Hunter’s “Brief window to avoid disaster”: Inquiry to hear appeal for diversification funding

Published: November 04, 2019

Significant government funding is needed to diversify the Hunter economy as thermal coal mining declines in response to global changes in coming years, according to Lock the Gate Alliance.

The Alliance’s NSW coordinator Georgina Woods will tomorrow (Nov 5) appear at a Senate inquiry into the Future of Regional Jobs when it visits Newcastle  and will argue the region needs support from governments to offset the economic disruption caused as coal importing countries switch to cheaper renewable energy.

The inquiry will also hear from a range of local and regional representatives about the need for assistance to diversify the Hunter region’s economy. 

Ms Woods said New South Wales’ thermal coal mining and export sector faced decline over the next twenty years, and the time for governments to act was now.

“This region is in for a rough ride over the next two decades as the countries that buy Australia’s thermal coal switch to cleaner, cheaper renewable sources of energy to reduce pollution and address climate change,” she said.

“In other parts of the world where coal mining declined, preparation, public dialogue and large scale investment has meant the difference between thriving and failing.

“We now face the very real risk that the legacy of our proud coal mining industry will be inter-generational unemployment. That’s certainly been the experience of most coal mining regions that do not prepare for market decline.

“We have this brief window to avoid disaster. We know that people across this region, in business, local government and the community broadly want a plan for the future, and we know that we can weather the storm of coal market decline.  

“It’s essential that we get help to transform and seize new opportunities and that’s why we are calling on governments to really invest now in our communities.”

Ms Woods said an example of one of the immediate economic opportunities was mine rehabilitation, which in the Hunter would require thousands of workers.

“Workers employed in the mining industry are well placed to take up jobs in improved mine rehabilitation due to their expertise in earth moving and environmental monitoring,” she said.

“Strengthening mine rehabilitation requirements and preventing mining companies from leaving behind large unfilled mining voids can create hundreds or thousands of new jobs that we are currently missing out on.  

“We don’t want this region to miss out on opportunities like this and other crucial pathways to create new jobs in manufacturing, energy and the industries of the future because governments in Sydney and Canberra wouldn’t give us a chance to diversify.”

Background

  • The Hunter produces nearly 60% of the coal mined in NSW and ~90% of coal mined in the region is exported.

  • Mining contributes 58% of the economic output of Muswellbrook and Singleton and employs around 40% of people.

  • In 2015, coal export volumes from Newcastle began to fall for the first time this century. Contracted volumes on ARTC’s rail network to Newcastle Port begin to decline from 2023.

  • The Reserve Bank has warned that Japan, China and South Korea account for around 75 per cent of Australia's thermal coal exports and in all three countries there are plans to shift towards cleaner energy sources. 

  • The current closure dates on the development approvals for NSW’s 35 thermal coal mines all fall between now and 2040. These mines employ 14,000 people. 

  • The NSW Government submission to the concurrent NSW parliamentary inquiry into the sustainability of energy supply and resources noted that “Based on approved coal projects, the state’s coal production will start to significantly decline from around 2030. Even if all coal mining proposals currently in the planning system are approved, the state’s coal production will start to significantly decline by the mid-2030s unless new proposals are brought forward and approved.”

  • Changes in the coal export sector will be harder than the electricity transition:

    • There are a lot more jobs in the mining and export industry than in the power sector;

    • The changes we’ll have to respond to in the mining and export industry are outside of our control;

    • The mining workforce is in the vulnerable age 35-45 age bracket for structural adjustment, is better paid and less skilled than the power station workforce.

  • Studies of transition experiences of coal mining regions in the UK, US, Netherlands, Spain, Czech Republic and Germany show patterns of long-term unemployment and disadvantage are commonly the legacy of coal’s decline. 

  • This can be avoided with:

    • Early preparation before decline occurs

    • Public participation and acceptance that adjustment programs are needed

    • Application of local knowledge and leadership

    • Large scale funds from government and industry over a long period of time.

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Content on this site is authorised by Georgina Woods for Lock the Gate Alliance, Lismore NSW.