THE minerals industry in NSW is an important contributor to the state’s economy. In 2010, it accounted for 5.9 per cent of NSW’s total industry value, and reports predict that number will rise to 6.9 per cent by 2020.
The minerals industry is also NSW’s largest merchandise exporter, and a significant direct and indirect employer: in 2010 about 70,000 people were employed in the mining and minerals processing sectors, and a total of 310,000 jobs in NSW were supported by mining and minerals.
In fact in regions that are highly reliant on mining for employment, such as NSW’s Illawarra and the Hunter Valley, more than one-fifth of overall employment is supported by minerals and mining. From 2008 to 2009, coal production represented 85 per cent of the value of all minerals produced from NSW. The leading production came from the Hunter Basin, which is responsible for more than 62 per cent of the state’s coal. These plentiful resources are in close proximity to rail and port facilities, which are undergoing upgrades in the face of increasing demand. The NSW coal mining industry has enjoyed a period of extraordinary prosperity in the past two years, thanks to rising coal prices and increased global demand, particularly from Asia.
Higher coal prices have stimulated investment in the NSW coal industry, with a number of new mining developments and major expansions proceeding to development. Xstrata Coal is the biggest coal producer in NSW, and the world’s biggest exporter of thermal coal.
The company’s Ulan West underground longwall mine is expected to produce 6.7 million tonnes of thermal coal per year, with a mine life of about 18 years, once production begins in 2014. Construction of the mine will create about 270 new jobs, with an expected
350 employees required for ongoing operations. “Through our continued investment into new operations, Xstrata Coal is providing new employment and local business opportunities within the Mudgee region and making an important contribution to the state’s economy,” Xstrata Coal chief executive Peter Freyberg said in a statement. NSW’s booming coal mining sector has also facilitated a large upswing in mining infrastructure development. In December 2010, NSW Treasurer Eric Roozendaal announced that the Port
of Newcastle was expected to generate $10.7 billion for the Hunter region’s economy by 2015.
The port reached the milestone of 100mt of product shipped for the first time in the 2009 financial year, with the total 103.02mt of throughput valued at $13.05 billion. More than 1900 people were directly employed at the port in 2009 and 2010, with another 3470 jobs indirectly supported across the region. It has been estimated that between 2014 and 2015, employment at the port will increase to 3360 jobs, with a $2.2 billion port development project between 2008 and 2015 directly and indirectly creating about 2140 full-time positions. In another show of support for the NSW coal industry, the Australian Rail Track Corporation (ARTC) has committed to an upgrade to increase thecapacity of existing Hunter Valley rail infrastructure. ARTC has reported that it expects to spend more than $1.4 billion in the next five years to address future volume growth. Meanwhile, the NSW Government is developing a 25-year freight strategy with a focus on improving controls for freight infrastructure to increase efficiency and throughput. NSW’s mining success isn’t just related to coal, however: recent mine developments, particularly in the Cadia deposits of the state’s central west region, have resulted in NSW becoming Australia’s second-largest gold produce – representing 13 per cent of the country’s
gold production from 2008 to 2009. NSW is also the third-largest copper producing state in Australia. Newcrest Mining’s Cadia Valley operation is the largest gold and copper producer in NSW, and one of Australia’s largest gold producers. Cadia Valley, 20km southwest of the City of Orange, incorporates the large, low-grade CadiaHill open pit mine and the higher-grade Ridgeway underground mine. It is Newcrest’s major development project – Cadia East – that will help increase NSW’s gold production profile further. Cadia East will be the deepest panel cave in the world and Australia’s largest underground mine, with an ore body containing one of the world’s largest gold deposits. Cadia East has a mineral resource of 2347mt containing 33.2 million ounces of gold and 6.59mt of copper, and is capable of underpinning Cadia Valley’s production for the next 30 years. The project will enable Newcrest’s Cadia Valley operation to increase production to between 700,0000oz and 800,000oz of gold plus 75,000t to 100,000t of copper per year in the first 10 years of production. Construction has started on the $1.91 billion project, with first production expected in the second half of 2012.
By Reuben Adams