$300 million exploration licence to be granted near Gunnedah

The NSW Government will grant an exploration licence for the Watermark area near Gunnedah for a period of five years following a rigorous tender process, Minister for Mineral Resources Ian Macdonald said today.

The value of the entire enterprise, if successful after Government assessments, could be worth more than $670 million to the people of NSW.

Minister Macdonald said he will grant the exploration licence to China Shenhua Energy Company on the recommendation of an expert assessment panel, which included an independent probity auditor.

Former Nationals State leader Ian Armstrong will chair a community consultative committee to involve the community in the on-going process.

The Watermark area is located approximately 35 km southeast of Gunnedah in the Gunnedah Coalfield. The Exploration Licence is for an area of about 190 sqkm which is expected to contain shallow coal resources of domestic and export quality thermal coal.

"The awarding of this exploration licence will benefit the local area and the State," Minister Macdonald said.

The successful bid has the following features in its favour:

• It will provide up to $300 million in payments for the people of NSW.
• Shenhua will give $1million annually for five years to a new regional community trust.
• A commitment to invest $175million for transport infrastructure.
• An additional $200 million if a mining lease is eventually granted.
• Shenhua is strongly committed to environmental protection and employee safety as its number one priority during the evaluation period.

The Minister said the licence is for exploration only, not mining.

"The exploration phase alone is expected to last for several years and will be done under strict conditions in accordance with the Mining Act 1992," he said.

"There is strict environmental regulation, which ensures that exploration does not have any significant impacts on aquifers. "

The NSW Government first invited Expressions of Interest in the proposal last October and in February this year expressions of interest closed.

Minister Macdonald said the State Government has the highest levels of scrutiny in regards to the expression of interest process.

"That’s why an assessment panel made the recommendation, after thoroughly reviewing all the expressions of interest and following the normal protocols," he said.