Negotiations to buy back part of Shenhua coal mine

However local farmers say reducing the size of the mine is only a half measure, that doesn’t address the threat it poses to the water table.

The government paid BHP $220m to give up its proposed mine – more than double the $100m it paid for the exploration licence in 2006.

Experts say the BHP deal sets a precedent for Shenhua to follow, who paid $300m.

Deputy Premier Troy Grant said the government was in talks to buy back a portion of Shenhua’s licence, reducing the size of the mine’s footprint.

“We are looking at every opportunity to remove any risk associated with that project posed to the black soil [of the Liverpool Plains],” Mr Grant said.

Mr Grant if the Shenhua project “doesn’t stake up, it doesn’t stake up”.

“But if it does, we have to do everything we can to mitigate any concerns or angst about any project,” Mr Grant said.

“I’m not sure I know another project that’s had so many water studies done and peer reviewed.

“[The BHP mine] was going to impact the black soil on top and underneath it. The subsidence risk here was significant. Those sort of factors aren’t relevant to the Shenhua mine in total.”

Tamworth MP Kevin Anderson said the two mines were different projects, which couldn’t be compared.

“[Shenhua coal mine] has been peer reviewed to the enth degree,” Mr Anderson said.

Caroona farmer Kirrily Blomfield said the community had little faith the water studies were independent or accurate.

Ms Blomfield’s husband, Derek, said if the Shenhua mine went ahead, even with a reduced footprint, there would be “massive upheaval”.

“Shrinking the size of the mine won’t satisfy a massive group of people – it’s not only about us in the immediate zone, there are broader implications,” he said.