New South Wales is one of Australia’s top three mining states, contributing around A$1.8bn in annual royalties and employing over 40,000 people. Yet, amid growing concerns around the environment and climate change, the hugely coal-focused sector faces huge environmental and regulatory challenges going forward.
Located on the east coast of Australia, New South Wales (NSW) is the third-largest mining region in the country. The local industry produces gold and copper, and has reserves of silver, zinc, and rare earth minerals, but it’s most lucrative commodity by far is coal.
The state is, in fact, the birth place of coal mining in Australia, with the first shipment of coal reportedly leaving the city of Newcastle in the 1799s. Today that same city is home to the world’s largest coal export port, which sees around 164-172 million tonnes (mt) of coal exported annually.
Annually, NSW’s extractive industry provides more than 40,000 mining jobs, and generates A$1.8bn in annual royalties, while using only 0.1% of the states’ land. However, despite its relatively small geographical foot-print and long, rich history, the sector is facing increasing pressures caused by the effects of climate change, in particular more frequent droughts and water shortages.
State of play
In a year, mining in NSW is estimated to add A$3.2m per square kilometre of area it covers, compared to A$0.01m per square kilometre of area used for agricultural production.
Of course, much of this revenue comes from coal, which is the largest single export product in the state. NSW exports 65% of its produced coal and uses the rest for 84% of the state’s electricity generation.
Demand is served by approximately 40 operating coal mines, some of which have recently been granted extensions. These include The Bloomfield Group-operated Rix Creek South coal mine and the Glencore-Peabody A$381m United Wambo coal project, both located in the Hunter Valley.
However, despite the approvals, increasing regulation and lengthy permitting processes have become a bone of contention for the industry.
The NSW Minerals Council, the local trade body for the sector, has widely criticised the nearly six years it took to secure the Rix’s Creek South approval, saying the delay clearly demonstrates why the NSW planning system needs urgent reform.
“This is an unacceptable timeframe caused by duplication, inconsistency and uncertainty within a complicated planning system that is acting as a deterrent to investment in NSW,” Stephen Galilee, CEO of the NSW Minerals Council, said in October.
Galilee cited an administrative error by the Independent Planning Commission (IPC), the body tasked with approving projects, that saw a 21-year mining lease approved before public submissions had closed, creating lots of confusion.
Dr Apurna Ghosh, lecturer at WA School of Mines at Curtin University, says while there should not be any compromise with mine closure planning and environmental issues, approval procedures should be “faster considering the time and costs incurred and where huge investments are required.”
Currently the assessment system is “lengthy, uncertain and costly”, he says.
Marrying mining with the environment
However, beyond red tape, NSW faces some considerable environmental challenges. This year, bushfires have torn through millions of hectares of land. This strain on the environment has been exacerbated by strong winds and long-term drought conditions, provoking other stakeholders to object to new mining projects and expansions on the grounds of competition for scarce water resources.
In October, South32’s proposal to extend operations at its Dendrobium coking coalmine in the Illawarra region were objected to by government-owned WaterNSW. It said the project would cause the loss of 3.3 billion litres of water a year and harm around 26 endangered coastal swamps. This would result in an “unprecedented level of surface-to-seam fracturing and groundwater depressurisation”.
Current regulation mandates that new projects should be subjected to a test that requires developments in the Sydney drinking water catchment to have either a neutral or beneficial effect on water quality. The city’s dam storage levels have dropped to 50% for the first time in 50 years.
In September, the IPC announced its decision to not approve the Bylong Coal Project proposed by KEPCO on environmental grounds. The project would have produced up to 6.5mt of coal per annum via two open-cut mining and one underground mining areas, with a 25-year life-span.
However, the mineral council condemned the decision, saying the project has broad support from local communicates, the local regional council, and local MPs.
“The Department of Planning recommended the project be approved and none of the 14 government agencies consulted on the project objected. Yet the IPC chose to ignore all this and refused the project, apparently giving greater weight to ‘cut-and-paste’ form letters from anti-mining activists from as far away as Sydney’s North Shore,” said Galilee shortly after the announcement.
He added that the refusal had lost 1,100 jobs for the local region and more than a billion dollars in investment.