Global grain crop yields expected to decrease due to climate change

“Agricultural production is vulnerable to climate change. Understanding climate change, especially the temperature impacts, is critical if policymakers, agriculturalists, and crop breeders are to ensure global food security. Our study, by compiling extensive published results from four analytical methods, shows that independent methods consistently estimated negative temperature impacts on yields of four major crops at the global scale, generally underpinned by similar impacts at country and site scales. Multimethod analyses improved the confidence in assessments of future climate impacts on global major crops, with important implications for developing crop- and region-specific adaptation strategies to ensure future food supply of an increasing world population.” [Chuang Zhao et al, July 2017, Temperature increase reduces global yields of major crops in four independent estimates]

Forbes, 1 September 2017:

Increased temperatures from climate change will reduce yields of the four crops humans depend on most—wheat, rice, corn and soybeans—and the losses have already begun, according to a new meta-study by an international team of researchers.

Humans depend for two thirds of their calories on these four staple crops, but yields of wheat are expected to decrease by 6%, rice by 3.2%, maize by 7.4%, and soybean by 3.1%.

"By combining four different methods, our comprehensive assessment of the impacts of increasing temperatures on major global crops shows substantial risks for agricultural production, already stagnating in some parts of the world," the scientists say in the study, which appears in the latest issue of the Proceedings of the National Academy of Sciences.

Yield increase has slowed down or even stagnated during the last years in some parts of the world, and further increases in temperature will continue to suppress yields, despite farmers’ adaptation efforts." The study, led by Chuang Zhao of Peking University, cites three other studies documenting declines in crop yields in Europe, Africa, India, China, Central and South America and other regions.

The study of studies was conducted by scientists in China, Germany, Belgium, Italy, France, Spain, The Philippines, and the United States, including the University of Florida, Stanford University, the University of Chicago, and Columbia University in New York. They hoped to settle a question that seemed to have produced conflicting results in the many studies they reviewed: what are the effects on crop yields of temperature increases from anthropogenic climate change?

The study rebuts an argument made by those who argue against mitigating climate change because they say higher CO2 concentrations will increase crop yields. That argument, the scientists say, fails to account for higher temperatures:

"While elevated atmospheric CO2 concentration can stimulate growth when nutrients are not limited, it will also increase canopy temperature from more closed stomata," the scientists say. The stomata are the pores plants use to exchange gases and moisture with the atmosphere. When plants close stomata because of higher temperatures they may conserve water but lose the ability to absorb CO2.

Higher temperatures can also increase atmospheric absorption of water in the plants and in the soil, provoke heat waves and stimulate pests and weeds.

The study anticipates that crop yields will improve in some areas because higher temperatures will lengthen the growing season, but it finds net losses worldwide.

How many times and in how many ways does the NSW Government have to be told before they admit they are wrong?

The majority of local residents and farmers don’t want this coal mine, a number of experts have been warning against it for years - yet still the NSW Government doesn’t appear willing to genuinely protect the water resources, agricultural assets and biodiversity values of the Liverpool Plains food bowl.

Here is the latest plea to go public.

The Sydney Morning Herald, 28 August 2017:

Claims that Shenhua's restricted coal mining will avoid affecting the aquifers of the rich farmlands of the Liverpool Plains are "false and ignorant", former state and private agronomists have said in a letter to Premier Gladys Berejiklian. 

The government last month paid the Chinese coal miner $262 million for just over half the exploration licence area of the proposed mine at Watermark in northern NSW. Energy Minister Don Harwin said the buyback would ensure there was no mining on the fertile black soils of the plains.

But the agronomists, five of whom worked for the Department of Primary Industries or precursor departments, said limiting the proposed open cut mine to ridges would still likely affect surface and groundwater flows in the plains and downstream regions.

"The claim that mining the ridges above Breeza will not have an impact on farming operations is false and ignorant," the letter's authors said.

"Hydrogeological investigations have shown that there is a high degree of connectivity between the alluvial aquifers throughout the Namoi Valley."

Brian Tomalin, a retired cattle farmer and a former Namoi Catchment Management board member, told Fairfax Media endangered ecological communities such as whitebox woodlands were also at risk from impacts of an open pit reaching as deep as 300 metres.

