MAC: Mines and Communities

Australia: Victory for farmers as Caroona coal mine cancelled

Published by MAC on 2016-08-22
Source: Reuters, ABC, The Guardian, Green Left

What now for the Shenhua project?

"After careful consideration, the NSW Government has determined that coal mining under these highly fertile black soil plains... poses too great a risk for the future of this food-bowl and the underground water sources that support it," Premier Mike Baird said in a release.

See previous on MAC:

2010-03-18 Farmers claim win in BHP fight
2010-01-11 Court blow to farmers fighting coal exploration

Victory for farmers as Caroona coal mine cancelled

Pip Hinman

August 12, 2016

Liverpool Plains' farmers are celebrating the New South Wales state government's decision, on August 11, to buy back BHP Billiton's Caroona coalmine licence for $220 million.

This comes after a struggle that began in 2008, when farmer Tim Duddy and the local community began a blockade that put a spanner in BHP Billiton's efforts to start drilling operations on his family's Rossmar Park property.

At the time Duddy said he was concerned that BHP Billiton had not undertaken any community consultation nor done any preliminary water studies on the area's aquifers which water the region's high agricultural yields.

He was also incensed that BHP Billiton had just marched onto his property to start drilling, telling Green Left Weekly at the time it was impossible to imagine BHP Billiton would be allowed to do the same in any city-based enterprise without even giving 24 hours' notice.

The then Labor government issued the $100 million exploration licence to BHP Billiton in 2006, when coal and gas licences were being dished out like confetti.

BHP Billiton's plan was for an underground coalmine covering approximately 344 square kilometres. The decision was absurd, given that the soil of the Liverpool Plains is some of the most prized in the world and, according to The Land, “unrivalled in Australia for its drought resistant groundwater supplies and ability to reliably produce high-yielding summer and winter crops”.

The Caroona Coal Action Group (CCAG) campaigned hard against BHP Billiton's mine and demanded a full, independent, catchment-wide water study to be conducted ahead of any exploratory mining.

But the laws — then the Environmental Planning and Assessment Act (Part 3A) — routinely gave mining companies the green light without comprehensive studies.

CCAG said: “We cannot afford to have these water supplies damaged, cracked, polluted and drained away. The aquifers grow our food and provide water for people, animals and the environment.

“The miners do not understand this or they would not be mining here — there is no 'damage free', half-way house, as BHP Billiton's extensive environmental damage from long wall mining down south already shows.”

Even the state government's natural resources commissioner at the time, Dr John Williams, publicly urged more regional and planning studies to “make sure we know where the no-go areas for mining and where the go areas for mining with care are”.

Duddy told ABC on August 11 that the project should never have happened.

“The licences should never have been issued. It has been an absolute cancer that has eaten away at the agricultural investment in the district. The community now can get on with pursuing agriculture the way it needs to be pursued.”

Premier Mike Baird has also just announced the government had started negotiations with another mining giant, Shenhua, which wants a mega open-cut coalmine in the same area. The $1.2 billion 35 square kilometre Watermark coalmine is located on the ridges running down to the Liverpool Plains at Breeza, and carries the same, if not bigger, risks as the Caroona coalmine.

Shenhua, a Chinese-owned company, is also struggling, with a company report in March stating gloomily that there is no end in sight to the global economic downturn and coal glut.

Baird says he wants to excise parts of the Watermark mine's mining title that encroach onto strategic parts of the Liverpool Plains. But farmers and locals want the whole mine closed down.

The NSW Greens' energy spokesperson Jeremy Buckingham described the Caroona buy-back as a “historic victory” and said the state government must now commit to cancelling plans for the Watermark mine, KEPCO's Bylong project and Hume Coal's Berrima proposal.

Greens Senator Lee Rhiannon said the federal and state governments must now focus on creating sustainable jobs in renewable energy and clean manufacturing to ensure a viable future for regional NSW. “A planned transition away from coalmining and coal-fired power is the way to boost employment and the NSW government needs to plan now so communities are not left behind with few work prospects,” she said.

From the rich black soil of the Liverpool Plains springs hope for coalmine-free future

New South Wales government couches its words carefully, but community hopes the end of BHP mine also spells the end of the Shenhua Watermark mine.

Michael Slezak

12 August 2016

One of Australia’s biggest mining battles could be drawing to a close, with the enormous Shenhua Watermark coalmine looking set to be stopped by the state government after relentless community pressure.

In a major victory for the uneasy coalition of environmentalists, farmers and conservative politicians and commentators, the New South Wales government said it was moving to stop mining in the fertile farming soils of the Liverpool Plains.

