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Aerial Drone of NSS @ Work

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South32 has decided against going ahead with further development of the Eagle Downs metallurgical coal project near Moranbah.

The announcement follows completion of a feasibility study on the project last quarter.

"While the study indicated the potential for a long-life operation, the expected returns do not currently support the allocation of capital in accordance with our capital management framework," the company stated.

"The project has been placed on hold while the partners assess options that may include the divestment of our 50 per cent interest."

South32, which also owns the Cannington mine in North West Queensland, bought into Eagle Downs in 2018. 

It signed a deal with BaoWu Steel Group subsidiary Aquila Resources to acquire a 50 per cent interest in the project.

The project had been placed under care and maintenance in late 2015 after initial development work that delivered site infrastructure including water supply and high voltage systems, office buildings and water and sediment dams.

Dual 2km drifts were also about 40 per cent complete.