Surprise, surprise - those Murray-Darling Basin water raiders have slithered over the horizon once more and are eyeing off the Clarence Valley river system yet again

With so little fanfare that much of  Northern Rivers region missed it, the NSW Berejiklian Government reopened the March 2016 inquiry into augmentation of water supply for rural and regional New South Wales on 28 May 2017, with Terms of Reference published in July 2017.

This Upper House inquiry is chaired by Robert Brown MLC, from the Shooters, Fishers and Farmers Party and its reporting date has been extended to 30 March 2018. 

Current committee membership is as follows:

Robert Brown MLC, Shooters, Fishers and Farmers Party, Chair

Mick Veitch MLC, Australian Labor Party, Deputy Chair

Jeremy Buckingham MLC, The Greens

Rick Colless MLC, The Nationals

Scot MacDonald MLC, Liberal Party

Greg Pearce MLC, Liberal Party

Penny Sharpe MLC, Australian Labor Party

Daniel Mookhey MLC, Australian Labor Party

Paul Green MLC, Christian Democratic Party

* Jeremy Buckingham MLC (Greens)is substituting for Dr Mehreen Faruqui MLC for the duration of the inquiry.

* Matthew Mason-Cox MLC (Liberal)  is substituting for Hon Greg Pearce MLC for the duration of the inquiry.

* Paul Green MLC and Penny Sharpe MLC will be participating for the duration of the inquiry.

A poorly advertised public hearing scheduled for 1 August 2017 in Lismore (with details sent to media on 31 July 2017) excluded Northern Rivers residents from giving evidence unless they represented a small number of invited groups.

It appears the committee had also determined that Clarence Valley Council was to be asked its view on diverting Clarence River system flood water.

Given flood water is already diverted to the purpose built Shannon Creek side dam to ensure a sustainable water supply for the est. 125,103 residents (Census 2016) currently living in Clarence Valley and Coffs Harbour local government areas, there are no prizes for guessing where any additional water diversion would be allocated.

Yes, that paragon of sustainable water mismanagement - the cluster of councils, industries, irrigators and water traders within the Murray-Darling Basin.

It will come as no surprise that Griffith Council is still pursuing a Clarence River dam and divert scheme. North Coast Voices reported on its obsession in August 2016.

This is what the Griffith City Council Deputy mayor, Dino Zappacosta of Zappacosta Estate Wines in Hanwood, told the inquiry on 1 March 2017:

The issue that my committee, Build More Dams, has looked at is that we need more water because farmers are crying out for more water. We need new water. By "new water", I mean water that is not currently being used at all. We looked at various options, including the Clarence Valley area, where millions and millions of megalitres of water flow out into the sea for what seems to be no real benefit at all for the community of the Clarence region, other than for the natural farming land and the fishery industry there.

It soon became apparent that, appart from the notion of free water at the expense of Clarence Valley communities’ social, cultural, aesthetic, environmental and economic values, Griffith Council knew little about how this dam and divert scheme would work.

The Hon. RICK COLLESS: You have been talking about the Clarence River diversion scheme. Is it correct that that is essentially restricted to the Mann River subcatchment?

Mr ZAPPACOSTA: To the best of my knowledge, it covers most of the tributaries—for example, the Boyd River, the Mann River, the Nymboida River and the Timbarra River. They are highlighted on map 2, which was provided to the Committee.

The Hon. RICK COLLESS: I am a little confused about the way the map reads. It appears as though the water is coming out of the Mann River catchment, which is a subcatchment of the Clarence. The divisions appear to be above the confluence of the Nymboida and the Mann. You recommend a 23 per cent Clarence River diversion, but the question is: What percentage of is that of the Mann River flow and what environmental impact will that have on the Mann River below where it is diverted? We should keep in mind the history of the Snowy River and what has happened there over the past 50 years. Does anybody have any thoughts about that? Mr ZAPPACOSTA: I will have to take on notice exactly how much comes from the Mann River itself.

The Hon. RICK COLLESS: What is the reduction in flow from the sub-catchment rivers below where the water is diverted from them? What environmental impacts will that have on those rivers?

Mr ZAPPACOSTA: I appreciate the question. I think what you are asking is something we should dig into a bit deeper; there should be a study of it, preferably a feasibility study.

