Coal in Australia, Part 3: New South Wales

Part three of a series looking at Australia’s coal industry. This post profiles the coal industry in New South Wales.

This post concludes a series I began back in this blog’s early days looking at coal production in Australia. The first two posts looked at Western Australia and Victoria and Queensland. Today we turn to New South Wales.

Firstly, an explanation for the delay in profiling NSW. There is a frustrating lack of official, publicly available information on coal production in New South Wales. The state government does provide quarterly reports on coal industry statistics but you must pay $506 to read them! This is a disgrace, clearly intended to limit access, avoid scrutiny and make money. It stands in stark contrast to the Queensland Government, which provides a wealth of data on the state’s coal industry for free.

I have spent much time trying to find another comprehensive and publicly available data source but to no avail. That means that this post will be less comprehensive than my posts for other states and rely on a wider range of sources, some of which are quite out of date. 

Coal in New South Wales

New South Wales has 38 operating coal mines. Unlike Queensland, which has two distinct coal regions in the south and centre, New South Wales’ coal mines are geographically concentrated in eastern New South Wales. Many of these coal mines are located relatively close to Sydney, in contrast to Queensland, Victoria and Western Australia, where coal mines are located fairly long distances from the capitals.

New South Wales’ coal mines can be divided into roughly two regions, one to the north of Sydney and one to the south. (I have been unable to find an especially good map of NSW coal mines but the least bad one I have found is from the New South Wales Minerals Council).

The large Northern region, which includes the Hunter Valley, the Western Coalfield and the Gunnedah Basin, begins in Narrabri in the north-western corner, running directly south down to Lithgow then east to Lake Macquarie before heading north along the coast to Newcastle. From there it continues up the coast towards Port Macquarie before heading back inland towards Narrabri. This region includes 34 of the state’s operating coal mines and produces around 95% of the state’s coal. Most of the coal in this region is exported via the Port of Newcastle.

All five of the state’s coal power stations are located in this region. The Bayswater* and Liddell power stations (owned by AGL) are located right next to each other near Muswellbrook in the Upper Hunter. The Eraring power station (owned by Origin) and Vales Point power station (owned by Delta) are located near Lake Macquarie south of Newcastle. The Mt Piper power station (owned by EnergyAustralia) is located on the western edge of this region near Lithgow.

The Southern region, which includes the Southern Coalfield, begins south of Sydney running along the coast to Wollongong before heading inland to Moss Vale then north-east to Campbelltown. This region is far smaller than the Northern region, including just four coal mines and producing 5% of the state’s coal. Most of the coal in this region is exported via Port Kembla near Wollongong.

New South Wales is the most coal-reliant state in Australia, with the most coal power station capacity generating 79% of the state’s electricity in 2020. The ageing Liddell power station is scheduled to close in 2023, which should lead to a drop in coal generation.

There are a handful of new proposed coal mines in the state, although a number of these projects are having difficulty getting developed and they are located in existing coal basins. Unlike Queensland, where there are still plans for massive coal expansion, New South Wales coal production has probably peaked. 

Like Queensland, New South Wales is a massive coal exporter and exports about 85% of its coal. But its export market is significantly more concentrated than Queensland’s. 87% of New South Wales’ coal exports go to just four countries: Japan (39%), China (22%), South Korea (13%) and Taiwan (13%). This highlights just how much the future of the state’s coal industry is dependent on the energy policies of just four countries.

Another crucial difference between New South Wales and Queensland is the type of coal exported. In Queensland, 72% of exported coal is metallurgical coal, which is used in steel-making. Metallurgical coal will likely take longer to phase out than thermal coal (used to make electricity). 

The opposite is true for New South Wales: 85% of the state’s coal exports are thermal coal and just 15% metallurgical coal (as of 2015-16). This means New South Wales is going to experience the brunt of the energy transition much earlier than Queensland, with the state’s major coal markets currently drawing up plans to phase out coal power stations and by extension, thermal coal imports. New South Wales needs a plan to manage the decline in thermal coal exports or the state’s economy and mining regions will be hit very hard over the next decade.

There is no one-stop shop for information on the New South Wales coal industry but the best places to start are Coal Services Statistics and Coal in NSW Industry Sectors (note that the data in this source is from 2015-16).

*I took a photo of the Bayswater power station from the top of the Liddell power station, which you can see on the homepage of this website.

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