Farmers in WA are reeling from the announcement in May this year that their live sheep export trade will end in May 2028. Some are outraged and some are constructively working towards this five year planning horizon.
I can appreciate that no one wants to see the end of their industry, but this decision reflects a shift in community expectations with modern Australia demanding higher animal welfare standards driving the federal government election promise to ban live sheep export. Societies have seen many such shifts which usually result in industry changes.
"The Kodak moment" example is often used for top tier businesses that fail to recognise a massive shift in customer demand.
"Today, the term "The Kodak Moment" increasingly serves as a corporate bogeyman that warns executives of the need to respond when disruptive developments encroach on their market." According to Harvard Business Review.
The recent decision affecting the export sheep trade, demonstrates the need for businesses and industries to be cognisant of both shifting community views and market changes.
Ninety-nine percent of the coal mined in the Namoi Valley, in northwest NSW is exported to Japan, South Korea and Taiwan. All three of these nations have committed to reach Net Zero Emissions by 2050. The NSW government and the Australian government have both legislated Net Zero by 2050 targets as well.
When announcing the live sheep export ban from WA, the then federal Senator Murray Watt provided:
a five year timeline with definite end date
a $107 million budget
a body to oversee the transition
a detailed consultation phase
and some social and mental health supports.
The independent advisory panel report found that the 22/23 financial contribution of the live sheep export trade was $76.9M and provided a market for around 12% of WA's annual turn off of sheep. The WA Government's scenario modelling assumed that if no repurposing of the land occurred, there would be 690 FTE jobs impacted, and if the land was repurposed away from live sheep raising for export there would be a loss of 387 FTE jobs.
Geni.Energy held a conversation starter event on Monday 12th August 2024, about what a transition away from export coal in the Namoi could look like.
This event was an opportunity for some key people in the Namoi to start discussing what a transition in the region might look like.
The sentiments that were most frequently stated in the inquiry into the live sheep export ban was the need for a definitive timeline that people and industries could plan around.
Likewise, all the work around the world, where communities have already begun the transition away from fossil fuels, they have stated how vital it is to start planning early and have a defined end date.
In the Namoi Valley, Northwest NSW, there are currently five open cut and one underground operating coal mines. These mines provide (according to Remplan) 1,866 local mine jobs which are filled by 1.415 local mine workers (within the three shires of Narrabri, Gunnedah and Liverpool Plains which form the northwest coal region).
In April 2021, the NSW Government announced the establishment of the Royalties for Rejuvenation Fund committing at least $25 million each year from coal mining royalties to ensure that coal mining communities can make targeted investments towards strategic planning, workforce development programs, constructing enabling infrastructure, and establishing new industries and employment opportunities.
Now, we are in 2024, but none of this funding has found its way into our communities.
Meanwhile, one of the mines in our region, Werris Creek is expected to see its last load of coal leave the region in coming weeks, having exported over 46 million tonnes of coal over its lifespan, which could be valued at over $4 billion. The company has paid $234 million to the NSW government in royalties.
And yet I have heard on a number of occasions Liverpool Plains Shire Mayor stating there is no transition plan and that the council rates will now drop from roughly $500,000 per year to $7,000 per year, leaving the remaining 4,500 ratepayers to fill the gap.
This is not a transition plan.
Currently all the major coal mines in the Namoi have end dates in the 2030's. Planning for a transition with a ten year time scale could work well. However, creating complexity to the issue is the continued expansion plans for these mines.
The not knowing the end point makes planning extremely difficult and is stressful for everyone in the community, particularly the mine workers. The coal industry has a long standing practice of applying for a mining licence, often with a fairly short time frame and smaller footprint. Over time, modifications to the licence are then applied for, increasing time and footprint size. To date these four mines have a total of 36 modifications to their original approval.
The scale of the challenge faced in the Namoi to shift away from export coal could arguably be said to be at least four times that faced by WA's live sheep export challenge in terms of the number of workers expected to be impacted.
There is approval for almost 50 million tonnes of coal per annum, valued at around $50 billion per year.
The scale of the resource here is around 600 times that of the size of the industry set to close in WA.
And yet the budget of $25 Million is intended to assist all four coal impacted regions in NSW to transition, is four times smaller than the amount to help WA readjust.
Comparing the suite of 5 approaches in WA we can see:
WA Live Sheep Export Trade End Initiatives | NSW Coal Export Trade Plans |
a five year timeline with definite end date | current approvals ~10 years, but expansions sought ~20 years and longer |
a $107 million budget over five years | $25 million per annum split between four regions ($0 so far provided and unsure when it may start) |
a body to oversee the transition | 4 expert panels were established, now inquiry into new structure |
a detailed consultation phase | two inquiries underway |
and some social and mental health supports |
The NSW government is currently holding two inquiries into different aspects of the transition. A parliamentary inquiry into beneficial and productive post mine land use held its hearings last week. And submissions closed a couple of weeks ago for the Future Jobs and Investment Authority inquiry.
The International Energy Agency has scoped three scenarios in its World Energy Outlook, depending if nations meet their Net Zero by 2050 targets, reach their Announced Pledges to decarbonise or if they keep to their Stated Policies.
It is worth noting that there is only one of these scenarios that sees that global temperature rise staying below 1.5 degrees Celsius and us maintaining a habitable world.
Each of these scenarios sees coal production declining, the only contention now is how quickly and where the impacts will be felt. We know for sure that locally led, properly resourced early planning gives our communities the best chance of surviving and thriving through this change.
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