Minister should approach Chinese Govt about Shenhua record

Published: July 24, 2015

Lock the Gate Alliance has welcomed news that the Minister for Resources and Energy and his department will be investigating whether Shenhua Australia, the proponents of the planned Watermark coal mine on the Liverpool Plains, are a 'fit and proper person' to hold a mining lease.

"We're calling on Minister Roberts to directly approach the Chinese Government seeking as much information as possible on the status of their investigations into Shenhua Group or their employees" said George Woods, spokesperson for Lock the Gate Alliance.

"It would be a very serious matter to issue a mining lease to Shenhua in Australia whilst their parent company is under investigation for alleged corruption in China, or under scrutiny for poor environmental performance.

"The Minister needs to thoroughly investigate this issue and to rigorously collect every skerrick of information available as to what has occurred with Shenhua Group in China before he makes any decision on a mining lease here in Australia.

"Our national foodbowl on the Liverpool Plains is too important to put at risk.  The Minister needs to assure the public that his investigation will be far-reaching and thorough, and that he will not approve a mining lease if there is any sort of cloud hanging over Shenhua Group.

“We should not be trusting the health of our land, our water and our communities to companies with poor track records and questionable practices" she said.

Under 380A (4) of the NSW Mining Act 1992, the grant, renewal or transfer of a mining lease can be refused on the ground that the Minister is of the opinion that the applicant is not a fit and proper  person.   




The NSW Minister for Industry, Resources and Energy, Anthony Roberts, has the power to refuse a mining lease for the Shenhua Watermark coal project on the Liverpool Plains if the proponent is considered not a 'fit and proper' person to undertake the project.

Under 380A (4) of the NSW Mining Act 1992, the grant, renewal or transfer of a mining lease can be refused on the ground that the Minister is of the opinion that the applicant is not a fit and proper  person.

This is the case even if the mining lease is necessary to carry out state significant development that has already been approved under the NSW Environmental Planning and Assessment Act 1979.

 The Minister may decide that a proponent is not a 'fit and proper' person on the grounds that the proponent is not of good repute or not of good character.

Action Needed

Lock the Gate Alliance Ltd is calling on the Minister to withhold a licence for the Shenhua coal project until he has commissioned an urgent investigation into whether Shenhua Australia and its' related body corporates are fit and proper people within the meaning of the NSW Mining Act 1992.

These concerns arise from ongoing investigations into serious corruption concerns and severe environmental incidents associated with Shenhua Group in China.

Is Shenhua Australia a fit and proper person?

Shenhua Australia is a subsidiary of Shenhua Overseas Development & Investment Co., Ltd, which serves as a global vehicle for outbound investment and project development on behalf of Shenhua Group Corporation Limited (Shenhua Group), reputed to be the largest coal producer in the world.

Shenhua Australia’s parent company, Shenhua Group, has been the subject of environmental and corruption allegations that warrant investigation by the Department of Trade and Investment. 

Corruption allegations

The central government of the People’s Republic of China has been investigating Shenhua Group, for corruption since November 2014. So far, four senior officials of the group are under investigations by authorities. Hao Gui, a senior vice-president of the group, was arrested by authorities in June 2015.

Environmental damage

A Greenpeace East Asia investigation found that a coal-to-liquid project owned by Shenhua in Inner Mongolia illegally dumped highly concentrated industrial wastewater. Shenhua’s groundwater extraction for the plant has caused groundwater to drop by 100m and the loss of every artesian well in the Haolebaoiji region, from where the water is taken. The region’s main lake, Subeinaoer Lake, has lost 62% of its area, and vegetation is dying. 80,000ha of land in a farming and herding desert region is now affected by severe water shortage.

According to Greenpeace, the amount of water required by production lines and its internal power generation facility has increased enormously from the initial projections.

The people of Haolebaoji signed a petition, outlining the scale of the impact on them:  

36 wells were drilled between March and October 2003. Every time a test drill for a well was conducted, the water levels in artesian wells, irrigation wells and drinking wells used by residents and animals went down. Water used for irrigation and daily life was seriously affected. When test drillings for these 36 wells were being done, statistics and estimates showed that inflow levels in the area declined by 20-30 meters. This threatened the existence of some 4,000 residents and 60,000 animals. It also affected the health of irrigated farmland, grazing land and forests in the area. The region in which we live is a semi-arid desert and while prospecting programs by the government show that there are rich groundwater resources, the close relationship between surface and ground water, and the relative lack of surface water, mean that life in this region is especially dependent on groundwater.

Shenhua claimed that the coal-to-liquids plant, in Ordos, was a “zero-discharge” system – incidentally, the same claim they are making for the Watermark coal mine.


Greenpeace investigations found three discharge sites or “seepage pits” which are essentially evaporation ponds, and revealed that highly toxic industrial wastewater from the plant was leaking from seepage pits into groundwater.[1] Greenpeace testing of this discharged water found high levels of harmful substances: sulfide levels were almost twice the national standard, while Benzo(a)pyrene levels in PAHs were 3.3 times the national standard.

[1] Thirsty Coal 2


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