Friday, August 15, 2008

China wins NSW coal rights amid water, farming fears

Posted Fri Aug 15, 2008 2:00pm AEST 

Updated Fri Aug 15, 2008 2:32pm AEST

The giant state-owned China Shenhua Energy group has won the right to explore for coal in a northern New South Wales section of the Murray-Darling river system.

The $600 million tender, which will cover 190 square kilometres of the Gunnedah Basin, has fuelled concerns about the effects of mining on rich farmland and groundwater reserves.

The area, south-east of Gunnedah, is next to BHP Billiton's Caroona coal exploration site - the focus of a battle with farmers over the effects of a potential mine.

NSW Primary Industries Minister Ian Macdonald says he is not concerned that the company is owned by the Chinese Government.

"I'm not worried about state-owned companies like some people are," he said.

"Many of the major corporations in South Korea that already have investments in Australia are state-owned.

"Over many years, we've had many countries invest in Australia that are essentially state-owned."

Mr Macdonald says money was a key factor in the Government's decision.

"But also, there's a number of other factors relating to the mining - the strength of the company, which is the world's largest and clearly, a very solid foundation."

Both the state and federal governments have rejected a call from local communities for an independent study on the effects of mining on groundwater reserves.

The federal MP for New England, independent Tony Windsor, says the Gunnedah basin decision is a sign of hypocrisy over the future of the Murray-Darling river system.

"We have the Federal Government in South Australia saying, 'Oh, we made short-term decisions without long-term knowledge in terms of water resources and now we're going to have to rectify that,'" he said.

"I think the real motivation here is both the state and the Commonwealth have refused to be part of an independent study because they're more interested in the short-term cash."

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