Shenhua paid $100m by state government to abandon NSW coal mine
A long fight over the proposed Watermark coal mine in NSW’s Liverpool Plains has ended after the state government paid $100m to cancel the project.
China’s Shenhua has abandoned a 13-year fight to build a controversial $1.2bn coal mine in NSW after the state government shelled out $100m to cancel the project in a bid to safeguard prime agricultural land.
Shenhua first paid $300m in 2008 for the Watermark Coal site on the Liverpool Plains in NSW’s northwest slopes, but the mine has struggled to balance protecting the state’s food bowl and an increasingly downbeat outlook for the fossil fuel due to climate concerns.
The $100m payment will see Shenhua withdraw its mining lease application and surrender its development consent under a deal with the NSW government.
“The NSW government is committed to making NSW the number one investment destination for mining in Australia, but we need to find a balance, and this decision will deliver certainty to farmers and the Liverpool Plains community, while guaranteeing protection to parcels of land with high value biodiversity,” NSW Deputy Premier John Barilaro said.
The NSW government had already shelled out $262m four years ago to buy half the area covered by Shenhua’s original exploration licence, with the renewed licence excluding the agriculturally rich blacksoil plains sections.
Shenhua said the decision was down to “shifting” economic and social conditions surrounding the project.
“While the project obtained state and federal government consents through rigorous merit based approval processes, this decision reflects shifting economic and social circumstances since the project first commenced in 2008,” Shenhua said in a statement.
“The state has agreed to pay Shenhua $100m for the cancellation of the exploration licence. We appreciate the NSW government’s willingness to work with Shenhua to reach an acceptable financial outcome. We would like to express our sincere gratitude to the local community for working closely with Shenhua during the project’s consultation process.”
The proposed 30-year mining project has faced firm community opposition for at least a decade. Shenhua pledged producing the vast coal deposits under the Liverpool Plains will leave no adverse environmental or social impacts.
But vocal anti-mining groups claimed the proposed large-scale extraction of coal will contaminate the area’s prime agricultural black soil and its underground aquifers, and squeeze the life out of tightly knit farming communities such as Gunnedah, 500km northwest of Sydney.
Future coal mining on the 6000 hectare site will be barred under the pact agreed by the NSW government.
“The cancellation of this project will mean that no open cut coal mining can occur in the area. Coal will of course continue to be an important part of our economy and is essential to supporting jobs, and the NSW government continues to support coal exploration in areas where it makes sense,” NSW Treasurer Dominic Perrottet said.
The mine had originally been expected to produce up to 10 million tonnes of coal each year.
Former independent MP Tony Windsor hailed the decision.
“Water issues defeat China Shenhua mine proposal on Liverpool Plains. BHP suffered the same fate some years ago. Largest Groundwater resource in the Murray Darling Catchment wins again,” Mr Windsor tweeted.
The Nature Conservation Council of NSW said the move was a win for the community.
“The end of the Shenhua coal mine proposal demonstrates that a determined community can protect land and water against one of the biggest corporations on the planet. Congratulations to the multitude of people involved in this long, long campaign.”