Chinese mine pits black soil against black gold

THE buzz along Gunnedah's Conadilly Street tells the story of a thriving Australian country town.

Shenhua Mining

THE buzz along Gunnedah's Conadilly Street tells the story of a thriving Australian country town.

The shops and restaurants are full. There's not a single vacant retail space available for lease. Residents and tourists alike are spending up.

Business is booming in this town 450km northwest of Sydney, and it's the direct consequence of the region's twin cash cows: the prime agricultural land of the Liverpool Plains, and the growing presence of mining interests lured by the area's vast coal deposits.

Recent grain harvests have been "phenomenal", according to one farmer, while the several coalmines on the outskirts of Gunnedah are also going gangbusters.

However, while the farming and mining industries have co-existed in the area for well over a century, the recent mass purchase of 43 local farms by Chinese-controlled mining giant Shenhua Watermark Coal has caused deep division not only between the two sectors but among Gunnedah's broader population as well.

Should the proposed 30-year Shenhua mining project -- which is unprecedented in the area in terms of scale -- be rubber-stamped by the NSW government, there is little doubt that significant economic benefits will flow on to the Gunnedah township. Not only is the area's 10,000-strong population tipped to swell by up to 6 per cent, but many young residents would not feel the need to leave Gunnedah in search of work.

"If the Shenhua mob get their project up and running, then the young people can get well-paying jobs in Gunnedah and won't drift away to the big cities," said Bob Hogbin, a former meat worker and builder who has lived in Gunnedah for all of his 73 years.

"I know there's concern that the mining might damage the black soil, but overall I think mining is a good thing for the town."

Mr Hogbin, who said he had seen the town's fortunes "ebb and flow" over the course of his life, said it was also "critical" that the area's famous black soil -- which makes the area some of the most valuable agricultural land in Australia -- was not destroyed.

On the flip side, though, is the soaring cost of housing in Gunnedah, which could force locals out of town. In some cases, rents have doubled in the past year.

Colleen Fuller, the Deputy Mayor of Gunnedah Shire Council, says she is "sitting right in the middle" of the dispute between the farming groups lobbying against the development of the Shenhua project, and those in favour.

"Where there's a will there's a way. I believe we can find a resolution that will be satisfactory to all parties," Ms Fuller said.

"Of course, when we do mining expansions for the community we have to take into consideration things like the cost and availability of housing. Where a mining family can afford to pay the extra, the everyday wage-earner cannot."

Ms Fuller said she was not aware of any families who had left Gunnedah because of skyrocketing rents, but added that the council was discussing ways to support low-income families who would be "struggling to find that extra $300 rent every week".

The president of the Gunnedah chamber of commerce, Derek Lodge, also warned of the dangers of the town's two-speed economy.

"We already have skills shortages, so one concern is that local workers will be lured away from their jobs as farmhands, retail workers, builders, electricians and so on, to go and work for the Shenhua mine," Mr Lodge said.

Local butcher Brett Streater, 23, acknowledges the skills shortage problem in Gunnedah. "It's hard enough to get an apprentice here," he said.

Mr Streater said most of his mates already worked for the mines on the fringe of town.

"All the electricians don't do any work in town, they are all subcontracted out to the mines."