Centennial Coal has turned up the heat on Origin Energy and the NSW government, warning that any failure to renew its supply contract with Eraring Power Station will be a social and economic disaster.
The government announced on Thursday that it would pay Origin up to $450 million to keep Eraring open for two years beyond its planned August 2025 closure.
Centennial has been locked in fruitless negotiations with Origin to renew its contract to supply coal from the Myuna and Mandalong mines.
The contracts expire next month, and both parties have faced calls from unions and politicians to bargain in good faith.
Centennial said in a media statement on Friday that "1000 direct jobs" would be lost immediately if the contract was not renewed.
The Centennial website says the two collieries employ a total of 750 people.
The company listed other consequences of losing the Eraring supply deal, including "over $360 million of lost royalties and payroll tax for the NSW government over the next four years", a "direct six-fold multiplier effect on the 6000 indirect jobs in the area" and another 1200 coal train movements a year through "Newcastle City" to allow supply from an alternate source.
Centennial said sulphur emissions across Lake Macquarie could double "due to Eraring burning high-sulphur coal when compared to Centennial's low-sulphur coal".
The company's comments came after Origin chief executive Frank Calabria said on Thursday that it was "important that we are able to source competitively priced coal".
"We continue to be in discussions with Centennial, and we hope we can reach an agreement which is broadly consistent with the terms with which we have secured other coal supplies," he said.
The Mining and Energy Union says the government must ensure Myuna and Mandalong continue to supply coal to Eraring as part of any deal to subsidise the plant beyond 2025.
"Centennial's Myuna mine at Lake Macquarie is a fully captured coalmine of Eraring power station, supplying coal via a conveyor belt with no other opportunity to transport coal to other markets," the union said.
"If no new ongoing contract is secured, there is an imminent risk of the mine closing and 350 workers being stood down."
The nearby Mandalong mine contributes about half of its coal to Eraring.
