January 10, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

The Shenhua aggregation, located on the Liverpool Plains and owned by Chinese mining giant Shenhua, had been earmarked for the development of Watermark, an open cut coal mining operation. The mine was estimated to have a working lifespan of 30 years, over which time it had the potential to produce 290 million tons of coal. 

However, pushback against the project was strong, with locals fearing it would contaminate the region’s significant water resources and threaten the koala population.

In the end, the New South Wales government struck a deal with the company last year whereby Shenhua agreed to end its coal mining plans for the land in exchange for A$100 million (US$71.7 million). 

This resulted in more than 16,000 hectares (39,527 acres) near Gunnedah being bought back by 12 local farmers and one institutional investor for A$120 million (US$86 million) after an unpredictable 13-year period that has taken their toll on local farmers. 

David Goodfellow, managing director with CBRE Agribusiness, which oversaw the sale process, commented on the deal, telling AFR, “It was a good outcome, and personally rewarding, to see so many local farming families expanding their businesses and having the capacity to do so.”

Over the course of five weeks, CBRE stated that 49 interested parties conducted 59 inspections on the Shenhua land, which included three aggregations: the Breeza, Tambar Springs, and Barraba, which have been used to produce cotton, cereals, and legumes, and to graze beef cattle.

Two families acquired the 1,208-hectare (2,985 acres) Tambar Springs holding, which includes three parcels within two kilometers of each other.

The 1,114-hectare (2,753 acres) Barraba aggregation, which is currently used for beef cattle and sheep, was acquired by another two local farming families, and the 14,270-hectare (35,262 acres) Breeza aggregation, which has water entitlements and has been used for dryland cropping and beef cattle grazing, was divided between eight local families, and one institutional investor. 

The institutional investor, which bought 5,860 hectares (14,480 acres), or approximately one-third of the total Breeza acreage, which it intends to use for mixed farming and livestock production, chooses to remain anonymous until the deal has secured approval from Australia’s Foreign Investment Review Board (FIRB). 

Goodfellow noted that despite the investor’s interest in acquiring Breeza in its entirety, the decision was made to purchase a portion of the land in order to afford local farmers the ability to acquire smaller holdings which could then expand their existing operations.

And, although unidentified, Goodfellow said of the investor, “This entity’s investment strategy is also well-aligned to supporting the new koala corridors and regeneration of soils and native forests which may be suitable for projects to create carbon credits which are quickly becoming very valuable given the current demand to achieve targets of net zero emissions.”

One of the local buyers was the Warmoll family, owner of the high-profile Jack’s Creek beef operation, that acquired 4,900 hectares (12,108 acres) with the capacity to run 3,500 head on a year-round basis.

Another was the Norman family, which acquired 183 hectares (452 acres) to expand its existing row cropping business on the Liverpool Plain.

Fiona Simpson, local farmer and president of the National Farmers Federation, expressed what many locals feel when she said to ABC, “To have it back now in local hands, to have family farmers again owning that land in a sustainable way that we know is going to be able to ensure the future of future generations of farmers … that’s extremely satisfying.”

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com. 

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