Upper Hunter Economic Diversification Project Report 3 of 3: Strategy Report Buchan Consulting June 2011 This project is supported by: Trade & Investment Office of Environment & Heritage Department of Premier & Cabinet Final Report Table of Contents Table of Contents.................................................................................................................................................................................. 1 Executive Summary .............................................................................................................................................................................. 4 A. Regional Economy........................................................................................................................................................................ 4 B. Major Issues.................................................................................................................................................................................. 6 C. A Diversification Strategy.............................................................................................................................................................. 8 D. Opportunities .............................................................................................................................................................................. 10 E. Implementation ........................................................................................................................................................................... 12 1 Introduction.............................................................................................................................................................................. 14 2 Economic Development in the Upper Hunter....................................................................................................................... 16 2.1 Economic Development in the Region ................................................................................................................................ 16 2.1.1 Current Assessment ................................................................................................................................................ 16 2.1.2 Economic Drivers..................................................................................................................................................... 18 2.1.3 Regional Employment.............................................................................................................................................. 21 2.2 Key Sectors in the Upper Hunter......................................................................................................................................... 22 2.3 Economic Development Issues ........................................................................................................................................... 23 2.4 Assessment of the Region................................................................................................................................................... 24 2.5 Future Factors ..................................................................................................................................................................... 27 3 Population and Employment.................................................................................................................................................. 29 3.1 Overview - Population and Jobs.......................................................................................................................................... 29 3.2 Population Size and Structure............................................................................................................................................. 29 3.3 Population Projections......................................................................................................................................................... 32 3.3.1 Future Population .................................................................................................................................................... 32 3.3.2 Housing Requirements ............................................................................................................................................ 34 3.4 Future Job Requirements.................................................................................................................................................... 36 3.5 Mining Jobs in the Region ................................................................................................................................................... 39 3.5.1 Current Workforce.................................................................................................................................................... 39 3.5.2 Medium Term Outlook ............................................................................................................................................. 40 3.5.3 Long Term Employment Adjustment ....................................................................................................................... 40 4 Environment Issues ................................................................................................................................................................ 44 4.1 Overview - Climate Change and the Region ....................................................................................................................... 44 4.2 Industry Impacts .................................................................................................................................................................. 45 4.2.1 Overview.................................................................................................................................................................. 45 4.2.2 Agriculture................................................................................................................................................................ 46 4.2.3 Tourism.................................................................................................................................................................... 47 4.2.4 Energy Sector .......................................................................................................................................................... 48 4.3 Community Attitudes to Climate Change ............................................................................................................................ 48 5 Energy Sector .......................................................................................................................................................................... 50 5.1 Overview - Energy Sector.................................................................................................................................................... 50 5.2 Coal Mining.......................................................................................................................................................................... 51 5.2.1 Coal Fields in the Upper Hunter .............................................................................................................................. 51 5.2.2 Employment in the Coal Sector ............................................................................................................................... 52 5.2.3 Attitudes to the Mining Sector.................................................................................................................................. 53 5.3 Power Generation................................................................................................................................................................ 54 5.3.1 Generation Capacity ................................................................................................................................................ 54 5.3.2 Development Projects.............................................................................................................................................. 55 5.3.3 Sale of Energy Assets ............................................................................................................................................. 55 5.4 Gas Projects ........................................................................................................................................................................ 55 5.4.1 Eastern Star Gas Project......................................................................................................................................... 56 5.4.2 AGL Gas Project...................................................................................................................................................... 57 5.4.3 Hunter Region Energy Projects ............................................................................................................................... 58 5.4.4 Renewable Energy in the Upper Hunter.................................................................................................................. 58 6 Key Industry Sectors............................................................................................................................................................... 62 6.1 Agricultural Industries........................................................................................................................................................