The Hon. RICK COLLESS: There needs to be a lot of work done on this, as you would appreciate.

While the Director of Utilities at Griffith City Council stated:

As an engineer I see the great benefits of supporting a scheme such as the Clarence River diversion scheme, not only from a water augmentation point of view. My directorate covers water supply as well as the flooding impacts caused by rainfall run-off. The Clarence River diversion scheme is not only a supply scheme but a flood mitigation solution, as the general manager mentioned. In my research I have referred to the document entitled Lower Clarence Flood Model—Update 2013 produced by BMT WBM consultants. They happen to be the same consultants who undertook our flood study and provided our flood mitigation options. They work across the State and they are well versed in flooding, from the Northern Rivers down to our area.

The Clarence River catchment on the far North Coast of New South Wales is one of the largest catchments on the east coast of Australia. It is approximately 20,000 square kilometres. It is above the towns of Grafton, Maclean and Yamba, and it is home to more than 20,000 people. The lower Clarence Valley has a long history of flooding, since settlement in about 1850. Bear with me as I read out the dates of the flooding events. I was just going to say a number, but it has more of an impact when you follow the years of flooding that the area has endured due to the large catchment that sits above it. Floods were recorded in 1863 and 1864. There was a record flood in 1890 in which two people lost their lives and there was extensive damage to the rural area. Further floods occurred in 1921 and 1928. Since 1945 the incidence of major flooding has been much higher, with floods occurring in 1945, 1946, 1948, 1950, 1954, 1956, 1959, 1963, 1967, 1968, 1974, 1976, 1980, 1988, 1996, 2001, 2009 and 2013.

There is a regular occurrence of extreme flooding in the Northern Rivers catchment, below the Clarence River. Section 4.4 of the Lower Clarence Flood Model—Update 2013 acknowledges that "the river flows originating from upstream of Grafton dominate flooding in the Lower Clarence Valley". Diversion of the Clarence River flows for that area towards the west, and the 25 per cent or 23.8 per cent that will be captured, diverted and controlled, will be of great benefit to flood mitigation in the Northern Rivers area. The document further says that it will maximise the investment from the Government not only to help solve water augmentation issues but to reduce the financial and human impacts flooding has in the northern coastal areas. The Clarence River diversion scheme was documented in 1981 by David Coffey and he estimated costings back then. We have done a projection to a present-day cost of approximately $10 billion. There are statistics on the map that I have provided to the Committee.

The Snowy Mountains scheme would have cost $10 billion in present-day money, so there are similar costings in the schemes. The 1,100 gigalitres diverted per annum from the Clarence River has generated $1.82 billion in agriculture. The scheme means that 23.8 per cent of the flows that would be heading down to flood people can be diverted. When you equate the $550 million a year in flood damages with the cost of a diversion scheme, 1,100 gigalitres can generate $1.8 billion a year in agriculture growth. The additional water means that 118,000 hectares of viable open country can be farmed. The offset of diversion and flood protection is that it is beneficial to all. That is where I will leave it.

The public hearing in Griffith was reported thus by The Area News on 2 March 2017:

HIGH-profile Griffith water users and city officials enjoyed a rare opportunity to sit face-to-face with Members of the NSW Upper House on Wednesday to discuss their handling of water….

The Honourable Rick Colless, The Honourable Paul Green, The Honourable Matthew Mason-Cox and The Honourable Penelope Sharpe were on hand to hear the concerns of the community….

Along with wanting to fix the water sharing plans, the other hot topic was the Clarence River Scheme, initially conceptualised by David Coffey in the 1970s.

The plan outlined diverting river flows westward from high rainfall catchments in the Northern Rivers.

According to Griffith City Council, the scheme will benefit lands south of the Dumaresq River while also providing flows into the Murray River, reducing the reliance for Murray-Darling Basin allocations to fill the original allocation to the basin. 

“We have looked at various options and we look at the Clarence Valley area where there are millions of millions of megalitres of water flowing out into the sea for what seems to be for no real benefit,” Councilor Dino Zappacosta said.

Griffith City Council general manager, Brett Stonestreet said it’s time the scheme is looked at again.

