The NSW government is rolling out a major change to how coal projects are approved, setting out a new strategy that closes the door to fresh coal mines on previously undeveloped or greenfield sites while keeping the door open to some mine expansions. This policy arrives as coal still underpins much of the state’s electricity supply and export earnings, so the tension now sits between climate targets and the economic weight of an industry that has shaped regions like the Hunter and Illawarra for decades.
Until now, companies could apply to explore new coal areas, with a number of bids sitting in the system and some licences already granted over greenfield ground. Under the new direction, nine pending applications for exploration on untouched sites will be cancelled and future bids for new coal exploration areas will no longer be accepted. The change does not touch critical minerals, which can still be explored and developed on greenfield land and highlights a shift in focus toward resources seen as essential for batteries, renewable technologies and advanced manufacturing.
The detail of the policy draws a clear line, exploration and development for brand new coal mines on greenfield sites is effectively off the table, but extensions that sit on the edge of existing mines can still proceed through the planning system. Industry groups describe that trade off as a mixed outcome. They see the ongoing support for extensions as crucial and point out that around 8000 jobs are tied to mines seeking approvals to keep operating longer, yet they argue the blanket exclusion of new sites places an artificial ceiling on future export growth and regional development. Coal producers, which earned the state an estimated $2.95 billion in royalties in 2024‑25 with roughly 85% of output shipped overseas, say the policy brings some investment certainty but also removes the option to open up what they view as high quality deposits.
Looking ahead, the decision fits into a broader transformation of NSW’s energy system but it also looks like it could narrow some economic options just as coal fired power stations move toward retirement. Coal still generated about 57% of the state’s grid supply in the past financial year and three of the four remaining coal plants are scheduled to close by 2030, with coal expected to be phased out of the grid entirely by around 2040. At the same time, the government wants the coal sector to contribute to emissions cuts of up to 70% below 2005 levels by 2035 while signalling that mining should not be pushed beyond what is technically achievable or asked to deliver deeper cuts than other sectors. Energy policy specialists suggest the new stance seems unlikely to move local power prices much because most NSW coal is exported, but it does look like it could trim future royalty streams and profits by limiting how far the industry can expand into new areas, even as global demand for seaborne coal appears set to linger for years.
