IT was the $262 million deal to secure the future of agriculture on the Liverpool Plains, says Premier Gladys Berejiklian.
But according to Shenhua, proponent of the controversial coal project at Watermark on the Liverpool Plains, it did much more than that.
Nearly a full year after former NSW’s Premier Mike Baird’s unprecedented $220 million buyout of Watermark’s neighboring coal proposal, BHP’s Caroona project, Ms Berejiklian announced on June 29 that a deal was struck to buy the 51 per cent of Shenhua’s exploration tenement which it did not intend to mine.
The deal secured the future of agriculture, Ms Berejikian said. The prized black soil of the fertile plains was protected in perpetuity, the mine plans were still subject to approval process.
The federal government’s Independent Expert Scientific Committee is owed a set of comprehensive water management plans and NSW is yet to issue a mining licence, which could theoretically be withheld, and the Department of Planning is still considering Shenhua’s application to renew its exploration licence, which expired on February 22.
But on July 12, following the buyback deal, Shenhua’s parent company advised the Stock Exchange of Hong Kong its Australian branch, Watermark, had secured an exploration extension over the remaining tenement.
“Watermark Pty reached an agreement with the NSW government in relation to partial extension of the exploration license,” Shenhua’s statement said.
A spokesman for NSW Resources Minister Don Harwin said the minister had never “discussed with or indicated” to Shenhua that the application would be successful.
The Planning Department said it “made no assurances to Shenhua” of an exploration extension following the buyback.
Labor resources spokesman Adam Searle said government should reconsider Shenhua’s tenement rights in light of its advice to the market.
Section 380A of NSW’s Mining Act contains a long list of conditions which can disqualify a company if the body corporate or director do not meet the fit and proper test, such as compliance issues, insolvency and criminal conduct.
“If a company isn’t playing straight with the stock market or the wider public that raises in my mind a very real question if they are fit and proper to have access to our precocious natural resources,” Mr Searle said.
Mr Harwin’s spokesman said the resources regulator was “not conducting any fit and proper inquiries into Shenhua”.
Last week on Macquarie Street during a Budget Estimates hearing, Mr Harwin refused a request from Labor Resources spokesman Adam Searle to make public the legal advice government cited to justify its buyback.
Greens mining spokesman Jeremy Buckingham and Mr Searle, who has accused the government of providing Shenhua with corporate welfare, asked why the government did not exercise its powers to reclaim half Shenhua’s licence for free.
Typically, only 50pc of an exploration licence is renewed, under a provision in the Mining Act.
“A minister is not bound to renew the area nominated by applicant. They can renew a smaller area than original licence area. And there’s nothing in the Mining Act saying government is bound to make any compensation,” Mr Searle said.
Mr Harwin agreed that parts of exploration licences could be reclaimed, but said there were not grounds to do so for Watermark.
The Act stipulates to be eligible for a renewal of more than 50pc of its licence a company must have complied with regulations and particular weight is given to special circumstances such as significant project investment.
Had Mr Harwin or Ms Berejiklian visited Watermark?, Mr Buckingham asked. No, but Mr Harwin would “make his best endeavours” to do so.
Mr Harwin said the $262m buyback comprised a refund of about half Shenhua’s $300m exploration fee from 2008 and recompense for the cost of government holding that money for 9 years.
Shenhua was contacted for comment.