EnergyAustralia locks in 2028 closure for Yallourn coal mine as wind-down begins

The owner of Victoria’s oldest coal-fired power station begins progressive closure of the open-cut mine that supplies the plant.

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By LineZotpaper

Published28 August 2026

Read Time3 min

EnergyAustralia has confirmed it will begin winding down the open-cut mine that supplies its Yallourn coal-fired power station in Victoria’s Latrobe Valley, locking in the plant’s planned exit in 2028. The move, announced on Thursday, signals the start of a multi-year process to decommission the mine, with the coal unit expected to cease operations by the end of the decade as part of the company’s transition away from fossil fuels.

EnergyAustralia, the owner of Victoria’s oldest coal-fired power station at Yallourn, has pushed ahead with plans to progressively close the open-cut mine that supplies the plant. The mine wind-down marks the next phase in the company’s previously announced intention to retire the 1,480-megawatt station by 2028, aligning with the Victorian government’s renewable energy targets.

“This is a significant step in our transition to a cleaner energy future,” a spokesperson for EnergyAustralia said. “We are committed to managing the closure responsibly, including the rehabilitation of the mine site and supporting our workforce through the change.”

The Yallourn plant has been a cornerstone of Victoria’s electricity generation for decades, but its age and emissions profile have made it a target for closure as the state pushes towards 95% renewable energy by 2035. The mine wind-down is expected to reduce coal extraction gradually over the next two years, with the plant’s four units eventually ceasing operation.

The announcement has been met with mixed reactions. Environmental groups welcomed the news, arguing it accelerates the state’s decarbonisation goals. “Every coal plant closure brings us closer to a cleaner grid,” said a spokesperson from Environment Victoria. “However, the transition must be just for workers and the Latrobe Valley community.”

Unions have raised concerns about job losses. The Yallourn site employs about 500 workers, and the phase-out is expected to affect many directly. The CFMEU’s mining and energy division called for a detailed transition plan with retraining and redeployment opportunities. “We need to ensure no worker is left behind,” a union representative said.

The Victorian government has committed to supporting affected communities through its Latrobe Valley transition authority, which provides funding for new industries and training programs. EnergyAustralia has indicated it will work with workers and unions to manage the closure process.

Yallourn’s closure is part of a broader trend across Australia, where ageing coal plants are being retired as renewables become more cost-effective. The Australian Energy Market Operator has noted that the grid can handle the exit of Yallourn if sufficient replacement capacity—like gas, batteries, and transmission upgrades—comes online in time.

The mine rehabilitation process will take years, with EnergyAustralia planning to return the site to a safe and stable condition. The company has allocated funds for this purpose under its decommissioning provisions.

Analysis

Why This Matters

Energy security: Yallourn supplies about 20% of Victoria’s electricity; its closure requires timely replacement with renewable sources and storage to avoid supply gaps
Workforce impact: Hundreds of direct jobs at the mine and plant will be lost, affecting the Latrobe Valley economy, which relies heavily on coal mining
Emissions and climate goals: Shutting Yallourn is a critical step for Victoria to meet its legislated 2035 emissions reduction target, but the pace must align with grid reliability

Background

Yallourn has been in operation since the 1920s, making it Victoria’s oldest coal-fired power station. EnergyAustralia (originally a state-owned entity, now owned by Hong Kong-based CLP Group) announced in 2022 that it would close the plant by mid-2028, citing the age of the infrastructure and the economics of running an ageing coal unit against cheap renewables. The open-cut mine adjacent to the plant has supplied brown coal to the site for over a century. The plan to wind down the mine was expected, as extraction typically ceases before plant shutdown to allow for coal stockpiling. The current announcement formalises the start of that process.

Key Perspectives

EnergyAustralia: The company frames the wind-down as a responsible and planned transition, emphasising its commitment to rehabilitation and workforce support. It has not disclosed specific retrenchment numbers but says it will consult unions.
Unions (CFMEU, AWU): They demand a just transition with guaranteed jobs, retraining, and financial support for affected workers. They worry about the timing given the government’s renewable rollout pace and the risk of job losses before alternative employment emerges.
Environmental groups: They applaud the closure as necessary but urge increased investment in renewables and storage to replace Yallourn’s baseload capacity. Some caution that relying on gas peakers could lock in emissions.
Victorian government: It supports the closure timeline but has not committed to major new incentives for the Latrobe Valley beyond existing transition programs. Critics say the pace of new renewable project approvals is too slow to replace Yallourn’s capacity.

What to Watch

AEMO’s annual Electricity Statement of Opportunities for Victoria to see if projected reserves tighten as Yallourn winds down
Final retrenchment numbers and redeployment plans from EnergyAustralia as the mine scale-back begins in earnest
Progress of the Victorian Renewable Energy Zones and the Western Renewables Link transmission line, which are key to replacing Yallourn’s output

Sources

Yallourn operator locks in 2028 exit as mine wind-down begins — Financial Review - Latest News