Mining supporting our coal communities

The NSW Minerals Council's CEO Stephen Galilee has responded to the claims that coal mining is damaging the Hunter Valley, refuting claims put forth by Stuart Rosewarne and Linda Connor on The Conversation.

Whenever I hear academics criticise mining in the Hunter, certain names run through my mind; Newcastle, Muswellbrook, Singleton, Gunnedah, Mudgee to name a few.  These towns and hundreds of communities like them are directly supported by the mining across NSW.

More to the point, it’s workers in these communities and their families whose livelihoods are threatened when city academics talk about bringing an end to coal mining for ideological reasons not based on all the facts; like the arguments put forward by Linda Connor and Stuart Rosewarne from Sydney University.

Mining does have some challenges; we’re not perfect and we recognise the need to constantly monitor and respond to issues surrounding mine area rehabilitation, coal dust mitigation and safeguarding areas around mining operations from other impacts.

The mining sector works closely with farmers and all levels of government to work out how we can improve our operations and develop world best practice in areas like environmental management.

However it’s important that when looking at issues surrounding mining the discussions are grounded in facts, not myths, in the best interests of NSW.  Unfortunately, in their passionate objection to coal mining, many city academics alter the facts to fit their views.

Contrary to many misconceptions, mining is actually a relatively small industry in NSW responsible for only 2.5% of Gross State Product.  In 2005 there were 58 mines in NSW; in 2012 there are 61, a net increase of only three in seven years.

Mining is nonetheless a vitally important industry in NSW, supporting approximately 93,000 direct jobs across the State (47,580 in mining; 45,537 in minerals processing), and some 325,000 jobs indirectly.

According to NSW Treasury, mining returns $1.48 billion in royalties to the people of NSW; that’s enough to fund 13,000 nurses, 11,000 teachers or 3,000 police every year.  Contrary to the nonsensical arguments of Linda Connor and Stuart Rosewarne that royalties are ‘likely to fall’, Treasury modelling indicates royalties will grow to deliver $8.9 billion over the next four years.

It’s also important to view mining’s land use in the Hunter region with some perspective.  Mining in the Hunter-Central Rivers Natural Resource Management region uses 0.6% of land, while agriculture uses 45.9% of land.  State wide mining only accounts for 0.1% of land use.

Far from agricultural land being at ‘risk’ from mining, access arrangements to land must be negotiated and agreed between landholders and explorers before any exploration can be undertaken on private property; a system that has been working very well.

It is estimated that up to 6,000 land access arrangements have been agreed and implemented between landholders and explorers in NSW.

It’s also important to remember that landholders can veto surface mining on their property where it contains prime agricultural land or other significant features.

One of the myths most keenly propagated by academics opposed to coal mining, is that the mining industry receives a relatively high amount of subsidies from federal and state governments.

The reality is that mining receives a very small portion of government assistance relative to other industries.  According to a recent Productivity Commission report, net assistance to the mining industry is $242 million, compared with $1.54 billion for farming and $8.28 billion for manufacturing.

Much of the current government assistance will be completely nullified by the wave of new government taxes including the Carbon Tax and the Mineral Resources Rent Tax which hit on 1 July.

The coal mining industries share of the Government’s Carbon Tax ‘assistance’ package is       $1.37 billion over 6 years for the ‘gassiest’ coal mines.  This represents less than 7% of the additional cost burden resulting from the Carbon Tax.

With regard to the diesel fuel levy which applies to heavy vehicles that use our nation’s public roads, the fact is that the majority of heavy mining vehicles operate ‘off road’ and therefore have no net impact on public infrastructure.

Thus, mining companies receive a ‘rebate’ on a tax that shouldn’t apply to them in the first place.  Indecently, the Federal Government reduced the Diesel Fuel Rebate by 0.6c per litre in the 2011-12 Budget.

The mining sector in NSW understands there is an environmental impact on the relatively small areas of land where mining operations takes place.

However we are seeking to meet the challenge of mitigating environmental impacts as much as possible.  Not only does mining use only 1.4% of NSW water resources, but we recycle 80% of the water we use.

Mining projects must also incorporate a ‘rehabilitation’ plan to regenerate the land used in mining operations.  In recent years mining land has been successfully rehabilitated to many uses, including parks, agricultural land and native vegetation.  Examples include the rehabilitation at Xstrata Coal’s Mt Owen mine in the Hunter Valley.

Also contrary to claims by academics, mining in NSW drives innovation in a broad cross-section of industries, from manufacturing to environmental sciences and engineering.  The NSW Minerals Council holds annual ‘Innovation Awards’, to recognise new achievements by companies that have made critical advances in techniques and equipment.

Studies also show that for every mining job in NSW, three jobs are created in other sectors.  And it’s not just in ‘traditional’ mining regions.

New figures from a survey of major NSW mining companies show that there are at least 3,800 Sydney businesses supplying the industry, from manufacturing and mechanics to professional services like environmental science and education and training. There are also more than 7,000 workers employed directly in mining across Sydney.

There is more to be done. Mining in NSW must rise to the challenge of ensuring that our mining techniques are world class when it comes to mitigating any environmental impacts.  We need to make sure that our land use objectives will see economic benefits flow both from mining and the agricultural sector.

However, only by engaging in rational and fact based discussions on mining can we ensure that jobs are protected, local Hunter communities are fostered and our environmental resources are sustained for future NSW generations.


This piece was a response to Stuart Rosewarne and Linda Connor's article that appeared on The Conversation yesterday.

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