The Newcastle metropolitan area is the second most populated area in the Australian state of New South Wales and includes most of the Newcastle and Lake Macquarie Local Government Areas. It is the hub of the Greater Newcastle area which includes most parts of the Local Government Areas of City of Newcastle, City of Lake Macquarie, City of Cessnock, City of Maitland and Port Stephens Council.
Situated 162 kilometres (101 mi) NNE of Sydney, at the mouth of the Hunter River, it is the predominant city within the Hunter Region. Famous for its coal, Newcastle is presently the largest coal exporting harbour in the world, exporting over 97 Mt of coal in 2009--10 with plans to expand annual capacity to 180 Mt by 2013. Beyond the city, the Hunter Region possesses large coal depositsThe first European to explore the area was Lieutenant John Shortland in September 1797. His discovery of the area was largely accidental; as he had been sent in search of a number of convicts who had seized the HMS Cumberland as she was sailing from Sydney Cove.
While returning, Lt. Shortland entered what he later described as "a very fine river", which he named after New South Wales' Governor, John Hunter. He returned with reports of the deep-water port and the area's abundant coal. Over the next two years, coal mined from the area was the New South Wales colony's first export.
Newcastle gained a reputation as a "hellhole" as it was a place where the most dangerous convicts were sent to dig in the coal mines as harsh punishment for their crimes.
By the turn of the century the mouth of the Hunter River was being visited by diverse groups of men, including coal diggers, timber-cutters, and more escaped convicts. Philip Gidley King, the Governor of New South Wales from 1800, decided on a more positive approach to exploit the now obvious natural resources of the Hunter Valley.
In 1801, a convict camp called King's Town (named after Governor King) was established to mine coal and cut timber. In the same year, the first shipment of coal was dispatched to Sydney. This settlement closed less than a year later.
A settlement was again attempted in 1804, as a place of secondary punishment for unruly convicts. The settlement was named Coal River, also Kingstown and then re-named Newcastle, after England's famous coal port. The name first appeared by the commission issued by Governor King on 15 March 1804 to Lieutenant Charles Menzies of the marine detachment on HMS Calcutta, then at Port Jackson, appointing him superintendent of the new settlement.
The new settlement, comprising convicts and a military guard, arrived at the Hunter River on 27 March 1804 in three ships: the Lady Nelson, the Resource and the James. The convicts were rebels from the 1804 Castle Hill convict rebellion.
The link with Newcastle upon Tyne, UK, its namesake and also from whence many of the 19th century coal miners came, is still obvious in some of the place-names -- such as Jesmond, Hexham, Wickham, Wallsend and Gateshead. Morpeth, New South Wales is a similar distance north of Newcastle as Morpeth, Northumberland is north of Newcastle-upon-Tyne.
Christ Church Cathedral dominates the skyline of Newcastle.
Under Captain James Wallis, commandant from 1815 to 1818, the convicts' conditions improved, and a building boom began. Captain Wallis laid out the streets of the town, built the first church of the site of the present Christ Church Anglican Cathedral, erected the old gaol on the seashore, and began work on the breakwater which now joins Nobbys Head to the mainland. The quality of these first buildings was poor, and only (a much reinforced) breakwater survives. During this period, in 1816, the oldest public school in Australia was built in East Newcastle.
Newcastle remained a penal settlement until 1822, when the settlement was opened up to farming. As a penal colony, the military rule was harsh, especially at Limeburners' Bay, on the inner side of Stockton peninsula. There, convicts were sent to burn oyster shells for making lime.
Military rule in Newcastle ended in 1823. Prisoner numbers were reduced to 100 (most of these were employed on the building of the breakwater), and the remaining 900 were sent to Port Macquarie. ( source Wikipedia )