The NSW State Government announced it will cancel mining
licences for Doyles Creek, Mt Penny and Glendon Brook following
ICAC recommendations. Local communities are celebrating the
decision. After ICAC found that the licences were granted corruptly
by Ministers in the last state government Eddie Obeid and Ian
MacDonald, this state government wants to finalise the mess as soon
as possible. But we don't think it will end
The legislation is yet to be seen, but it sounds like in
addition to preventing mining on the sites, it will require all the
exploration data collected by the miners to be handed over to the
State and the miners will still bear the burden of any obligations
to rehabilitate the sites. The State says it won't be paying
any compensation to the miners, and will try to 'indemnify the
taxpayer from any possible claims'.
Predictably the miners are threatening multi-million dollar
claims against the State including a constitutional challenge. In
addition to those claims, aggrieved investors in the miners might
bring a claim against the miners and/or their directors. To win
they would need to show that the directors did or should have known
that the licences were obtained in corrupt circumstances and by
failing to disclose that to the market caused the investors to
file an investment treaty claim against the Commonwealth
Government if they can show that they reside in a foreign State
that has an investment treaty with Australia that would give them
standing to sue the Commonwealth for a breach of the general
investment protections offered under the treaty.
While there may be a number of options open to the investors the
decision to bring any claim will turn on the facts surrounding the
granting of the licences. As the details still seem murky, it is a
case of watch this space.
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It is a common misconception that the grant of mining tenure, whether it be an Exploration Permit, Mineral Development Licence or Mining Lease, will entitle the holder to access all land within it in order to explore or mine.
This briefing note sets out a likely structure for the proposed privatisation of the networks and identifies key issues.
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