TODAY is the last day Chinese coal mining giant Shenhua can apply for a mining licence for its Watermark project on the Liverpool Plains, before a clause is triggered that will allow the government to cancel the development at any time.
The June 30 deadline was set two years ago, when the NSW government paid $260 million to buy back half of the project's exploration area.
The buy back included a cancellation clause, which allows the state government to effectively terminate the project if the company fails to bring it to a production stage by applying for a mining licence.
The clause also includes a 15 per cent per yearly increase in the mining licence fee.
The mining licence will cost Shenhua $200 million, and if it misses the deadline, it will instantly go up to $230 million.
While the NSW government will have the power to cancel the project, there is no guarantee it will given the strained relationship between Australia and China.
Should the company apply for a mining licence, it still has to get three environmental plans signed off by the state government before it can start construction, including water, rehabilitation and koala management plans.
The water and rehabilitation plans also have to get signed off by the federal government.
More to come.