Shenhua initially paid $300 million for exploration license 7223 across 20,000 hectares in the basin in 2008.

The withdrawal ends a 13-year process of applications and community opposition over the proposed 10 million tonne a year operation.

Deputy Premier of New South Wales John Barilaro said compromise must be found between mining and agriculture, and unfortunately, the project didn’t hit the mark.

“The New South Wales Government is committed to making New South Wales the number one investment destination for mining in Australia, but we need to find a balance, and this decision will deliver certainty to farmers and the Liverpool Plains community, while guaranteeing protection to parcels of land with high value biodiversity,” Barilaro said.

Shenhua believed the project would have created more than 500 jobs, with company chairman Liu Xiang saying it would always do what was right in the interest of local communities.

“Shenhua Watermark (CSEC subsidiary) is committed to the communities in which we work, and our philosophy of being a socially responsible mining company is well integrated into our operations and is engrained at all levels of our business,” Xiang said.

The agreement between the state government and CSEC will put more than 6000 hectares in the protection of habitat for koalas and other endangered species.

It will also redirect water that would’ve been used in mining to agricultural purposes.

New South Wales State Treasurer Dominic Perrottet said the decision did not mean the end of coal mining in New South Wales.

“The cancellation of this project will mean that no open cut coal mining can occur in the area,” Perrottet said.

“Coal will of course continue to be an important part of our economy and is essential to supporting jobs, and the New South Wales Government continues to support coal exploration in areas where it makes sense.”