Resources Minister Don Harwin said 51.4 per cent of the company’s exploration licence will be handed back, with the government agreeing to refund around $262 million from the original amount received from Shenhua.

Mr Harwin said the government was “determined there should be no mining on the fertile black soils of the Liverpool Plains”.

“Any future mining activity will now be restricted to the ridge lands, with a commencement still subject to further management plans and the ongoing monitoring of strict conditions already in place.”

The announcement comes almost a year after the government first announced it was negotiating with the Chinese company, and days after The Leader reported the government was preparing to renew its licence.

Tamworth MP Kevin Anderson said the agreement strikes the right balance between preserving agriculture on the Liverpool Plains, while also creating up to 600 new jobs and millions of dollars in investment for the region.

“Farming and mining have long been the backbone of this region’s economy,” Mr Anderson said.

Primary Industries and Regional Water Minister Niall Blair said future mining operations must abide by strict water management conditions.

“Shenhua’s proposed activities on the ridge country have been exhaustively assessed and considered under the NSW Aquifer Interference Policy, and will be subject to continual monitoring,” Mr Blair said.

“Today’s agreement unlocks prime agricultural land for farming, helping to maintain the region’s reputation as one of the great food bowls of Australia.” 

The government said the must also comply with around 100 of the strictest conditions in Australian history, especially around water, and has had four expert reviews and two further reviews by the Independent Expert Scientific Committee.

The company must also receive approval for detailed management plans in a number of key areas, including water management, biodiversity and environmental management before mining can commence.

While Liverpool Plains farmers celebrate the decision, they refuse to rest until the whole mine is gone.

Local farmer and Caroona Coal Action Group spokesperson said the announcement was “very good step in the right direction” and a “testament to the huge community effort” to protect the area.

“What it means for the future of the rest of the licence is another question,” Mr Duddy said.

“We have an excellent agricultural resource that needs to be developed, and it needs to be developed with the constraints of incompatible developments.

“As farmers have always said, Shenhua is incompatible.”

He invited NSW Premier Gladys Berejiklian to come to the plains to “see what we’re dealing with”.

THE NSW government has rolled out the red carpet to the mining industry to trash Australia’s best farm land, Lock the Gate Alliance says.

The environmental lobby group slammed the NSW government’s “half baked and cowardly” decision to only buy back half of the exploration licence.

“Half measures won’t protect the Liverpool Plains,” Lock the Gate’s NSW coordinator Georgina Woods said.

“Carving out areas of this exploration licence won’t change anything. Nothing short of a full cancellation of the mine will protect the plains.”

The agreement paved the way for Shenhua to apply for a mining licence, Ms Woods said.

“They’ve essential given them permission to mine the Liverpool Plains and given the $262m to do so.

“They’re rolling out the red carpet to trash our best farm land, and the public is not going to put up with it.

“We will fight this every inch of the way.”

Tamworth MP Kevin Anderson says the deal strikes the right balance between agriculture and mining.

While he had nothing to do with the Shenhua negotiations, Mr Anderson said he and his Coalition colleagues had been “working very hard” to get rid of the parts of the exploration licence that fell on the black soil.

“We’ve said all along, since assuming this office six years ago, that we were very uncomfortable, seeing that exploration licence sitting on black soil,” Mr Anderson said.

While the black soil may be protected, many still hold fears the mine could affect groundwater – however Mr Anderson said local farmers tell him there was no water under the ridges Shenhua plans to mine.

“Farmers that I’ve door knocked Curlewis and I’ve spoke to farmers who had country in and around that ridge area, they tell me there is no water under where Shenhua plan to conduct their operations,” Mr Anderson said

“In addition to that there have been a number of independent scientific panels, that said there would be minimal impact in relation to that project in the ridge country.”

“We do need to protect our water resources and it's something I’ll continue to have close scrutiny of.”

Mr Anderson said the project would employ up to 600 people, with a significant number of those jobs coming from Gunnedah and the surrounding region.

“Agriculture and mining can co-exist and has done so in the Gunnedah Basin for more than a 100 years,” he said.

LABOR has questioned why the government spent hundreds of millions of dollars buying back part of an expired licence, when it could have cancelled it without paying a dime.

Eight years have passed without Shenhua starting “substantial development”, which means the government has the power to scrap its exploration licence

Shadow Resource Minister Adam Searle described the $262m deal as “grotesque corporate welfare”, that could have been better spent on classrooms and hospitals.

“I don’t agree with spending millions of dollars from the public's pocket to buy back a licence that had already lapsed,” Mr Searle said.

“In fact it should have done the proper thing and given certainty by shutting the whole thing down.

“We call on the government not to do half measures, but to do away with the project completely.”

NSW Greens resource spokesman, Jeremy Buckingham, said there was "no safe size for the Shenhua coal mine".

“Anyone who has visited the area knows how interconnected the ridges are to the plains," Mr Buckingham said.

“The idea that you can dig a 300 metre deep pit next to a flood plain and it will not impact on the water table is ridiculous.

“The fact that Nationals MP Kevin Anderson is still pushing the mine shows how beholden the Nationals are to the big mining corporations.

“He should be ashamed he has not backed local farmers over a Chinese Government owned coal mining corporation.”

More to come.