Shenhua Watermark mine: Liverpool Plains coal mine cancellation comes without warning for councils, business

That's the view of local mayor Doug Hawkins, who said the news that the government has been negotiating for months to buy back the mine's lease came as a surprise to the Liverpool Plains Shire Council.

"We've got to go with the umpire's decision. I think in one way we're going to lose out, we'll lose out on jobs," he said.

"But again, that's something they had to negotiate. I guess that they've decided that that's the end of the line."

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The Sydney Morning Herald reported on Tuesday that the state government has been negotiating for months with the Chinese-owned coal mining company, to buy back its entire exploration lease for the multi-billion dollar mine.

Cr Hawkins was not consulted about the plan and didn't know about it until contacted by the Leader on Tuesday.

"There's been no discussions with me as the mayor of the Liverpool Plains," he said.

"I was under the impression that everything was moving on solidly. I'd not been given a decision one way or the other. I just assumed that everything was going along as expected.

"It's not the end of the world for me, although I think we will lose out on investment, we will lose out on more people coming to the area. And more importantly our own people that are here already being able to source good-paying jobs."

He said the buyback plan had never been brought to the joint organisation of local councils, Namoi Unlimited.

Local business is equally divided over the news.

President of the Gunnedah and District Chamber of Commerce and Industry, Juliana McArthur, said local businesses were not overly surprised by the reported failure of the mining project.

"We live in interesting days," she said.

"The Shenhua mine has been a bit of an unknown for some time. The Gunnedah local economy has steamed ahead off the back of the other mines around Vickery and Boggabri, Maules Creek."

In terms of economic benefit the local business community was divided as to whether the scheme would be a net positive for the community, she said.

She said it was vitally important that the region not depend on a single industry like agriculture.

But on the other hand, the project would have exacerbated a housing and skills shortage in the rapidly-growing community, she said.

"I think there'll be people on both sides. I think that the government needs to provide us with a comprehensive response as to what's going to happen to effectively our investment in buying back the licences - what happens next," she said.

Even without the project, the economy will be fine, she said.

Farmer and near neighbour, John Hamparsum, has been fighting the proposal for 13 years. He's still not convinced the fight is over, and won't be until government signs on the dotted line.

But if the project is dead "we will be absolutely over the moon", he said.

"Basically, it's a win-win for everybody.

"It's a win for coal miners in the Hunter Valley. It means that their jobs will be secure for longer, because there'll be less cheap coal being flooded onto the market.

"It's a win for the koalas, because that area has quite a substantial koala population.

"It's a win for the Liverpool Plains farms and the local towns that rely on the groundwater system. It's a win for the local indigenous people, their sacred sites are going to be protected. And it's a win for Shenhua, because they get to walk away with dignity. It really is a win-win for basically everybody, including the government.

"It's not an intelligent thing to do, to put a toilet bowl smack in the middle of your dining table."

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If the mine is cancelled, he wants the mining exploration licence quashed, all arable land used for agriculture and koala habitat preserved, and sacred sites given back to the local Indigenous community.

"And whatever's left over hopefully there'll be some renewable energy there as a monument to the mistakes of the past and hope for future generations," he said.

Liverpool Plains farmer Andrew Pursehouse said if the project is cancelled "it'll be the biggest party the Liverpool Plains has ever seen".

Local federal MP Mark Coulton said it was "disappointing news for the community of Gunnedah, which was looking forward to the local jobs the project would have provided".

"I understand some will welcome the announcement," he said.

"This has been a long-standing issue, and local residents now have certainty, and can move on with their lives."

State MP Kevin Anderson declined to comment on the story. Gunnedah Mayor Jamie Chaffey told the Leader he would reserve his response until later this week.

Deputy Premier John Barilaro, who is the minister responsible for the state's resources industry, was contacted for comment on this story, but did not respond.

A spokesperson for Shenhua Watermark Coal said "as the mining lease is still being assessed, it would be inappropriate to make any comment at this time".

Lock the Gate Alliance NSW spokesperson Georgina Woods said any state government action to "end the shadow of this coal mine hanging over our national foodbowl on the Liverpool Plains would be very welcome".

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She said it was a "costly mistake" for the state government to approve the mine in the first place, back in 2015.

"Farmers and traditional owners have lived with the threat of this mine for more than a decade and we really hope the NSW Berejiklian Government will now let them know whether the nightmare is finally going to end," she said.

Government refunded $262 million to Shenhua to buy back 51 per cent of the mine in 2017.

The Sydney Morning Herald reported the buy-back of the remaining land would cost the state less than $200 million.

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The state-owned Chinese mega-corporation purchased an exploration licence for the project for $300 million in 2008. The project was granted an exploration licence by a Labor government, and granted federal environmental approval in 2015. It applied for a mining licence in 2020.

In a parliamentary estimates hearing in February, Secretary of Department of Regional NSW Gary Barnes said it could take the government an entire year to process the application.

The "ball is now in our court. It's us that are taking our time," he said.

The project's water, environmental and rehabilitation plans are yet to be signed off by the federal government.

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