Both the NSW government and BHP made the announcement August 11 that progression would cease for EL 6505, with the government reimbursing the producer the A$100 million (US$77 million) it paid for the license.
In all, the government, which said the mine had posed significant risks to water sources and agriculture, paid approximately $220 million for the project.
“It [the land] should be returned back to agricultural enterprise. The manner in which we do that hasn’t been determined, but that’s the obvious purpose,” Deputy Premier and Nationals Head Troy Grant told the Australian media.
“It’s a decision that has calculated what they have already contributed — let’s not forget they paid $100 million for this privilege — and the amount we’ve arrived at is the value of that license in today’s dollars.”
BHP Billiton Minerals Australia President Mike Henry noted that the NSW government did work with the company to come to a mutual agreement on the planned mine’s cancellation.
“While we believe that Caroona would have been developed responsibly, we accept the government’s decision and appreciate its willingness to work with us to agree an acceptable financial outcome,” he said.
“The Caroona coal project was studied extensively and developed cautiously for almost 10 years. We carried out extensive planning to ensure there would be no mining under the black soil plains, consistent with the conditions contained in our exploration license,” he added. “It was also subject to extensive scientific research, which showed the proposed project could have been developed in an environmentally sustainable manner.”
Caroona’s EL was first issued in 2006, and covered underground mining over about 344 square kilometers (132.8 square miles) in the state’s Liverpool Plains area.