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Jobs and industry in the Hunter Valley: Context for a conversation about a Just Transition away from coal

 

 

 

By Steve Phillips

 

May 5, 2017 –– Links International Journal of Socialist Renewal –– The Hunter Valley is famously, or infamously, one of the most coal-mining-dominated regions in the world. We have one of the highest concentrations of mines on the planet, and we host its biggest export coal facility. Many will tell you that the Hunter has always been a coal-mining region, and it's true. But in the past it played a lesser role, and only in recent years has mining come to dominate the physical, social, and economic landscape of the Hunter Valley.

 

Historically, the mines were far fewer, and were underground. It was in the late 1970's and early 1980's that the first open cut pits began to appear, and those were tiny artisanal ditches compared to today's gargantuan, town-sized excavations.

 

For pretty much the entirety of the 20th century, the Hunter Valley was a national agricultural powerhouse. And despite the more recent dominance of the mining industry in our region, agricultural industries remain significant. If they are protected, encouraged, and regrown, these industries will play an indispensable role in our region's necessary and inevitable transition away from coal.

 

In previous decades the Hunter was one of the largest dairy farming regions in Australia. While the industry has declined dramatically in the past two decades, Hunter dairy farms still produce 16% of New South Wales milk and contribute $170 million to the state economy.

 

Cropping and grazing long dominated our region's landscape and economy, and remain significant, with over 2,500 farms contributing $331 million to the state economy.

 

The Hunter remains an icon of global thoroughbred breeding, despite this industry's decline in some parts of the region due to the recent invasion of coal-mining. Last month the two biggest thoroughbred studs in the Hunter won a decade-long fight against Anglo American and the state government, defeating the Drayton South coal mine proposal which threatened the very viability of thoroughbred breeding in the Hunter. Their victory secures the future, for now, of an industry that spends $270 million a year in our region, and employs over 1000 people.

 

The Hunter is one of only two internationally recognised wine production areas in Australia. In 2009-2010, the Hunter Valley was estimated to have 3,537ha of wine grapes planted, or just over 8% of NSW’s wine grapes, and more than 120 wineries, producing quality award-winning wines, valued at more than $210 million. In total, Hunter vineyard and tourism industries jointly inject $1.8 billion annually into the NSW economy. The total value of investment by viticultural and wine-making enterprises in the region exceeds $450 million, and these businesses directly employ over 7,000 people, with an additional 10,000 indirectly employed. Wine tourism employs an additional 30,000 people directly and indirectly, servicing more than 2.8 million visitors annually who spent over $1 billion in the Hunter Valley every year.

 

The rise of coal

 

Coal mining has been part of Hunter Valley culture since European settlement, and to the Wonnarua people for many thousands of years before that. For 200 years, the Hunter coal-mining industry happily coexisted with other industries, demanding only a fraction of the land and water that it does today, and nobody had ever heard of climate change or renewable energy. But times have changed.

 

In the last two decades, open cut mines have proliferated in our valley, and every other industry has suffered serious decline as a result. In 1981, the area of the Valley cut open by mines was 1,724ha, which is about the size of one large pit today. Back then, the entire Hunter coal industry produced 18.5 million tonnes of coal per annum, less than just 1 of the larger mines will ship out this year. Nowadays, the mines occupy over 31,000ha, over 16 per cent of the Hunter Valley floor.

 

The Hunter Valley is now home to 26 coal mining operations, with 42 open cut pits and 15 underground operations, producing 163 million tonnes of coal in 2015.

 

Impact of the boom on other industries

 

The boom of coal-mining in the Hunter over the last 20 years has had a major impact on other industries in the region. Between the 2001 and the 2011 Census, mining employment in the Hunter Valley almost doubled, while employment in agriculture almost halved.

 

The mines occupy 16% of the Valley floor, but the gravity of their impact extends far beyond their mine pits.

 

Mining exploration leases cover 128,000ha, or 64% of the entire region. No commercial agricultural operation is secure with a mining lease over it's head.

