Property

Shenhua to exit northern NSW after mining venture fails

Linda Rowley, July 13, 2021

Shenhua is offering three properties to the market through an EOI campaign. Photo: CBRE

LOCAL farmers, institutional investors and corporate farming organisations are expected to vie for 16,570ha of prime land in New South Wales’ sought-after Liverpool Plains region.

The Gunnedah landholdings, in the state’s northwest, will be offered for sale by China’s Shenhua Watermark Coal.

In October 2008, the state-owned Chinese mining company was awarded the controversial coal exploration licence by the NSW Government in exchange for $300 million.

The proposed open-cut mine, located 3km west of Breeza and 25km south east of Gunnedah, was estimated to have a production life of 30 years generating an estimated 290 million tonnes of coal.

However, the project faced intense opposition from locals fearing it would adversely impact the fertile Liverpool Plains, threatening water resources and the koala population.

In April this year, the NSW Government agreed to pay Shenhua $100m to surrender its exploration licence and mining lease.

Deputy Premier John Barilaro said the decision would deliver certainty to farmers and the Liverpool Plains community, while guaranteeing protection to parcels of land with high value biodiversity.

The agreement includes:

  • The prohibition of future coal mining projects on the site;
  • the acquisition of more than 6000ha of high biodiversity land to be managed by Local Land Services, including the protection of habitat for koalas and other endangered species;
  • protecting significant Indigenous cultural sites and artefacts;
  • ensuring water that would have been taken by the mine can continue to be used for agriculture and other productive uses.

Barraba block included

The Shenhua landholdings consist of three aggregations, Breeza, Tambar Springs and Barraba.

They are currently used for dryland cropping (cereals, legumes and cotton) and beef cattle grazing, with the opportunity to irrigate benefited by access to water access entitlements.

  • At 14,246ha, Breeza is the largest parcel comprising 14 properties acquired between 2009 and 2010, in addition to three dwellings and an office located in Gunnedah. The aggregation includes a 608ML bore-water allocation, and 1215ML of stream water from the Lake Goran system.
  • The 1208ha Tambar Springs is made up of two non-contiguous holdings 2km apart. They are currently used for mixed dryland cropping and beef cattle production.
  • The 1114ha Barraba comprises two non-contiguous, nearby landholdings principally used for beef cattle production. Around 583ha is considered grazing land, with the balance comprising remnant vegetation.

The three holdings are currently leased to seven tenants, who occupy and manage various titles under independent lease agreements.

Shenhua representative Chris Walker said the company looked forward to handing over the properties to the farming community and returning the land to agricultural pursuits.

“We have owned the majority of these assets for more than 10 years and have formed good relationships with the farmers who have continued to work the land during this time,” he said.

CBRE Agribusiness managing director David Goodfellow said the sales process would provide local farmers with equal opportunities to compete against larger corporate agribusiness investors.

“A landholding of this size and its annual productivity is suitable for a combination of local farming businesses to acquire individual sites to add onto their existing operations.”

Mr Goodfellow said the landholdings will also be appealing to the corporate agribusiness sector.

“There are huge economic benefits of properties boasting scale and location. In addition, the site offers potential benefits from the creation of carbon credits, which adds to the overall financial returns.”

He said ballpark figures for the holdings were $115 million for Breeza, $5M for Tambar Springs and $3M for Barraba.

Some of the country is suited to native forest regeneration for the production of carbon credits, which are quickly becoming very valuable given the current corporate demand to achieve zero net emissions targets.

CBRE Agribusiness manager James Auty said the Gunnedah region was well-known for its highly productive soils, its wide range of well-proven agricultural systems and its typically even distribution of rainfall throughout the year.

“The region can grow pastures for breeding and fattening livestock throughout the year, as well as growing both summer crops and winter crops for grain and/or fodder – lending these landholdings to an incredibly wide range of purposes.”

CBRE will stage a pre-campaign launch event in Gunnedah ahead of the formal expressions of interest campaign which will close on August 26.

 

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