Thermal coal is the Hunter’s biggest export and the Port of Newcastle, rights to the operation of which just sold under a 98 year lease from the NSW government for $1.75 billion, is the globes biggest coal export hub.
So more news over the weekend that another 500 workers are going to lose their jobs after Vale subsidiary Integra Coal said that it was shuttering two Hunter Valley coal mines, the Camberwell open-cut and Glennies Creek underground mines, will be worrying for the Hunter economy.
It is the latest in a series of cuts in the Valley as the coal price has now fallen below the cost of production for many mines.
Worse still for workers and business is that the price is now lower than the price that the mines must pay in the “take or pay” system. Sources told Business Insider that the company had lost $100 million last year but only had to pay $70 million under the take or pay system of guaranteed supply and demand.
So in effect Integra “saved” $30 million by closing the doors at Camberwell and Glennies Creek.
The Hunter Valley Research Foundation (HVRF) says that mining employment makes up 5.6% of total employment in the Hunter and local Labor MP Joel Fitzgibbon is clearly concerned releasing a statement which said,
Unfortunately we are about to get a taste of what the Hunter’s economy would be like without a strong coal mining industry. This is why the community needs to rally behind and support the industry.
It is not just the direct jobs – it’s also the manufacturers and support industries, the petrol stations, the sandwich shops, and many other businesses which rely on mining.
All of which is true but HVRF research also shows that the Hunter is a diverse economy not overly reliant on any one single industry and also an area which largely mirrors the employment diversity of Australia as a nation. Indeed ABS data released last week showed that Hunter employment is up at record levels in terms of total employed persons.
So mining is an important “other” employer but it is not even in the top 5 employment sectors in the region suggesting the economic impact of these job losses can be absorbed relatively well.
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