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NSW mining industry central to 2021/21 Budget says NSW Minerals Council

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Upper Hunter MP Michael Johnsen, Deputy Premier John Barilaro and NSW Minerals Council CEO Stephen Galilee at Mount Thorley mine earlier this year.

The NSW Minerals Council says the NSW mining sector will play a key role in the economic recovery of that state amid the impacts of the COVID-19 pandemic. 

The NSW Minerals Council CEO Stephen Galilee said the NSW Budget highlights the central role the NSW mining sector will play in the economic recovery, with mining royalties to help pay off COVID-19 related government debt.

"The Budget also recognises the ongoing importance of our NSW mining regions to the economy with a range of funding announcements, including a significant funding increase for the Resources for Regions program."

"Future mining royalties will be invested in the NSW Generations Fund as part of the NSW Government’s debt reduction strategy. According to the Budget papers this is expected to help reduce net debt by $19 billion by the end of the decade."

"The global economic downturn and stronger currency has had an impact on mining royalties, which are forecast to be around $1.4 billion lower over the period to 2023-24, with falls in coal royalties only partially offset by increased royalties for metals like gold and copper."

Royalties delivered $1.7 billion in revenue in 2019-20 but this is expected to fall to $1.4 billion in 2020-21 due to the COVID-19 global economic downturn. 

However, Stephen Galilee said "royalties are then expected to grow again, increasing back to $1.6 billion in 2023-24 and delivering over $6 billion in contributions for the NSW Generations Fund over the period to 2023-24."

Also in the NSW Budget to help the mining industry and the community they're in, is a further $75 million for Round 8 of the Resources for Regions Program which the Minerals Council is very happy about. 

"Ideally this will become an annual $75 million commitment to give the 24 eligible mining-related local councils the funding certainty they are seeking to keep investing in local projects to improve their communities," said Stephen Galilee.

"The Budget has confirmed $45 million for Coal Innovation NSW to progress low emissions technologies including carbon capture, use and storage. This is an important investment with the potential to unlock new opportunities over the long term."

"The commitment of $106 million for the NSW Resources Regulator is also welcome, as is the $180 million investment to expand the NSW Government’s trade and investment network."

"The NSW mining sector provides the state’s most valuable export commodities to around 20 different countries each year, and this initiative has the potential to attract significant additional investment into NSW to help drive further export activity and local jobs."

"The commitment to further reduce planning assessment timeframes is also positive, given the importance of an efficient assessment process for investment and jobs over the long term."

"These Budget measures all serve to highlight the ongoing importance of the mining sector to our State, reinforcing several previously released NSW Government policies and strategies."

The mining industry is going through a tough time amid the pandemic, there have been partial site closures for short periods of time, permanent closures and sadly there have been job losses. 

But Stephen Galilee said it could be worse.

"We've been able to minimise the impact on jobs although there have been some impacts there. The price of coal our main commodity export from the mining sector has fallen and we have seen that over the past few months or so."

"It's important to note the last year, 2019 was a record year for coal exports out of NSW and even the first few months of this year we were doing pretty well too, we were on track for another  strong year but COVID-19 hit the global economy so that's had an impact on global coal prices as its had an impact on many other industries as well but we are starting to see a recovery in those coal prices which is very welcome they're starting to track upwards again,"

"So while we have seen some impacts on the industry we've been reasonably fortunate compared to a lot of other sectors of the economy as we've been able to minimise the impacts and very importantly keep most of our operations going while maintaining the health and safety of our workforce and the mining community," he said. 

"We are an export industry, we are NSW largest export industry and we are of course part of the national export effort on resources so all of those important discussions are going to be really really critical for us and particularly with Japan which is such an important trading partner for the country, that is also our major customer in relation to NSW export coal, they're very reliant on the high quality coal we export for their power stations particularly their new technology power stations that they have been building in recent years."

Image credit: Grant Broadcasters/Jessica Rouse