‘From pit to port’: Will automation tear up the social contract in coal communities?

The promise of jobs and royalties lies at the heart of the social contract between coal towns and mining companies.

As those coal jobs emerge as a critical issue in negotiations over net zero emissions within the federal Coalition, automation equipment manufacturers are designing “smart mines” with fully automated coal extraction from pit to port.

Despite Australia’s major coal trading partners eyeing a green future, and New South Wales today committing to more ambitious climate targets, mining companies in NSW are pursuing plans to extend their operations and extract close to a billion tonnes of coal.

In the state’s Hunter Valley, there are more than half a dozen proposals at various stages in the planning system to establish new open-cut pits and tap into an additional 60 million tonnes of coal a year.

More than 2,000 jobs in the region depend on the projects being approved and developed.

But projections from NSW Treasury and coal analysts indicate some of those jobs may not exist in the coming decades, even if export demand remains strong.

According to resource analyst David Lennox, as coal companies grapple with tighter profits resulting from competition from renewables, many “just won’t be able to withstand” the allure of automation.

Autonomous drilling and haulage are commonplace in West Australian iron ore mines, and companies like Epiroc are now marketing the same technology to coal companies.

“Now we’re starting to see more customers coming to us and wanting to talk about automation on the east coast coal market,” Epiroc’s business manager, Alex Grant, said.

Mr Grant cautioned against equating automation with reduced employment, adding it could increase the need for specialists to maintain equipment.

Report predicts 80pc reduction in coal jobs by 2050

But the NSW government confirmed to 7.30 that technological advancements were factored into Treasury projections that coal employment would decline at a faster rate than coal volumes.

Eighty per cent of coal jobs, representing 18,000 workers, will not exist by 2050, according to Treasury’s central estimate in the latest Intergenerational Report.

NSW Minerals Council chief executive Stephen Galilee said automation was yet to have any impact on coal jobs in the state and would ultimately make mining safer.

“I would be saying to anybody considering a career in the mining sector that what you are considering is a career where your skills are easily transferred from a coal mining operation to a gold or iron ore mining operation,” he said.

Data from NSW Treasury projects coal volumes will remain steady until 2030, but more than halve by 2050.

Governments must step up, says former planning boss

With coal communities facing a turbulent future, former industry figures are demanding further action to diversify local economies.

Among them is the former director-general of the NSW Department of Planning, Sue Holliday.

During her time in charge of the department from 1997 until 2003, Ms Holliday was a driving force behind regional forest agreements, which set out a transition plan for logging communities.

“There needs to be roundtables involving the federal government, state government, communities, unions, environmentalists, all of those who play a part in the future of these mining communities, to come to an agreement about the process by which those communities can transition.”

Four months ago, the NSW government announced an expert panel of community organisations to decide how to spend mining royalties in the Hunter.

The government confirmed to 7.30 no progress has been made forming the panel.

When questioned on what the coal industry was doing to support a transition, Minerals Council CEO Stephen Galilee said coal communities “do have time” and export demand was likely to continue for “at least a decade or two more”.

“We support a strong and diverse Hunter economy,” he said.

“We support strengthening other sectors while continuing to make our own contribution.”

‘The closing bell has rung for thermal coal’

Michael White knows the Hunter coal industry better than most.

He had a 23-year career with BHP, including eight years as operations manager at the state’s largest coal mine, Mt Arthur. 

Despite his long career in the fossil fuel industry, he is now a fierce opponent of plans to extend Hunter Valley coal mines, including Glencore’s Mangoola mine, which will bring it to within 3 kilometres of his farm near Wybong.

“In 2001 we didn’t have the scale of open cut mining that we do have today and the consequential impacts. And the other thing we didn’t have is essentially the climate emergency.”

While some Hunter miners launch extension plans, others such as BHP and Rio Tinto, are exiting thermal coal.

BHP has been searching for a buyer for its Mt Arthur mine for over a year, recently slashing its value to negative $290 billion.

“The closing bell’s rung and the sensible patrons have left, a few of the patrons have rushed to the bar and ordered 10 schooners before closing time,” Mr White said.

‘Without mining we have nothing’

Tony Riley worked in the local mines for 36 years, and now runs a coffee cart in the town of Aberdeen.

He has watched the Hunter Valley economy slowly diversify in recent years, but coal remains the bedrock of the economy.

His customers are quick to offer reminders of what continues to power the region.

“Without mining we sort of have nothing,” said one local miner grabbing her morning coffee. “It’s our whole money, it’s small business, it’s families, it’s kids sports — it’s everything for the Hunter Valley.”

“It’s the lifeline,” said another. “It’s been the lifeline for the past two years of this COVID, keeping us going, keeps a lot of young people in a trade.”