“It provides new water to give this state another shot in the arm,” he said.

“It also looks at potentially reducing flooding impact of the coastal communities adjacent to the Clarence by 25 per cent.

“There is a huge amount of money that can be generated and inland communities rediscovered and regenerated through new water.”

Mayor Dal Broi was pleased with how the inquiry was conducted and the feedback from the Senators.

“Some of the questions that were asked by the panel members, we know now what they are thinking,” he said.

“They were very receptive to the concept of new water so whether it's the diversion of the Clarence or lifting the wall on Burrinjuck Dam ... they were very receptive to that because we tried to make the point that the limited resources at the moment.”

“We need new water if our regions are to grow and have a better long-term sustainable allocation.”

Not content with bringing down the largest river system in Australia in order to line their own pockets, these wanabee water raiders just keep on coming after what they see as more 'free' water for the rorting.

Clarence Valley Council gave evidence at the re-opened inquiry on 1 August and the only question of interest to the water raiders came after a few minutes of questioning at Page 26 of the Lismore public hearing transcript:

The Hon. GREG PEARCE: Thank you for your submission. In your submission you talk about this idea of diversion of the Clarence River to west of the Great Dividing Range. Could you give us a bit of a background on that proposal and what your council thinks about it?

Mr ANDERSON: I will start but Mr Mashiah might finish. Our council has resolved six times that they do not support the diversion of the Clarence, and each time that has been unanimous in regard to council's position. That is based on the fact that damage to the environment and the ecological systems that work within the Clarence River emerge from there. 

The CHAIR [Robert Brown MLC, Shooters, Fishers and Farmers Party]: You probably cannot answer this, but that is an all-encompassing position of council?

Mr ANDERSON: Yes.

The CHAIR : I wonder what the council's position would be on the diversion of floodwaters only.

Mr ANDERSON: Again, Mr Chair, like you said, I cannot answer that question.

The CHAIR: What I am asking you is that I guess the council's resolutions were not burrowed down to that extent to be able to answer that question. We might ask Clarence council for an opinion on that.

The Hon. GREG PEARCE: Are those decisions supported by an independent side to pick advice? How were they derived?

Mr MASHIAH: There was a Healthy Rivers Commission inquiry into the Clarence in I think it was 1999, from memory, and part of the outcome of that commission inquiry was the importance of regular flood events in terms of the fishing industry and also the cane industry. I believe you have representatives from the cane industry here with us later.

The CHAIR: This afternoon, yes.

Mr MASHIAH: And also in terms of fisheries, one of the aspects that Clarence Valley Council has been active in for the past 20 years is trying to manage the floodplain to address issues such as acid runoff.

The CHAIR: Solid sulfate soils.

Mr MASHIAH: As the sulfate soils and particular acids run off. So we have done things like open floodgates and—

The CHAIR: And you should be congratulated.

Mr MASHIAH: Thank you, Mr Chair, for that. I will pass that on to the relevant staff who have been coordinating that. The regular flushing of those areas, which are fish breeding grounds, by floodwaters is very important. So if floods were diverted there are significant concerns from the fishing industry about the ongoing viability of the industry because the grounds where fish breed, according to the studies that have been undertaken, would then be adversely impacted. So that is one of the reasons that the fishing industry has very strongly opposed, through our estuary management committee in particular and through the estuary management plan, any diversion of water and we have tried to ensure that the fish breeding grounds are protected.

The CHAIR: I just made the observation that most of those fish breeding grounds would not be the same areas of land that are subject to high residential development or business or commercial or other aspects. In other words, you are not talking about the township of Grafton itself, you are talking river peripheries, flooded-out areas, for breeding concerns?

Mr MASHIAH: The challenge is that the urban footprint on the lower Clarence floodplain is probably about 1 to 2 per cent of the total surface area and all the urban areas are surrounded by rural areas. So it is very hard to work out how you manage that 1 or 2 per cent without adversely impacting the other 98 per cent, or vice versa, how do you manage the 98 per cent without adversely impacting 1 or 2 per cent of urban area?

The CHAIR: The 2013 flood, you have described it as a major flood, correct?

Mr MASHIAH: It was the flood of record at Grafton.

The CHAIR: I am wondering how the 2013 flood would have enhanced the fishery on the Clarence?

