regional economy beyond mining. Conceptual studies suggest the project could support about 1 000 construction jobs in the Upper Hunter region, contribute to local economic activity in Muswellbrook, and power as many as 500 000 homes across New South Wales each day.

ACCIONA Energía, which has more than 14 GW of operating generation capacity globally and a growing portfolio in Australia – including 600 MW of operating assets and 1.3 GW under commissioning – will lead a 12-month due diligence programme to assess the technical and commercial viability of the pumped hydro proposal.

“In 2022, following an extensive review of options including divestment, BHP announced our plan to cease mining at Mt Arthur in 2030,” said BHP president Australia Geraldine Slattery. “Mt Arthur Coal sits on more than 7 000 ha and we are working hard to explore alternative land uses for the site that will continue to support jobs, investment in the region, and the local economy.”

“The community have told us they want to see Mt Arthur repurposed when mining ends. This study will examine the role pumped hydro at the Mt Arthur site could play in the region’s future,” she added.

Alongside the feasibility study, BHP also announced a A$30-million community fund to assist the Upper Hunter region in preparing for life after coal. The fund will be deployed through a shared decision-making model with the local community and will focus on job creation, economic empowerment and industry diversification.

“BHP is committed to leaving a positive legacy in the Hunter Valley. With our approval to keep mining to 2030 and with a $30-million fund, we’re recommitting to giving the community and our people the certainty and the support they need for the future,” said Slattery.

Pumped hydro energy storage involves moving water between two reservoirs at different elevations to store and generate electricity on demand. Former mine sites, such as Mt Arthur, are often considered ideal for such projects owing to their existing elevation profiles and water catchment potential.