The company said the drilling, about 10km northwest of Breeza near Court Ln, was for “purposes of assessing soil and foundation conditions”.

“The work is being carried out as part of Shenhua’s ongoing engineering site investigations so design for the proposed Watermark road and rail overpass and intersections can be progressed and approvals with the respective agencies finalised,” a Shenhua spokesperson said.

The state government bought back about half of the company’s expired exploration licence for $262m in June, but it has yet to renew the remaining half.

Shenhua and the government were recently at odds, with the company telling the Hong Kong Stock Exchange it had “reached an agreement” with the NSW government for a “partial extension of the exploration license”.

Resources Minister Don Harwin said the statement Shenhua made was “not correct” and its exploration licence renewal application was still being considered.

In June, the Department of Planning and Environment (DPE) told The Leader Shenhua was allowed to continue exploration activities despite its expired licence.

“While the original exploration lease expired on 22 February, 2016, an acceptable renewal was lodged prior to this date, meaning the lease continues until a determination is made,” a DPE spokesperson said.