Sydney will feel the shockwave as thousands of mining jobs and billions in royalties leave NSW

July 01, 2013

Stephen Galilee
CEO, NSW Minerals Council

Mining in NSW is facing the toughest conditions in two decades and while mining regions will bear the brunt of the storm, Sydney will also be hit by the shockwave as investment and revenue leave our borders for interstate and international competitors.
 
In the last six months media reports indicate that over 1,600 jobs have been lost in NSW mining – the industry estimates the unreported figure is possibly twice that.
 
These job losses are not just numbers. They are real people and real families now dealing with the loss of their livelihood. And the indirect impact will be felt not just in mining regions like the Hunter but also in the suburbs of Sydney.
 
Last year mining companies directly spent $9.32 billion in NSW, with $1.8 billion of this going to workers and businesses in Sydney – including around $600 million spent in manufacturing and supplier businesses across Western Sydney.
 
That’s on top of the $1.3 billion in royalties mining contributed last year to help to pay for services and infrastructure we all need – hospitals, schools, police and roads.
 
As things stand, economic contributions of this scale are set to become a fond memory.
 
Unless the NSW Government replaces the current broken planning system with a more efficient system that provides certainty and consistency for mining projects, NSW will take an economic body blow that will take years to recover from.
 
The NSW Minerals Council commissioned a detailed economic study to assess the cost of inefficiencies in the NSW Planning System that are currently causing mining project delays of 12 months or more.
 
The PricewaterhouseCoopers research found that the costs to NSW of these project delays are massive. Unless the planning system is fixed NSW stands to lose 29,000 jobs, $10.3 billion in investment and $600 million a year in mining royalties.
 
Given these stark findings, the NSW Government needs to act to save tens of thousands of jobs and prevent NSW from losing billions in revenue and investment.
 
Right now nearly 1900 direct jobs are at risk thanks to the State’s broken planning system; two Hunter mining projects are being delayed with an another delay West of the Blue Mountains. 
 
Recently the Land and Environment Court overturned Rio Tinto Coal & Allied’s Warkworth Mine expansion despite the mine receiving all necessary approvals over a year ago. 1300 people work at the mine and their jobs are now at risk. On the weekend, Rio Tinto’s global head of energy said that there was ‘...considerable uncertainty in investing in NSW at the moment,” and called on the NSW Government to take ‘immediate action’.
 
Anglo Coal’s Drayton South mine expansion is needed to ensure the jobs of another 500 local mine workers. The expansion met the approval requirements of the independent Planning Assessment Commission but has since been thrown into uncertainty by a further delay in the assessment process that puts the future of the mine and the jobs of its workers at risk.
 
Last week Anglo Coal’s Chief Executive said that, ‘…we are at a crucial decision point as to whether the State Government wants to have a continuing coal mining industry in the Hunter Valley or not.’
 
The communities of Lithgow and Cullen Bullen and surrounds, West of Sydney, have also seen 95 direct jobs lost as a result of the delay to Coalpac’s proposed mine expansion.   If the proposed expansion were to be approved the company would be able to replace those 95 workers and create an additional 30 jobs.
 
The mining industry is heavily regulated and certainly not afraid of additional oversight. However this regulation and oversight should lead to greater certainty.  Unfortunately the industry faces greater uncertainty through projects that are thoroughly assessed, analysed and independently determined, and then subjected to further endless legal appeal processes.
 
There is a solution. The NSW government has the power to ensure these three vital mining approvals are upheld. The operations could again become viable and thousands of jobs could be saved. This would also see mining royalties continue to flow to the taxpayers of NSW, helping fund infrastructure and services we all need.
 
Further, many of these issues can be resolved for the long-term through the NSW Government’s current planning system review.
 
Without policies that support mining in our state we’ll see more jobs head interstate or overseas. This will hit NSW hard, not just in the regions, but in the suburbs of Sydney where much of the income from mining flows.

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