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PERTH (miningweekly.com) – New South Wales Premier Barry O’Farrell has cancelled the Doyles Creek exploration licence, sending the share price of ASX-listed NuCoal tumbling 68%.
The Doyles Creek exploration licence had been subject to controversy after the Independent Commission Against Corruption (ICAC) identified alleged corrupt conduct by the previous owners of the project.
ICAC has recommended that the licence be revoked.
NuCoal’s insistence that it had nothing to do with the alleged corrupt conduct, and its appeal that the project would prove beneficial for the entire New South Wales state, has fallen on deaf ears, with O’Farrell this week cancelling the licence without any compensation to NuCoal.
The Premier said that the legislation to cancel the exploration licence would require all exploration data on the tenements to be provided to the government, and would hold the licence holder responsible for any necessary rehabilitation work on the site.
“There is no intention to immediately re-release the affected areas, but any future process for issuing licences will be consistent with the New South Wales government’s implementation of the ICAC’s recommendations on probity,” O’Farrell said.
He added that the legislation would also indemnify the taxpayers from any possible claims relating to the issuing or the cancellation of the licences, and “draws a line under this sorry saga of Labour politics and corruption in New South Wales”.
NuCoal chairperson Gordon Galt on Tuesday expressed his shock and disappointment at the government’s decision, saying that there had been no consultation on the matter, given that only three working days had elapsed since the company’s submission was lodged with the state government.
“It is difficult to believe that the decision to pursue the course announced by the government was made with a mind open to persuasion, and not pre-set. The submission could not have been given genuine consideration having regard to its length, the arguments raised in it, and its technical detail.”
Galt said that the company clearly pointed out legal and factual errors in the bases used by ICAC for its recommendations to cancel the exploration licence, which the state government failed to rebuff.
“The fact that no compensation is to be payable under the proposed legislation is grossly unfair, with even the ICAC itself suggesting that the government consider paying compensation if it intended to legislate to cancel the exploration licence.
“It is unacceptable that a government considers that it has the right to take – with no compensation – the results of all the detailed exploration NuCoal paid for and the many upfront payments NuCoal made – when it was the government of New South Wales itself that insisted that we spend these funds in accordance with conditions of the exploration licence.”
Galt said that the company would take “whatever action is necessary” to protect its interest, which he said could include a constitutional challenge to the legislation, once it was introduced.
At one stage, NuCoal shares traded hands at A$0.024 a share on Tuesday, but regained some of the losses to close at A$0.034 apiece. On Monday, NuCoal traded at A$0.076 a share.