Editorial: Cost of mining requires payment for profit

COAL mining is subject to a social contract.

The communities that are affected – through pollution, noise, and loss of environment – agree, or are made to agree, to the imposition of the mining industry because of the economic benefit, such as the jobs that employ thousands of workers in the Upper Hunter, and the prosperity that flows on from that employment.

But there is also a wider social contract too, because not everyone is a net beneficiary of the coal industry.

In fact, it’s quite often the opposite. Just ask the residents of Bulga.

Which is why coal mining companies are required to pay a price for the profits they make out of the land they occupy.

Through royalties to the state, of course, but also through programs like Resources for Regions and the environmental offsetting agreements that have become commonplace in recent decades.

And in a place like Muswellbrook, where coal mining is a lifeblood industry, but one that comes with significant environmental cost, there are also agreements made directly with communities, most commonly through local councils.

These are not acts of generosity – those exist, through sponsorships of local football clubs, community grants and the like – but the price extracted from the profits that coal mining brings these companies.

Which is why reports that Muswellbrook council has felt it necessary to turn to the courts to receive the $5 million community fund it was apparently promised under a licence agreement for 7600 hectares of land at Wybong are of concern.

At a time when many local towns increasingly question the value of coal mining versus the costs that it imposes on nearby populations, coal mining, as an industry, cannot afford to shirk its responsibilities.

This latest example raises a number of questions too about the role of governments in enforcing these agreements.

As the Newcastle Herald reports, an exploration licence deed of agreement required “bi-annual written reports to the Minister through the Director Industry Coordination” detailing payments made and projects funded. Muswellbrook council has alleged that the lack of detail around the agreement raises questions about whether government representatives “have not and do not care whether the local community obtains the benefit”.

Issue: 38,561


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