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Coal Mining in Australia

Currently Australia are one of the largest exporters of coal worldwide. The biggest demand is for high quality ‘black coal’, or bituminous coal (coking coal) and is most commonly used in for the production of steel. There is also a high volume of ‘brown coal’, or lignite mined in some areas. This coal is mainly used in coal fired power stations. This article will look at the history of coal mining in Australia, how it has evolved through the years, where it is currently and also the outlook for the future.

How is coal formed?

Coal is mainly formed of carbon which occurs through deposits of organic material, such as trees and other organic matter which is altered by heat and pressure over many millions of years. This process is known as ‘coalification’ and the oldest coal deposits are up to 350 million years old 1). There are many different grades of coal, as categorised below by age and quality –

Peat

Peat is the first stage of coal formation. It is composed of semi decayed organic material and is a very low grade fuel. In some parts of the world there are peat mires, which are similar to swamps. Peat can be used as a fuel, but has a low carbon content and is not energy efficient.

Lignite

Lignite is coal that is relatively young compared to coking coal. Lignite has a low carbon content, which is usually around 30%. Lignite only burns at a moderate temperature and releases high levels of carbon and other toxins including sulphur. It is used mainly for coal fired power stations.

Subbituminous

Subbituminous coal has a carbon content of around 40% and is a slightly better alternative to lignite. It burns hotter and has a lower sulphur content which allows it to burn cleaner. There are only a limited number of subbituminous coal deposits that are currently being mined worldwide.

Bituminous

Bituminous coal is the most commonly mined coal. It can have a carbon content ranging from 50 – 80 %, and there are many sub-classifications of this coal. It is highly sought after due to its high burning temperatures and lower carbon emissions. This coal is used for coking steel and occasionally for coal fired electricity stations.

Anthracite

Anthracite is coal of the highest quality. It can have a carbon content of up to 98% and is used for home heating due to its low emissions. There are very few known deposits of anthracite worldwide, making this coal expensive and sought after.

Mining Techniques

In Australia, coal is mined either as open-cut or underground. A majority of coal mined in Queensland is obtained using the open-cut technique, however there are also many underground mines. In New South Wales, a majority of coal mining operations are underground, due to the greater depth of the coal seam compared to Queensland.

Open Cut Mining

Open cut mining is the most cost effective way of extracting coal. This technique is used when the coal seam is relatively shallow and the terrain above is easily accessible. Firstly the ground above is cleared, and the soil and top layers of shale and rock are stripped. Slowly a pit is excavated, and ‘tables’ are formed which spiral downwards so that machinery can access the coal face. A haul road is also created so the dump trucks can take the coal out of the pit.

Underground Mining

A majority of the underground coal mining operations in Australia use a method called longwall mining. After tunnels are dug to access the coal seam, steel roof supports are installed above the coal seam to ensure there is no collapse. Most underground operation in Australia use automated longwall mining, where a mechanical miner strips the face of the coal seam onto a conveyor which then transports the coal to the surface. As each section of coal is stripped, the roof supports move further along the seam and the stripped area behind is allowed to collapse into the void.

History

Early Days

New South Wales

Coal was first discovered in Australia 1804 near Wollongong, New South Wales. The discovery of this coal led to the construction of a convict settlement in order to be able to use the labour from this settlement 2). Whilst this was the first discovery, coal mining really started to gain a foothold in the 1830’s, especially with the advent of steam powered machinery 3).

Victoria

Coal was also discovered relatively early in Victoria with deposits found at Cape Patterson, which is located 130 kilometres south east of Melbourne in 1825, but it wasn’t mined commercially until the late 1800’s 4).

Queensland

Queensland was settled in 1870, and soon after coal was discovered near the upper reaches of the Brisbane River, near Ipswich which is 80 kilometres east of Brisbane. This would only be the tip of the iceberg however, with vast deposits of high quality coal found in the Bowen Basin in the latter years 5).

Small deposits of coal were also found in South Australia and Western Australia but very little coal was mined and the amount of coal produced by these states is negligible. South Australia is better known for its copper, zinc and uranium mining, whilst iron ore is primarily mined in Western Australia.

The 1900’s

In 1915, steel giant BHP opened their first steelworks in Newcastle, New South Wales. This started to drive the demand for coking coal, and many new mines started to establish in the Hunter Valley region. In 1937, the first major open cut coal mine in Queensland was opened at Blair Athol, which was to be first of several hundred that now operate in the state 6). Until the mid-80’s, the Hunter Valley region of New South Wales was the largest producer of coal from Australia. However many new deposits of high quality coal was discovered in the Bowen Basin, Queensland. With the advent of many new mines in this region, and the fact that they were open cut soon boosted the production coming from the Bowen Basin as one of the biggest worldwide, which created the Queensland ‘mining boom’ (see below).

