Tag Archives: Newcastle

Fund managers aren’t really my kind of people

Five years ago, I was invited to Newcastle, north of Sydney, to give a presentation on the history of coal mining in Australia to a group of fund managers. This is not my normal type of gig, but I once wrote a chapter on the topic as part of an interdisciplinary study of the coal industry in Australia. Australia’s coal industry first began in Newcastle, and it still depends on mining.

Early Newcastle coal mine

Robert Westmacott, Newcastle, the coal mines of N.S.W. (1832), from National Library of Australia

It was a brief insight into how the other half (or, more likely, the top 10 percent) live. These fund managers were mainly American, and they had just come through the global financial crisis.

These men had been badly burnt – but only metaphorically. Thumbs permanently attached to their Blackberries and groggy with jet lag, they were there to be schmoozed within an inch of their lives. Over the course of a long weekend, they moved from business breakfasts to a visit to port facilities to more presentations and a visit to a mine, interspersed with dinners at the ritziest restaurants Newcastle has to offer. It was all washed down with the best Hunter wines.

At a waterfront seafood restaurant, I ordered salt and pepper squid from the 3 entrees on our special custom menu. This dish can often taste like greasy rubber bands, but here I expected it to be absolutely delicious, and it was. This was some compensation for a boring night, since none of the men (they were virtually all men) around me felt the least need to talk to me. In their normal lives, they probably outsourced small talk to their wives anyway.

Through either luck or good management (your call will depend on your political allegiance) Australia came through the global financial crisis of 2007-9 relatively unscathed, which is why, not doubt, we cheerfully abbreviate it to the GFC. We did much better than America, so these fund managers were surprised by the strength of the Australian economy, the low unemployment, and the fact that Newcastle’s coal industry was touting for their business, promising profits well above what they could make at home. Two countries, on different phases of the investment cycle.

I flew home next day, so I don’t know what happened to these optimistic plans. Five years later, the American economy is recovering but in Australia, coal and iron ore prices are cactus. Green shoots are very thin on the ground – especially in Newcastle, where the boom turned out to have a rotten core of political corruption too, and the uncontrolled growth of coalmines has killed much of the greenery anyway.

Business cycles, by their nature, go up and down, and money managers have a poor reputation for dodgy predictions and self-serving boosterism, if not necessarily for corruption. Sitting opposite me that night in Newcastle was a fund manager from Goldman Sachs. Matt Taibi in Rolling Stone had only recently, memorably, described Goldman Sachs thus:

The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

The image of the vampire squid went viral, and I confess that it was a comfort to me to think of this as I sat there ignored, out of place surrounded by young men in suits twiddling under the table with their Blackberries.

I was ignored until my meal arrived. I had been surprised by how few people ordered the salt and pepper squid. Clearly, when they saw my dish, some of my neighbours regretted not doing so – but it was ‘Mr Goldman Sachs’ who said, with amazement: ‘But it’s calamari!’ It turns out he didn’t even know what squid was. Two nations, divided by a single language.

History at the Coalface

A couple of years ago I was one of a group of academics who wrote a study of coal in Australia for the American mining giant Peabody.  It was a scholarly study, with good research, bringing together people from different fields to produce a detailed perspective on Australian coal mining, past, present and future.

In retrospect, Peabody probably felt it did its dough.  The company had planned to use the report in its fight with the Rudd government over the forthcoming Emissions Trading Scheme.  At the time, they probably expected they would need hard evidence about the significance of the coal industry as ammunition in the debate, whereas it turned out that all the mining companies needed to spook the government was a few million dollars worth of advertising.  Who knew?  Well, they know now – as does every other company with an axe to grind with government.

My part in the report was to supply some background history.  I learnt a lot from the experience, not least that it’s possible to find anything interesting once you start researching it – even coal.

Coal mines of Newcastle

Coal mines of Newcastle

Australia has been mining coal since 1797, when some marines chasing escaped convicts stumbled on a coal seam next to the Hunter River.  The town of Newcastle was established in 1804, and working at the ‘Coal River’ became a secondary punishment for convicts who had committed further crimes in New South Wales.  The Hunter Valley mines were based on 19th century technology, as were the mines on the West Moreton field at Ipswich, west of Brisbane.

Labour relations were modelled on 19th century conditions too.  In my research, I came across The Coalminers of New South Wales: a history of the union, 1860-1960 (1960) by Robin Gollan.  Gollan had been a communist in his earlier days; he left in 1957, along with so many others, following the Hungarian uprising.  His work was strongly influenced by the British Marxists, especially Harold Laski, who supervised his PhD, and by E. P. Thompson, whose book The Making of the English Working Class uncovered the lost world of working class customs.

The Grimethorpe Colliery Band has been touring Australia recently, having outlived the Grimethorpe colliery by nearly 20 years.  In his book, Gollan describes a world straight out of Brassed Off.  He uncovers a rich cultural life in the mining towns – but it was a claustrophobic, sexist world as well, full of male bonding rituals and devotion to old fashioned union politics, where ‘to do your darg’ was to do a decent day’s work.

It was also a world of Us and Them.  During industrial clashes – and there were many – violence flared.  During a lockout at Rothbury in 1929, police fired on union demonstrators and killed an innocent bystander with a ricocheting bullet.

The unions were strong because the mines were dangerous, and miners needed whatever protection they could negotiate, though there was nothing to be done about ‘black lung’.  As early as convict times, men had been invalided out with ‘asthma’– almost certainly silicosis.

Ipswich was a union town too, but less radical than the Hunter Valley, with a working class culture that tended more towards Methodism and Welsh choirs.  Perhaps because it is only an hour away from Brisbane by train, Ipswich was a less claustrophobic mining town.

World War II poster

World War II poster

However they did participate in the great strikes of the late 1940s. Power shortages affected everyone during these strikes.  By World War II, Australian industry relied on electricity, and electricity relied on coal-fired generators.  Besides, electricity had become essential in the home, for light, cooking and heating.  My parents married during one such strike in 1946.  The wedding reception was held by candlelight – very romantic, until my mother’s bridal veil caught fire.

In one of the defining moments in labour history, the Labor Prime Minister Ben Chifley called in the army to get the coal moving again. The wonder of it is that Chifley – originally a train driver from Bathurst – could have imagined that the army could do the work.  Underground mining was far too dangerous to hand over to untrained soldiers.

Open cut mining is another world entirely.  The State Electricity Commission in Victoria first experimented with open cut in the 1920s at Yallourn in the La Trobe Valley.  Environmentally it can be a disaster.  Yallourn’s coalmine eventually gobbled up the town itself in the unremitting hunger of the SEC for coal.  Mining can and does move mountains, and reclamation is expensive.  But while the old deep-sunk mines of Newcastle and Ipswich were miserable places to work, open cut is safer.  Since the early 1960s, with the opening of the Bowen Basin in Queensland, it has become the norm.

But there are no Welsh male choirs or Grimethorpe Bands in the Bowen, or Surat, or Galilee Basins.  The old world of working class practices has gone – and on the whole a good thing too.  But in the world of fly-in, fly-out mining, the social capital that gave men a sense of cooperative purpose and pride in a dangerous, dead end job, has gone as well.  Men no longer expect to spend a lifetime down the coalmines – and it is the owners, not the workers, engaged in a game of brinkmanship with government today.

Note: a shorter version of this post first appeared in the Weekend Australian on 16 July 2011.