 

Coal-mining companies own 26% of water licences in the Hunter Regulated River, including 55% of high security licences. In the most heavily mined areas of the region, mining companies own up to 95% of high security water licences. In times of major drought, high security licences are the only ones that matter. The dominance of big-money mining companies in the Hunter water market has driven prices to the highest level in the state, $2000 per megalitre, pushing out other water users in other industries.

 

In Muswellbrook Shire, coal companies own 24% of all freehold land, and in Singleton it's 15%. They own 23% of the mapped Strategic Ag Land in Muswellbrook, and Singleton they own 27% of it.

 

Many people in the Hunter are shocked to learn that the open cut pits they see spreading over the countryside do not need to be backfilled under NSW government policy. Mining companies have been given permission to leave over 30 so-called “final voids” in the Hunter – abandoned mine pits hundreds of metres of deep and sometimes kilometres wide, which fill with super-saline water over hundreds of years, and are modelled to continue messing with the surface and groundwater hydrology for 1000 years into the future.

 

Employment in mining

 

On a region-side scale, the coal industry is no longer a major employer in the Hunter, with the metropolitan centres of Newcastle and Lake Macquarie being largely uninvolved in the industry, except for some of its impacts. In these population centres, employment in mining is around 2%. Over the region as a whole, about 5% of the workforce work in the mining industry, but these low figures mask a greater reliance on coal-mining further inland, in the rural centres of Singleton and Muswellbrook.

 

In the local government areas of Singleton and Muswellbrook, the two major population centres of the Central Hunter Valley, up to 25% of the workforce is employed in the mining industry, and many other local industries enjoy the flow-on benefits. It is undeniable that in the Central Hunter Valley, coal-mining has become the dominant industry, and many people now depend on it. That is why it is so important at this time when the impacts of coal-mining in our region have grown to crisis point, and the medium-term outlook for the industry is so dire, that we must unite, as much as possible, around the cause of a Just Transition away from coal-mining for the Hunter, and we must turbo charge the development of new industries, strategies, and ideas for our region.

 

Massive growth of the coal industry has not lead to reliable, enjoyable, or long-term employment. The dominance of the coal industry in the Central Hunter has had terrible social and personal flow-on effects, due to the gruelling conditions of the industry, which demands 12-hour rotating shifts on punishing schedules, making it impossible for a person to meaningfully engage in their local community or maintain active membership of organisations, and difficult even to maintain a happy family and personal life.

 

The Central Hunter has one of the worst gender pay gaps in Australia, due to the large wages of the coal industry and its predominantly male workforce.

 

But the high wages of the coal industry are to many a cursed gift, making it easy to enter into huge amounts of debt, but accompanied by the ever-present insecurity of a job in mining, where you might lose your high-paying, high-stress position at the first hint of a dip in the coal price.

 

Coal companies are not interested in the long-term welfare of their workforce, and have failed to provide training and skills development to allow people to move into other work when retrenched. Once you've been retrenched from the mine, you're at a dead end. This problem's been exacerbated by the weakening of the TAFE system in NSW, which should be there to provide skills building that can help attract new industry.

 

Coal-mining companies are the most powerful lobby group in NSW, and often have the law changed in their favour if some administrative decision fails to deliver them the approvals they demand. In arguing for their interminable mine expansions, the industry always cites jobs as the major social benefit of granting them every mining permit they desire. But recent experience shows that mining approvals do not equate to job growth, or even job security.

 

In November 2014 Glencore's Mt Owen mine was given approval to increase their coal production, and five months later they sacked 60 of their workers.

 

In April 2015 Peabody Energy was approved to expand longwall operations at their Wambo mine, just 20km northwest of where we sit today, in this beautiful olive farm in the spectacular Broke-Fordwich wine region. Two months later they sacked 50 miners.

 

In 2015 BHP Billiton was given approval to extend mining at Mt Arthur, near Muswellbrook, the largest mine in the region. Two months later they sacked 150 miners.