The Queensland Mining Boom

In the 1990’s, with the discovery of new vast deposits of bituminous coal in the Bowen Basin in Queensland, the state encountered an unprecedented mining boom. Mining companies raced to secure mining leases in order ride the wave of demand. China and Japan were buying the coal faster than it could be taken out of the ground. There was also a huge demand for skilled and unskilled labour, with many workers from around Australia and worldwide migrating to Queensland to cash in. Employee wages skyrocketed, with unskilled workers able to earn upwards of $3,000 per week. This boom also affected the many small towns that are located near the mines. Moranbah, a central town in the Bowen Basin saw house properties rise from an average of $60,000 to well over 1 million dollars. Rental homes which were earlier rented out at around $150 a week were now over $1,500. The towns could not satisfy the demand so many mining camps were established in order to meet the demand. This boom lasted until 2010, and most pries have now returned to more realistic levels.

Whilst the communities benefitted somewhat from the boom, it also had negative impacts. Many businesses started to increase their process due to the extra money which was now present in their towns. This started to hurt locals in the towns who did not earn high wages in the mining industry. There was also a drain on resources, with most of the towns’ workforce working at the mines, they were unable to find staff to work in essential areas such as retail and services.

New South Wales

During the same period, many mines started to emerge in the Hunter Valley in New South Wales. Mining companies found the going tougher due to the high start-up costs and the growing sentiment in the community against coal mining. The communities were concerned that vital food growing areas would be affected by mining, thus jeopardising their livelihoods and polluting the local environment.

Current Volumes

Queensland

In 2013, Queensland produced over 434 million tonnes of coal, with 390 million tonnes from open cut operations and the remainder from underground operations. Approximately 55% of the coking coal produced was exported to Asia, with Japan and China being the major customers. Asia was also the largest consumer of thermal coal 7).

New South Wales

In 2012, New South Wales produced over 221 million tonnes of coal. Over 163 million tonnes of this coal was exported to Asia, with Japan being the major customer. Coal makes up for over 35% of all exports from New South Wales 8).

Future Predictions

Whilst the production and export of coal in Australia has reduced somewhat from the boom period, there is still significant amount of investment, exploration and infrastructure development in the coal industry in Australia. Many deposits of coal seam gas have also been discovered, which now appears to be the next industry set to boom. More than 55,000 people are employed directly by the coal mining industry, and over 100,000 indirectly 9). Mining in Australia makes up for approximately 7.7% of the gross domestic product, and coal mining accounts for 26% of this figure 10). Coal mining continues to be a viable export option for Australia so it is predicted that the industry will remain strong in the years to come.

Australia | Energy

1) Australian Government, Geoscience Australia, 2012, ‘Coal Fact Sheet’, Available: http://www.australianminesatlas.gov.au/education/fact_sheets/coal.html Accessed 7th of February, 2014
2) , 3) Australian Coal Association, 2011, ‘The History of Coal in Australia’, Available: http://www.australiancoal.com.au/history-of-coal-in-australia.html Accessed 7th of February, 2014
4) , 5) Australian Bureau of Statistics, 2012, ‘History of Coal Mining’, Available: http://www.abs.gov.au/ausstats/abs@.nsf/featurearticlesbytitle/6893596390A01028CA2569E3001F5555?OpenDocument Accessed 7th of February, 2014
6) Australian Mining History, readyed.com.au, Available: http://www.readyed.com.au/Sites/minehist.htm Accessed 7th of February 2014
7) Queensland Department of Natural Resources and Mines, 2013, ‘Queensland coal statistics report’, Available: http://mines.industry.qld.gov.au/assets/coal-stats/12-month-reports/coal-stats-fin-year-2012-2013.pdf Accessed 7th of February 2014
8) NSW Mining, 2013, ‘Fast Facts’, Available: http://www.nswmining.com.au/industry/fast-facts Accessed 7th of February 2014
9) Australian Coal Association, 2012, ‘Employment’, Available: http://www.australiancoal.com.au/employment.html Accessed 7th of February 2014
10) Australian Bureau of Statistics, 2012, ‘Mining Industry Economic Contribution’, Available: http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1301.0~2012~Main%20Features~Mining%20Industry~150 Accessed 7th of February, 2014

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