The NSW premier, Mike Baird, said mining under the most fertile soils in the country “poses too great a risk for the future of this food bowl and the underground water sources that support it”.

It came with two announcements late on Thursday afternoon.

First, Baird announced the government was paying $200m to buy back BHP’s licence to build a huge underground coalmine at Caroona.

Second, the government also revealed it was negotiating with Shenhua to excise parts of its licence that encroached on the “strategic agricultural lands” of the Liverpool Plains.

The statements were grand, but also carefully hedged. The government avoided saying they were moving to end coalmining in the Liverpool Plains more generally. Rather, it was just the “fertile black soils” and the “strategic agricultural lands” that would not be mined.

But the distinction seemed like a strange one for the government to make.

These interventions were driven by a vigorous community campaign. And that campaign will not settle for Shenhua’s mine merely being shrunk to avoid falling on one type of soil rather than another.

“The only solution that the people will accept is that the Liverpool is preserved, like a national park for agriculture,” says Tim Duddy, a farmer from the region and head of the Caroona coal action group.

Jeremy Buckingham, the NSW Greens mining spokesman, said the distinction between the two soil types was meaningless.

“No one believes them for a minute that slightly reducing the footprint of the mine will in any way ameliorate the impact that a 20km long, 200m deep open-cut coalmine will have on an incredibly sensitive and interconnected water and agricultural system,” he said.

“The expectation in the community is that that mine will be bought out too.”

And it wasn’t just the locals and mining opponents who were not fully on board with Baird’s language. BHP denied that any of its mine was actually going to occur under the fertile black soils.

“We carried out extensive planning to ensure there would be no mining under the black soil plains, consistent with the conditions contained in our exploration licence,” BHP Australia’s president, Mike Henry, said. They “accept the government’s decision” but insist the the mine could have proceeded sustainably.

And for the Shenhua mine, despite categorical community opposition to mining anywhere on the Liverpool Plains, a spokesman for Baird told the Guardian the negotiations with Shenhua were focused only on excising those areas of the title that are on the strategic agricultural land.

Shenhua was not willing to comment. But commentators have speculated the mine could not go ahead without encroaching on the black soils of the region. And now with the Caroona mine gone, it will not be able to share any infrastructure, and all the community’s energy will be focused squarely on them.

The state government has been walking a thin line between supporting a declining coal industry and recognising the need for a transition. And the hedged language could be a way of managing that manoeuvre – moving to end coalmining in the Liverpool Plains while saying it is doing something slightly more limited.

Unusually, neither the Minerals Council of Australia nor the NSW Minerals Council were willing to comment. “It’s a matter between the government and a private company,” a spokesman for the NSW Minerals Council said.

A financial analyst, Tim Buckley, from the Institute for Energy Economics & Financial Analysis, said both projects are commercially unviable.

“To me they are clear stranded assets,” he said.

“I think BHP has taken the NSW government and taxpayers for a ride demanding $220m compensation.”

Buckley said it also meant the government had shown its hand to Shenhua, before it had a chance to close negotiations with it, having paid out 1.8 times what BHP paid for its licence. If it followed the same path with Shenhua, it would be up for more than half a billion dollars.

“Shenhua has spent the last 18 months closing coalmines in China to reduce Chinese oversupply,” Buckley said. “It’s highly unlikely Shenhua will turn around and invest over $1bn to build yet more greenfield capacity when they have excess coal coming out their ears and Chinese national coal demand is down over 5% this year after a 4% decline last year and a 3% decline the year before.

“China passed peak coal in 2013 and as the largest coalminer in China, Shenhua totally understands this.”

Buckingham said the government needed to confront the reality of a declining industry. “The NSW government have today woken up to the reality that new coalmines are unviable and the Greens are calling on Mike Baird to commit to a transition plan away from coal,” he says.

And while the Liverpool Plains might be the first place in NSW to see coalmining stopped, the Greens are pushing to see it spread around the state.

“The next step must be the cancellation of the neighbouring Shenhua Watermark mine which continues to threaten the Liverpool Plains, as well as KEPCO’s Bylong project and Hume Coal’s Berrima proposal.”

Duddy said the writing was on the wall for Shenhua, and that the focus on one type of soil could just be a way for the government to minimise the amount of money it will have to pay the company to pull out.

“It may come to a point where they’ll say ‘Well the mine is no longer viable’ and they can gracefully back out of it,” he said.

Caroona mine buyback does not mean Shenhua mine is cancelled, NSW Government says


11 Aug 2016

A decision to cancel the licence for the Caroona coal mine in the north-west of New South Wales is not a sign the nearby Shenhua mine will also be cancelled, the State Government says.

