The New South Wales (NSW) coal mining industry produced around 170.3 million tonnes (Mt) of raw coal, yielding 131.3 Mt of saleable coal in 2006-07. This accounted for $8.1 billion in income, or 66% of the total value of the NSW mining sector. Exports of 91.5 Mt of thermal and metallurgical coal totalled approximately $6.2 billion in value, while domestic consumption of 34.5 Mt of coal by the power, steel and other industries totalled $1.7 billion in value. The remaining saleable coal was placed into mining stocks.

The coal mining industry continues to be a major employer in NSW. At the end of June 2007 there were 13 392 people directly employed in the five coalfield regions across NSW. This is an increase of 734 positions (8%) compared with June 2006 (12 658 positions) and the highest level of employment in the industry since June 1997.

The coalfields of the Sydney-Gunnedah Basin contain almost all of the coal resources in NSW, with smaller quantities in the Gloucester and Oaklands Basins. Recoverable coal reserves in NSW are over 12 billion tonnes. These reserves are contained within 60 operating mines and colliery holdings and more than 30 major development proposals.

The major coal deposits in NSW range in rank from bituminous coking and thermal coals to sub-bituminous thermal coals. The quality of thermal coals ranges from medium- to high-ash, low-sulphur coal used for domestic power generation and cement manufacture; - to low- to medium ash, high-energy, export quality coal. Prime, low-volatile, hard coking coal and low-ash, semi-soft coking coal, used for iron and steel production, supply both the export and domestic markets.

Industry Trends

Forecasts by the Australian Bureau of Agricultural and Resource Economics (ABARE) predict continued growth in demand for both thermal and metallurgical coals over the next couple of years.

Exports of high quality thermal coal decreased slightly during 2006-07, whilst export demand for metallurgical coal increased by around 14%. In the past ten years the majority of the increase in coal exports can be attributed to the demand for thermal coal and this trend is likely to continue for the foreseeable future. Domestic coal sales increased slightly between 2005-06 and 2006-07 to 36.3 Mt.

Productivity in the NSW coal industry has increased by 25% in the past ten years. Productivity based on saleable tonnes per employee has increased from 6920 tonnes per annum in 1996-97 to 10 120 tonnes per annum in 2006-07. Improved levels of productivity coupled with a continued rise in production from longwall and large scale open cut mines, has NSW well positioned to supply an increased share of the growth in world energy requirements from black coal.

Production

The 170.3 Mt of raw coal produced in NSW in 2006-07 represents a 5.7% increase from the previous year's production of 161.1 Mt. Raw coal production from open cut mines rose by 3.9% to 113.1 Mt from 108.9 Mt the previous year. Raw coal production from underground mines increased moderately from 52.2 Mt in 2005-06 to 57.2 Mt in 2006-07.

There is a large and significant difference between raw and saleable production from open cut mines (28.0 Mt) compared with the difference between the raw and saleable production from underground mines (11.0 Mt). This reflects the greater recoveries achieved from mining selected seams or working sections in underground mines. Open cut coal recoveries averaged 75% compared to 81% for underground operations.

Exports

Coal exports in 2006-07 increased to 91.5 Mt from 89.8 Mt the previous year. This reflects, in particular, an improvement in coking (metallurgical), coal exports which increased by 2.5 Mt to 20.4 Mt. During the same period thermal coal exports decreased slightly from 71.9 Mt to 71.1 Mt, potentially reflecting existing port constraints and the impact of the June 2007 floods on coal exports from the Hunter. In the past decade, NSW coal exports have increased by 21%.

During 2006-07, the 91.5 Mt of export coal represented 70% of the saleable coal production of 131.3 Mt. Thermal coal exports contributed 71.1 Mt or 78% of total coal exports. This can be contrasted with 1997-98 when only 51.8 Mt of thermal coal was exported. In comparison, in the ten-year period since 1997-98, coking coal exports have decreased from 24.1 Mt to the current 20.4 Mt.

NSW exported coal to 26 countries worldwide during 2006-07, four more than the previous year. Asia continued to be the major market for NSW coal, with the region buying approximately 82 Mt (90%) of exports. Japan has been the largest single export destination for the past 20 years and dominates both thermal (55.8%) and coking (52.5%) coal export markets.

The major export customers for NSW coal in 2006-07 were Japan (50.5 Mt), a slight (1.7 Mt) increase over the previous year, Taiwan (13 Mt), unchanged from the previous year, and the Republic of South Korea (9.4 Mt), 18% lower than the previous year. Thermal coal accounted for 82% of coal exports to Korea and Taiwan.

fter declining for a number of years, NSW coal exports to Europe increased by 0.4 Mt in 2006-07 to 2.6 Mt. The UK, Germany and Italy imported 1.5 Mt, representing 58% of total coal exports to Europe. Coal exports to ‘other countries’ continued to grow in 2006-07, with Mexico being by far the largest customer in this category. NSW coal exports to Mexico in 2006-07 were 5.6 Mt.