“Our economy is significantly dependent on thermal coal production and, as a result, our economic fortunes are largely determined internationally rather than locally,” he said.

“There have been extraordinary fluctuations in international energy markets in recent times – the prices of oil, coal and gas have all plummeted in the last six months.

Cr Rush said the market for thermal coal is heavily oversupplied, however there looks like there will be an increase in the coming 12 months.

“The consensus view is that, notwithstanding the oversupply, production of thermal coal globally will increase in 2015,” he said.

“Prices will remain subdued for most of 2015 and probably 2016 for that reason.

Cr Rush said the coal market was difficult to predict due to a range of factors.

“Supply has also not adjusted to lower prices because of a whole raft of rigidities to the usual corrections when prices drop,” he said.

“‘Take or pay’ port contracts, for example, have kept production high because the cost of reneging on the contracts is higher than the cost of idling production.”

There may be a lot of talk surrounding the industry but Cr Rush believes the biggest impact has been on new mining construction.

“This is because typically the first thing to suffer from lower prices is new investment,” he said.

“That is significant because mining construction is far more labour intensive than mining production.

“Fortunately for Muswellbrook, our mining construction industry is relatively small compared to other parts of the Hunter.”

Cr Rush said the town’s economy was more reliant on operational mining.

“The biggest local impact of the decline in mining investment has been on the housing market as mining construction employees who rented locally, but lived elsewhere, have left the local economy,” he told the Chronicle.

“This has also had consequential impacts on parts of the hospitality industry – and most noticeably the pubs and clubs.

“The impact of mining construction has also affected a number of local businesses who had larger mining construction workforces or local suppliers of construction inputs.”

Despite the visible loss, Cr Rush believes the ride for operational or production mining has been more sheltered from plummeting thermal coal prices, adding the idling of mines is less likely to happen locally.

“We are also fortunate that most of our mining operations have low production costs compared with the global average,” he said.

Cr Rush said unemployment in Muswellbrook has not been too drastically affected by the coal prices with the recent local unemployment figures at 5.8 per cent, compared with 6.1 per cent nationally.

“The strength of our local operations is a small silver lining in what is otherwise a subdued forecast for thermal coal over the next few years,” he said.

“Our focus must remain on building resilience in our local economy.

“That means expanding the education, aged care, tourism and intensive agricultural sectors.

“It means building productivity in our thermal coal sector and increasing the liveability of our town by increasing entertainment and other options. It also means that the private sector must carefully assess demand gaps and opportunities for expansion into new markets.

“Our underlying economy remains strong.

“It is founded upon a skilled workforce, rich natural resources, proximity to markets and good infrastructure. It is a sign of that strength that our economic fundamentals, and particularly our low unemployment rates, have remained so solid.”