ALLEGED corruption in the Doyles Creek exploration licence approval process is being investigated by the NSW Independent Commission Against Corruption (ICAC), with the possibility of charges for those involved. Disgraced former NSW Mining minister Ian Macdonald was in charge of the license, approved in December 2008 and granted without competitive tender to former union associate John Maitland against departmental advice.
According to The Australian, the granting of the mining exploration licence delivered Mr Maitland and his associates a $48 million profit from the sale to NuCoal, after only investing $165,000.
Mr Macdonald’s former chief of staff Jamie Gibson told the ICAC the approval process was unusual, The Australian reported.
“He wanted it done quickly and he wanted it done in-house,” Mr Gibson said. The mine’s size was originally downplayed to make the plans for a training mine more plausible, the ICAC was told.
The Sydney Morning Herald reported the ICAC heard evidence that the Doyles Creek investors planned a major coal operation from the beginning and the training operation was a small part of the overall plans.
The Doyles Creek tenement EL 7270 is about 27 square kilometres. A submission in 2007 stated the resource was 125 million tonnes, but a week after the licence was granted it was revealed that to be as much as 550mt.
Doyles Creek Mining, a wholly owned subsidiary of NuCoal Resources, was establishing an underground mine training school in the Hunter Valley.
According to the NuCoal website EL 7270 was regarded as “relatively large” for the region.
The tenement contains a 512mt JORC-compliant measured, indicated and inferred resource of semi-soft coking and thermal coal.
It was alleged at the corruption inquiry that the licence was signed by the proponents and Mr Macdonald during an expensive dinner at Catalina restaurant on 15 December 2008.
Mr Gibson said he felt uncomfortable about approval being granted at a restaurant.
“I was personally worried about that,” he said.
“It’s not proper.” NuCoal announced in February that Mitsui Matsushima International (MMI) received foreign investment review board approval for its investment in the Doyles Creek coal project.
If MMI spends up to $40 million on the project it has the right to earn up to 10 per cent equity. Additionally, the company can purchase a further 10 per cent in the project after a bankable feasibility study is completed.