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TheStreet Open House

China's Money Changes The Landscape In Australia

"It's a new phenomenon. It's challenging some of the old assumptions in Australia," he says.

Including the price of land in Gunnedah.

Paul Smyth almost fell off his harvester and into a crop of sunflowers when a Shenhua representative called him on his cellphone two years ago to offer AU$6 million for his 1,100-acre farm â¿¿ quadruple its market value. Smyth had bought the farm 12 years earlier for around AU$700,000.

"You'll have to run that past me again; I'm in a very noisy machine," he recalls saying. "I heard him first up, but I just couldn't believe my ears."

He adds: "If I lived two or three lifetimes there, I would never see a farmer come along and want to buy it at that price."

Once word got around that he had sold, others who had once greeted him with a friendly "G'day" stopped acknowledging him.

"If I was in their shoes, I'd be exactly the same way, I guess," says Smyth, who has retired at 57 and moved to a 3-acre property near the coast.

Those who remain are in limbo.

Shenhua has completed exploratory drilling after paying New South Wales state AU$300 million for exploration rights, but it won't be able to mine unless it wins state environmental approval for what would be three open-cut pits.

With the future uncertain, farmers don't want to invest in improving their farms, and no one wants to buy them. The affected include those who chose not to sell and others who were never given the choice, because they live on the periphery of the actual coal mining zone.

"I've got 1,000 hectares of land that's irrigated from underneath," says Andrew Pursehouse, whose farm lies outside the zone but under ridges that Shenhua plans to excavate. "If something happens to that water resource, my land is going to be worth only a third of what it is now."

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