The 53km (30 mile) railway was designed and built in 1906-07 by the famous engineer Henry Deane for the Commonwealth Oil Corporation (COC) to exploit oil shale deposits in an isolated part of the Wolgan Velley. The township that subsequently developed was named Newnes after Sir George Newnes, a director of COC. It is to the north of Lithgow and the Zig Zag Railway. An oil shale refinery was constructed.

(Old) Newnes Junction on Dargans Deviation was where the Wolgan Valley Railway linked to the NSWGR Main Western Line, 12km east of Lithgow and 3km from Zig Zag Railway.
The current Newnes Junction station lies some 500m further east, having been relocated in 1910, when the Ten Tunnel Deviation was opened, leading to closure of Dargans Deviation.

Initial output averaged 400 tons per day, consisting mainly of shale ore for export and coke, with some refined oil. The refinery experienced considerable difficulties with the 'cracking' plant.

While principally a freight railway it also carried passengers because Newnes was hard to access.

The Newnes shale oil works finally closed in 1932; having had a troubled industrial and technological history over many years. Competition came from (mineral) oil from the East Indies. The railway officially closed at the same time but actually operated intermittently until 1935-36 when lack of maintenance and substantial washaways caused total closure.

Much material was transferred to Glen Davis, in a valley to the north, where another oil shale deposit had been found. Oil was then piped from the Glen Davis refinery through the mountains to Newnes and then via a pipe buried beside the disused Wolgan Valley railway line to storage tanks near (Old) Newnes Junction into the 1950s.

Between 1940-1942 the railway line was lifted and much shipped to Tobruk (N.Africa) where the steel rail formed part of the defences.

However, the southern end of the Wolgan Valley Railway between Newnes Junction and the old exchange sidings was not lifted. It enjoyed a subsequent life as a Commonwealth siding as part of the Australian government's diversified fuel storage plan during WWII.


More comprehensive information can be found in the 'The Shale Railways of NSW', and Henry Deane's book 'The Wolgan Valley Railway - Its Construction. (See Bibliography)