NSW to ban new coalmines in major shake-up for $23bn industry

Development of new “greenfield” coalmines will be banned under an ambitious Australia-first proposal by the NSW government.

The state government will, however, consider extensions to existing mine sites, as well as exploration in adjacent areas, under a 25-year plan released on Thursday.

Proposals to extend the life of existing coalmines will also be considered.

NSW Natural Resources Minister Courtney Houssos said coalmining was a “high-value” industry in the state, employing about 23,800 people and contributing about $2.7bn in royalties in 2025 alone.

She said coal had a “long-history” in NSW and would continue to make an important contribution to the state’s growth and prosperity.

“It sustains many regional communities and helps fund essential services right across NSW,” she said.

“Coal remains one of NSW’s top exports by value, with $23.4bn generated in exports during 2025, serving 21 trading partners globally.“

However, the coal’s role was “evolving” in response to global shifts and the state’s emissions targets, Ms Houssos said.

The Labor minister said she expected coal-fired stations to remain in use until they were retired or replaced by renewable electricity by 2040, with thermal coal to play a role in global energy use as late as the 2050s.

“Some of Australia’s key trading partners require access to NSW coal to ensure their energy security, although these partners also have their own net-zero targets,” she said.

The NSW government said the state had sufficient coal reserves – NSW’s biggest single export – at or near existing coalmines to meet forecast local and export demand, allowing for extensions.

Extensions will be considered on a project-by-project basis and would be required to meet environmental standards.

Coal regions – the Hunter, Central West, Illawarra, and North West – are expected to be supported through the Future Jobs and Investment Authority.

Opposition Resources Minister, Senator Susan McDonald, said she was “shocked” at how “incredibly short-sighted” the decision was.

“In the middle of a looming energy crisis, this is what NSW Labor has decided is the best decision to secure the state’s future,” she said.

“The policy shift to ban new coal mines on greenfield sites is not what’s best for NSW, or Australian energy security as the conflict in the Middle East continues.

“Australia’s key trading partners rely on access to NSW coal for their energy security, so the Prime Minister must consider how this could hurt our trading relationships as we urgently seek assurances on issues such as fuel supply.”

Senator McDonald questioned if Ms Houssos had consulted her ministerial counterparts in coming to her decision.

“It’s fair to question whether it is wise or appropriate to release a strategic directive to the mining industry, essentially driving away investment and jobs in NSW, while Australian energy sovereignty is in crisis,” she continued.

“How can the NSW Resources Minister claim coal mining is a ‘high-value’ industry in the state, which employs about 23,800 people and brought in about $2.7bn in royalties in 2025, then slam the door on new coal mines?

“It’s so poorly thought out that even the Mining and Energy Union called the coal ban ‘disappointing’.”

Federal Resources Minister Madeleine King said she had been informed of NSW’s move.

Speaking on Sky News, she said the decision provided “certainty for industry”.

“But, really importantly, certainty for the workers on those coal mines across the Hunter Valley,” she said.

Ultimately, she said it would be up to the state to make decisions regarding extensions.

Appearing before budget estimates last month, Environment Minister Penny Sharpe admitted the latest modelling forecast NSW would only reach about 40-46 per cent emissions reductions by 2030, well below the legislated target of 70 per cent below pre-2005 levels by that year.

Nonetheless, Ms Sharpe said the government was committed to its legislated targets.

“The targets are challenging, but they are something we’re committed to and we’re doing a whole range of work in relation to that,” she said.

Australian Conservation Foundation campaigner Freja Leonard welcomed the NSW government’s proposal.

“Today’s announcement is recognition that the coal industry is already in decline,” she said.

“The NSW government should now plan for the orderly phase out of coalmining and support for coal workers.”

The proposal comes after it was revealed Australia’s largest coal-fired power plant, Eraring in NSW, would stay open for an additional two years until 2029.

Ms Sharpe said Eraring would support emissions reduction and provide certainty for investment in replacement generation.