Short-lived Coal Monopoly & Providing Land Access: Disputes With James Mitchell
In 1828, 3 years after commencing their 31 year lease, the Australian Agricultural Company was accorded a monopolistic position after the company received a grant of 2,000 acres of coal land in the centre of Newcastle. Further, it was feared that the company may have had control of the entire coal supply in the Colony had the Crown Law Officers responsible for the substitution of a grant for the lease not objected and an alternative agreed upon.
Between 1835 and 1850, the Australian Agricultural Company was involved in significant Australian historical law events relating to monopolistic coal mining and private railway access.
In 1835 James Mitchell purchased approximately 900 acres of coastal land extending from the far side of Merewether ridge to Glenrock Lagoon and named the property the Burwood estate, which was later extended to 1,834 acres. Not long after Ludwig Leichhardt’s visit to the Burwood estate in 1842, Mitchell announced the planned commissioning of tramroad tunnels, Australia’s first two railway tunnels, through Burwood ridge (or bluff).
Whilst Leichhardt visited the Burwood estate he drew up the stratigraphy of the coastline. It is speculated that Leichhardt may have established the extent of the coal seams under Mitchell’s property. Mitchell claimed the construction of the tunnels was to allow access to Burwood Beach in order to build a salt works. It is further speculated that Mitchell actually sort to destroy the Australian Agricultural Company’s legal monopoly on coal mining. Prior to these events Mitchell had already approached Governor Gipps seeking:
- a repeal of the Metallic Ores Act;
- Newcastle be made a free port and
- that he be permitted to mine and use coal from Burwood estate as fuel for a copper smelter.
Mitchell was unsuccessful with only his request to use coal as fuel in a copper smelter.
Although Mitchell had no legal use of coal, the commissioned tunnel project commenced in 1846 with the cutting line being directly into a coal seam. Between 2 and 3 thousand tonnes of coal were extracted but unusable owing to the Australian Agricultural Company’s monopoly.
Whilst Mitchell’s operations were going on, a number of small illegal mines operated in the district in defiance of the monopoly. A mine near East Maitland operated by Mr James Brown undercut the Australian Agricultural Company’s price to supply coal to steamships at Morpeth which lead to prosecution. The Government’s legal advice after this case was that they would have to individually prosecute every illegal mine, which Governor FitzRoy believed the cost of the prosecutions should be paid for by the Australian Agricultural Company. In 1847, the NSW Legislative Council created the Coal Inquiry and appointed a Select Committee to investigate the matter. Both Mitchell and Brown gave evidence; Mitchell in relation to his tunnel and Brown in relation to price cutting. Before the Committee could issue any recommendations the Australian Agricultural Company relinquished its monopoly. Mitchell proceeded to lease out the coal rights on the Burwood estate, with five mines being quickly established by J & A Brown, Donaldson, Alexander Brown, Nott and Morgan.
Because Australian Agricultural Company owned the land between the Burwood estate and the Port of Newcastle the company refused to allow Mitchell to transport coal by rail across its land. Mitchell successfully lobbied the Government again by having New South Wales’ first Private Act of Parliament titled, Burwood and Newcastle Tramroad Act 1850, passed, that specifically allowed Mitchell to carry coal through Australian Agricultural Company lands.
Also in 1850, the coal mining monopoly ended with the peal of the Metallic Ores Act as promised by Governor Gipps, allowing copper to be brought into NSW duty free. After the monopoly ended, Mitchell established the copper smelter in 1851 until its closure in 1872. In 1913, salvaged bricks from the site were used to cap some of the old mines.
Read more about this topic: Australian Agricultural Company
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