Watermark moment as Chinese miner tipped to quit big coal project near Gunnedah

Lock the Gate Alliance today urged the NSW Government to clarify if a deal had been struck to buy out Shenhua's coal project on the Breeza Plains near Gunnedah.

Nine reported the deal had been done and was due for announcement soon. The deal would see the government pay up to $200 million in compensation to buy back the exploration and mining licence of Shenhua over the Watermark project area.

The company had only started exploration drilling in January last year after holding the exploration licence since 2018, with that due to expire in October this year. The project has been on the table for 15 years.

If the buyout is confirmed it will mean a large area of farmland bought up by Shenhua will have to go back on the market. The company bought 32 farms to start the mine project.

Shenhua had been planning to develop the proposed open-cut mine and extract 10 million tonnes of coal a year over 30 years.

Lock the Gate Alliance NSW spokesperson Georgina Woods said "any action by the Berejiklian Government that will end the shadow of this coal mine hanging over our national food bowl on the Liverpool Plains would be very welcome."

"Farmers and traditional owners have lived with the threat of this mine for more than a decade and we really hope the NSW Berejiklian Government will now let them know whether the nightmare is finally going to end.

"It was a costly mistake to approve this mine in the first place and we hope that we will now see decisive action by the Berejiklian Government to ensure it never proceeds and that precious groundwater, koala habitat, and prime farmland are safeguarded for the long-term.

"This plan to open up a whole new farming area to coal mining was always a crazy idea and it's essential that Liverpool Plains farmers can now focus on doing what they do best - growing food and fibre for Australia.

Farmers on the black soil rich Breeza Plains have been concerned the new mine would cut their groundwater supplies including John Hamparsum, of Drayton.

"We have been very concerned at what effect the mine would have on our groundwater supply as we depend on that for our crops." Mr Hamparsum said.

"This will be a big relief if the buyout is confirmed. As far as I see it it will be a win-win for the government so that a new coal mine here would not flood the coal market and preserve those jobs in the Upper Hunter."

He said he hoped things would return to where they should have been in the early 2000s when there was a massive reallocation of groundwater entitlements.

If there was a land sale he hoped the farmland would be put back on the market, that sacred sites for the local aborigines would be protected or handed back, and some area could be used for renewable energy projects.

Some of the farmers who had sold their farms to Shenhua, had leased their country back. Shenhua had paid top market value for the land.

The Government had already agreed in 2017 to pay Shenhua $262 million to hand back 51 per cent of the exploration licence. The large Chinese mining company had paid $300 million for the exploration licence in 2008.

A report released in May last year found NSW and Queensland coal mines are using about 383 billion litres of water a year. Mr Hamparsum said he was concerned at the wastage of water on coal mines and the possible loss of underground water.

"The concern for us in agriculture is that burning coal is adding to climate change," he explained.

"Its a double whammy for us. We are seeing this wastage of water, and to then be wasting it on something that is making our climate worse."

National Farmers Federation president Fiona Simson who has a property nearby has been a vocal critic of the Shenhua project, urging government to protect prime farming country.

In 2019 she hit out at the NSW Government changing the planning process, which she said lacked transparency, and was "another example of the government moving the goal post to suit the mining company that had failed to meet numerous deadlines".

Jamieson Murphy reported in 2019 for The Land that the changes allowed Shenhua to commence pre-construction works before it has submitted studies on the mine's impacts to vegetation and groundwater.

"The feeling on the ground at the moment is absolute frustration and disappointment," Mrs Simson said.

"This has further eroded our confidence, and the transparency, of the planning and assessment process."

At Drayton, the Hamparsums grow everything from canola, cotton, sorghum to radish.

Shenhua told The Land newspaper it was inappropriate for it to comment at the moment as the mining lease application was still going through government. A comment was being sought from Deputy Premier John Barilaro's office.