Project I: Small Town Coal

Summary

Muswellbrook, a coal mining town in the Hunter Valley, has been significantly shaped by its relationship with the coal industry for over 117 years. This report examines the complex relationship between the town and the mining industry, exploring its importance and the challenges that lay ahead.

A Spotlight on Australia’s Mining Sector

Economic Reality Check

The region faces significant upcoming changes as Australia’s coal industry transforms. AGL's Liddell Power Plant and Muswellbrook Coal have already closed. BHP's Mt Arthur mine will close by 2030, and Bayswater power station is scheduled to close before 2035. All coal stations are projected to close by 2038 (UNSW, 2023).

Reducing coal production could improve Muswellbrook’s air quality and public health while creating opportunities for new industries. However, this transition needs careful planning to protect the community’s economic wellbeing (Campbell, 2014; MacNeil & Beauman, 2022). Historical examples of unplanned mine closures have had severe community impacts, including job losses, collapsed housing markets, eroded public services, and abandoned mine sites with environmental hazards (Beer, 2018).

Recently Approved Coal Projects

Despite the broader transition away from coal, seven new mines have been approved since 2022, including the Mount Pleasant Optimisation Project, set to become Australia’s largest black coal mine, Glendell Continued Operations Project, Hunter Valley Operations Continuation, and Mangoola Coal Continued Operations Project.

These approvals appear contradictory to Australia’s climate commitments and transition goals. However, they have been justified by short-term economic benefits and job preservation, meeting ongoing export demands from Asian markets, and claims of using "cleaner" mining technologies. Employees remain tied to the industry with no long-term support, and while Asia—led by China, Australia’s biggest coal customer—is shifting away from fossil fuels, China now dominates renewable energy and is developing coal-free steelmaking technologies (Hilton, 2024; Nicholas, 2024). Meanwhile, only $5.2 million goes to helping coal communities adapt to new industries, while the NSW government spends $27 million on coal research and backs a $700 million fund promoting unproven ‘clean coal’ technology (Simpson et al., 2024).

This dual approach of approving new mines while planning for industry closure creates significant challenges for communities trying to prepare for the future.

The Future of the Mining Industry

Mining remains crucial for supplying the minerals needed for clean energy technologies. Australia’s abundant critical mineral resources and established mining infrastructure provide a natural pathway for communities and workers to shift from traditional coal mining to sustainable resource extraction.

Projected global demand by 2050 includes 9 million tonnes of lithium for energy storage, 130 million tonnes each of silicon (EVs) and copper (wind turbines), and 48 million tonnes of nickel for batteries (Bruce et al., 2021). Australia’s strategic position as the world’s largest lithium producer, third-largest cobalt producer, and fourth-largest rare earth producer strengthens this transition, with 81 major critical minerals projects in development valued at $30-42 billion and $23 billion in government commitment to domestic manufacturing and processing.

The current resources sector employs 290,000 people, under 2% of the Australian population. Projected new jobs in critical minerals include 115,000 jobs in mining and extraction and up to 262,600 jobs with expanded processing capabilities. Global EV sales are projected to reach 60% market share by 2030 (IEA, 2022b). Lithium demand is expected to increase 40-fold by 2040 (IEA, 2021)., requiring significant new infrastructure globally, including 50 new lithium mines, 60 new nickel mines, and 17 new cobalt mines (IEA, 2022a).

Hunter-Central Coast Renewable Energy Zone Development

The Hunter-Central Coast region is undergoing significant electrical infrastructure improvements. EnergyCo, in collaboration with Ausgrid, is enhancing the existing power network to support new renewable energy generation projects in the area (EnergyCo, 2024).

Figure 1: Hunter-Central Coast REZ proposed network project.

This transition offers a sustainable path forward for mining communities, maintaining Australia’s resource industry strength while contributing to global clean energy goals.

The Ownership Landscape

Foreign entities dominate Australia’s mining sector, controlling an overwhelming 86% of the industry, with most profits going overseas (McKissack & Xu, 2016). For instance, BHP has 76% foreign ownership, and Rio Tinto has 83% foreign ownership. These two giants represent 70% of the resources held by mining companies listed on the Australian Stock Exchange (Edwards, 2011).

Mining companies have poured over half a billion dollars into lobbying efforts targeting Australian governments (Aulby, 2017). Rio Tinto and BHP prevented new oversight of the $75 billion iron ore sector. Mining companies also spent $100 million fighting the Minerals Resource Rent Tax (2010-2012), cutting tax revenue by $5.3 billion. Companies claimed lobbying costs as tax write-offs.

The Hidden Cost to Australian Taxpayers

Foreign mining companies claimed $162.4 million in tax deductions for lobbying expenses over the past decade (Aulby, 2017). Australian governments provided $14.5 billion in direct fossil fuel subsidies during 2023-24 (Campbell et al., 2024). Taxpayers bear $55.6 billion in implicit subsidies, including costs related to health impacts and environmental damage (Foley, 2023).

A Community at the Crossroads

Muswellbrook faces new challenges after decades of reliance on coal. In 2023, bushfires threatened Muswellbrook, Aberdeen, and nearby areas (Parmeter et al., 2023). Scientists predict that under a high emissions scenario, severe fire weather days may double by 2090 (DCCEEW, 2024).

Infrastructure and Employment Challenges

Muswellbrook suffers from inadequate regulations, including 25+ unfilled mining voids creating environmental hazards and low penalties for rehabilitation non-compliance. While coal production generates $810 million in royalties annually, the transition fund commitment is only $25 million total, with minimal investment in alternative industries.

TAFE NSW requires increased funding to train workers for new sustainable industries. Budget cuts have limited its capacity to help Hunter Valley workers transition to long-term careers.

Union Representation in Energy Transition

Union engagement in Australia has declined from over 50% in the 1970s to approximately 15% today (ABS, 2024). Key union initiatives include calling for a National Energy Transition Authority, supporting worker retraining programs, and advocating for job security and fair transition policies.

Taking Action: Community Advocacy

Engage with legislators to influence policy decisions through grassroots lobbying. Direct communication methods like patch-through calls, email campaigns, and social media outreach can build awareness. Community leadership by organising events and sharing success stories is critical.

Support Our Mission

Join us in helping mining-dependent communities grow strong roots for a sustainable future. Connect with us on instagram @smalltowncoal.