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Australia greenlights China Shenhua coal mine on prime farmland

China Shenhua Energy Co Ltd has cleared the last regulatory hurdle to build a 10 million tonnes a year coal mine in farmland in eastern Australia, prompting the country's farm minister to say it was a sign that "the world has gone mad".

Shenhua bought a licence to develop the A$1 billion ($745.90 million) Watermark thermal and semi-soft coking coal project in the state of New South Wales six years ago, just before a peak in coal prices which have since slumped to more than five-year lows.

It then took until January this year to secure approval from the state government to begin construction, following lengthy assessments and modifications to plans in response to concerns raised by farmers.

The final approval, from Federal Environment Minister Greg Hunt, means the company can build its first large-scale mine under strict environmental controls. The company must now prove to Hunt and the state government that it can comply with their conditions, as well as determining for itself whether the project is still viable under them.

"Mr Hunt's approval is the final piece in an overwhelming body of evidence showing the Watermark Project will not harm the region's valuable agricultural enterprises," Shenhua Watermark Project Manager Paul Jackson said in a statement.

However the approval also puts pressure on Prime Minister Tony Abbott, who relies on a coalition between the conservative Liberal party and rural-focused Nationals to form government.

In a posting on Facebook, Farm Minister Barnaby Joyce, a National, said he had done everything in his power to block the mine and "it is ridiculous that you would have a major mine in the midst of Australia's best agricultural land".

"The world has gone mad when apparently you cannot build a house at Moore Creek because of White Box grassy woodlands but you can build a super mine in the middle of the Breeza plains," he added, referring to areas 240 miles north of Sydney where the mine is planned.

A spokesman for Hunt, a Liberal, did not return a call requesting comment. The Department of Environment published an approval document for the project dated July 4 and signed by Hunt.

Senator Larissa Waters, the Australian Greens deputy leader, said Joyce had failed his rural constituency and "with the coal price in structural decline, it's economically insane to be sacrificing valuable farming land for the dying coal industry". ($1 = 1.3407 Australian dollars)

source: http://af.reuters.com