Coal was mined at Shag Point for over 100 years, with most of it won from below sea level. From a 140-metre main shaft located near this spot (back towards the houses), a network of tunnels extended out from the coastline to a depth of about 80 metres.
Enticed by exposed seams near sea level, still visible today, and by reports of whalers using Shag Point coal in the 1830s, D. Hutcheson began commercial mining in 1863. There were numerous owners over the years, and with each came new technology and expertise. By 1880, extraction had peaked at 36,000 tonnes annually and there were more than 170 employees.
In 1875 the little coastal steam, ss Shag, joined the trade, slipping into the narrow harbour to load. It was said miners working beneath the shoreline could hear the throb of engine and propeller.
A branch railway was built in 1879 and eventually the bulk of the coal was railed out. The old line is now an access road for the homes and holiday cottages.
Seawater seepage was a relentless problem. By the time serious flooding forced the closure of the mine in 1902, over 400,000 tonnes of sub-bituminous coal had been extracted.
Mining continued on land under various owners till the 1970s. Seams a few hundred metres inland worked and some relics remain. The broken concrete platform near the southern carpark is a return air vent.