Mr MASHIAH: The main issue with the 2013 flood—I guess with any flood in the Clarence the flood behaviour in the upper river is a lot different to the flood behaviour in the lower river because of the tidal influences in particular and also how wet the floodplain is already. The 2013 event was actually three floods.

The CHAIR: And they rolled up on each other?

Mr MASHIAH: Yes, within a three-week period—quite distinct flood events.

The CHAIR: So it was a prolonged flood.

Mr MASHIAH: It was a prolonged flood and that meant there was significant inundation of back swamp areas, and I understand that there were some areas that effectively were areas that were flushed that had not been flushed in floods probably since 2001, so it is probably 12 years. So from an ecological perspective, talking to our environmental scientists, I understand that it was actually quite beneficial because the bigger floods only get into those areas once every 10 to 20 years.

The CHAIR: Were there any concurrent blackwater events for the fishery?

Mr MASHIAH: Not that I can recall, and I think that is a result of the management measures that have been undertaken on the floodplain because most of the farmers now operate the floodgates and so only shut the floodgates when there is actually a flood coming and open them fairly soon afterwards.

The CHAIR: So it is their responsibility to operate their own floodgates, is it?

Mr MASHIAH: That has been passed on to them, yes.

The CHAIR: Do you have any oversight of that?

Mr ANDERSON: Yes, we do, and we work with those groups and undertake training et cetera . It is a two-way street of communication: they tell us what they need and, vice versa, we provide training associated with that and inductions and operate that through a number of committees et cetera as well.

Evidence was also given by the NSW Professional Fishermen’s Association (commencing Page 38) the NSW Canegrowers Association (commencing Page 45) and the Clarence Environment Centre (commencing Page 56).

See https://www.parliament.nsw.gov.au/committees/DBAssets/InquiryEventTranscript/Transcript/9964/Uncorrected%20transcript%20-%20Lismore%20hearing%20-%201%20August%202017.pdf

One has to wonder why the committee members of this reformed Water Augmentation Inquiry didn't seek the views of those holding Native Title (See Yaegl People #1 & Yaegl People #2) over the Clarence River from the waters approximately half-way between Ulmarra and Brushgrove right down to the eastern extremities of the northern and southern breakwater walls at the mouth of the river.

After all they are significant stakeholders in any discussion of water policy and water management in the Clarence River catchment area.

The other matter of note, arising from North Coast Voices somewhat belated discovery that the water raiders were back on the scene, is the suggestion that not all Clarence Valley councillors had forewarning that council staff were appearing before the inquiry on 1 August.

If true this would be a disturbing indication that council administration has retained some of the bad habits it acquired under the former general manager who was handed his hat in March this year.

Pressure mounts on Turnbull and Berejiklian governments to stop Murray-Darling Basin water theft

MEDIA RELEASE
25 July 2017	MR/56/17
NSW Farmers’ President Derek Schoen’s statement on ABC Four Corners: “Pumping” “ABC’s Four Corners episode last night raised a number of very distinct issues that all relate to water take in the Murray Darling Basin. One of the issues raised was illegal water take. The overwhelming majority of farmers and irrigators do the right thing, however, strong regulatory enforcement is needed when it is proven that water has been taken against the rules, or tampering/disabling of metering equipment has occurred. This is theft from all other water users and it should not be tolerated. Another issue raised on the program was the changes to the rules that were reflected in the Barwon-Darling Water Sharing Plan, finalised in 2012. These rule changes have been the subject of discussion amongst NSW Farmers’ elected representatives during past months and years, and are something that we know causes significant angst amongst all of the water users within that Water Sharing Plan. Where it is alleged that those rules were changed without true transparency for all water users- NSW Farmers fully supports an investigation into the process by which these rule changes were made. We call for this on the principle that these changes can have a significant impact on all water users, including stock and domestic water rights holders, and downstream users. These decisions need to be made with full transparency and scientific backing. Rule changes also need to occur through the established processes of the local consultation committee during the appropriate review period. The agricultural community needs complete certainty that this will occur, always.”

