Surge in new coal mine proposals in NSW triggers fresh calls for coal moratorium

There has been a surge in applications for new coal mines to be established in the NSW Upper Hunter Region, with proponents rushing to head off potential coal mine moratoriums.

According to research undertaken by think tank The Australia Institute, 2020 saw a significant surge in planning lodgements for new coal mines in New South Wales, with the pipeline for new projects now so large that there is a real prospect that the state’s coal handling infrastructure could be overloaded, and projects could fail to find buyers for coal if they all go ahead.

“While the proponents of each new coal project make optimistic claims about how their project will deliver a significant increase in coal exports, royalty revenues, and employment, it is clear that all of these claims cannot simultaneously be true,” a new report released by the think tank says.

“With flat or falling world coal demand, no plans to expand the volume of coal exports the Port of Newcastle can handle, and no likelihood of new coal fired power stations being built in NSW there is simply no market for, nor transport infrastructure to market, an enormous increase in new coal production in NSW or the Upper Hunter Valley.”

“Building new coal mines when existing coal mines are under-utilised increases disruption to the existing workforce and imposes additional external costs on other Hunter Valley landowners and communities,” the report adds.

A total of 11 new coal mines were added to the ‘major projects’ list maintained by the federal Department of Industry, Science, Energy and Resources, with the potential to produce a combined 68.2 million tonnes of coal annually.

This was a dramatic increase compared to the handful of projects that were added to the list in 2019, indicating that the coal industry may be to accelerating the development of new coal projects, which The Australia Institute suggests is motivated by the increasing likelihood of tighter coal project restrictions in the future.

There are 23 prospective coal mines currently sitting on the governments ‘major projects’ list in New South Wales, with a combined capacity to produce an equivalent of 15 Adani Carmichael coal mines worth of output.

The Australia Institute has called on governments to step in and limit the development of new coal mines, arguing that the global demand for coal is falling, and it would be “absurd” to allow more mines to open.

“World demand for coal is falling, not rising. Trying to build 10 new Adani mines’ worth of coal mines in the Upper Hunter at precisely the time world demand for coal is falling is absurd,” the Australia Institute’s chief economist, Dr Richard Denniss, said.

“The NSW Government’s enthusiasm in approving a record number of coal mines does little more than offer false hope to the Hunter region, locking huge parts of the Hunter into the past while failing to plan for the future.”

“New coal mine approvals destroys prime Australian farmland, which impacts current and future investment in Australia’s agriculture, wine, and tourism industries, leaving significant liabilities for the NSW Government and lasting scars on the Upper Hunter,” Denniss added.

Denniss said the NSW government should introduce a moratorium on new coal mines to allow for a measured response to the use of the state’s existing coal resources to avoid overloading the state’s existing coal infrastructure.

“What we need is a moratorium on the approval of new coal mines, so the NSW Government can look at all of the applications currently in train and develop a cohesive plan. At the moment there are more mines seeking approval than could ever be handled by the rail networks and the Port of Newcastle, let alone the world’s coal customers,” Denniss added.

One of the projects added to the development list in 2020 was the Mount Pleasant Optimisation project, which proposes to expand the output of an existing mine near Muswellbrook by up to 21 million tonnes per year.

The proposal was the subject of an objection submitted to the NSW planning department by Malcolm and Lucy Turnbull, who own a nearby grazing property. Former prime minister Malcolm Turnbull was recently appointed to chair a new NSW government zero emissions and clean energy advisory body.

According to the Turnbulls, there are substantial doubts about the future ability of the mine’s operator, MACH Energy Australia, to remediate the site at the conclusion of mining operations, as well as contributing to unacceptable air quality impacts due to pollution caused by the mine.