The New South Wales government has bought back BHP’s licence to mine for coal in the fertile farming regions of the Liverpool plains for $220m, and says it is in negotiations with the nearby Shenhua coalmine, which has sparked strong opposition from farmers and environmentalists.

BHP had planned to develop a huge underground coalmine at Caroona, which would produce 260m tonnes of coal over its 30-year lifetime. The mine was located beside the controversial Shenhua Watermark open cut coalmine, and was expected to share some infrastructure with it.

“After careful consideration, the NSW government has determined that coalmining under these highly fertile black soil plains, as proposed by Labor, poses too great a risk for the future of this food bowl and the underground water sources that support it,” the NSW premier, Mike Baird, said in a statement on Thursday night.

“This decision guarantees the future of the state’s most productive and fertile farming land, providing confidence for local farmers to invest in an industry that has the potential to be one of the food bowls of the world.”

The deputy premier, Troy Grant, said: “The Liverpool plains black soil is one of our most precious resources and today we have taken this major step to secure its long-term future.”

The statement also said Baird was in negotiations with Shenhua to secure a buy-back for parts of its mine that encroached into the “strategic” agricultural lands of the Liverpool plains.

Questions have been raised over the viability of the Shenhua mine, since it was planned to produce coal for export to China, but China has been steadily moving away from imported coal.

Speculation that the mine wouldn’t go ahead was raised in February when the company didn’t apply for a mining licence, and instead applied for an extension to its exploration license, which cost less money.

The NSW Greens resources and energy spokesman, Jeremy Buckingham, said the decision represented a “historic victory for farmers, Greens and the community who have fought a decade-long campaign to save the Liverpool plains from coalmining.”

“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,” Buckingham said.

The Guardian

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