NSW Government renegotiating $200 million success fee for Shenhua coal mine
MEDIA RELEASE – 29 September 2015
The Greens NSW mining spokesperson Jeremy Buckingham today called on the government to come clean about their negotiations with the Chinese government owned Shenhua coal mining company after answers to Budget Estimates questions on notice revealed that the $200 million success fee was being renegotiated.
The government answered (174):
“The Department has initiated commercial in confidence negotiations with Shenhua to finalise and discuss a number of outstanding issues associated with its development application. The timing of the payment of the State’s success fee, when the Division grants the mining licence, is part of those discussions.”
Infamous former mining minister Ian Macdonald, accepted a $300 million success payment to the government for the Shenhua Watermark exploration licence, to be followed by a $200 million success payment to the government on grant of the mining licence. It is this last payment that is currently being renegotiated.
“The Shenhua coal mine in the heart of the fertile Liverpool Plains is an issue of national significance. The NSW government should reveal exactly what they have promised Shenhua, and whether they are negotiating to facilitate the mine or to protect the Liverpool Plains,” said Greens MP Jeremy Buckingham.
“Most credible economists conclude that building the greenfield Shenhua Watermark coal mine does not make sense financially in the current global coal market and at current coal prices.
“It would be treacherous for the NSW government to now renegotiate the $200 million fee to help facilitate the construction of a mine that is already a dubious financial prospect. It would mean an exploration licence is not worth the paper it is written on if it can be changed at a whim to suit the mining company.
“The community has long been concerned that these very large payments to governments impact on the assessment process and create an inherent conflict of interest – and that’s putting it politely.
“Minister Roberts should make it clear to the public exactly what the NSW government is hoping to achieve in these negotiations,” Mr Buckingham said.