The coal springboard

COAL mining companies can no longer rely on local communities in the Hunter Valley to provide them with their social licence to operate as increasingly the cumulative effects of intensive coal mining in a small geographical area begin to provoke local backlash.
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The coal mining industry has assisted with the development of new industry research including work at Newcastle University on energy and resources.

However, the coal mining industry has also helped generate a thriving regional business sector that is creating industries and markets.

The challenge for the Hunter is to harness the coal industry's decades of expertise, resilience, and innovation to create a more environmentally and sustainable future.  

This will not be easy, given that there is pushback at local and state government level.

Just look at the Muswellbrook Shire Council's submission to the New South Wales Department of Planning, Industry & Environment over Mach Energy's proposed Mt Pleasant optimisation project.

That project seeks to extend the life of open cut mining operations to 2048 and extract an extra 247 million tonnes of run-of-mine coal over the life of the project through the mining of deeper coal seams and optimisation of the North, Central and South Pits.

Mach Energy wants to extract and process up to 21 million tonnes per annum of RoM coal - about what it is currently approved to do.

Muswellbrook Council pulls no punches in its opposition to the project.

"Communities in the Hunter have experienced rapid transitions associated with expansion of the coal mining industry," it says in its submission.

"In the next few decades they face the prospect of the coal mine industry contracting as a result of declining global resource demand.

"While communities have benefited from the expansion of the coal industry through the creation of jobs and the investment in economies, an abrupt and unplanned transition would have resounding social and economic impacts on the region and the state. The state government needs to take a lead in planning for this transition."

Muswellbrook Council says the compounding impacts of multiple intensive mining operations concentrated around a residential area stretch environmental, social, human and economic capital.

"Multiple mining operations may demonstrate additive effects and compounding effects," it says.

"The conventional mine-by-mine approach to assessment, management and mitigation does not provide confidence for the local communities impacted where there are multiple active mines."

Infrastructure also remains an ongoing challenge for coal logistics in the Hunter and Newcastle region.

The Port of Newcastle handles most of NSW's coal exports and also contributes about 30% of national coal export volumes.

NSW Minerals Council CEO Stephen Galilee said it was almost inconceivable that governments had been willing to allow such an important piece of national economic infrastructure to operate as an unregulated monopoly service provider.

"This lack of oversight is a major reason why access arrangements between coal producers and the port operator remain unresolved and uncertain after several years," he said.

"These issues have become even more acute given the port's publicly stated ambition to significantly expand its container terminal operations.

"Ongoing uncertainty on future terms of access for coal sector port users represents increased risk due to potential container terminal expansion costs, including the potential price impact on future coal exports.

"The NSW Minerals Council will continue to pursue all options for appropriate regulatory oversight of the port that also delivers reasonable commercial outcomes for all parties."

Given the hostile reaction to coal mining developments from local government and monopoly service providers, it is surprising coal mining companies persist with developing projects in the Hunter.

The Hunter Thoroughbred Breeders Association is in a protracted legal stoush with Australian Pacific Coal to halt the underground development of the Dartbrook mine.

HTBA has a track record in stopping mining developments in the Hunter and was chiefly responsible for stopping Anglo American's proposed Drayton South development.

AusPac is seeking leave to appeal a New South Wales Land and Environment Court decision to let the HTBA join the proceedings relating to a proposed modification of its Dartbrook underground mine application.

Under its proposed Modification 7, AusPac seeks to extend the approval to mine at the Dartbrook underground to five years from the two years initially granted by the Independent Planning Commission.

The miner struck an agreement with the IPC over the modification, which would advance the modification.

However, that agreement only becomes effective, and the development consent is only modified, once the Land and Environment Court disposes of the proceedings in accordance with the agreement.

HTBA's proposed application also involves an application for a stay that could delay or prevent the finalisation of the proceedings on the terms of the agreement that has been reached.

"Thirty years ago mining was at least 30km away," HTBA said.

"Today mining is at the doorstep of our internationally renowned Hunter Valley thoroughbred breeding studs.

"We are not opposed to all coal mining but the Hunter Valley is saturated and has reached a tipping point."

At the bigger end of town BHP has begun seeking approval for its Mt Arthur thermal coal mine in the Hunter Valley to continue operating beyond June 30 2026 despite its intention to sell off the asset.

Mt Arthur's future after its present open cut approval expires and that of its workforce of about 2000 people who predominantly live in the region is uncertain as BHP seeks to find a buyer.

To date, no buyer has been found despite the mine being a world class asset. 

For mining to continue beyond 2026, further approvals are required - hence the BHP application.

In this case, State Significant Development and federal Environment Protection and Biodiversity Conservation Act approvals are required, as well as a new mining lease.

The multi-year approval process will involve comprehensive assessment and review, and broad engagement to enable the local community and other key stakeholders to provide input.

"BHP is assessing options to divest its thermal coal assets, including Mt Arthur Coal, to focus its portfolio on higher quality metallurgical coal," the company said. 

"This means Mt Arthur Coal's ownership or operating control could change in the coming years."

Despite these barriers, businesses on the ground in the Hunter continue to innovate and diversify and tap into the intellectual property being generated from the mining industry and its suppliers as well as Newcastle University.

Business Hunter CEO Bob Hawes said the coal mining industry established a core of world class suppliers in the global supply chain as well as a number of services industries that led to a more diverse and sustainable regional economy.