 

These incidents highlight the paradoxical dynamic that coal-workers face in our region when coal prices are low. With supply already exceeding demand, every mine expansion project that adds to supply actually makes jobs in the industry less secure, driving down the price which leads to the workforce being squeezed on hours and conditions, and sometimes retrenched.

 

The fall of coal

 

Most coal mined in the Hunter is thermal coal. The stuff that's burned in power stations. From the unprecedented prices it soared to in 2012, the global thermal coal market then took a dramatic plunge, leading to widespread mine shut-downs and scale-backs in the Hunter during 2014, 2015, and into 2016.

 

In the last year or so the coal price has climbed again, prompting some excited coal enthusiasts to shout that the boom is coming back, baby. But as to what the future really holds for coal-mining in the Hunter....well, that depends on who you ask.

 

The coal lobby and its followers say that coal is the best and cheapest way to make electricity and that it always will be, and they promise that each bust will always be followed by the next boom. But most people outside the coal industry and its ideological bubble can see that in an age of climate change and cheap renewable energy, it makes no sense to burn coal any more. Many respected energy analysts and economists now say the thermal coal industry is entering terminal decline. Despite the recent uptick in coal prices, the industry is doomed to fade rapidly over the coming years as the world transitions to affordable renewable energy that doesn't smother local populations in particulate pollution or cook the planet's climate.

 

Even major players in the coal industry can see the writing on the wall. Rio Tinto has dominated the region's coal-mining industry for decades, but is now selling out. Other major companies are reportedly contemplating the same.

 

Transitioning

 

The traditional agricultural industries in the Hunter have suffered from the recent coal boom, but they persist as significant and viable industries in our region that can regrow, if they are protected and encouraged, and lead our region's Transition from coal.

 

The skills base we can draw on to drive the Hunter's transition is not just restricted to agriculture though. Our region is skilled and innovative in diverse fields including engineering, manufacturing, psychiatric health care, and energy innovation, to name a few. The Hunter's leadership in industries like these will help drive our transition.

 

The Transition from coal in the Hunter will also require new industries, new ideas, and new innovations. But above all it will require new alliances, new cooperation, a broad-based community consensus that the Transition is a thing we all need to work for together.

 

Happily, it seems most people in the Hunter can see the need for a Just Transition, and the opportunities it promises.

 

In the past year, Lock The Gate has been undertaking door-knocking in Muswellbrook, talking to local residents about the coal industry, and surveying them with three simple questions about the past, present, and future significance of the coal industry to our region.

 

We've interviewed about 400 people in one of the most mining-dependent population centres of the Hunter, and the results have been illuminating.

 

Of our respondents in Muswellbrook, one third of residents believe that the coal-mining industry has done more harm than good to our region. About 45% of people believe that the spread of coal-mining in our region has gone far enough, and that no further coal mines or mine expansions should be approved.

 

These results are remarkable, given we're talking about Muswellbrook, where residents live in the heart of the Hunter coal industry and who, in large numbers, rely on the industry for employment.

 

But the most remarkable figure comes in the responses to our third survey question, which asks, Do we need a plan for a post-coal economy in the Hunter? 9 out of 10 people in Muswellbrook think we do.

 

Clearly most people in Muswellbrook have not been staying up to date with Minerals Council media releases or the press conference talking points of our state and federal mining ministers. The residents of Muswellbrook are at the coal-face, so to speak, of the Hunter mining industry, and they can see that it's not a long-term game. The jobs are not steady. The future of the industry is in doubt. Clearly, we need a plan to diversify our regional economy and position ourselves for a future where the world is no longer interested in buying our coal.

 

Government's are not going to lead the transition, that seems pretty clear. They are too enthralled by the mining companies. If we're going to make this happen, we need to talk to the people on the ground, the other industries that are already established in our region, and the workers themselves, for whom getting this Just Transition right really matters the most.

 

I hope we can some up some ideas today, for how we can make this happen.

 

Steve Phillips is an organiser with Lock The Gate Alliance. This speech was given at a public meeting in Broke, New South Wales on April 28, 2017.

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