THE Hunter Valley region is undoubtedly one of NSW’s engine rooms, and a powerhouse of Australian mining.

Its history goes all the way back to the early 1800s, when the government began mining the first coal in the colony’s history.

Today, the Hunter Valley is home to more than 272,000 people and comprises 41 coal mines owned by 11 producers. It is spread over more than 450km, with coal haulage distance of up to 380km.

There were more than 31 points for coal loading, four rail haulage providers delivering to three terminals, and as a collective, filled and exported more than 1400 coal vessels every year through the port of Newcastle.

With the growing demand for coal in South East Asia’s up-and-coming economies vastly outgrowing the down turn in European demand, coal mining looks set to remain intrinsically linked to the valley, and to the community of miners that support it.

The Hunter Valley Coal Chain Coordinator (HVCCC)

Being spread over more than 450km, the Hunter Valley coal chain was a complex interconnected operation that targeted very large deposits of coal from a concentrated network.

Until 2003, there was no coordination process for the movement of coal through the Hunter Valley, which often led to inefficiencies, logistical errors and a lack of synergy between the coal producers.

The complexities of having so many individually managed mines competing for the four independently managed rail providers and transport operators was further compounded by the “two-week visibility” window for arriving vessels at Newcastle Harbor, and the allocation of their supply to individual mines.

The HVCCC was set up to streamline operations through a centralised planning model for the production, transport and export of coal from the all the sub-regions of the Hunter Valley.

The body was originally tasked with the day-to-day scheduling, and to look at long term capacity planning. However, in 2009, it went from a cooperative of service providers to a separate entity with legal status.

Today, mines such as Mandalong and Westside in the Newcastle coalfield to Ulan and Springvale in the Western coalfield have access to the services provided by HVCCC, which helped get the thermal and coking coal to Newcastle where about 85 per cent of Hunter Valley coal is exported to Asia.

BHP

Mount Arthur is the biggest mine in the Hunter Valley region.

Also known as New South Wales Energy Coal, it is 100 per cent owned by BHP and reported 18.5Mt of saleable coal produced in 2018.

The company planned to expand its Ayredale and Roxburgh pits that would push the mine life out to 2026, and reported an increase from $US75 per tonne in 2017 to US$87 in 2018.

The company had launched its extensive tailings dam operation, with its stage 2 raise project underway to raise the existing embankment 10m and increase the tailings storage capacity.

In 2018, the company came under fire from the CFMEU for its announcements surrounding in-house labour hire company Operations Services, which was expected to impact about 300 local roles.

Yancoal

Chinese heavyweight Yancoal is the 51 per cent owner of the unincorporated Hunter Valley Operations (HVO) JV with Glencore, and is 100 per cent owner of its other Hunter Valley Tier 1 asset, Mount Thorley Warkworth.

HVO was located about 24km northwest of Singleton in the upper Hunter Valley, and was considered to be one of the highest quality thermal and semi-soft coking coal mines in the world.

Offering semi-soft coking coal and low, medium and high-ash thermal coal, HVO operated a multi-pit open cut mine.

The JV used a “dragline truck and shovel” method and processed through two on-site coal preparation plants.

HVO had a mine life of 43 years, and a reserve of 796Mt producing 13.3Mt at a 100 per cent basis in 2018.

Mount Thorley Warkworth is a tier 1 coal asset that operates two open cut mines with the potential to head underground.

Following preliminary studies, drilling and technical assessments were commissioned to consider the feasibility of an underground opportunity. In 2018, the company recorded 21.1Mt production of saleable coal.

Glencore

One of the world’s largest gold producers, and the largest economic contributor in the Hunter Valley, Glencore operates 15 active mines in the Hunter valley including its JV with Yancoal, Hunter Valley Operations and Bulga Coal.

Bulga Coal was the biggest landholding operation in the Hunter Valley, and produced about 12mtpa of semisoft coking coal and thermal coal making it a tier one asset.

Located 15km southwest of Singleton, Bulga includes the Bulga open cut and the handling and preparation plant. BHP began mining Bulga in 1982, when it was known as the Saxonvale mine.

In 1992, the mine went underground and was operational until May 2018, when it completed operations and closed the mine.

Today, it continues to operate the Backfield North pre-drainage gas wells in order to provide gas for the 9mw power station, and Glencore had begun the long and arduous task of rehabilitating the mine, aiming for completion of the outer face stage by August 2019.

The outlook

Coal had been the big employer in the Hunter Valley, providing about 9000 jobs to the community and generating billions in revenue, but international pressure, and government scrutiny over clean energy alternatives, has long loomed over the future of mining in the Hunter Valley.

In a report, the Institute for Energy Economics and Financial Analysis (ERRFA) warned the NSW government that coal exports had peaked and the industry was now facing a terminal long-term decline.

According to the report, Australia’s largest thermal coal export locations – Japan, China, South Korea and Taiwan – all aimed to reduce their consumption of thermal coal in order to increase the development and uptake of renewable energy.

However, other sources tell a different story.

The March 2019 Resources and Energy Quarterly said that In 2017, Australia exported 54 per cent of all coal worldwide, and 20 per cent of all thermal coal, making it the world’s largest coal exporter.

While international demand is set to plateau between 2019-2024, the report predicted that coal demand would remain strong through 2019 and 2020.

In March, NSW Mining reported that since 2001, coal export volumes from NSW had more than doubled – from 75Mt to 164Mt – due to increased international demand.