Gloomy times for mining in the Illawarra


The image of a soot-smeared miner emerging dirty, dusty and tired from a lengthy shift underground has long been synonymous with the Illawarra.

Since men first struck coal deposits in Coalcliff nearly 200 years ago, the region's mines have buoyed the local economy, to the tune of $1.4 billion in 2013, providing hundreds of jobs and support industries.

But in the past 12 months, the sector has been hit hard.

Wollongong Coal, formerly Gujarat NRE, has been plagued with job losses and problems with its longwall machines and expansion plans.

About 165 jobs now hang in the balance at its Russell Vale and Wongawilli sites as workers continue to try to negotiate a deal to stem the losses.

Any lay-offs would add to the 50 jobs already axed this year.

BHP Billiton subsidiary Illawarra Coal is set to cut 36 jobs from its local mines while Peabody's Metropolitan operation in Helensburgh slashed 42 jobs in June 2013.


Related industries have not been immune.

Mining manufacturer Joy announced plans this week to shed another 50 positions from its Moss Vale workshop, adding to the 30 jobs cut last year and the closure of its Unanderra plant.

The figures are worrying - mining now accounts for just 2463 jobs in the Illawarra, compared with 5720 in 1981 and 4740 in 2011.

And it's not just in our own backyard.

The Minerals Council of Australia estimates 10,000 coalmining jobs have been axed nationwide since 2012, courtesy of sinking coal prices.

Coking coal prices have slumped to six-year lows - they peaked in mid-2011 at about $300 a tonne but have been trading at about $130 a tonne this year.

Queensland's mines, which mainly produce thermal coal, have arguably felt the brunt of the falling prices, compounding their struggle to compete with renewable energy sources.

This week, Glencore announced the closure of its Newlands mine, west of Mackay, slashing 50 jobs.

The miner sacked 450 workers from its Bowen Basin operations last year.

Peabody closed its Wilkie Creek mine at the end of 2013, resulting in 200 job losses, while another 200 workers were cut when Anglo's Dawson mine, near Moura, reduced its workforce.

While doom-and-gloomers have used the statistics to spell the industry's demise, experts have been quick to allay fears that coalmining is dead.

Ray Tolhurst, the former chair of the Illawarra branch of the Australasian Institute of Mining and Metallurgy, says mining, like any industry, is cyclical and is simply experiencing a downturn.

"As more mines stabilise, there's more supply, which means there's more to choose from so prices go down; high-cost producers can't survive so the mines close," he said.

"Then you see it go the other way, where there's a shortage of mines, a shortage of coal and prices go up and suddenly, they're back in the market."

While Mr Tolhurst does not believe the downturn is permanent, the upswing will come a little too late for casualties of the recent decline.

"There's definitely a flow-on effect to businesses but it's the social impact too," he said.

"Mining companies can't make donations to community groups, people are forced to become fly-in, fly-out workers and it creates dramatic disruption in the household."

Navigating the upturn is critical to the long-term viability of the region's mines, according to the industry expert, along with investment in technology.

Wollongong councillor Chris Connor, who sits on the Association of Mining Related Councils, believes investing in rail and expanding Port Kembla will make Illawarra mines more competitive.

"Newcastle is choked, you only have to look at the number of ships in their port," he said.

"The city is the largest coal exporter in Australia but the Illawarra has the capacity to be - we've got the connections to other industries, that makes us pretty unique; that's why the expansion of the port and rail links are so critical."

For Professor Chris Cook, executive dean of the University of Wollongong's Faculty of Engineering and Information Sciences, investment in Illawarra mines may be too little, too late.

While he agrees the recent downturn is not a sign that coalmining is over, he is quick to note that traditional labour-heavy industries are no longer the bread and butter of the nation's economy.

He sees the Australia - and the Illawarra - of the future as a place where "brain-based" jobs rule and mining work is few and far between.

"We're always going to need coalminers, engineers and support staff to keep everything going but it's not going to be a growing workforce," he said.

