It is mid morning on a sunny day in the Collie River Valley. About 15 kilometres from Collie’s bustling central business district, a conveyor belt is quietly humming along. While hidden from the populous, it is one of the most vital pieces of infrastructure in the area. The belt, which runs to the Muja Power Station, carries the town’s most precious commodity: coal.
The fossil fuel is synonymous with Collie. In 1883, coal was discovered in the area by local shepherd George Marsh. The region hasn’t looked back since. The town originally known as Coalville has grown from a population of 900 in 1900 to more than 7,500 people by the time of the 2016 Census. Despite the small population, the town punches above its weight.
“We’ve got the only two active coal mines in Western Australia and still provide up to 50 per cent of the state’s power, even today,” says Sarah Stanley, the town’s shire president.
“We’ve got three power stations currently supplying power to the South West electricity grid.”
Unsurprisingly, coal plays a big role in the town. Ms Stanley says about a quarter of the 4,700 jobs in Collie are directly related to the coal mining and power industry. She would know. One of those workers is her husband, a fourth-generation power station operator.
Yet it appears Collie’s golden era with coal is over. State secretary for the CFMEU Mining and Energy division Greg Busson believes a lot of Collie’s current pains have been self-inflicted.
“For a long period of time, there was only a certain amount of coal power generators required. So the coal companies didn’t look at any new markets, they just decided when their contract was up they would undercut each other to the point where it was unsustainable,” he says.
“The current coal contracts are well known to be worth around 40 to 45 dollars a tonne, and it’s currently costing 60 dollars a tonne to produce”.
Although he says Collie production costs are around the industry average, Mr Busson does concede that the town’s mines are disadvantaged compared to their eastern state counterparts.
“On the east coast they have only one [coal] seam, we have multi seams on slopes.”
Despite claims that Premier Coal has been receiving government assistance to keep its operations afloat, its nearby competitor has been the problem child for the town.
Griffin Coal, the town’s oldest mining company, has been experiencing financial difficulties for more than a decade. Having nearly collapsed when Ric Stowe’s business empire went under in January 2010, the mine was sold by administrators in December of the same year. But the trouble didn’t end there.
“Lanco, the Indian company bought Griffin Coal for way more than it’s worth,” Mr Busson says.
“They paid something like $800 million for something only worth about three hundred, and since then the bank have taken control of that asset from Lanco.
”They had been putting something like $6 million in a month to keep the place going, but since February last year the banks haven’t put in any more money to prop up the company.”
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| The sunset of coal? The future makeup of Collie’s economy is uncertain. Photo: Sean Mack (CC BY 2.5) |
As part of cost cutting measures, workers at the mine have for the past three years taken a $50,000 pay cut, worth about 35 per cent of their annual income. Member for Collie-Preston Mick Murray argues it has had a noticeable impact on the community.
“Some of the small businesses have shut down. The impact of the cuts have been underestimated in this community when you work out how much money should be coming in.”
He says uncertainty over the mine’s future has been damaging to the local economy.
”People don’t spend if they don’t have security. People have been worried about their jobs and the rumours that go around, they’re going to shut every second week.”
While the local mining companies have been struggling with production costs, another factor threatens to become the final nail in their coffin: renewable energy.
According to an 2019 report commissioned by the Department of Treasury, uptake of rooftop solar increased 50-fold in Western Australia between the 2008 and 2018 financial year. An Australian Energy Market Operator report published the same year uncovered another problem. The requirement to quickly start up coal power generators due to fluctuations in renewable energy generation was increasing maintenance costs.
The town has witnessed the consequences of these changes first hand, with the state government announcing the closure of two power generating units at the ageing Muja Power Station by 2024. Professor Peter Newman from Curtin University’s Sustainability Policy Institute describes Collie’s situation more bluntly: its dependence on coal is unsustainable.
”Locals may keep feeling as though the economy in Collie could keep going a bit longer if you sort of don’t push things too hard with sustainability,” he says.
“But the future is catching up very quickly and it’s not possible to keep avoiding it, it is now on the doorstep and we either welcome the future or we try to stop it.
”If we try to stop it, it is just going to ride over us and they’ll be a lot more pain, so we have to accept a certain amount of pain and the adjustment, but hopefully that pain can be avoided by all kinds of other projects.”
This is exactly what Collie is pinning its hopes on. With the realisation coal’s days are numbered, the town is now frantically working to diversify its economy. When asked how exactly Collie is doing that, both Ms Stanley and Mr Murray listed multiple examples. Some have been easier than others to get up off the ground.
“Just about all my hair’s fallen out trying to get the Lake Kepwari redevelopment done,” Mr Murray jokes. “It’s taken 15 years. Nothing moves very quickly at times.”
Tourism is one of the main industries the town is focusing on building. Along with the $5 million being spent on Lake Kepwari, an infilled former mine site, $10 million is expected to be spent over the next three years developing more than 180km of mountain bike and hiking trails around the town. Another $1 million is being spent on refurbishing the Collie Roundhouse, the only railway roundhouse left in the state.
While tourism is the most prominent, it is far from the only industry sector Collie is attracting.
”We’ve got a hemp pharmaceuticals and nutraceuticals operation that is starting,” says Ms Stanley. “They’ve bought land and they’re just waiting on their final licenses from the federal government.”
It is not the only hemp-related opportunity for the town.
”There’s another sort of related one in hemp processing, so this would be more broad acre-grown hemp and processing that for things like building materials.”
It is part of a long wish list for Collie, which includes manufacturing cement with fly ash (the remnant left from burning coal), advanced timber manufacturing, protected cropping and aquaculture. However, Ms Stanley stresses not all of these projects will get up. A $60 million state government fund had to be redirected last year after there were no takers for building a biomass or solar generation facility in the town.
Mining memories: Collie is taking advantage of its natural beauty to develop a tourism industry. Photo: Bert Luxing (CC BY-SA 4.0)
Despite the setbacks, their persistence is starting to pay off. Earlier this year, mining equipment dealership Westrac announced it will be building a autonomous vehicle training facility for Caterpillar trucks in the town, the first of its kind outside of the United States. It came a month after it was announced Frontline Fire and Rescue Equipment will begin constructing the state’s firetrucks in the town.
Looking into the future, Professor Newman expects Collie to use their centrality in the South West Interconnected System to their advantage.
“The infrastructure for the grid is still very focused on the link to Collie, so that is not going to disappear. The renewables and batteries that would be established in that area to keep that long corridor going will be part of the future for that area. They will require jobs, good engineering-type jobs.”
So how long does coal have left in Collie? Professor Newman expects all of Collie’s power stations to reach the end of their useable life by 2025.
“And it’s happening perhaps quicker than that because of the COVID destruction of demand, which has gone down. It will pick up but the going down process did show that we can get by with a lot more dependence on renewables.”
However, the locals disagree.
”I must make it very clear, there will be a coal industry for quite some time yet, but at a reduced level,” says Mr Murray.
Either way, the town is confident it will rise to the occasion.
”It’s a challenge and we’re not putting our head in the sand as in regard that change has to be made,” says Mr Busson. “It’s how that change is made and that people don’t get left behind.”
But for now, the conveyor belt keeping Collie alive will keep humming along.
