Shenhua letter reveals details of secret deal between Chinese mining company and NSW government

The letter, sent from Shenhua to NSW Premier Gladys Berejiklian, refers to specific clauses in the controversial contract, the contents of which have been a closely kept secret.

Less than two weeks after the letter was sent on July 9, the government renewed Shenhua’s licence for five years.

On June 29, 2017, the government paid Shenhua $262 million to buy back half the company’s exploration licence; however, the decision was questioned, as the licence could have been legally halved without any reimbursement.

“Agreement on this (exploration licence renewal) was reached on 29 June, 2017 and a Deed of Settlement was signed,” the letter stated.

“Shenhua requests that the NSW Government meets its legal obligations.”

See the full letter at the bottom of the story.

The letter referred to a clause in the agreement which states the NSW government will “as soon as reasonably practicable determine the Renewal Application”. There is no suggestion that the terms of the agreement state the NSW government must approve the application.

Questions about the secret deal were raised in July 2017, when Shenhua told the Hong Kong Stock Exchange it had reached an agreement to renew the licence – but both Resources Minister Don Harwin and the Department of Planning and Environment denied any such deal.

“The Department of Planning and Environment made no assurances to Shenhua that the Watermark exploration licence renewal would be approved following the buyback,” a Department spokesperson said at the time.

Community groups are calling on the government to release the details of the agreement – a request that has been denied despite multiple freedom of information requests, with the government citing Cabinet confidence and commercial confidence.

Caroona Coal Action Group chairwoman Susan Lyle said the whole situation “doesn’t pass the pub test”.

“The agreement should be a public document as far as I’m concerned,” Ms Lyle said.

“A company has been paid a quarter of a billion dollars of taxpayer money, and the public deserves to know why they were paid, which all comes back to the conditions of the agreement.”

Lock the Gate Alliance spokeswoman Georgina Woods said the whole situation was “shrouded in secrecy”.

“The public has a right to know about the NSW government’s secret deal to renew Shenhua’s coal exploration licence on the Liverpool Plains and hand the company more than a quarter of a billion dollars,” she said.

Lock the Gate is currently involved in a court case with the NSW government, in an attempt to force it to hand over the classified documents.

A spokesperson for Mr Harwin said an application to renew the exploration licence was received before the buyback

“The buy-back rendered that application null and void and so the company submitted a new renewal application post buy-back,” they said.

“This renewal application was approved in July 2018 following a rigorous assessment against the requirements in the Mining Act.

“The renewed exploration licence does not allow any mining to take place. No agreement has been made with the company to enable mining as part of the renewal decision.”