Special report – Science is clear that our economy and society needs to clean up its act and make the leap to a low-carbon future. The Hunter region, with its blend of coal-fired enterprises, agricultural businesses, booming coastal urban cities, wind turbines, eco-developments and research think-tanks is like a microcosm of what the nation is facing.
The Fifth Estate embarked on a deep-dive into the region’s issues, to find out what the big challenges and opportunities are in key sectors.
Professor Richard Bush, heads up the International Centre for Balanced Land Use at University of Newcastle. He explains that while the coal industry is one of the largest landholders in the region, it is not the biggest employer or economic powerhouse.
Agriculture, tourism and viticulture are substantial contributors to the regional economy, as is the equine industry.
The Hunter is one of only three equine centres of excellence globally, and the equine industry in the region generates around $2.5 billion in exports annually.
Coal mining has, however, come to dominate parts of the region that used to be more diverse in agriculture and horticulture.
Bush says the mining operations have been gradually shifting into the Upper Hunter as deposits get played out closer to the earliest mines near Newcastle that were opened in the 1790s.
Another difference in contemporary operations is the Lower Hunter mines were often underground operations, meaning there’s more opportunities for other land uses on the surface.
Many of the newer operations in the Upper Hunter are open-cut, which prevents any other land use during operations.
One consequence of the geographical shift in mining has been a continual process of change for towns, reducing employment for locals within the mining industry. Cessnock, for example, has seen a decline in mining jobs.
It’s a region that does not have the kind of fly-in-fly-out workforce more remote mining operations often rely on, Bush says. In the Hunter it’s drive-in-drive-out, so local jobs are key.
- See our story Three ways the Hunter is making the sustainability shift
The Hunter has become a global leader in mine remediation
One perhaps unexpected co-benefit of the coal mining industry has been the creation of a strong new industry sector focused on remediation of mines.
“The Hunter has one of the biggest environmental remediation and environmental management sectors [in Australia],” Bush says.
Some of the biggest consultancies in the nation including AECOM, GHD and Jacobs have large workforces based in the region, and skills and expertise developed through working on Hunter projects is exported around the world, Bush says.
There are a number of specialist research bodies also based in the region including the CRC CARE.
“It is a multi-million dollar industry in Australia but also becoming an important industry globally.”
For all those upsides, there is still the problem of what land can be used for following remediation.
Bush explains that one of the constraints for the past 25 to 30 years is remediation has focusing almost solely on biodiversity in terms of outcomes.
“But if a whole valley goes back to biodiversity, where are the jobs?”
The Hunter is “unique from an environmental systems perspective,” Bush says.
It’s where several of Australia’s key climactic and biodiversity zones overlap – the subtropics, alpine, temperate and coastal. That makes it a “hotbed” for native species, especially with the region’s National Parks including Wollemi and Barrington Tops.
Bush says there is “huge value” in the region’s biodiversity, and that smart rehabilitation efforts are increasingly looking at corridors for native species.
Regenerative agriculture systems could be a way forward
But the issue remains that there needs to be productive, income-generating land uses as well. This is where regenerative agriculture systems that incorporate biodiversity into land planning and management could be a way forward.
“There is good evidence to suggest that going onto the future, those new and old types of agricultural approaches could be highly valued, particularly as farmers move away from chemicals and pesticides.”
Intensive agriculture and smart agriculture such as solar-powered greenhouses could also be part of the picture, particularly within the context of reduced land availability and a growing population.
The existing infrastructure could support this vision, Bush points out.
This includes rail loops, access to ports and access to airports for exporting food products and value-added products from the region.
The Hunter is already at a “fusion point” for regional connectivity and food distribution.
While currently the majority of the freight infrastructure is used for coal exports and some bulk agricultural commodities, it can be easily repurposed to carry horticultural products or value-added food products.
The latest UN data shows that 70 per cent of the global population will be living in cities, Bush says, so there is an increasing reliance on the other 30 per cent living in regions like the Hunter to manage the land-based ecosystems that provide those cities with clean air, clean water and food security.
These essential services, as well as biodiversity, are both managed and generated by regional areas, and Bush says the Hunter has significant advantages in this regard.
There is, however, still a level of fear around what happens if coal mining winds down.
Bush says people are concerned about jobs, particularly as coal mining jobs have traditionally paid very good wages.
Speaking with members of the community, he says a major concern is jobs that will pay equally well for the next generation.
Communities in the region already have shown an ability to change. In towns where coal mining has declined, there are already people moving into other occupations.
The future of energy in the region
Leaving coal behind also involves a shift of community identity, Bush says.
Where coal-fired power has been a mainstay, there is a real sense of community pride in the region’s role as a generator of the state’s electricity.
This is one of the reasons AGL has been looking to invest millions of dollars in repurposing a former coal mine near Muswellbrook into pumped hydro storage for renewable energy as part of its strategy for closing down the Liddell coal-fired power station in 2022.
It is also looking more broadly at how to transform the power station site into a low-carbon, multi-use innovation precinct.
Bush says battery technology and biofuels are also gaining traction.
