Skip to main content
NSW Department of Planning, Industry and Environment
  • Share:

The Illawarra-Shoalhaven region contains valuable natural resources including minerals, water, coal and construction materials. Drinking water for around 60 per cent of the State’s population is sourced from catchments partly located within the Illawarra-Shoalhaven. Approximately 21 per cent of the region is located within the Sydney Drinking Water Catchment Area. The safety and reliability of water in this catchment is essential for the health and security of more than 4.5 million people, as well as businesses and industry across the Sydney and Illawarra-Shoalhaven regions.


The region has agricultural and natural resources that make an economic and environmental contribution to the region and to Sydney.


The Regional Plan confirms the long term importance to the economy of maintaining agricultural and resource production. It aims to minimise potential land use conflict and encourage continued investment in land for agriculture and resources, and value-adding services.


The Metropolitan Water Plan (2010) provides the framework for water management in the Sydney region, including the Illawarra-Shoalhaven. The Plan ensures that there will be sufficient water in drought and for the longer term growth of the Sydney region. The Plan is currently under review, and will consider the implications of growth projections for the Illawarra- Shoalhaven region.

Illawarra-Shoalhaven's resources map

Click to enlarge.

Map showing Illawarra-Shoalhaven region's resources including national parks, fisheries and mineral resources

The value of agricultural production in the region is estimated at $94 million. The region is home to a range of rural enterprises including organic produce, beef, cut flowers, fruit, and dairy farming, which is the greatest contributor to agricultural production, accounting for 57 per cent.26


These agricultural industries also support a range of other value-adding industries, such as milk and cheese factories, abattoirs and wineries (some of which operate in the Illawarra-Shoalhaven or in adjacent regions).


Agricultural land, particularly in areas such as Gerringong, Jamberoo, Berry and Kangaroo Valley, is one of the features of the landscape that attracts both residents and tourists.


Aquaculture, which is dominated by oyster farming within the Shoalhaven-Crookhaven estuary, is also a significant contributor to agricultural output. The NSW Government has recently approved three aquaculture leases in Jervis Bay (two off Callala Beach and one off Vincentia) with a combined area of 50 hectares. Port facilities and adjacent commercial land could support the development of a marine aquaculture industry at Greenwell Point and Huskisson.


Greater investment in agriculture requires the application of consistent land use policies and development assessment processes for settlement and housing in rural areas.


ACTION 4.1.1: Identify regionally important agricultural lands and reflect the outcomes in local planning controls

In January 2014, Biophysical Strategic Agricultural Land maps for the State were released that identified land with high quality soils and water resources capable of sustaining high levels of productivity. These maps were produced to support the assessment of mining and petroleum resource applications.


Developing regionally specific data will help to identify the agricultural lands that are important to regional industry, which can then be reflected in local planning. This will expand on the State-level mapping and incorporate industry data, as well as information about soils and water availability, to support a general assessment of the productivity of agricultural lands.


The NSW Government will:

  • map land that is highly suitable for agriculture and industries to better inform strategic and local planning processes; and
  • develop profiles of the leading agricultural industries to guide future investment decisions.


Coal mining in the region is largely concentrated in the western and northern parts of the Wollongong Local Government Area. There are five colliery holdings (all underground) – three with planning approvals beyond 2030.


The region lies partly within the Southern Coalfield which provides the only hard coking coal in NSW. This coal is in high demand for steel production around the world. In 2014, 16.8 million tonnes of coal was produced in the Southern Coalfield, up by 10.1 per cent (from 15.3 million tonnes) on the previous year.27 The State Government earned royalties in excess of $71 million from these activities in 2012-13.28


The region also has valuable hard rock resource lands such as the Dunmore – Shellharbour Hills area, and Bass Point and Bombo Quarries. In 2010-11, the quarries produced approximately 5.2 million tonnes of hard rock and sand, which represented 23 per cent of construction material produced in the State that year.29


More than 84 per cent of the region’s petroleum and gas resources are covered by the NSW Government’s two-kilometre coal seam gas (CSG) residential exclusion zone, the Sydney Drinking Water Catchment, Special Areas and/or national parks. The Government has also announced the cancellation and buy-back of all petroleum exploration licences covering the Sydney Drinking Water Catchment, including the Special Areas.



