Further production decline is predicted for the New South Wales southern and western coalfields, according to a Strategic Study published earlier in the year by the NSW Department of Mineral Resources. The southern and western coalfields produced 19.6 Mt of saleable coal in 1998/99, worth $730 million. The study predicts that while domestic demand for thermal coal will remain static, demand for coking coal will decrease by around 500,000t.
Saleable production from the southern coalfield declined from 16 Mt in 1991 to 11.5 Mt in 1998/99. Of the 12 mines operating in 1998 one (Oakdale) closed in May 1999 while another four were thought likely to close in the next five years, because of limited reserves. This would amount to 4 Mt of lost production. The report expected production for the southern coalfield to fall to about 8.7 Mt by 2002/03 and to 6.9 Mt by 2007/08.
Collieries in the southern coalfield include Appin, Cordeaux, Elouera, Tahmoor, Tower and West Cliff. Two thirds of production comes from the five BHP Illawarra collieries, which each produced 1-2 Mtpa. Elouera will exhaust its reserves by 2003/04 and BHP has proposed the Dendrobium project as a replacement. This project could begin production in 2004 and be at full capacity by 2008 but development is not guaranteed.
Saleable production from the western coalfield in 1998/99 amounted to 8.2 Mt, 70% of which went to local power stations. Production has declined from peak levels of 1.2 Mt in 1996/97 but is expected to pick up to 8.7 Mt in 2002/03 and 9.3 Mt in 2007/08. The report said some small coal mines could close in the short to medium term
Collieries in the western coalfield include Angus Place, Baal Bone, Clarence and Springvale. Production from this coalfield is expected to increase slightly from 8.2 Mt in 1998/99 to 8.7 Mt in 2002/03 and 9.3 Mt in 2007/08.
The report said prospects for new developments were limited. Reserves at Cherry Tree Hill (Centennial) and Running Stream (Glencore) required further exploration.
While much of the coal from the western coalfield is transported directly to power stations, the southern coalfield exports its coal through Port Kembla Coal Terminal. The terminal, with an annual capacity of 15-16 Mt handled only 9Mt in 1998/99 and indicated figures for 1999/2000 are 7.5 Mt. This reduction in tonnage increased the terminal's charges to $4.20/t in spite of the State Government reduction in the lease charge from $2 to $1.30/t.
This is to be further reduced from June 2003 to 50 cents/t, amounting to an increase in Government subsidies for the terminal from $2.5 million to about $8.5 million a year. Making the announcement in June 2000, NSW premier Bob Carr said the lower lease fee would provide greater security for miners and the communities in the southern and western coalfields.
The report found that employment in both the southern and western coalfield continued to fall. Employment in the southern coalfield is predicted to fall to about 900-1,000 in 2002/03 from 1,574 in June 1999 and to 600-700 by 2007/08. In the western coalfield employment is forecast to fall by 10-20% by 2002/03 to about 800-900. Job losses between June 1996 and June 1999 were 413.
The report recommended that options be examined for regional development and employment opportunities. Where mines were under threat of closure new operators should be encouraged to take over such mines if they could be shown to be viable.