Gunnedah is relatively remote compared to its Hunter Valley neighbours, with lack of nearby access to shipping, employee transportation problems and increasingly complex environmental issues stifling its long-known potential.

The 15,000sq.km Gunnedah Basin is 330km northwest of Sydney and represents the central part of the Sydney-Gunnedah-Bowen Basin system.

The basin’s Permian and Triassic-age coalfield is the most rapidly expanding coal exploration zone in New South Wales, with the state’s minerals council estimating insitu reserves at more than 30 billion tonnes, or up to 40% of the state’s total coal reserves.

Recoverable reserves are thought to top 1.48Bt of coal.Thermal and coking coal in the region has so far been found to be high-energy, high-volatile, and low in ash, sulfur and phosphorus – but by no means low-hanging fruit.

Natural and logistical challenges in the region have been no secret in the industry, thwarting generations of would-be developers from establishing what could be one of the state’s biggest coal mining regions.

Australian Longwall Magazine asked for comment on Gunnedah’s challenges from its major players, including Whitehaven, Shenhua Watermark and Boggabri operator Idemitsu. Sadly, miners have been tight-lipped about the region’s pitfalls and what is in store for the future.

The most pressing of practical concerns seems to be rail infrastructure, which, though adequate for present traffic, is significantly less developed than in the more southerly coalfields.

An eruption in Gunnedah coal production and rail demand is easy to predict over the next few years as several major operations come on stream and existing mines ramp up activities.

Shenhua’s $1.7 billion Watermark project is targeting 10 million tonnes of coal per annum over a 30-year mine life and should be online by the end of 2013. BHP Billiton’s Caroona longwall is earmarked to follow by 2015.

Those two mines by themselves expect to introduce 550-600 dwellings in Gunnedah communities and, as they coalesce, remind developers of the necessity of moving fast to improve the valley’s infrastructure.

The coal rail network in the Gunnedah Basin is only rated for 25-tonne axle loads (100t wagons) compared to the greater Hunter Valley coal network, which can manage rolling stock with 30t axles (120t wagons).

Track capacity also diminishes as the distance from the export point at Newcastle grows.

From Maitland to Newcastle’s Port Waratah, four tracks have been planned.

From the Whittingham station near Singleton toward the port there will be three tracks, one of which will be bi-directional.

The parallel tracks are intended to keepthe network moving with an aim to get headways between trains down to eight minutes. Such fast turnarounds are not yet in demand, but authorities are already anticipating the Gunnedah boom.

Phased construction plans at Port Waratah’s T4 terminal project aim to provide a maximum throughput capacity of 120Mt per annum over 10 years.

Acknowledging the need for T4 to receive coal by 2015, project consultants have warned that coal producers in the Gunnedah basin would face “significant negative consequences” if the terminal works did not go ahead.

Aside from installation of the occasional spur or loading facility, the Australian Rail and Track Corporation has assumed exclusive responsibility for rail development in Gunnedah and has already invested some $200 million in the basin.

ARTC spokesperson Brian Dale said infrastructure was keeping pace with mine development but the severe grades of the mountainous passages to Gunnedah’s south remained a major obstacle.

“There’s always been a bit of a bottleneck on the Liverpool Ranges,” he said. “The operators have always had to station an extra loco in the area so they can push the coal trains up the hill. So we’ve been working on different ways to increase the efficiency.”

The ARTC has defined four options to overcome the Liverpool Range challenge, including tunnelling and track duplication, but it will be left up to the miners who will fund the new rail alignment to make a decision. It appears in the end, however, that no amount of rail construction can eliminate the Liverpool Range’s effect on Gunnedah Basin mining operations.

The 1300m-high barrier between coastal and inland drainage basins has a reputation for severe thunderstorms and the subsequent flooding that can hamstring mines.

Gunnedah’s most ambitious coal producer Whitehaven was forced to close four of its open cut mines and lose about one week of production in February due to heavy rainfall.

Idemitsu’s Boggabri open pit was sidelined by the same downpour as strict observance of environmental standards obliged the miner to spend more than five weeks completing a controlled release of 655 million litres of surplus rainwater.

Add to this government rezoning complications and noises from basin communities about the inevitable economic ramifications associated with a localised mining boom.

In March, 1.3 million hectares of NSW’s New England region was identified as “strategic agricultural land”, which will require projects to be funnelled through additional state and federal approval panels before development can continue. The mapping of where agricultural land overlaps with coal resources and the compounding of procedural regulations has ruffled state mining lobbyists, who say the emerging region may be unnecessarily hindered.

NSW Minerals Council chief executive Stephen Galilee said delineating industries on the map created confusion.

“The definition of critical industry clusters is questionable given the definition in the plans exclude coal itself, surely one of the most critical industry clusters in the state, and particularly in the Upper Hunter,” he said.

“And coal resources are defined and mapped too broadly, not accounting for whether those resources can be recovered economically, giving a false impression about the future development of the industry.”

Such false impressions have stirred up reactions locally too, with the Gunnedah Shire Council upping the pressure on state government for what the community calls its “fair share of the expanding NSW mining royalties pie”

Gunnedah mayor Adam Marshall said the region would earn $1.7 billion in royalties for the state this year, but the Resources for the Regions program was “shafting” local communities.

“We were led to believe that Gunnedah, along with other communities like Narrabri and Quirindi in the region, would receive a fair share of royalties but the reality is we’re still not seeing a single dollar returned directly to address some very serious road, bridge and rail issues, not to mention housing affordability concerns,” he said.

These social, regulatory, environmental, infrastructure and efficiency concerns spurred the fourth gathering of the Gunnedah Coal & Energy Conference, held last June in Newcastle.

Legal and state government representatives as well as key speakers from the ARTC, the Environmental Protection Authority and Newcastle Port Corporation discussed the developments in the region and plans to increase infrastructure capacity.

The annual conference itself marks an evolution in Gunnedah’s development – a transition from asking “is this possible?” to “how do we get ready?”

It took a century to switch from the first question to the second, but, as the projects start piling up, the answers need to start coming a little faster.