Centennial Coal Rejects Origin's 12-Month Eraring Contract Extension Offer
Centennial Coal has formally rejected an offer from Origin Energy to extend the coal supply contract for Myuna Colliery to Eraring Power Station by an additional twelve months. This decision places the immediate future of approximately 300 direct mining jobs in serious jeopardy and threatens a wider economic ripple effect across the Hunter Region.
Contract Negotiations Reach an Impasse
The current supply agreement between the two energy giants is set to expire later this month. Origin Energy presented the short-term extension offer on Tuesday morning, framing it as a step to advance negotiations and provide Centennial time to develop a support package for its workforce. However, Centennial's leadership has dismissed the proposal as unsustainable.
Centennial chief executive Craig Gillard stated that the offer, which proposed unchanged terms, fails to provide a viable pathway for the continued operation of the purpose-built Myuna mine, whose sole customer is the Eraring Power Station. "A 12-month extension, on unchanged terms, is not sustainable," Gillard emphasised.
Centennial Seeks Long-Term Security Until 2029
Centennial is advocating for a new three-year contract that would align with the scheduled closure of Eraring Power Station in April 2029. The company argues it has previously absorbed losses under short-term arrangements to maintain employment, while pointing to Origin's substantial $1.5 billion profit reported for the 2025 financial year.
The economic stakes extend far beyond the mine's direct employees. Myuna Colliery is estimated to support around 1,800 indirect jobs throughout the Hunter, including contractors, transport workers, and various local small businesses and service providers.
Origin's Stance and Union Mobilisation
In response, Origin's head of energy supply and operations, Greg Jarvis, defended the offer, stating it would enable the continuation of the companies' long-term relationship and support ongoing employment. Origin maintains that Eraring plays a critical role in NSW energy security until its 2029 closure.
Jarvis expressed disappointment that workforce issues were being brought into commercial negotiations, urging Centennial to focus on helping workers prepare for the energy transition through initiatives like the Net Zero Economy Authority's Energy Industry Jobs Plan.
Meanwhile, the mine's four major unions have united in a campaign to pressure Origin to secure the jobs. Union members are planning a rally outside Eraring Power Station. Mining and Energy Union Northern District President Robin Williams accused Origin of "trying to pull a swifty" with an offer that doesn't ensure the mine can operate viably until 2029.
Broader Context of Supply and Transition
This dispute occurs against a backdrop of changing supply dynamics. Origin's reliance on locally sourced Hunter Valley coal has declined since 2013, with the company recently sourcing about 80% of Eraring's coal from the region. Origin has cited cost, quality, and reliability concerns for reducing its dependence on Centennial's supply.
The standoff highlights the complex challenges of Australia's energy transition, balancing immediate employment, corporate profitability, and long-term planning for coal-reliant communities as major assets like Eraring approach their scheduled retirement.
