Mining in NSW is a vibrant and growing industry worth $20 billion, and generates an increasing revenue stream for the state through royalty returns.

According to NSW Treasury, mining royalties were $1.2 billion last year and are expected to total $8.5 billion over the next four years.

In the Hunter coal production is at about 95 million tonnes of coal a year and there are plans to expand, adding around 60 million additional tonnes of capacity at the Port of Newcastle over the next five years.

In the Hunter there are about 20,000 people directly employed in mining – the figure across NSW is 47,000 jobs. For each job there are roughly 3.5 people who are supporting the industry indirectly in service industries that supply our mines. NSW mining is determined to work constructively with other industries, in a positive way, for mutual benefit.

An example of mining and manufacturing working together is the Swedish manufacturing and engineering company Sandvik that recently opened a $50 million operation at Heatherbrae in the Hunter.

Sandvik is taking advantage of the resources boom and its operations will be used to manufacture and provide equipment for the mining industry in the Hunter.

The plant will employ about 750 Hunter residents when it reaches full capacity and generate about $300 million for the Hunter economy.

A challenge facing the NSW mining industry and the broader Hunter community is inadequate infrastructure in regions.

The mining industry has for a long time played an important role in providing much needed regional infrastructure and services through developer contributions and voluntary planning agreements.

ACIL Tasman estimates mining industry contributions to community infrastructure is about $109 million a year.

To ensure regional mining communities remain an attractive place to live and work, it is critical government investment in public infrastructure and services in mining regions keeps pace with growth.

A recent NSW government study found some of our most important mining communities, including Singleton and Muswellbrook in the Upper Hunter, are missing out on the infrastructure funding they deserve, particularly given the level of royalties these towns and communities generate for the state.

The NSW Minerals Council strongly supports a long-term commitment from the NSW government to heavily invest in public infrastructure in mining regions.

We are advocating for both short-term “real” funding and longer term “dedicated’ funding. That is, a fixed percentage of existing royalty payments to be annually dedicated to investment in public infrastructure.

There has been some progress though. The NSW government’s Hunter Infrastructure and Investment Fund committed $350 million over four years to upgrade infrastructure in the region.

However, of this $350 million – $100 million has already been pre-allocated, leaving just $250 million in “real” dollars to spend on infrastructure projects over four years.

There are “big ticket” infrastructure items out there. Look at the Singleton and Muswellbrook bypass, Scone overpass and $250 million in reality will not go very far.

The government needs to allocate the dollars it promised and deliver real outcomes in mining regions.

Last year further uncertainty surrounding infrastructure development in the Hunter increased when the federal government threatened to withhold infrastructure funding from NSW as part of the ongoing dispute between state and federal governments about the carbon tax, MRRT and royalties.

Holding state infrastructure funding to ransom in a political game will inflict the hardest blow on the key mining regions across NSW, particularly the Hunter.

The modern mining industry is very much a global industry where resource projects compete for footloose global investment.

NSW also faces fierce competition from other states in attracting skilled workers. Other resource states will easily absorb any talent not utilised in NSW.

The NSW government recently released its Strategic Regional Land Use Policy.

As an industry we are concerned the proposed policy will lead to more regulation and duplicate existing processes, for what is already one of the most heavily regulated industries in NSW.

While agriculture accounts for 76% of the state’s land coal and mineral exploration titles cover 22% of the state’s land, and actual mining operations just 0.1% of the state’s land use.

Mining is also a relatively small user of water. Mining accounts for about 1.5% of the state’s water consumption, and recycle up to 80% of the water used.

Mining in NSW has not come without its problems, especially in places such as the Hunter where the cumulative impacts are highly visible to a community where mining is a very big part of life.

Issues such as dust and air quality, noise, the loss of amenity, insufficient infrastructure and services, and concerns about water and rehabilitation are all a growing concern.

In late 2010 all nine coal producers in the Hunter Valley came together through the NSW Minerals Council to work with the community to develop solutions to some of the challenges. This process was called The Upper Hunter Mining Dialogue.

This was only going to work if as many alternative views as possible could be brought to the table.

The results have been a big wakeup call to the industry showing there is deep distrust for the mining industry in the region.

Responding to community concerns is not an easy thing to do, and we are the first ones to admit things are not perfect.

But we’ve been working hard to give a voice to the community and for the first time for the mining industry in Australia we are tackling the issue with an industry coordinated approach.

The article first appeared in the September edition of Australian Longwall magazine. Sue-Ern Tan is deputy chief executive officer of the NSW Minerals Council.