MUSWELLBROOK, Australia — Global mining giant BHP is laying the groundwork for a future beyond coal. In a move that signals a pragmatic shift toward renewable infrastructure, the company has partnered with Spanish renewables developer ACCIONA Energía to assess the feasibility of converting its Mt Arthur coal site in New South Wales into a large-scale pumped hydro energy storage facility.
The project, still in its early stages, marks one of the most ambitious post-mining land repurposing initiatives in Australia to date—and could play a central role in stabilizing the state’s electricity grid as coal phases out.
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A New Life for Mt Arthur
Once one of the largest coal mines in the southern hemisphere, Mt Arthur is set to cease operations by June 2030, following BHP’s 2022 decision to shutter the site rather than divest. With more than 7,000 hectares of disturbed land at its disposal, BHP is under increasing pressure to deliver an economically viable—and socially palatable—afterlife for the mine.
“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,” said BHP’s Australia president Geraldine Slattery in a statement.
Pumped hydro offers one such path. Unlike conventional hydroelectricity, it does not require river flows. Instead, it uses gravity to move water between two reservoirs—one located at a higher elevation and another lower down. Water is pumped uphill when energy demand is low, and released to generate electricity during peak periods.
Scale and Impact
BHP’s initial studies suggest the project could generate enough power for up to 500,000 homes and create 1,000 jobs during construction. Those figures are provisional, pending a 12-month due diligence study led by ACCIONA.
If realized, the Mt Arthur hydro facility would become one of the largest pumped hydro assets in New South Wales, rivaling Snowy 2.0 in potential regional impact, though likely on a smaller scale in capacity.
“This is the kind of infrastructure Australia needs to meet its 2030 renewable energy goals,” said Kane Thornton, CEO of the Clean Energy Council. “Projects like this are critical as we bring more intermittent renewables onto the grid.”
Strategic Timing
The partnership comes as Australia accelerates its transition away from coal-fired power. According to the Australian Energy Market Operator (AEMO), the national electricity market could see up to 60% of coal generation exit by 2033. New South Wales is particularly vulnerable, with four of its five coal-fired power stations slated to retire within the decade.
Hydro storage acts as a buffer, absorbing excess solar and wind generation during the day and releasing it at night or during cloudy, windless days. Experts say without such firming capacity, the grid could become unstable.
“While solar and wind are essential, we won’t hit our net-zero targets without firming technologies like pumped hydro or batteries,” said Dr. Ariel Liebman, Director of the Monash Energy Institute.
Community at the Forefront
To ease the transition, BHP is committing $30 million to support the Upper Hunter region as it prepares for a post-coal economy. The fund will focus on employment, education, and Indigenous entrepreneurship, among other community priorities.
But not all locals are convinced the hydro plan will materialize. “We’ve seen too many studies that go nowhere,” said Janice Malloy, a Muswellbrook shop owner whose business depends on mine workers. “We want action, not just announcements.”
Others are cautiously optimistic. “It’s a chance to be part of the energy future, not just the coal past,” said Darren Fisher, a former Mt Arthur employee who now works in solar installation.
A Deliberate Recalibration
BHP’s decision not to sell Mt Arthur but instead invest in remediation and reuse signals a broader trend among mining majors: an attempt to repair reputational damage while building relevance in a carbon-constrained world.
ACCIONA, which already manages over 1,000 MW of renewable assets in Australia, brings technical credibility to the table. Yet even with due diligence and local backing, pumped hydro projects can face delays. Environmental approvals, water licensing, and civil engineering complexity are formidable barriers.
Still, analysts see strategic value. “If BHP pulls this off, it could become a blueprint for what a just transition looks like,” said Tim Buckley, Director of Climate Energy Finance, an Australian think tank. “But it needs to move from concept to execution fast—before confidence erodes.”
