The Guardian 5 September, 2007

NSW Government pours millions into coal

The New South Wales Govern­ment is spending millions of dollars of taxpayers’ money on rail infrastructure in the Hunter Valley and Newcastle districts in readiness for an expected increase of coal rail freight to the port of Newcastle. This money is in effect a subsidy for one of the richest and largest mining corporations in the world, money that would be better spent on researching developing low greenhouse gas renewable sources of energy. It is also an example of how privatisation leads to inefficiencies and higher prices.

At a place called Antiene just to the south of Muswellbrook and close to Bayswater and Liddell power stations, approximately $100 million has been spent on a huge rail passing loop and rail car unloader, coal stockpile and reclaimer area and overland conveyer line to the stockpiles at the nearby Bayswater power station.

According to the Iemma Labor government, these taxpayer-funded works are necessary to ensure coal supplies for future power needs of NSW. The question is whether it is necessary at all. The work is being carried out within 6 km of the BHP operated Mt Arthur open cut mine which already has an overland conveyer connected to the Bayswater power station.

The huge coal reserve at Mt Arthur was initially owned by the NSW Government and was going to be mined by the then Electricity Commission of NSW. Most of the coal mined went direct to Bayswater and Liddell power stations. But then the former Carr Labor Government put Mt Arthur up for private tender and the operators of the old Bayswater mine won the contract to supply coal.

This initial contract was for 15 million tons of coal over a four-year period and the return price for that coal barely covered the mine’s operating costs. BHP have since bought their way in and developed a huge open pit operation with a 30-year life span and are currently developing an even bigger underground long wall mine with the total expected output to be somewhere close to 22 million tons of raw coal produced annually.

BHP are negotiating their way out of the supply contract to Bayswater power station, and instead wish to wash and export it, which would give them a higher price. The overland conveyer that was purposely built by the taxpayers of NSW in the early 1980s would then be turned off and, no doubt, left to fall into disrepair.

That would be the end of the idea of a government-run mine supplying coal to a government-owned power station — all part of the privatisation of energy production and distribution in NSW.

The government is also spending millions of dollars on additional rail lines and other infrastructure to facilitate the opening of new mines and relieve existing congestion, particularly around the port of Newcastle.

A new passing line (allows trains travelling in opposite directions on a single line to pass each other) through Muswellbrook railway station which cost $10 million. (Muswellbrook is the place where the western line and the north western lines meet and in the past has caused some problems with trains queuing to pass through on their way to Newcastle or north to Gunnedah and beyond.)

Also close to Muswellbrook there will be rail track work done at Denman soon to allow speedy turnaround of coal trains servicing the Ulan coal mine and the new Wilpanjong open cut mine which is currently being developed near the township of Wollar.

There is another huge mine being planned for the Mudgee district called Moolarben which will throw another 10 million tons per annum of coal into the system. Then there is Anvil Hill, which the government has recently approved, a huge mine 6 km west of Denman. This mine when fully operational will produce 150 million tons of coal over its planned 20-year life.

All of these mines will need rail services to freight their coal to Newcastle, Bayswater and other power stations. Meanwhile the overland conveyor between My Arthur mine and Bayswater power station remains idle and millions of dollars more will be spent on infrastructure to take coal from other mines to Bayswater.

There is no logic in that. All to feed BHP’s profits, all a result of private ownership.

It is beyond belief that both federal and state governments claim to be aware of the effect of climate change brought on by use of coal fired furnaces but yet they allow the massive expansion of the coal industry in NSW.

In return for all this injection of funds to expand and enhance the profits of the coal industry consumers will be paying more and more for the very power they already subsidise with their tax dollars.

It would be great if this money were spent on re-opening and developing rural and regional rail tracks and in the research and development of renewable, low greenhouse energy.

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