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Quest for resources causes contention. -

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The pursuit of Coal Seam Gas in Queensland and NSW has caused some contention between the
agriculture and the mining industries. Farmers are anxious that the quest for resources will affect
their future and food production negatively.

Transcript

LEIGH SALES, PRESENTER: Since the earliest days of white settlement, Australia's development has
been built around the two primary industries: agriculture and mining. The farm and the quarry have
largely operated in peaceful coexistence. But across many rural areas, farmers and miners are now
at loggerheads. The controversial search for coal-seam gas over big areas of Queensland and New
South Wales has only served to fuel the conflict. The farmers are worried that the ever-widening
search for resources is jeopardising their livelihoods and Australia's long-term food
production. From the Liverpool Plains in north-western NSW, here's Paul Lockyer.

PAUL LOCKYER, REPORTER: The winter grain crop is popping up through the rich black soil of the
Liverpool Plains. Come spring, this valley will be bursting with food as preparations are made for
harvest. On a nearby ridge other plans are under way.

JOE CARTER, SHENHUA WATERMARK: The second pit will start just down the bottom of this hill and take
this hillside out and go down to 150 metres off the end of the black soil plains.

PAUL LOCKYER: Joe Carter is the project director of a huge open-cut mine proposed by Shenhua
Watermark, a Chinese government-controlled mining company. It is hoped that the mine in the NSW
north-west, near the village of Breeza, will yield 200 million tonnes of coal over 30 years.
Shenhua paid $300 million to the New South Wales Government for an exploration licence covering
almost 200 square kilometres of farmland and forest.

JOE CARTER: These are State assets under the ground that the State owns, and will want to develop
to help improve the State for everybody.

PAUL LOCKYER: Landholders on the Liverpool Plains have been fighting mining projects in this region
for six years. They blockaded a property to prevent BHP drillers from exploring below the farmland.
But BHP still has plans for mining in the rich country, and the farmers are determined to try to
block them and to block Shenhua.

FIONA SIMPSON, NSW FARMERS' ASSOCIATION: The battle here is enormous. What we are standing in, in
here, is the food lands of Australia.

PAUL LOCKYER: Fiona Simpson is the newly-elected president of the NSW Farmers' Association.

FIONA SIMPSON: Food security across the world is going to be one of our biggest issues. Yet, by the
same token, we see exploration licences and mining licences being granted over some of our most
valuable agriculture lands.

PAUL LOCKYER: Shenhua's decision to buy the farmland it plans to mine has brought the company more
unwanted attention, triggering a debate over foreign investment controls

FIONA SIMPSON: The community is suddenly finding that there is a large amount of foreign investment
that's actually slipping under the radar.

PAUL LOCKYER: How much have you paid and how many people have you bought property from?

JOE CARTER: We've purchased 14,700 hectares and we've paid $167 million for that.

PAUL LOCKYER: Shenhua has brought 43 properties, offering well above market value for the land.

CHRIS ROWARTH, FARMER: I would suspect most of them have got more money than they thought they
would ever dream possible for their places.

PAUL LOCKYER: When Shenhua presented its offer to Chris Rowarth, he was quick to accept. He had
been juggling off farm work to make ends meet.

CHRIS ROWARTH: With a young family and a bit of ambition, really, the decision was made for us.

PAUL LOCKYER: But he was targeted by some mining protesters as a sell-out.

CHRIS ROWARTH: We got a little bit of stick for selling. But I think any reasonable person put in
the same position would come up with the same decision. Look, you live with your own decisions and
I don't have any trouble sleeping.

PAUL LOCKYER: Chris has leased the farm back from Shenhua and will try to work around the mining,
while using most of the windfall from the sale of his property to expand his operations on country
elsewhere. Only the Clift family, the first settlers of the Liverpool Plains, are determined to
hold on to their farmland in the Shenhua mining zone. Michael Clift's property stretches from the
black-soil plains into the ridges that will be mined.

MICHAEL CLIFT, FARMER: I won't be going anywhere in a hurry, that's for sure. You don't get quality
land like this anywhere else. You know, I just love farming and this is where I'll be staying.

PAUL LOCKYER: Shenhua insists its land purchases are only for the life of its mining operation.

JOE CARTER: All the land we've purchased has come under the Foreign Investment Review Board rules
for mining purposes only. So, we can only own the land for mining purposes. When the mine is
completed we have to sell the land.

FIONA SIMPSON: A lot of people now are seeing purchases, such as is the Shenhua purchase for
example, where they are he going to be mining our coal. They're going to be sterilising our
agriculture resource for two or three generations and exporting that coal as to not necessarily
serving much of a national interest.

PAUL LOCKYER: But this is as much a fight about water resources as it is about the coal reserves.
There are major concerns about how the proposed mining operations could affect the precious
supplies of underground water that grow the food.

TIM DUDDY, INDEPENDENT CANDIDATE FOR UPPER HUNTER: This is about whether we are prepared to
compromise water resources and prime agriculture land for extractive industries. It is as simple as
that. It is not very hard to imagine what it is going to do here.

PAUL LOCKYER: Tim Duddy and others who led the fight against BHP's exploration attempt, won
agreement that a study be conducted into the groundwater supplies before any mining could be
considered. But news that Shenhua has decided to drill three deep test holes on a block it has
bought on the Liverpool Plains has triggered a new alarm. Shenhua insists it is simply carrying out
water tests. Neighbour Andrew Pershouse is unconvinced and plans to form a barricade to stop the
drilling rig.

ANDREW PERSHOUSE, FARMER: I want future generations to know farmers in the Liverpool Plains took a
stand on this. It has to stop.

PAUL LOCKYER: All the assurances from mining companies are greeted with a high degree of scepticism
on the Liverpool Plains. There's an atmosphere of distrust and it is spreading to many other rural
areas where mining companies are widening their search for resources. Concerns that are being
fuelled by the controversial tapping of coal seam gas reserves.

FIONA SIMPSON: The concern about coal seam gas is the water and the effects on water. The effects
on the water table of changing the pressures underneath the surface of the earth, and also, of
course, what are you going to do with all that water that they pump to extract the gas.

TONY WINDSOR, FEDERAL MP: In parts of NSW and Queensland we are heading very quickly towards an
ignition point.

PAUL LOCKYER: Tony Windsor, the Federal Independent MP who was raised on the Liverpool Plains,
believes state governments have mismanaged the resources sector, and he's introducing legislation
in the next session of Parliament to give the Commonwealth greater powers to intervene.

TONY WINDSOR: Allow the Commonwealth to overrule the states in terms of some of these developments.
I guess that's a veiled threat in a sense. The states could have fixed this some years ago.

PAUL LOCKYER: Shenhua has already made a huge investment in these hills. It is not about to fold
and leave. The farmers are gearing up for a long battle.

MICHAEL CLIFT: 100 years down the track will we just be a quarry, or will we still have decent
farmland to produce food for the people of Australia?

PAUL LOCKYER: Paul Lockyer reporting.