During COVID-19 the NSW mining sector has worked tirelessly to keep operations going while ensuring the safety of mining workers, their families and their local communities.
This has helped to keep the NSW economy going, particularly in the regions, and today’s Budget confirms that this important contribution is set to continue and grow in the future.
Today’s NSW Budget highlights the central role the NSW mining sector will play in the economic recovery, with mining royalties to help pay off COVID-19 related government debt.
The Budget also recognises the ongoing importance of our NSW mining regions to the economy with a range of funding announcements, including a significant funding increase for the Resources for Regions program.
Future mining royalties will be invested in the NSW Generations Fund as part of the NSW Government’s debt reduction strategy. According to the Budget papers this is expected to help reduce net debt by $19 billion by the end of the decade.
The global economic downturn and stronger currency has had an impact on mining royalties, which are forecast to be around $1.4b lower over the period to 2023-24, with falls in coal royalties only partially offset by increased royalties for metals like gold and copper.
Royalties delivered $1.7b in revenue in 2019-20 but this is expected to fall to $1.4b in 2020-21 due to the COVID-19 global economic downturn.
However, royalties are then expected to grow again, increasing back to $1.6b in 2023-24 and delivering over $6b in contributions for the NSW Generations Fund over the period to 2023-24.
More broadly, the Budget contains a range of other funding commitments that will support the role of the mining sector and help improve quality of life for mining communities across NSW.
The NSW Minerals Council has been a strong advocate for more funding for the Resources for Regions program, and today’s announcement of a further $75m for Round 8 is very welcome.
Ideally this will become an annual $75m commitment to give the 24 eligible mining-related local councils the funding certainty they are seeking to keep investing in local projects to improve their communities.
The Budget has confirmed $45m for Coal Innovation NSW to progress low emissions technologies including carbon capture, use and storage. This is an important investment with the potential to unlock new opportunities over the long term.
The commitment of $106m for the NSW Resources Regulator is also welcome, as is the $180m investment to expand the NSW Government’s trade and investment network.
The NSW mining sector provides the state’s most valuable export commodities to around 20 different countries each year, and this initiative has the potential to attract significant additional investment into NSW to help drive further export activity and local jobs.
The commitment to further reduce planning assessment timeframes is also positive, given the importance of an efficient assessment process for investment and jobs over the long term.
These Budget measures all serve to highlight the ongoing importance of the mining sector to our State, reinforcing several previously released NSW Government policies and strategies.
In June this year the Deputy Premier released the Government’s Coal Strategy, outlining the future role and demand for NSW coal, including our exports to the Asia-Pacific region which represent around 85 percent of overall NSW coal production.
This complemented the NSW Government’s Minerals Strategy released in early 2019 which focuses on the development of non-coal minerals and metals resources, including many of the minerals inputs needed for renewable energy generation and utilisation.
With the right policy settings the NSW mining sector has the potential to continue driving economic development across NSW to help with the economic recovery from COVID-19.
Media contact: Callum Fountain | firstname.lastname@example.org | 0409 758 734 | 02 9274 1419