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December 2017 – NSW Coal Industry Update

At 30 September 2017, there were 41 coal mining operations in NSW; 20 underground mines (15 longwall operations) and 21 open cut mines. There were no mine closures during the quarter.

Production

Raw coal production for the September 2017 quarter fell by 9 per cent or 6 million tonnes to 59.5 million tonnes against the June 2017 quarter production figure of 65.5 million tonnes. Underground coal mines produced 13.6 million tonnes of raw coal during the September 2017 quarter, down 16 per cent or 2.6 million tonnes compared to the June 2017 quarter, while open cut mines produced 45.8 million tonnes of raw coal, down 7 per cent against the 49.4 million tonnes won during the June 2017 quarter. Saleable coal production fell 11 per cent, or 5.4 million tonnes, to 45.9 million tonnes in the period.

NSW coal production was down 5.2 million tonnes or 8 per cent compared to the September 2016 quarter.

Raw coal production from underground mines in the Gunnedah coalfield increased by 34 per cent to 2.2 million tonnes compared to the June 2017 quarter, reversing the trend of previous quarters where tonnage won per quarter was in decline. Production from underground mines in the Western region fell by just 5 per cent against the June 2017 quarter, with a 38 per cent fall in production in the Mudgee coalfields offset by a 56 per cent increase from Lithgow mines.

NSW underground coal mines produced 13.7 million tonnes of raw coal during the September 2017 quarter, down 21.5 per cent or 3.7 million tonnes compared to the September 2016 quarter. Open cut mines produced 45.8 million tonnes of raw coal, down slightly (3 per cent) against the 47.2 million tonnes won during the September 2016 quarter.

The fall in raw coal production during the quarter may be attributed to a number of factors. There were six longwall moves at mines across the Hunter, Newcastle and Mudgee coalfields during the September 2017 quarter. Production from the Southern coalfield was affected by gas and geotechnical issues at the Appin Colliery mine while production only resumed at the Wongawilli mine in late September after operations ceased in July due to their labour hire contracting company going into administration. There were also hours lost due to industrial action across Glencore mines.

Exports

Coal exports for the September 2017 quarter were down 4.5 per cent compared to September 2016. The FOB value of coal exports for the quarter rose 32.4 per cent to 4.5 billion Australian dollars with an average FOB value of $109.47 per tonne. The average value per tonne was up 38.7 per cent or $30.54 on the previous September quarter.

Productivity and Employment

During the twelve months to 30 September 2017, there was net job growth of 1,247, taking the production workforce at NSW coal mines up to 20,432 mine workers (full-time equivalent workers). The number of workers at the end of the September quarter, however; is slightly down on the 30 June 2017 figure of 20,538. Overall employee growth was strong in the Hunter, Gunnedah and Mudgee mining regions. Employee growth was highest in the open cut sector.

Productivity at NSW coal mines, calculated as raw coal production tonnes won per employee, fell 13.7 per cent to 2,907 tonnes, down from 3,370 tonnes for the September 2016 quarter.