The November 2008 mini-budget removed freight from the list of costs that could be deducted from the royalties that companies pay the government to extract mineral resources.

For the Charbon Colliery, located far from its export ports, the cost of freight is approximately $20 a tonne, and the new laws would add about $1.5 million to the mine’s production costs each year.

Katie Brassel of Centennial Coal, owners of Charbon Colliery, said the Charbon mine had long been considered as a marginal operation in spite of its high efficiency, because of the high cost of transporting its coal to port.

She said Charbon “couldn’t win a trick,” with export prices falling recently and Rail Corp access charges rising by an average of 70 per cent.

Each time an additional cost has been introduced, Ms Brassel said, the mine’s continuation was put further at risk.

“Whilst we have a significant commitment to that workforce and that mine, at the end of the day we are a business,” she said.

Mid-Western Regional councillor Esme Martens, chairperson of the Charbon Colliery consultative committee, said the loss of the mine would be a “catastrophe” for the Kandos/Rylstone region.

The colliery is one of the area’s major employers, along with Kandos Cement and Hyrock Lime, each of which depend on Charbon Colliery for their coal, and may be put at risk if the colliery is closed.

The colliery employs 89 people locally, including 10 apprentices, and a further 35 open cut contractors.

“Our employment base in those areas is quite limited, “ Cr Martens said.

“In a time of rising unemployment, we just can’t afford to have more people out of work.”

Cr Martens took the issue to a recent meeting of the Association of Mining Related Councils, and she said the association voted to take the problem up, and has already written to the minister.

She said Centennial Coal had also contacted the minister, as well as approaching Lithgow Council and Mid-Western Regional Council, and that the company’s representations were well received.

“I do feel optimistic about it,” she said.