That means a commitment to automation and change management from the top right down to the coal face.

 

The trend away from underground and longwall mining in NSW was clearly demonstrated in the latest statistics from Coal Services.

 

A greater proportion of coal production in NSW came from open cut mines in 2018 than underground, according to the data.

 

For the 12 months to December, NSW produced 256,211,000 tonnes of raw coal compared to 245,688,000t for the previous corresponding period.

 

Of this 58.2Mt were from underground mines in 2018, down from the 61Mt in 2017.

The story was different for open cut coal mining with yearly production rising from 184.6Mt in 2017 to 198Mt in 2018.

 

Despite the decline in underground production, employment numbers remained stable at 7253. Open cut employee numbers increased from 13,619 in 2017 to 14,282 in 2018.

 

Less production with the same number of employees means declining raw coal output per employee per hour.

 

Hogsback reckons a lot of mine owners and managers in NSW have seen returns from their significant investment in underground mine plant and equipment diminish over the past year.

 

This has been demonstrated at NSW's flagship underground coal mine, Illawarra Metallurgical Coal's Appin. 

 

This mine, one of the gassiest and most troubled in the state, is ironically also a good case in point as to how about go about introducing change to get better results.

 

Illawarra Metallurgical Coal parent company South32 CEO Graham Kerr said there was still work to do to overcome challenges at some of its operations, including the Appin and nearby Dendrobium longwall mines.

 

 "At Illawarra Metallurgical Coal we are re-establishing minimum performance criteria and implementing work practices to improve longwall and development performance," he said.

 

"We believe these initiatives will enable production rates to return to historical levels."

Improved longwall performance at Appin in the December quarter has underpinned a 7% increase to its prior estimate for FY2019 to 6.5Mt. 

 

Illawarra Metallurgical coal has reduced first half operating costs at its mines from US$149 per tonne in 2017 to $87/t for the six months to December 2018.

 

The company reached agreement with employees covered by the Dendrobium Mine Trades and Operators Enterprise Agreement during the December quarter, having previously reached agreement with the Dendrobium and Appin Deputies. 

 

"We continue to renegotiate the remaining labour agreements at Illawarra Metallurgical Coal and this process is being closely managed," the company said.

 

Hogsback reckons it is going to take a lot of work to get underground mining in NSW competitive again but the industry is up for the challenge.