"The Hunter will continue to be a globally oriented, diversified and connected economy. It will continue to boast a number of industry pillars supporting a range of economic and social enterprise," he told Australia's Mining Monthly.

"There are certainly businesses that respond exclusively to the needs of the mining sector, however, many of these also deal with markets outside the region including overseas countries.

"Many also target other sectors related to, for example, transport and engineering, which reduces the dependency on mining.

"However, there is no doubt that the mining supply chain sustains many businesses in the region and the range is quite diverse, from equipment supply to professional services."

Hawes said the NSW Minerals Council estimated more than 3000 businesses rely on mining in the region.

"By supporting direct mining industry jobs, there has been support for many indirect industry jobs which stem to the services sector as well as the production or industry sectors," he said.

"We have members in law, accounting, recruitment and many other fields who have significant accounts with mining clients. At local level, main-street businesses in mining towns like Singleton and Muswellbrook, receive a lot of flow-on business from the mines and their employees," he said

"This supports justification to provide social infrastructure in response to the needs of the community and populations working in the mining industry. Investment in schools, health facilities and the like are justified on the basis of meeting the needs of relatively substantial communities that would not otherwise be as large in the absence of mining."

Hawes is not fazed by any switch from coal-fired power to renewable energy and believes that it could be a healthy development for the Hunter if it is planned properly.

"The region needs to embrace and encourage new energy projects in all forms, where practical, and where our comparable advantage in skills, access to infrastructure and resources gives us comparative advantages in the development of a new-energy economy," he said.

"The risk in terms of energy supply and the health of the Hunter relates to the availability of affordable, reliable and dispatchable power.

"This cannot be guaranteed to industries that need it if we are to rely totally on renewables without support, at least in the short- to medium term, from traditional sources such as gas and coal, or perhaps hydro-generated electricity, to provide consistent energy supply."

However, Hawes believes there needs to be an ongoing commitment to further skills training and the promotion of new sectors in the Hunter to increase diversification.

This is a trend that began in the 1990s following the closure of the former BHP steel works in Newcastle.

"The region already boasts a diverse business and industry base and its future success can be underwritten by supporting, leveraging and growing the businesses already here and not singularly focusing on establishing new sectors that may or may not succeed in a regional context," Hawes said. 

"Those existing industries with potential to grow include defence, aerospace, agriculture, equine, manufacturing, energy, education, tourism, research and health."

Hawes cites the examples of local companies that have used their experience in supplying the local industry to develop products and discover new markets.

Quarry Mining, for example, has adapted technology developed in mining to the needs of tunnelling for transport projects.

Ampcontrol has also diversified horizontally and vertically from its energy and mining roots, and during the COVID-19 lockdown it turned out a ventilator prototype in a matter of weeks.

Varley has diversified intensively into defence over the past 30 years and is a significant supplier to the forces across land, sea, air and cyber.

Hawes said with such innovative companies already in existence, the government's policy settings and its ability to facilitate industry development should be focused on optimising the region's many inherent advantages.

"The government needs to fully understand the ecosystem and interconnections of industry and business that is already here," he said.

"The region has a number of relatively underutilised qualities and comparable advantages in areas such as energy, research and port-related activity.

"From this, the government could do much to level the playing field and continue an emphasis to drive growth in regional areas where there is capacity and capability to grow.

"They could also do much to encourage further sovereignty in manufacturing through their own procurement programs as well as engaging in state-wide ‘business to business' economy."

Hawes said the issue of skills and training remained a problem that needed to be addressed at the state and national level.

"One issue that does require addressing is the drift away by students from mining-related studies at university and TAFE, which happens because young people don't see a long-term career pathway in the industry due to the current debate about the future of mining," he said.

"It is important the mining sector promotes its importance, given the reliance the entire economy has on products produced from mining.

"Industry needs are usually ahead of the education system, which can be a constraint."

Hawes said there were some positive examples of how industry and training providers had worked together to ensure they were teaching the skills needed to meet future industry needs.

Newcastle University is uniquely positioned to conduct world-leading research on coal and renewable energy and the ability to optimise their coexistence.

The university's Renewable Energy Sources Laboratory is dedicated to work on two large programs of study aimed at developing more efficient technologies for utilisation of biomass, and geothermal resources, respectively.

Several projects are under way as part of these two large programs of study, including methodologies to interpret Trials of Coal and Biomass Co-Firing and the Low Emission Coal Program.

The Low Emission Coal Centre's research includes coal reactions, combustion and gasification in turbulent flows, emissions and impact of carbon capture for retrofitted units as well as new plant. Emissions from existing plant are also included.

The research involves interaction with technology demonstrations within Australia and international developments.

Professor Terry Wall, who is one of the centre's researchers active in Low Emission Coal Technologies, was the first Australian to win the Percy Nicholls Award for Notable Scientific or Practical Contributions in the Field of Solid Fuels.

"I have enjoyed establishing and maintaining the University of Newcastle as a centre of excellence in coal usage, through two cooperative research centres and now in a national research and development centre," he said.

The Research Program on Low Emission Coal Wall leads has an emphasis on greenhouse gas abatement, with scientific research underpinning technologies for carbon capture, such as oxyfuel, post-combustion capture, gasification and chemical looping.