"We already know there's fewer people underground; we've seen it in places like Western Australia where they can run an open-cut mine from Perth, they don't need a lot of people to do it, that trend is clear.

"We have a city where coal and steel have served us well, and they still will for a while, but it won't last forever; we can't rely on coal for the rest of our lives.

"We have a chance now to define the way we interact with the rest of the world; there is high-value on brain-based goods and services, that's where world trade is moving and that's where we need to go."

But Mr Tolhurst believes the focus should be on collaboration, rather than competition.

"Yes, coal isn't the be-all and end-all it once was but that doesn't mean we should replace it," he said.

"It doesn't have to be a 'one or the other' debate - the traditional and emerging industries can learn from each other.

"I think there is this image of the Illawarra [as a region that is] completely moving out of the mining sector but I can't see why the industries can't sit beside each other."

Cr Connor agrees but believes the region's new markets will eventually outstrip traditional operators.

"It will be a long time before the income from areas like IT matches mining [in the region] but I'd like to see a day when high-tech manufacturing outstrips mining," he said.

"It will happen if we keep investing in it."

But for the moment, Cr Connor is confident the region's practical mining side can co-exist with its research and development arm.

"We have the knowledge of what works well here - we know how to do things so there's no reason we can't use it to further research," he said.

Despite the global downturn, Prof Cook believes the core need for coking coal is still strong and will be for many years.

"Every time the price of coal drops $1 a tonne, people start to panic but we need to understand that these things come and go, economies are never constant and there is a natural ebb and flow," he said.

"We still need coal - you can't have electricity, you can't run a city, you can't build infrastructure without it, the underlying demand is still there."

Cr Connor agrees, noting the Illawarra's coal has long been coveted worldwide.

"This region is known for producing some of the best quality coking coal in the world," he said.

"When people want to make quality steel, they come here for the coal - that demand is still there."

Coalminers sometimes enjoy the thought that there really isn’t any other job like it.

Many workers have spent decades underground, often doing strange afternoon or night shifts, living daily with the dirt, darkness and danger of pit life.

It’s something to take pride in, most of the time.

But it can be a problem when you’re forced to take your skills and land a job in a different industry.

Several miners the Mercury has spoken to in recent weeks say that a basic operator in a coalmine is not properly qualified to do a different job beyond mine work, so they face the prospect of starting again from scratch.

Plenty have left the industry in the Illawarra this week, many taking redundancy from Wollongong Coal’s operations at Russell Vale or Wongawilli.

It’s not the first time the industry has contracted and it won’t be the last.

Many of the men who are leaving the mines this time, face an uncertain future, or the possibility of having to leave the area in search of work.

Others are luckier, with skills in building, fishing, emergency services, sometimes even more arty pursuits, allowing them to find good employment after they have left the mine.

Some will stay in the coal industry, flying in and out of mine sites in Queensland where the pay may be better but your family is far away.

One miner the Mercury spoke to was just picking up his overalls before signing on the dotted line and heading off for a vastly different career.

With his own business to concentrate on now, he thought it was a good thing he was doing, but said that hadn’t been proved yet, and it didn’t quite seem real.

Others are grateful for the package they receive upon leaving, grateful for help paying the mortgage as they embark upon a journey into uncertainty.

But with increasing casualisation, and contractors being relied on more, one 37-year-old miner said it was time to look for something more steady.

‘‘A contract’s not a contract any more – you can be in work one minute and then out the next,’’ he said.

‘‘A lot of people are in the same situation.’’

He wouldn’t be named as he had not found other work but said the uncertainty that now beset the industry was a worry.

‘‘I’ve worked in four pits in two years,’’ he said.

‘‘If anyone’s got a mortgage or kids, it’s not nice to feel like you’re on the chopping block again.

‘‘As much as the money’s nice, it’s heading south, not north. And security matters.

‘‘If you’re going to work underground for less than $30 an hour, you might as well be in the sun doing some gardening or bricklaying, rather than risking your life.’’


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