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MIN­ING IN THE HUNTER VAL­LEY

The Australian Mining Review - - FRONT PAGE - CAMERON DRUM­MOND

WITH a 2016 pop­u­la­tion of 732,000, the Hunter Val­ley ac­counts for 28 per cent of NSW’s in­hab­i­tants out­side Syd­ney.

Since the early 1800s, the Hunter’s min­ing op­er­a­tions have been a stal­wart of eco­nomic ac­tiv­ity in the re­gion.

The Hunter is no stranger to coal price cy­cles. Hav­ing just nav­i­gated the post-global fi­nan­cial cri­sis de­pres­sion, it is look­ing to­ward a brighter fu­ture as in­creased de­mand from Asian mar­kets pro­pels greater out­put from mines through­out the re­gion.

Hunter Val­ley Coal Chain

The Hunter Val­ley Coal Chain pro­vides about one-fifth of Aus­tralia’s ther­mal and cok­ing coal from 35 coal mines owned by 11 coal pro­duc­ers, under the aus­pices of the Hunter Val­ley Coal Chain Co­or­di­na­tor (HVCCC).

Mines near the east­ern edge of the basin are spread along the Hunter Val­ley from New­cas­tle in the south, to Muswell­brook in the north; with min­ing fur­ther at Yar­ra­wonga near Gunnedah.

Mines such as Ulan and Spring­vale in the West­ern Coal­field and Man­da­long and West­side in the New­cas­tle Coal­field pro­duce mainly ther­mal coal.

In the Hunter Val­ley coal­fields, both soft cok­ing and ther­mal coal prod­ucts are pro­duced from mines such as Hunter Val­ley Op­er­a­tions and Bulga.

The HVCCC was a con­cept cre­ated in 2003 to stream­line pro­duc­tion through a cen­tralised plan­ning model for the pro­duc­tion, trans­port and ex­port of coal from th­ese sub-re­gions.

Coal is de­liv­ered from mines through four main rail haulage providers; Pa­cific Na­tional, Aur­i­zon, Glen­core and South­ern Shorthaul Rail­road.

Col­lec­tively, they make more than 20,000 trips from more than 31 dif­fer­ent load­ing points to the Port of New­cas­tle, the world’s largest coal ex­port op­er­a­tion, from dis­tances of up to 380km away.

Prod­uct is then loaded onto more than 1400 coal ves­sels each year via three ter­mi­nals con­trolled by Port Waratah Coal Ser­vices (PWCS) and New­cas­tle Coal In­fra­struc­ture Group’s (NCIG).

PWCS is the largest ter­mi­nal, fa­cil­i­tat­ing about 70 per cent of through­put at New­cas­tle.

About 85 per cent of ex­ports through the coal chain out of New­cas­tle are des­tined for Japan, Korea and Taiwan.

161.4 mil­lion tonnes (mt) of coal was ex­ported through the Port of New­cas­tle dur­ing 2016, up 3.3mt from the pre­vi­ous year.

Ex­ports con­tin­ued to rise dur­ing 2017, with an in­crease of 2mt be­tween Jan­uary and Au­gust com­pared to the same pe­riod last year, re­flect­ing the con­tin­ued re­cov­ery and strong global de­mand for the com­mod­ity.

Weath­er­ing the storm

In the five years to 2016, 11 op­er­at­ing mines in the Hunter Val­ley had been shut­tered.

More than 20 per cent of its coal min­ing work­force – about 3500 per­son­nel – had been put out of work.

Long as­so­ci­ated with coal min­ing, the Hunter’s re­gional hub of Cess­nock was not un­af­fected by the re­ver­sal of for­tunes.

How­ever in 2010, co­in­cid­ing with the de­pres­sion of the re­gion’s coal min­ing in­dus­try, con­struc­tion of the $1.65 bil­lion Hunter Ex­press­way pro­ject – a 40km dual car­riage­way that cut 28 min­utes off travel time be­tween New­cas­tle and the Hunter – had be­gun.

Cess­nock Mayor Bob Pynsent said much of the Hunter was fairly lucky, with its newly un­em­ployed work­ers able to side-skill into con­struc­tion and as­so­ci­ated trades for the ex­press­way, which as a by-prod­uct had also opened up real es­tate in the re­gion.

“Ini­tially, trades­peo­ple left their jobs to move into the more lu­cra­tive min­ing in­dus­try,” Mayor Pynsent said.

“When there was a ra­tio­nal­i­sa­tion of em­ploy­ment op­por­tu­ni­ties in the coal in­dus­try around 2010, those same peo­ple were able to leave min­ing in­dus­try and be ab­sorbed into the boom in hous­ing that flowed from the con­struc­tion of the high­way pro­ject.”

Resur­gence

Since the start of 2016, the cycli­cal na­ture of min­ing has pro­vided new op­por­tu­ni­ties in the coal in­dus­try, with bet­ter-than-ex­pected ther­mal and cok­ing coal prices driven by in­creased de­mand from Asian mar­kets.

2016 ex­port data from Coal Ser­vices re­vealed that global de­mand for NSW coal had reached record lev­els, with ex­ports in­creas­ing by 1.5mt on the year be­fore, de­fy­ing pre­dic­tions from some that coal would di­min­ish as a key ex­port.

The fig­ures also re­vealed a record vol­ume of 161mt of coal was ex­ported through the Port of New­cas­tle that year.

Mr Galilee said de­mand for NSW coal would re­main solid across its main ex­port mar­kets.

“Cur­rent fig­ures from coal ser­vices sug­gest an­other strong year of de­mand for NSW coal year for 2017,” he said.

“The In­ter­na­tional En­ergy Agency (IEA) re­cently re­leased its South East Asia En­ergy re­port, which in­di­cated that coal de­mand would in­crease in the re­gion by near 4 per cent an­nu­ally to 2040.

“Com­bined with de­clin­ing In­done­sian ex­ports over the same pe­riod (from 290 met­ric tonnes car­bon equiv­a­lent (mtce) in 2016 to 170mtce in 2040) the IEA ex­pects Aus­tralia, in­clud­ing NSW with its high qual­ity coal, will in­crease its ex­ports by more than 15 per cent to 2040.

“This is good news for the NSW econ­omy as coal and other min­er­als ex­ports are our State’s most valu­able ex­ports.”

Mr Galilee said the Hunter would see pos­i­tive af­fects across the spec­trum.

“New fig­ures from coal ser­vices show there were just over 20,600 coal pro­duc­tion jobs in NSW as at July this year – over 1300 more than at the same time last year, and the high­est since March 2015.

“Many of th­ese new coal min­ing jobs are in the Hunter, with over 1000 more lo­cal coal min­ing jobs than a year ear­lier.

“It’s good news for lo­cal com­mu­ni­ties and as well as for the more than 3600 lo­cal Hunter busi­nesses that sup­ply the mines.”

Image: Rio Tinto.

Image: Yan­coal.

The HVCCC man­age­ment en­tity was first im­ple­mented in 2003 to ef­fi­ciently stream­line coal op­er­a­tions to the Port of New­cas­tle.

Image: HVCCC.

The Hunter Val­ley Coal Chain.

Image: Cess­nock Coun­cil.

Cess­nock Mayor Bob Pynsent.

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