PRIDE: Miners outside the Corrimal Balgownie Colliery at Corrimal. It took that name in 1906. Picture courtesy

PRIDE: Miners outside the Corrimal Balgownie Colliery at Corrimal. It took that name in 1906. Picture courtesy

Illawarra coal industry's fate will be decided by decisions made this year

Illawarra coal industry's fate will be decided by decisions made this year


Coal train at a crossroad


In the Illawarra, coal has always held a place as a significant driving force of the region's economy - and for a long time, its identity.

Over 170 years, there's hardly a patch of greater Wollongong where coal's presence isn't felt - from the families dependent on an income, to the naming of suburbs, to the "Coal Coast" moniker given to the northern surf beaches, and even a beer named in its honour.

The industry today is either solidly entrenched, or facing existential threats - depending who you ask.

Decisions to be made over the next year are set to determine the fate of the Illawara coalfields, for better or for worse. And while coal may be on the nose as an energy source in the face of climate change, the Illawarra's metallurgical "black" coal mines are largely insulated from this, as they provide coking coal for steelmaking, not for power generation.

Production has been between 14-16 million tonnes per year this decade. The problem isn't lack of demand. Here it's water, not climate, which looms as the biggest factor.

In November the NSW Government suspended decision-making on new mines in the water catchment after an expert panel's advice on the issue. In April Panning Minister Rob Stokes said all 50 recommendations would be accepted, with "better protections, stronger assessment and more environmental offsets" to safeguard the water supply.

(The month before, his department approved Peabody's expansion of the Metropolitan Colliery, including longwall mining underneath the walls of Woronora Dam.)

Several projects are at stake. South32 is seeking permission for a $1 billion expansion of its Dendrobium mine, further underneath the Cordeaux water catchment.

British billionaire Sanjeev Gupta's Tahmoor mine wants to extend for another four million tonnes per year.

Wollongong Coal, suspended from the ASX and with questions over its solvency, awaits its bid to mine behind Russell Vale.

DOUBLE SHIFT: Union leader Bob Timbs has seen the industry change in the Illawarra.

DOUBLE SHIFT: Union leader Bob Timbs has seen the industry change in the Illawarra.

Last year South32 threatened that if it couldn't expand Dendrobium, it would close, as would its Appin operation. This could have dire consequences not just for the steelworks - but for the industries which formed the Illawarra's historical backbone.

It's said it was Matthew Flinders who wrote about spotting coal in the cliffs of the northern Illawarra. Along with George Bass and George Martin, he was on his way in 1796 to a memorable encounter with the original inhabitants of Lake Illawarra.

But it was five men who'd walked from Victoria after their ship Sydney Cove was wrecked in Bass Strait in 1797, who made a fire with coal on the beach at Austinmer.

Despite the Hunter exporting coal from 1801, the Illawarra industry didn't develop quickly, bogged in argument over who had the right to mine. The first coal wasn't shipped out of Wollongong until 1849, from the Mt Keira mine under the ownership of a Captain James Shoobert.

The high quality black coal appealed to Charles Hoskins, who moved his steelworks from Lithgow to Port Kembla in the 1920s, forming Australian Iron and Steel. This company, along with the mines that fed it, was later bought by BHP.

The remnant mines around escarpment suburbs are too numerous to name. A more detailed "unofficial history" of the industry can be found at the project.

While Illawarra families last century could count multiple generations of miners, the landscape has changed. The NSW Minerals Council said there were 2107 full-time Illawarra mine workers in 2019, including 723 contract positions. But employment is less certain than for generations.

South32 recently cut 100 jobs, Peabody 150, and Tahmoor 63, indicating a total Illawarra coal mine workforce now closer to 1800. During the industry's peaks in the 1920s and the 1980s, that figure was more than 23,000.

"It's always been an uncertain industry because of the cyclic nature of it - but obviously it's a lot more now," said miners' union (CFMEU) district vice-president Bob Timbs.

"We see coal owners cutting numbers harder and faster than what they had previously. And a lot of that boils down to the large contract numbers at mines that are a lot easier to get rid of than permanent employees."

If this year is looming as crunch time, the miners' lobby group, the NSW Minerals Council, isn't admitting it. Asked whether Illawarra coal faced a crossroads, CEO Stephen Galilee avoided a direct answer, claiming mines' impact had been "negligible".

"Multiple reviews have found that the overall impact of mining on drinking water supplies have been negligible, and additional protections have also been recently announced by the NSW Government that will help ensure the long term future of this industry for the Illawarra region and the NSW economy," he said.

Environmentalists warn the Dendrobium expansion is more aggressive than any nearby operation. Water NSW estimates it could drain 3.3 billion litres of surface water from the catchment and risk cracking dam walls.

The best coal seams exist below the upland swamps and gorges that form the drinking water catchment for Wollongong and Sydney. Signs warn of heavy penalties for trespassing on catchment "special areas".

Perhaps strangely, it was the controversy over coal seam gas extraction which has focused the controversy on the effects of mining in the water catchment.

Mr Timbs said miners were confident permissions would be granted. "The viability of the Port Kembla Coal Terminal and potentially the steelworks as well, could be at stake," he said. "Because [Illawarra mines] have low transport costs, they can provide coal to BlueScope cheaper than seaborne coal.

"There is come confidence they'll be given permission to expand. It is the right thing for the industry and the local economy. Coal mining in these times is a lot safer and, I believe, environmentally sound, than what they had been in previous years."

That confidence would have been boosted by the Peabody approval, which drew accusations the pandemic was used as cover. But these decisions are months in the making. It showed that new rules or not, only the bold or foolish would confidently predict this Illawarra industry is nearing its end.