NSW Minerals Council survey shows mining spending down, despite being a $4.5 billion industry in Hunter

COAL WARS: The big banks might be refusing to fund new coal projects, but existing mines, including Mount Arthur, near Muswellbrook, are still pumping out products and profits.
COAL WARS: The big banks might be refusing to fund new coal projects, but existing mines, including Mount Arthur, near Muswellbrook, are still pumping out products and profits.

DESPITE the end of the coal mining construction boom, the industry still contributed $4.5 billion to the Hunter economy last financial year, the latest annual NSW Minerals Council survey of coal mining company expenditure has found.

Minerals council chief executive Stephen Galilee said the expenditure survey found 23 participating mining companies directly contributed $10.4 billion to the NSW economy.

Although the survey shows the coal industry is still a major contributor to the Hunter and NSW economies, most of the measured indices showed a decline for the third year in a row.

The exception was the Hunter’s coal mining employment, which averaged 12,600 full-time workers in 2016-17, up by 1400 positions from 11,200 in 2015-16.

Mr Galilee said this year’s results covered the end of the previous mining downturn and the start of the recovery.

“This survey, now in its sixth year, shows the Hunter continues to depend on mining for local jobs, investment and economic growth,” Mr Galilee said. “Ensuring the right policy settings for mining will deliver more jobs and better times for Hunter mining communities over the long term.”

Across NSW, the industry’s overall direct expenditure was the lowest in three years, down from a peak of $13.6 billion in 2013-14, $11.3 billion in 2014-15 and $10.8 billion in 2015-16. In 2012-13, it was $12.8 billion.

In the Hunter, the industry’s direct spending provided 19 per cent of the gross regional product and included $1.7 billion in wages at an average of $135,000 per person.

Hunter coal mining spent $2.8 billion with some 3070 of the region’s businesses, down from $3.3 billion to 3640 businesses in 2015-16. It paid $17.5 million into local government coffers, down from $19.4 million, and contributed $2.8 million to more than 400 community organisations at an average of $6730 per grant, down from $3.7 million at an average of almost $8900.

Despite the international question marks hanging over the industry, mine operators are enjoying some of the highest prices, and most profitable times, for some years.

Whitehaven, founder of the Maules Creek mine at Narrabri, has seen its share price go from 41 cents in February 2016 to a high of $4.91 in February this year, and $4.72 this week.

New Hope Group, which owns Bengalla and two other mines, is making $25 a tonne after tax on its coal, based on a six-month profit of $115 million from 4.4 tonnes of production.

In March, the Hunter’s biggest miner, Glencore, said a quarter of its global 2017 before-tax profit of $US14.8 billion came from coal.