ACTION 4.2.1: Sequence release areas, in the vicinity of mineral resources, to allow the continuation of working extraction activities

Shellharbour City Council has undertaken an extensive planning exercise to identify appropriate land in its urban fringe lands, taking into account a range of issues, including the importance of the Dunmore Hills extractive resource. As Council evaluates planning proposals to rezone lands identified under this process, the potential impact on the continued extraction of resources needs to be considered.


In addition, identified release areas such as Shell Cove (near Bass Point Quarry) and Spring Creek (near Bombo Quarry) have sequenced development so that working quarries can continue to operate. This approach to the staged rollout of new release areas in the vicinity of extractive operations should continue.


The Dendrobium, Wongawilli, Russell Vale and Metropolitan collieries are located near current and future residential developments. Balancing the ability of these mines to continue to operate, and any future extraction of resources, with the expectations of current and future residents remains an ongoing challenge.


The NSW Government will:

  • work with Shellharbour and Kiama Councils to coordinate new development with the continued extraction of hard rock resources; and
  • consider the need to protect the ongoing operation of existing collieries and future development of known resources in assessing rezoning proposals.


ACTION 4.2.2: Investigate opportunities for biodiversity certification and/or bio-banking agreements in the Dunmore – Shellharbour Hills area to allow ongoing extraction of hard rock

The Dunmore – Shellharbour Hills quarries need to be safeguarded against pressure from residential encroachment and managed to deliver certainty around extraction and biodiversity outcomes.


This area contains 830 hectares of native vegetation including State and nationally listed threatened species and endangered ecological communities, for example, Melaleuca armillaris, Illawarra Subtropical Rainforest and Illawarra Lowlands Grassy Woodland. These are only known to occur in the Illawarra-Shoalhaven region.


In the past, conservation outcomes associated with extraction activities have been negotiated on an application-by-application basis resulting in poor outcomes for both quarry operations and biodiversity.


The Strategy for the Conservation and Management of Biodiversity in the Dunmore – Shellharbour Hills Area (2011) establishes a framework that can be used to identify long term biodiversity outcomes, to provide certainty for the continued extraction of the hard rock resource. Resolving biodiversity outcomes through a strategic process will provide certainty, and streamline development assessment processes for future extraction activities.


The NSW Government will:

  • investigate opportunities for either biodiversity certification and/or bio-banking agreements in the Dunmore – Shellharbour Hills area to allow ongoing extraction of hard rock and the long term protection of threatened ecological communities.


Drinking water for almost 60 per cent of the State’s population is sourced from the Illawarra-Shoalhaven – approximately 20 per cent of the region is located within the Sydney Drinking Water Catchment Area. Protecting water quality and quantity in this catchment is essential for the health and security of these communities.


Rigorous planning and development controls apply to proposals within the Sydney Drinking Water Catchment. Developments must have a neutral or beneficial effect on water quality and should not reduce the quantity of water reaching reservoirs. These protections form part of a suite of legislation that protects the catchment areas, including:

  • State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011;
  • Local Planning Direction 5.2 Sydney Drinking Water Catchments, issued under section 9.1(2) of the Environmental Planning and Assessment Act 1979;
  • the Water NSW Act 2014 and the Water NSW Regulation 2013; and
  • the Water Management Act 2000.


Under the Water NSW Act 2014 and Water NSW Regulation 2013, areas of land have been declared as Special Areas. The region contains parts of the Metropolitan, Woronora and Shoalhaven Special Areas that perform a critical role in protecting the water quality in the storages.


As with other industries, coal mining and coal seam gas extraction have the potential to affect water supply, security and infrastructure, and the ecological integrity of the Sydney Drinking Water Catchment Special Areas. These risks can be managed and it is important that these proposals continue to be assessed and regulated, informed by the best available science.

Page last updated: 25/09/2019