Shenhua coalmine scaled back as NSW government buys back part of licence

Resources minister says 51.4% of exploration licence in Liverpool plains would be handed back, in exchange for a refund of $262m

The controversial Shenhua Watermark coalmine in NSW will be scaled back to avoid mining land marked as "strategic" agricultural lands, after a partial buy-back of the mining licence by the state government.

The government indicated it was in discussions with Shenhua in August, when it announced a similar buyback of BHP's planned underground mine in nearby Caroona, also on the Liverpool plains. There has been continued speculation that the mine was not financially viable, given declining Chinese coal imports and Shenhua's failure to apply for a mining licence, instead extending its cheaper exploration licence.