Shenhua coalmine scaled back as NSW government buys back part of licence

Resources minister says 51.4% of exploration licence in Liverpool plains would be handed back, in exchange for a refund of $262m

 A Liverpool plains farmer, Andrew Pursehouse, whose farm in Breeza, New South Wales, adjoins the proposed Shenhua coalmine.
 A Liverpool plains farmer, Andrew Pursehouse, whose farm in Breeza, New South Wales, adjoins the proposed Shenhua coalmine. Photograph: Gay Alcorn for the GuardianShares

The controversial Shenhua Watermark coalmine in NSW will be scaled back to avoid mining land marked as “strategic” agricultural lands, after a partial buy-back of the mining licence by the state government.

The government indicated it was in discussions with Shenhua in August, when it announced a similar buyback of BHP’s planned underground mine in nearby Caroona, also on the Liverpool plains. There has been continued speculation that the mine was not financially viable, given declining Chinese coal imports and Shenhua’s failure to apply for a mining licence, instead extending its cheaper exploration licence.

On Wednesday the NSW minister for resources, Don Harwin, said 51.4% of the company’s exploration licence would be handed back under the agreement, with the government refunding about $262m from the original amount received from Shenhua.

The Shenhua exploration licence was granted for about $300m in 2008 by the disgraced former NSW Labor resources minister Ian Macdonald. The open-cut mine was planned to cover 35 sq km in rich farming land in the state’s north.

“While the previous Labor government granted the original exploration licence, this government has determined there should be no mining on the fertile black soils of the Liverpool plains,” Harwin said.

“In August 2016 the NSW government also secured an agreement to buy back the licence for BHP’s Caroona project, another exploration licence issued by the previous Labor government on the Liverpool plains.”

“We’ve been betrayed by the NSW government,” said a Breeza farmer, Andrew Pursehouse, whose property adjoins the proposed coalmine.

“If it was serious about protecting farmland, it would have cancelled the coal licence outright and stopped this coalmine.

The NSW Greens’ resources spokesman, Jeremy Buckingham, said the buy-back did not go far enough and he called on the premier to cancel the project.

“Today’s announcement is a recognition that building a giant coalmine in Australia’s best agricultural area is a terrible idea, but anything less than full cancellation does not lift the threat,” he said.

“Anyone who has visited the area knows how interconnected the ridges are to the plains. The idea that you can dig a 300-metre deep pit next to a flood plain and it will not impact on the water table is ridiculous. It is certainly not worth taking the risk.

“There is no ‘safe’ size for the Shenhua coalmine. It is the wrong mine, in the wrong place, at the wrong time as we confront dangerous climate change.”

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