A new pilot biorefinery and research hub at Muswellbrook that has attracted funding from the NSW state government is a good example.
The plant, which is already under construction, will use agricultural and forestry waste to produce biofuel, and biochemicals including bioplastics and biopharmaceuticals.
“This isn’t pie-in-the-sky stuff, these projects are already going on,” Bush says. The momentum is going to create “new, meaningful work in a new type of environment system.”
The coal wind-down poses another opportunity to redeploy the 25 per cent of the region’s water resources currently used by coal-fired power into other uses.
Focus on the upsides
How the economic transition discussion is framed needs to be carefully considered.
“At the end of the day, with the transition, there is an opportunity to focus on the positives of other industries and [economic] diversification,” Bush says.
This is also a challenge for the nation, which Bush describes as having a fundamentally “vulnerable” economy as only five types of goods account for the bulk of the nation’s exports and prosperity.
The Hunter is the example of how this plays out at the grassroots, as an economy in need of diversification.
Part of making the shift might mean adopting new accounting systems, such as those that account for natural capital impacts, that can better demonstrate the value of decisions that support diversification.
If we go down this path, Bush says that as time goes by, we end up with “more resilient societies and more resilient communities.”
“The Hunter valley has a primed group of people who recognise they have to make decisions, and [generally] people in the region adapt to information very well.”
Urban Taskforce wades in
The Urban Taskforce recognises the potential in the Hunter, and recently announced it was establishing a Hunter and Newcastle Chapter.
“The Urban Taskforce believes that development in Newcastle and the Hunter is very important for the economic output of the region,” Urban Taskforce chief executive Chris Johnson said.
“With the federal government encouraging more growth outside the capital cities it would seem that Newcastle is an ideal centre to accommodate this growth. Ultimately a very fast train connection between Newcastle and Sydney will ensure the economies of both cities are connected for the benefit of both cities.”
He also notes the Newcastle University announcement of a new creative industry and innovation hub, and a $200 million expansion of its STEM facilities at the Callaghan campus, will both be good for the Newcastle economy.
“The development application for a $95 million creative industries and innovation hub on a CBD site near the recent Law School will help reactivate the historic centre of Newcastle,” Johnson says.
“The new Law School has already shown how innovative architecture located adjacent to the light rail line adds important activation to the CBD. The proposal to build the new creative industries hub on a nearby site will continue the urban renewal of Newcastle’s centre.”
Reinvention – the Hunter has form
Professor Will Rifkin from the Hunter Research Foundation told The Fifth Estate that the Hunter region has already successfully navigated economic transition following the 1998 closure of BHP’s steelmaking operation in Newcastle.
“It has shown resilience in successfully diversifying its economy.”
It is currently the largest regional economy by GDP in Australia – outstripping Tasmania. And according to 2019 ABS data, when encompassing the whole region including Newcastle, Lake Macquarie, and both the Lower and Upper Hunter, mining comes in at only number eight in employment creation.
Dr Anthea Bill, lead economist with the HRF, says that the leading employer, healthcare and social assistance, has a workforce two and a half times the size of the mining workforce.
Other sectors outranking mining include construction, retail trade, education, manufacturing, professional scientific and technical services and accommodation and food services. The region also has one of the nation’s lowest unemployment rates.
“The region has already transitioned from [reliance on] heavy industry to service industries,” Bill says. “There has been very strong growth in other sectors [aside from mining].”
Significant institutional employers and generators of exportable research include the John Hunter Hospital Health and Innovation Precinct, the CSIRO Energy Technology Centre headquarters and the Hunter Medical Research Institute, Bill says.
In educational terms, she says the region has the state’s highest rates of participation in STEM [science, technology, engineering and mathematics].
The Hunter Joint Organisation of Councils has also worked with the NSW government, University of Newcastle and members of councils to develop an Upper Hunter Economic Diversification Action Plan. Sectors seen as offering potential include renewable energy, advanced manufacturing and professional services.
The HRF has been highlighting the importance of innovation and supports for innovation including connectivity, educational and medical facilities and a focus on collaboration.
When it comes to jobs to take the place of coal-related employment Bill says community consultation by organisations in the Upper Hunter has found aspects like the quality of life attributes of jobs, their meaning, level of safety, purpose and degree of innovation all add to the value of alternative employment.
There is $40 million of “smart city investment” going into Newcastle to enhance digital infrastructure, and transport technologies are also an area of focus, including an EV trial, Rifkin says.
The latest data shows the region is performing above the national average for business innovations, with a “big jump” in activity. The region’s business groups have identified science, technology and media as growth areas.
Rifkin says the emerging change in the energy mix will support the innovation trend.
He says the region also has “great resources” for future growth. Firstly, it has relatively affordable property, particularly in places like Maitland and the Upper Hunter.
As a bonus, that affordability comes with liveability, lifestyle and natural resources. The region is also “very well set up” with health infrastructure and high-ranking tertiary education. This combination is an attractive lure for talented people.
Rifkin says there is a positive conversation to be had about the region’s capacity to create “interesting jobs for people”.
“It’s a big, grand, sea change equivalent,” Rifkin says.