On Wednesday, The Leader reported about a possible $100 million deal between the NSW government and BHP, however both sides refused to comment.

Leading energy industry financial expert, Tim Buckley, said such a deal would not only be “smart business”, it would set the stage for a face saving deal with the Chinese government company Shenhua, which also has a proposed mine on the Liverpool Plains.

“The two mines have parallels left, right and centre – both were sold licenses by the prior state government under the watch of disgraced Labor resources minister Ian Macdonald, both are on the Liverpool Plains and both have been controversial,” Mr Buckley said.

Shenhua paid $300m for the exploration licence in 2008 and while any deal would likely be expensive, Mr Buckley said the government would be “patted on back for solving disaster they inherited”. 

“In isolation, it’s an expensive move for taxpayers, but it’s the best outcome and it’s the right thing to do,” he said.

“Despite what Shenhua is saying, it would definitely consider a government pay out to pull the pin on the project. China will always say it’s full steam ahead with the mine – until the day it’s not.”

China as a whole is moving toward becoming an exporter of coal, rather than an importer and investing heavily in its renewable energy sector.

The biggest coal port in the world, China's Qinhuangdao Port, reported a net profit decrease of 80 to 90 per cent in the first half of 2016, when compared to the same time last year.

Mr Buckley said the downturn was a reflection of both the pressure on the coal market and China’s changing attitude to coal.

“Why would China spend $1.2 billion building another mine to export coal they don’t need?” he said.

“Shenhua is rapidly diversifying [its investments], why would it build more coal capacity?

“If the Australia government made a deal to Shenhua to make the coal mine an agricultural venture instead, China would jump at that tomorrow.”

NSW Premier Mike Baird has a track record of letting the money talk.

In 2013 as the then NSW Treasurer, Mr Baird paid Origin Energy $300m to stop the development of the Cobbora coal mine - a project that was likely to cost NSW taxpayers up to $2b over the life of the mine.

Mr Buckley said the NSW government would have to negotiate with the Chinese Shenhua board, rather than their Australian counterparts.

“The Australian Shenhua board are all out of a job the moment the mine is off the table,” he said.