Newcastle, Australia

Newcastle was founded in 1804 for convicts too hard even for Sydney to cope with, but the river is the real reason for the city's existence: coal, which lies in great abundance beneath the Hunter Valley. The proximity of the mines encouraged the establishment of other heavy industries, though the production of steel here ceased in late 2000 and most of the slag heaps have been worked over, but the docks are still functional, particularly with the through traffic of coal from the Hunter Valley. Today, Newcastle remains the world's largest coal-exporting port; ironically, the city also has a reputation as one of the most environmentally progressive places on Earth.

New South Wales' second city, with a population of over a quarter of a million, Newcastle has long suffered from comparison with nearby Sydney. However, for a former major industrial city, it's surprisingly attractive in parts, a fact now being more widely recognized. The city has been experiencing a real-estate boom: hundreds of apartments and hotels have gone up, and old icons have been redeveloped, such as the once-grand Great Northern Hotel at 89 Scott St, first built in 1938 and now benefiting from a $3 million face-lift.

Years of accumulated soot has been scraped off the city's stately buildings, riverside gardens have been created in front of the city centre, and a former goods yard has been converted into a waterside entertainment venue. The once blue-collar town is taking to tourism in a big way, trading particularly on its waterside location – the surf beaches are wonderful, and there are some more sheltered sandy beaches around the rocky promontory at the mouth of the Hunter River. The large and lively student community keeps the atmosphere vibrant, and there's a serious surf culture too – many surfwear- and surfboard-makers operate here, several champion surfers hail from the city, and there's a big contest, Surfest, in March.