NSW Farmers – Level 6, 35 Chandos Street St Leonards 2065

A plea on behalf of NSW Liverpool Plains communities

LOCK THE GATE:

It's been a difficult week on the Liverpool Plains. Yesterday the New South Wales Government paid coal company Shenhua $262 million dollars in a deal that removes part of their larger exploration licence but still lets the company go ahead with it's full coal mining project on the irreplaceable Liverpool Plains. There is a lot of public relations spin from the NSW Government, but the cold hard truth is that they haven't stopped the Shenhua Watermark coal mine and the company now says it plans to proceed to start the project. The consequences for local farmers adjoining the mine, and the productivity of this vital national foodbowl, will be severe. Local farmers have been fighting this proposal for ten years, and need your support now to phone the NSW Premier to tell her that she hasn't delivered what is needed and she must stop the entire Shenhua coal mine and cancel all licences. Can you phone the Premier now?  The Government is trying to throw the coal dust over our eyes by telling us this is a great win for the Liverpool Plains. But in fact, all they have done is pay an exorbitant price for some areas that Shenhua never had any intention of mining, whilst allowing the full 4,000 hectare mine with 3 massive open-cut coal pits to go ahead full bore on the Plains. The NSW Government has the legal power to cancel the entire Shenhua exploration licence and put an end to this dangerous mine proposal once and for all. Please phone the Premier now and let her know that is what she needs to do.  We've got some simple talking points here to help you with your call. This is an incredibly crucial moment. We need a crescendo of voices demanding full protection of this magnificent country and an end to the Shenhua mine project. Thanks for your help, George Woods Lock the Gate Alliance http://www.lockthegate.org.au/ Lock the Gate Alliance · PO Box 6285, Sth Lismore, NSW 2480, Australia . You can also keep up with Lock the Gate Alliance on Twitter or Facebook.

'The Force' is strong on the Liverpool Plains

Farmers on the Liverpool Plains joined forces in a main street walk in Gunnedah, 26 June 2014

People power at work on the NSW Liverpool Plains -  well done to everyone over the years who attended protest events, emailed, wrote, phoned. posted, tweeted and/or made formal submissions objecting to Shenhua’s mining expansion plans.

The Northern Daily Leader, 12 July 2017:

Shenhua says it still plans to progress the Watermark coal mine in light of the NSW government $262m buy back of half its exploration licence.

Shenhua Australia Chairman Liu Xiang said the planning for the mine would continue on the remaining section of the licence “in line with the planning approvals” from both the state and federal governments.

The NSW government said despite the agreement, Shenhua's expired exploration licence had yet to be renewed.

“An application to amend the current renewal application to remove the relinquished area has been received,” a Department of Planning and Environment spokesman said.

“The relinquished area will be removed from the title and the consideration of the renewal application for the remainder of the licence will be considered as per normal procedures and in accordance with the Act.”

In a statement to The Leader, Shenhua expressed its “disappointment” regarding the NSW government’s stance on mining operations on black soil plains, “as it would prevent its efforts” to get its exploration licence “wholly renewed”.

While Shenhua believes it “would have been able to responsibly expand its existing Watermark Coal Mine”, it has “come to terms with the NSW Government’s decision to not allow any mining on the black soil plains”.

A convoy of tractors protests the proposed Shenhua Watermark coal mine on the Liverpool Plains, September 2015

However, the fight continues…….

@AustralisTerry

Liberal Member of the NSW Legislative Council, Don Harwin
Minister for Resources, Minister for Energy and Utilities, and Minister for the Arts, Vice-President of the Executive Council

Phone	(02) 8574 7200
Fax	(02) 9339 5568
Email	Contact the Minister for Resources, Energy and Utilities, and the Arts

ABC News, 12 July 2017:

National co-ordinator for the Lock the Gate Alliance Phil Laird said anything less than the full cancellation of the project would not protect the farming systems.

"If we are going to hand over our best farming country to a coal mine that's owned by the Chinese Government, we've got to change our priorities," Mr Laird said.

"This coal mine is going to be 200 metres deep and its going to cut below the ridge line way below the level of the farm land and the aquifers.

"The impacts to those aquifers is unknown and the entire region depends on those aquifers for survival."

Public Now:

CSEC - CHINA SHENHUA ENERGY COMPANY LTD.

