The backing for the project comes after Muswellbrook Shire Council reportedly lobbied the Minerals Council to gain its support.

The council hopes to ensure mining regions remain attractive places to live and work ahead of new coal mine developments in the shire.

The Minerals Council said mining regions deserved publicly funded infrastructure to keep pace with population growth, maintain standards of living and boost economic growth.

“Mining communities like Muswellbrook deserve better,” a spokesperson for the Minerals Council told ILN.

The Minerals Council said investment in regional infrastructure such as the bypass should be high on the federal government’s agenda.

The scale of growth in the minerals industry has led to increasing local investment, including 75,000 direct and indirect jobs in mining and minerals processing in the Hunter region.

NSW produces 42% of Australia’s coal exports and the Minerals Council believes the state’s mines will make a significant contribution to the revenue raised by the Minerals Resource Rent Tax.

Funding for the bypass should come out of the $6 billion Regional Infrastructure Fund, the Minerals Council said.

While the Western Australia and Queensland have each been promised funding of $2 billion, the federal government has so far only designated NSW $1.8 million for a feasibility study into the Scone overpass, which the Minerals Council said was not enough.

“It’s time for the federal government to follow through on its promises to work with local communities and the NSW Government to nominate and fund projects that will maintain the State’s competitiveness,” the Mineral Council spokesperson said.

Muswellbrook Shire Council has been increasingly concerned about the socio-economic impact of coal mining and has criticised aspects of Xstrata Coal’s proposed modifications to the Mangoola (Anvil Hill) open cut project.

“Muswellbrook is the only town of its size in Australia to be completely encircled by coal mines except for the road, rail and river corridors,” the council said as part of its submission on the project changes.

The Bengalla open cut mine near Muswellbrook is planning a $A141 million expansion that will increase its run-of-mine production from 7.8 million tonnes per annum to 9.3Mtpa.

The joint venture partners – Coal & Allied, Wesfarmers, Mitsui and Taipower – reached an agreement after completing a feasibility study into an expansion of the existing thermal coal mine, following increased capacity in the Hunter Valley coal chain after last year’s introduction of a long-term port access framework.

The Bengalla expansion will include an upgrade to the site’s coal handling and preparation plant to allow for two-stage washing, together with the upgrading of infrastructure and the purchase of additional mining equipment.

Meanwhile, mines operating in the Muswellbrook shire – including Xstrata’s Mangoola mine and BHP Billiton’s Mt Arthur mine – will be slugged with a 14.7% rate rise after a state regulator allowed the council’s application to exceed the standard pegged rate increase of 2.8%.

The special variation will deliver the council an extra $400,000 in the next financial year – at an average of more than $22,000 per mine – which it has pledged to spend on upgrading local roads, specifically at Carramere and Blakefield Roads, Muswellbrook.

“These roads have deteriorated due to mining activity and are used by trucks from several mines and not just one mine,” the IPART report said.