Shenhua's $200m race against termination

Shenhua's $200m race against termination

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DEADLINE: If Shenhua fails to meet the deadline, the NSW government can terminate the project - however there is no guarantee it will do so.

DEADLINE: If Shenhua fails to meet the deadline, the NSW government can terminate the project - however there is no guarantee it will do so.

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Shenhua has just over a month to apply for a mining licence for its Watermark coal project near Breeza.

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THE Chinese state-owned Shenhua Watermark Coal Pty Limited has just over a month to apply for a mining licence for its Watermark coal project near Breeza.

The mining licence (or mining production lease) application comes at a cost of $200 million and is necessary if the company is to avoid triggering a clause that will allow the state to terminate the proposal.

When the NSW government renewed Shenhua's exploration licence on July 19, 2018, it included a cancellation clause which allows government to effectively terminate the project on June 30, 2020, if the company fails to bring the project to production stage which it does by applying for a mining licence.

The clause also includes a 15 per cent per year increase in the mining licence fee.

Should Shenhua successfully apply, construction on the mine cannot begin until all its environmental management plans (EMPs) are ticked off.

Shenhua is yet to submit its water, biodiversity, rehabilitation and koala EMPs to the NSW government. Some of the EMPs have been revised as many as five times.

"All the plans are at varying stages of consultation, draft versions of these documents have been reviewed by the department," said NSW Planning Department spokesperson.

"There are no statutory time frames in place."

The company's koala EMP has come under particular scrutiny. A recent survey found the koala population on the mine's site has dropped 87pc since 2012-13.

The report, conducted by Shenhua's environmental consultant Dr Steve Phillips, suggests the species may be locally extinct "even before the mine commences".

According to the report, which was discussed by the mine's technical working group at a meeting in March, a survey conducted in 2012-13 noted a koala density of 0.3 koalas per hectare.

"What that represents is a population decline of 87pc," the report stated.

"On that trajectory and worst-case scenario, it indicates the koala is heading to localised extinction even before the mine commences."

Shenhua also needs the federal government to sign off its water and biodiversity plans before it can be approved for a mining licence.

The federal Department of Agriculture, Water and the Environment (DAWE) said it provided feedback on Shenhua's water, biodiversity and rehabilitation EMPs last year, however, none have been approved.

"The department has been working with Shenhua and with the NSW Department of Planning, Industry and Environment, to ensure the plan contains sufficient information to satisfy the conditions of each jurisdiction's environmental approvals," a DAWE spokesperson said.

Documents from the Shenhua Community Consultative Committee meeting in December revealed the company was confident of hitting the "target date for approvals of all the EMPs (of) June 30, 2020", with construction expected to start in "early 2021".

Shenhua was contacted, but declined to comment.

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