The Strategic Statement on Coal Exploration and Mining in NSW, published by a state government agency on Wednesday, says it seeks to strike a balance between demand, jobs and moving towards a low-carbon future.
“Coal mining is an important industry for NSW, and will continue to be so for the next few decades,” Deputy Premier and Regional NSW Minister John Barilaro writes in the report.
“It is particularly important for our regional economies, who have recently suffered a series of blows from drought, bushfires and the COVID-19 pandemic.”
In 2018-19, coal brought in about $2 billion in royalties.
The sector generates more than 22,000 direct jobs and about 89,000 indirect jobs, and is used to produce about 80 percent of the state’s electricity, the report notes.
And the report argues that continuing to use NSW-sourced coal is a cleaner option.
“Most coal consumers would be likely to source their coal from elsewhere, and much of this coal would be lower quality.
“Reducing demand for thermal coal in line with the Paris Agreement by progressively replacing coal-fired electricity with cleaner energy sources, as has been seen in Europe, will be more effective in reducing global emissions than reducing NSW coal supplies.”
The NSW government will take a “balanced approach, allowing exports to continue while there is global demand, but significantly scaling back where mining can occur,” Barilaro said.
“We will work to support coal-dependent communities to diversify for the future, ensuring they remain vibrant places to live with good employment opportunities.”
The use of thermal coal in NSW is forecast to decline over coming decades as ageing coal-fired electricity plants reach the end of their lives and are replaced with cleaner options, the report says.
But while there’s offshore demand for coal, NSW wants to be a supplier.
“Some developing countries in South East Asia and elsewhere are likely to increase their demand for thermal coal as they seek to provide access to electricity for their citizens,” the report says.
“Under some scenarios, this could see the global demand for thermal coal sustained for the next two decades or more.”
The use of coal in the manufacture of steel (coking coal) is likely to be sustained longer as there are currently limited practical substitutes available.
“Ending or reducing NSW thermal coal exports while there is still strong long-term global demand would likely have little or no impact on global carbon emissions.”
The plan outlined that the NSW government will identify areas where coal exploration and mining can’t happen because of higher-priority land uses.
It will also support responsible coal production by considering measures, including the release of a limited number of new areas for exploration, such as sites adjacent to current mines.
Transition planning has begun for regions, such as the Upper Hunter, which are expected to be impacted first by declining coal production.
By Heather McNab