This is well recognized.

Less well recognized is that the first mining rush involved coal, not gold.

Coal was discovered near the mouth of the Hunter, Coal River, in 1799. While there were early mining attempts, attempts impeded by shipping shortages, mining did not really get underway until the establishment of a penal colony at Newcastle in 1804.

The government in Sydney recognized the potential financial value of coal and declared it a state asset. However, there were significant difficulties involved in efficient production using the convict work course.

1824 saw the formation of the Australian Agricultural Company. While the AACo was predominantly focused on wool production, it was granted an exclusive 31 year lease on coal production. In return, the company was required to recruit experienced miners to extend mining activities, bringing the first Welsh to Northern NSW.

In 1828 the lease was converted into an effective monopoly. This was challenged by other producers. After a series of court cases, lobbying and the launch of a Legislative Council inquiry in 1847, the AACo voluntarily relinquished its monopoly,

By then, the AACo had invested quite heavily in expanding coal production and transport. There were practical, profitable, reasons for so doing. Over the depressed years of the 1840s when the pastoral industries suffered from low prices and drought, the AACo made more money from coal than its huge pastoral interests.

The ending of the monopoly saw a rapid expansion in coal production. Initially this was impeded by Newcastle port conditions. Newcastle was an open roadstead providing little protection from either prevailing winds or storms. Now the port was developed by new breakwaters, wharves and machinery.

By 1864, coal shipments from Newcastle had reached around 340 000 tons. The Hunter now had two major ports, Newcastle plus the traditional river port at Morpeth.

Morpeth was still attracting much of the inland traffic, but its period of dominance was now under a threat that would finally prove fatal.

Jim Belshaw's email is ndarala@optusnet.com. His New England life blog is http://newenglandaustralia.blogspot.com/: his New England history blog http://newenglandhistoryl.blogspot.com.au/

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