Farmers in the Gunnedah area, near Tamworth, have been celebrating the Government's decision to buy back the Caroona mine licence from BHP, but remain concerned about the nearby Shenhua Watermark open-cut coal mine.

Deputy Premier Troy Grant, who today visited the area and spoke to local farmers, sought to allay concerns when asked what the buy back of the licence for the Caroona Coal Project meant for the future of the 344-square-kilometre parcel of land.

"The licence is now in the possession of the NSW Government and will be cancelled," he said.

"We'll then put in place mechanisms to return it to either market or to landholders so we can get on with business so it can be used for what it should be used for, and that's agricultural production," Mr Grant said.

He has warned against comparing Caroona and Shenhua.

"The subsidence risk here was significant, those sorts of factors aren't relevant to the Shenhua mine in total, but negotiations will take the factors and circumstances of that mine site into consideration," he said.

Tamworth MP Kevin Anderson said the land on the two sites was of different types.

"Shenhua is in the ridge country, it's scrubby country that wouldn't feed a goat, it's been peer reviewed to the nth degree, and they are different projects, so you can't compare the two," he said.

The Caroona licence has been bought back at a cost of $220 million, more than 10 years after it was sold to BHP Billiton for $100 million, while Shenhua paid $300 million for its licence nearby.

NSW Premier Mike Baird has confirmed the Government has begun negotiations with Shenhua, to excise parts of the mining title that encroach onto strategic agricultural land.

'We've still got a big elephant in the room'

Andrew Pursehouse, who owns a farm in the area, said the region's farmers were relieved, but exhausted after fighting the proposal for a decade.

"We're only really a quarter of the way — we need to understand we've still got a big elephant in the room, in terms of Shenhua, and we also have whole areas covered under an exploration licence for coal seam gas.

"We don't want to have this fight in the future.

"We still have to ensure all of the Liverpool Plains is protected and safe for agriculture, and that no other generation goes through what we have over the last 10 years," secretary of the Caroona Coal Action Group, Prue Green, said.

Sandy Bloomfield, whose farm is across the road from land purchased by BHP, was one of the organisers of a blockade from 2008 to 2010, that blocked BHP's access to a Caroona property.

"It's been a learning curve, and I hope one that no-one else ever has to go through," he said.

"We've set a precedent — I'm damn sure that no government would now be game to go and casually issue another licence, they'll do the preliminary checking before they jump in."

The Gunnedah Chamber of Commerce has spoken out against the buyback, with president Jamie Chaffey raising concerns over the cost of the venture.

"I can't understand as ratepayers, how we can be expected to foot the bill for the buyback of this lease, which was purchased for much, much less than that ... I'm angry, that's irresponsible in my book," he said.

NSW Farmers board member Mitchell Clapham said he was pleased to see the Government recognising the importance of agricultural land.

"Agriculture is a $12 billion industry and especially in the iconic area of the Liverpool Plains, which is some of our state's best food-producing country," he said.

"We think it's a really positive decision."

Australia to pay BHP $170 million to repurchase coal exploration permit

Reuters -

Aug 11, 2016

New South Wales agreed to pay BHP Billiton A$220 million(131.23 million pounds)to buy back a coal exploration licence that extends under prime farmland in the state's eastern Liverpool Plains, the government said on Thursday.

"After careful consideration, the NSW Government has determined that coal mining under these highly fertile black soil plains... poses too great a risk for the future of this food-bowl and the underground water sources that support it," Premier Mike Baird said in a release.

The agreement relates to a commercial exploration licence in the state's northeast, at Caroona, for underground coal mining covering approximately 344 square kilometres. BHP bought the licence for A$100 million in 2006.

"While we believe that Caroona would have been developed responsibly, we accept the Government's decision and appreciate its willingness to work with us to agree an acceptable financial outcome for the cancellation of our exploration licence," BHP Billiton Minerals Australia President Mike Henry said in a statement.

Baird also indicated that negotiations with China Shenhua Energy Co Ltd (601088.SS), whose Watermark coal mining title extends into the area, had also begun.

China Shenhua did not immediately respond to an emailed request for comment.

Shenhua bought a licence to develop the A$1 billion Watermark thermal and semi-soft coking coal project seven years ago, but development was delayed following lengthy assessments and modifications to plans in response to concerns raised by farmers. ($1 = 1.2963 Australian dollars)

(Reporting by Melanie Burton; Editing by Christian Schmollinger/Keith Weir)

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