Blue Sky Mining, produced by Warne Livesey, was released by CBS/Columbia on 25 February 1990. It peaked at number one on the Australian Recording Industry Association (ARIA) albums chart. It stayed at number one for two weeks in Australia and had Top 5 chart success in Sweden, Switzerland and Norway. It peaked at number 20 on the Billboard 200 and number 28 on the UK charts. The album was "more defiant and outspoken" than their previous work; the single "Blue Sky Mine" describes asbestos exposure in the Wittenoom mine tragedy. The lead single peaked at number eight on the ARIA singles charts, top 15 in Norway and Switzerland, number 47 on Billboard Hot 100 and number one on both their Mainstream and Modern Rock Tracks charts, and appeared on the UK charts. The second single, "Forgotten Years," was more moderately successful, reaching number 26 on the ARIA singles chart, number 97 in the UK, number 11 on the Mainstream Rock Tracks, and number one on the Modern Rock Tracks.
At the ARIA Music Awards of 1991, Midnight Oil won 'Best Group' and an 'Outstanding Achievement Award', and were awarded 'Best Cover Art', 'Best Video' and 'Album of the Year' for Blue Sky Mining. Manager Gary Morris, accepting awards for Midnight Oil, was criticised for a speech lasting 20 minutes.
Some early Australian copies included the track "You May Not Be Released" - it was the B-side to a 12-inch issue of "Forgotten Years," and it is believed that this only appeared on the first 1,000 LP copies.