China Shenhua has been trying to develop the A$1 billion Watermark power and semi-soft coking coal mine in the Hunter Valley north of Sydney since 2008, but a moratorium on Chinese imports of Australian coal and a worsening price outlook have hit the mine’s economics. Australia’s New South Wales government will buy back China Shenhua’s mining license to develop a local coal mine, sources said.
Australia’s New South Wales government will buy back the mining license granted to China Shenhua Energy to develop a new mine, Reuters reported today, citing anonymous sources in the Sydney Morning Herald. China Shenhua has been trying to develop the A$1 billion Watermark Power in the Hunter Valley, north of Sydney, since 2008.
Farmers have opposed the mine, which is located on prime agricultural land that could affect the region’s water table, and local Aboriginal people have opposed the development because it would destroy important cultural sites.
We are not in a position to comment at this time as the mining lease application is still under review,” according to a Shenhua spokeswoman, who has said the company complies with all strict planning and environmental approval procedures set out by the state and Commonwealth.
The Sydney Morning Herald quoted a senior government official as saying the New South Wales government would buy back the permit from Shenhua Energy for no more than A$200 million ($156 million), the report said. The official declined to be named because the deal is not public.
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