GOLDMINING juggernaut Newcrest has been served with a lawsuit challenging its licence to Australia’s biggest underground goldmine, Cadia Far East, a licence granted by NSW powerbroker and former politician Eddie Obeid.
The lawsuit is likely to drag Newcrest into the Independent Commission Against Corruption inquiry where officers from the NSW mines department are scheduled to face questions this week.
Last month, The Australian Financial Review ran a story that covered claims by a small explorer Gold and Copper Resources (GCR)* that Newcrest had been mining in the Cadia/Ridgeway area without a mining licence.
But BusinessDay has obtained a claim served last week on Newcrest which contests the validity of the mining licence itself – and over the leases which cover the underground mine itself.
The problem for Newcrest is that even if its mining rights are legally defensible, there is likely to be a review of all approvals granted by Eddie Obeid, former mines minister Ian Macdonald and development approvals by former state planning minister Tony Kelly.
As a result of explosive evidence tendered at the ICAC inquiry over recent weeks, the NSW government may be forced to act over the granting of mining leases across the state.
As revealed in BusinessDay yesterday, an investigation of the Mines Department by solicitors Clayton Utz had found that there had been a lack of evidence supporting controversial mining approvals as department files had gone
missing. This is believed to be the case, not only for the Doyles Creek mine, now owned by NuCoal, but also for the Mount Penny mine.
In its most recent action against Newcrest, GCR has challenged the validity of the grant of ML1472, which covers a third of the giant Cadia East deposit. Behind GCR is a cabal of influential mining identities including the former Rio Tinto chief Leigh Clifford, founder of Barlow Jonker Jeremy Barlow, former Glencore and Xstrata chairman Willy Strothotte, and venture capitalist Mark Carnegie.
Newcrest has already told the stock exchange that the GCR claims are without foundation but it has not moved to strike out any of the four proceedings. This fifth action was served last week but there has been no response.
According to the Mining Act, a licence (ML) can only be granted with an ”appropriate development consent”. In 2000, the development consent for ML1472 only considered mining purposes. GCR contends that ML1472 should have only been granted for mining purposes, yet it was granted for mining minerals, and GCR claims this was beyond the powers of the minister at the time.
A Newcrest spokeswoman said the company was vigorously defending all five sets of proceedings.
*Gold and Copper Resources is a private company and in no way related or involved with the listed Golden Cross Resources (ASX:GCR).