Shenhua buy-out a victory for farmers and Traditional Owners

April 28, 2021
Photo: Save Liverpool Plains/Facebook

After more than a decade of campaigns, Gomeroi Traditional Custodians, Liverpool Plains farmers and environment groups are celebrating the preservation of rich farming plains from a coal corporation.

The New South Wales government announced on April 21 that it will pay Chinese mining company Shenhua $100 million to walk away from the Watermark Coal Project.

Deputy Premier and resources minister John Barilaro said Shenhua will withdraw its mining lease application and surrender its development consent. The government will cancel the exploration licence and acquire 6000 hectares of high conservation land, to be managed by the state’s local land services.

The Environmental Defenders Office (EDO) described the buy-back as a “massive win” for its clients including First Nation’s leader Veronica “Dolly” Talbott, Lock the Gate Alliance and Upper Mooki Landcare.

The licence, given in 2008, created a groundswell of opposition from the Gomeroi Traditional Custodians, who wanted to protect the area’s cultural sites and landholders who feared the mine’s impact on an area renowned for its fertile soil.

EDO spokesperson Rana Koroglu said the mine “should never have made it past the first hurdle”. She said this means that state and federal laws needed to be strengthened “so that the voices of the community and First Nations peoples, in particular, are heard loud and clear up front before destructive proposals like this are even allowed to proceed to the assessment stage”.

The buyout, while welcome, contained an odour of opportunism. Even Shenhua said “the decision reflected shifting economic and social circumstances since the project began in 2008”.

The Watermark project had been on shaky ground for some time. Shenhua’s March 2016 Annual Report had forecast a drop in demand for coal and capital expenditure on new mines was slashed. It was around this time that the NSW government negotiated a $220 million buy back of BHP Billiton’s Carooma licence, after an 8-year community opposition campaign.

There secret negotiations between the NSW government, backed by its federal counterparts, and Shenhua for reimbursement of the $300 million licence fee. 

In July 2017, the NSW government secured a deal to buy back 51% of the mining licence for $262 million. In August 2019, after a 2-year battle and using Freedom of Information laws, Lock the Gate Alliance finally secured documents that showed Shenhua had revised its coal exploration application down to 50% or less of its licence area on the Liverpool Plains.

The revised application was lodged on June 29, 2017, two days after then Energy and Utilities Minister Don Harwin was sent two deeds of agreement, the contents of which have never been made public. But he announced two weeks later that he had “reached an agreement to protect the farming future of the Liverpool Plains” by scaling back Shenhua’s Watermark Coal exploration licence.

Then, Lock the Gate spokesperson Georgina Woods questioned why, if the government knew Shenhua only wanted half of its exploration licence area to proceed, it paid Shenhua more than a quarter of a billion “for a licence renewal over land it apparently didn’t want anyway”.

Given the Australia-China trade wars, the Upper Hunter by-election on May 22 and increasing public concern about Australia’s inertia on climate change, the Watermark buy-back part 2, which brings the total cost to $362 million, may seem a good investment.

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