Half baked: Shenhua advances Watermark mine

Government pays $262 million to buy half Watermark exploration licence as coal plans firm


Government pays $262 million to buy half Watermark exploration licence as coal plans firm


SHENHUA has taken a massive step forward in its plans for the Watermark coal project at Breeza, on the Liverpool Plains.

NSW Government announced this morning it had reached a deal with the Chinese miner to excise half of the area covered by Shenhua’s exploration licence, reclaiming high value cropping country, including black soil floodplains.

Despite the move to protect farmland, it will stir fears the remaining tenement will be extended into an underground mine.

In return Shenhua gets a $262 million refund from the original $300m exploration fee paid to government by the company in 2008.

Map shows Shenhua's reduced exploration area.

Map shows Shenhua's reduced exploration area.

Shenhua has previously received development approval for the Watermark mine, but the project has languished for years 

Shenhua still requires Commonwealth approval of management plans for water, biodiversity and environment.

NSW must also issue a mining licence, which is largely a legal formality now development consent has been granted.

Excising the strategic agricultural leaves in play the area planned for Watermark’s three open-cut coal pits, which have been approved under the planning process to remain an open void when mining stops.

Shenhua may be able to tap about one third of the total coal resource available under the initial exploration area. A large amount of coal left in the project boundary is too deep for open cut mining.

Earlier this year, speculating on a potential licence excise, local farmer Andrew Pursehouse said Shenhua would have a “backdoor” to pursue an underground mine.

“Reducing Shenhua’s footprint leaves potential for an extension into an underground longwall mine,” Mr Pursehouse said at the time.

Last year, NSW bought back BHP’s exploration licence for the Caroona coal mine for $220m. 

Caroona was planned as an underground operation underneath black soil plains, and then premier Mike Baird said potential damage to valuable farmland justified the buyback.

Said the exploration licence buyback will not protect the unique water resource that makes the region unique among farmland, and able to produce two crops a year.

Chairwoman of the Caroona Coal Action Group Susan Lyle said the exploration area buyback does not remove the risks that the mine poses to farmland and the underlying water table.

“It makes no difference to the effect the mine will have on the surrounding agricultural area. There will still be a mine in the middle of the Liverpool Plains. This hasn’t protected the water,” she said.

“The mine, even in the remaining area, will dig below the aquifer, it could even puncture the aquifer.

NSW Resources Minister Don Harwin said mining would now be restricted to ridge lands.

Minister for Primary Industries and Regional Water, Niall Blair, said future mining operations must abide by strict water management conditions Shenhua’s plans have been “exhaustively assessed” by the NSW Aquifer Interference Policy, and will be subject to continual monitoring.

“Today’s agreement unlocks prime agricultural land for farming, helping to maintain the region’s reputation as one of the great food bowls of Australia.”

Tamworth MP Kevin Anderson said the agreement strikes “the right balance” between farming and creating up to 600 new jobs and investment in the region.

Mrs Lyle said government consultation had fallen short.

“We’ve been kept out of the loop almost forever,” she said.

“We have written to the Premier and minister, but we’ve only heard that government is negotiating to excise land. We have not seen a minister or departmental person here.

“To throw it back at us like, here’s the decision and here’s a map, if nothing more it's bad manners.

“Seeing we’re the ones who will be affected it would’ve been good if government had at least told us ‘this is what we’re considering’”.

Shenhua major approval document, the Environmental Impact Statement has been approved by government. It says the mine will no damage farmland. 

Shenhua has missed several key deadline on its development approval process, which has been held up by state and federal assessments and community opposition.

Shenhua’s exploration licence, set by the NSW Labor Mining Minister Ian Macdonald, expired in March this year. The eight year deadline to start development has also long expired

Shenhua is eight months overdue with water and biodiversity management plans that are required by federal government for assessment by its independent expert science panel.

Chairman of Shenhua Australia Liu Xiang, said the company will continue to progress its Watermark mine on the remainder of exploration licence.

“(Watermark) has been subject to unprecedented scrutiny which has demonstrated the project can be developed in an environmentally sustainable manner,” Mr Xiang said.


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