12/07/2017 | Press release | Distributed by Public on 12/07/2017 19:28

Voluntary Announcement- Announcement On Progress Of The Wate...

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(STOCK CODE: 01088)

VOLUNTARY ANNOUNCEMENT

ANNOUNCEMENT ON PROGRESS OF THE WATERMARK PROJECT

This announcement is made by China Shenhua Energy Company Limited (the "Company") on a voluntary basis. The purpose of this announcement is to keep the Shareholders and potential investors of the Company informed of the latest business development of the Group.

On 20 November 2008, the Company issued the Announcement in relation to Watermark Exploration Area Exploration License. Shenhua Watermark Coal Pty Limited ("Watermark Pty"), a wholly-owned subsidiary of the Company, entered into Exploration License with the state government of New South Wales, Australia (the "NSW Government"), pursuant to which Watermark Pty paid for the exploration license at a consideration of AUD299,900,000 and obtained the Watermark exploration area of approximately 195 square kilometers in aggregate.

On 29 June 2017, Watermark Pty reached an agreement with the NSW Government in relation to partial extension of the exploration license. Pursuant to the established policies of protection of agricultural activities on the black soil plains, the NSW Government withdrew the exploration license of approximately 100 square kilometres within Watermark exploration area and provided Watermark Pty with economic compensation amounting to AUD261,800,000, and accepted the application for the partial extension of the exploration license of non-black soil plains in Watermark exploration area. According to the agreement upon tendering in 2008, if the mining license of Watermark Pty is approved, then an additional AUD200,000,000 shall be paid to the NSW Government.

There are three planning open-cut mining areas, which are situated within the area of non-black soil plains, for the Watermark Pty Open-cut Coal Mine Project with recoverable reserves of approximately 290 million tonnes (JORC Standards), total designed raw coal production capacity of 10 million tonnes/year and designed service life of 24 years. The total investment amount of the project was approximately AUD1,470,000,000, among which 40% was contributed by Watermark Pty and 60% was financed by way of bank borrowings.

Up to now, the approval from the National Development and Reform Commission of the PRC, the approval for the environmental impact assessment from the Australian Federal Government and the approval from the Planning and Assessment Commission of the NSW Government have been obtained for the Open-cut Coal Mine Project. The environmental protection certification and mining rights license from the NSW Government will be applied for.

Watermark Pty will comply with the requirements of laws in Australia to promote the approval and construction of the Open-cut Coal Mine Project.

SHAREHOLDERS OF THE COMPANY AND POTENTIAL INVESTORS ARE ADVISED TO PAY ATTENTION TO INVESTMENT RISKS AND EXERCISE IN CAUTION WHEN DEALING IN THE SHARES OF THE COMPANY.

By Order of the Board

CHINA SHENHUA ENERGY COMPANY LIMITED HUANG QING

Secretary of the Board of Directors

Beijing, 12 July 2017

As at the date of this announcement, the Board comprises the following: Dr. Ling Wen, Dr. Han Jianguo and Dr. Li Dong as executive directors, Mr. Zhao Jibin as non- executive director, and Dr. Tam Wai Chu, Maria, Dr. Jiang Bo and Ms. Zhong Yingjie, Christina as independent non-executive directors.

It should be noted that the Shenhua Group has been named as one of the top 100 global fossil fuel companies collectively resposible for 72% of all global industrial Green House Gas (GHG) emissions.

The Ladies Who Bake (and organize, lobby, raise funds & volunteer) come out against coal seam gas exploration, mining and production

The Country Women’s Association (CWA) of New South Wales came together for its annual conference on 22-25th May 2017 for the 95th time and debated policy.

Photograph: The Land, 25 May 2017

At this conference the CWA passed the following motion:

Maules Creek Branch (Namoi Group):

Preamble: The results of hosting unconventional gas on farms are properties devalued, mortgages refused, insurance covers rejected, destroys families, divides communities, drains aquifers and turns land into dead zones, sick children, suicide and mental breakdowns.

“That the policy of CWA of NSW shall be to support a ban on unconventional gas exploration, extraction and production”.

With the largest women’s organisation in Australia now having this policy endorsed by one of its founding chapters, NSW Nationals leader and MP for Monaro John Barilaro’s statement that he saw no reason why the coal seam gas industry should not be supported in areas of the state where it would not affect prime agricultural land is not looking as robust a proposition as he perhaps thought two weeks ago.

