Barnaby Joyce says the business case for big new coalmines “no longer stacks up” given the low price and slowing global demand for the fuel.

The agriculture minister’s comments were directed at the $1.2bn Shenhua Watermark coalmine planned for the fertile Liverpool Plains in his New South Wales electorate, but he conceded the financial argument applied in principle to all new coalmines.

Asked whether Shenhua made sense commercially, Joyce replied: “No. Why would you build it. The price of coal is $60 a tonne. It just doesn’t make sense ... The inherent business plan these coalmines used to be stacked up by is no longer there.

“... If that thing [Shenhua] goes ahead it is going to cost them $200m just to say they want to do it, to buy the [state government] licence, $800m to build it, $300m probably to put aside for rehabilitation works – that’s a $1.3bn punt on $60 a tonne spot price. They could go down to the Hunter Valley and buy [a coalmine] for $350m to do exactly the same job.”

“I think if you were making a logical decision, you’d make the logical decision not to go forward with it,” Joyce said in an interview with Guardian Australia.

Asked whether the same financial logic applied to the $16bn Carmichael mine proposed by the Indian company Adani in Queensland, Joyce said “in theory yes ... you would have to look into Adani’s business plan. I haven’t delved deeply into Adani’s business plan, they have to deal with the issue of why they are investing here when you can do it somewhere else.

“But I do look at Shenhua’s books and they have a 42% reduction in profits, China Coal for the first time made a loss and the reason they gave was an over-availability of coal. Well if you have an over-availability of coal it doesn’t make a lot of sense to then go back and say we’re going to invest more than a billion of our own money in building a coalmine.”

China’s coal sector has been hit by chronic overcapacity and lower demand as the country battles pollution and its industrial growth slows. Shenhua’s market-listed arm, China Shenhua Energy, reported a 45% fall in profits for the first six months of this year. Its July monthly production statistics showed it had imported no coal in the first seven months of the year, and reports in China suggest it is actually preparing to export coal. China’s overall coal imports fell 31%. China Coal Energy, a separate state-owned coalmining company, warned in June that it expected losses of around 1bn yuan ($A220m) in the first half of the year.

But Joyce said he believed there were key differences between the Shenhua and Adani projects, including the fierce opposition from local farmers to Shenhua and the fact that it was located in a fertile farming region. He said he had not complained about other mines in his electorate, such as Whitehaven’s Maules Creek mine, although he says he was misled about the problems that would be caused by Whitehaven Werris Creek coalmine, which was creating dust and noise issues for locals and enormous problems with loss of water – the same problems he anticipated would be caused by Shenhua.

The prime minister Tony Abbott has said he understands “people being absolutely passionate to protect the Liverpool Plains” but insisted the Shenhua mine should go ahead because it would create hundreds of jobs.

“Mining and agriculture have coexisted for 100-odd years in this country, they can and should continue to coexist in the future. As all the science tells us, it’s not going to have an impact on the water table. And frankly, if it’s not going to damage the farming areas, if it is going to bring billions of dollars worth of economic activity and hundreds of ongoing jobs, I think we should say ‘let’s go with it’,” he said in July.

Joyce said the $300m figure for Shenhua’s rehabilitation bond was “a rough approximation”. Companies are not always required to pay the money as a bond and can usually offer a financial assurety.

Joyce appeared to suggest the NSW government should demand it as an upfront bond.

Asked whether it should be held as a bond, he said “that’s a very good question for the state government. I think you should have to prove you have the capacity to rehabilitate the site and if you can prove it you should prove you have the money to do it.”

Joyce has strongly backed the government’s proposed changes to the Environment Protection and Biodiversity Conservation to stop so-called “lawfare” – environment groups using legal challenges to stall developments – but they appear unlikely to pass the senate.

When federal environment minister Greg Hunt conditionally approved the Shenhua mine Joyce said the “world has gone mad”, but accepts Hunt was acting as he had to under the law.