NSW coal mine

NSW Gov halts development of two coal projects, pays out $100M to Shenhua

The New South Wales state government has put an end to the development of two new coal projects, agreeing to pay Chinese company Shenhua $100 million to withdraw its mining lease application to build the Watermark Coal project in the Liverpool Plains, and rejecting an application by Australian Pacific Coal to turn its underground coal mine into an open cut mine.

Meanwhile, deputy premier John Barilaro talked about opening up a new area of land for coal exploration.

Buyback of Watermark Coal project

The NSW government rejected the mining lease application for China’s Shenhua Energy’s Watermark Coal project in the Hunter Vally, north of Sydney in north-eastern NSW. The state government said in a statement that it will pay A$100 million ($77.17 million) to Shenhua Energy for withdrawal of its mining lease application.

The settlement is the result of a 13-year battle with farmers and environmentalists over the project which they argued would damage prime agricultural land. The proposed mine was staunchly opposed by farmers and local Aboriginal people citing that the mine would damage the prime agricultural land and impact the region’s water table, and disturb important cultural sites.

China Watermark Coal had attempted to develop the A$1 billion thermal and semi-soft coking coal mine since 2008. However, China’s ban on Australian coal shipments and a deteriorating price outlook eroded the mine’s economics.

Deputy premier John Barilaro said: ”This decision will deliver certainty to farmers and the Liverpool Plains community, while guaranteeing protection to parcels of land with high value biodiversity.”

Shenhua Watermark said: “This decision reflects shifting economic and social circumstances since the project first commenced in 2008.”

Australian Pacific Coal’s application rejected

The New South Wales state government reported that it has rejected an application by Australian Pacific Coal (APC) to turn its underground coal mine in the NSW Hunter Valley into an open cut mine due to community opposition.

Dartbrook has been dormant since 2006 after several deaths, with ownership since passing from former billionaire Nathan Tinkler to APC who are reportedly in “dire financial straits”. APC had sought to extend the approval to mine at the Dartbrook underground to five years from the two years initially granted by the Independent Planning Commission.

The NSW government said they will not support the Dartbrook mine being an open cut project as they received opposition from the Hunter Thoroughbred Breeders Association.

New area for coal exploration

The NSW government opened up a new area for coal exploration and invited tenders. The government cited advantages like jobs and royalties as the reason for the move.

Barilaro said: “We want to make sure that coal mining can take place in areas where it makes sense. Coal mining generates jobs for communities and royalties that can be used for essential public services and infrastructure and regional economies will depend on coal mining as a key industry for decades to come.”

Written By Jonathan Norris
Jonathan is a founder of Mining.com.au and has been covering the resources industry since 2018. With over 17 years experience in print, broadcast and online media, Jonathan has seen first hand the transformative effect of online niche media.