NSW nurses & midwives stand with Pilliga-Narrabri communities against Santos coal seam gas project

“Santos expects to build 850 production wells over the next two decades” within the mining lease. ABC NEWS, 10 April 2017, PHOTO: An aerial shot of the Santos CSG exploration project in the Pilliga. (Audience supplied: Dean Sewell)

Echo NetDaily, 19 May 2017:

Local nurses are voicing their concerns about the threat to health in a submission to the government objecting not only to the Santos Narrabri Coal Seam Gas Project, but to all CSG mining across NSW.

It was following a successful motion put forward by the Lismore Base Hospital branch of the New South Wales Nurses and Midwives Association that the a submission was lodged.

‘As nurses and midwives we believe that an ecologically sustainable environment promotes health and wellbeing. We are greatly concerned about the health of communities impacted by CSG’, said Heather Ryan Dunn, midwife and Vice President of the Lismore Base branch of the NSWNMA. ‘We also know that climate change is the biggest threat we are currently facing and that decisions made today will impact greatly on future generations.’

The 20 page submission which includes references to CSG well accidents and risks to human health via contaminated water and air pollution, is one of approximately 12,000 already submitted in response to the EIS, a record breaking and resounding ‘no’ from objectors to the project.

Australian Minister for Agriculture and Water Resources seeks to place farm lands and water security in jeopardy

This man is the Deputy Prime Minister, Leader of the National Party of Australia and Minister for Agriculture and Water Resources.

Photograph found at The AIM Network

Member for New England Barnaby Joyce is also the same man who is irresponsibly calling for the dismantling of the already inadequate protections afforded rural and regional lands and water resources when coal seam gas miners move into a district.

Deputy Prime Minister Barnaby Joyce has started dismantling Australia's sweeping ban on coal seam gas drilling, arguing a new scheme to divert a share of government royalties to farmers will overcome furious opposition in the bush.

Mr Joyce on Friday embraced a South Australian government plan to pay farmers 10 per cent of royalties in exchange for allowing gas wells on their land, saying the scheme should be rolled out nationally, with an exclusion of prime agricultural land.

The Agriculture Minister said lifting moratoriums and giving landholders a fair price in exchange for access would equate to "a substantial turnaround in attitude and that is a very good outcome".

"I can't see people who start making hundreds of thousands or possibly millions of dollars a year having a backlash," Mr Joyce told Fairfax Media.

"I think you'll probably find them onside."

Mr Joyce's comments could cause political problems in regional Australia and will be opposed by some MPs in the Coalition party room, where views about the environmental, social and electoral impacts of CSG remain mixed……

National Farmers Federation president Fiona Simson said moratoriums were "blunt instruments" but still needed "because of the lack of confidence the community, including the farming community, have in the way governments have regulated the gas industry in the past".

"Until we have absolute confidence these concerns have been addressed, then moratoriums will be part of the response," she said.

But Joyce said excluding prime agricultural land and productive aquifers from exploration would address most concerns….

Ms Simson said the National Farmers Federation welcomed the South Australian plan to "adequately compensate" farmers, but said "it's never been just about the money".

"The two things we can't and won't compromise on is the secure access to water and land," she said.

NSW Resources Minister Don Harwin said the state gas plan "makes clear that landholders and communities will share in the benefits of gas development, and the government has already made legislative changes to deliver on this commitment."

Since July 2016 companies have been able to apply to establish a Community Benefits Fund from which individuals and organisations can apply for grants for community initiatives.

NSW landowners are also entitled to compensation under a land access agreement struck with a company wishing to drill on their land.

"Further compensation may be payable to landowners if there is any loss or damage resulting from exploration or production," Mr Harwin said.

But opponents say this is insufficient as landowners still have no right to refuse access.

NSW Greens MP Jeremy Buckingham said of Mr Joyce's statement: "Barnaby hasn't got the message that farmers won't be bribed. Rural community know coal seam gas destroys land values".

This is what typical coal seam gas production wells, supporting infrastructure and access roads looks like on rural land.

ABC Four Corners, 3 April 2013