Gold mining giant Newcrest Mining has been served with a lawsuit from GCR challenging the validity of the miner’s licence to Australia’s largest underground gold mine, Cadia Far East.
Gold and Copper Resources (GCR) is made up of some high profile mining representatives 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, SMH reported.
In a statement released today, Newcrest has already hit back at the claims, telling the ASX that the five separate legal actions that relate to various tenures and activities at the Cadia mine are without foundation.
“We believe that none of the claims has merit. We take our permitting very seriously and are confident that the claims are without merit,” said Newcrest spokeswoman Kerrina Watson yesterday.
GCR currently holds a number exploration licences in the region, all of which are within 50kms of the Cadia mine and is seeking to expand these holdings; Newcrest is claiming that it is seeking to do so "by challenging existing Newcrest exploration tenure in the region".
The Mining Act states a licence may only be granted with "appropriate development consent". In 2000, the development consent for ML1472, the licence in question, only considered mining purposes.
GCR alleges ML1472 should have only been granted for mining purposes yet it was granted for mining minerals, leading GCR to claim this was beyond the powers of the minister at the time the SMH reported.
The Cadia Far East mine licence was incidentally granted by the NSW power broker and former politician Eddie Obeid whose dealings are currently under intense scrutiny at the current ICAC inquiry.
The other key allegation in GCR’s lawsuit surrounds Newcrest’s Cadia Valley Exploration licence. They claim when renewing the licence Newcrest provided “false and misleading information”.
According to the Mining Act, a licence may be terminated or suspended if it can be proven false or misleading information was used to obtain it.
This lawsuit will most likely drag Newcrest into the ICAC inquiry as officers from the NSW mines department are scheduled to face questions this week, SMH reported.
This isn’t the first time Newcrest’s Cadia Far East mine licence has been challenged. Australian Mining reported Newcrest was gearing up to fight legal claims filed by GCR in October regarding its exploration licences and claims of breach of confidence.
The junior explorer first lodged a complaint again the miner late last year, implicating the miner and an employee of the Department of Primary Industries had acted fraudulently in regards to Exploration Licence (EL) 3865.
According to Newcrest at the time, it has also launched legal action "in relation to a breach of confidence in respect of GCR exploration technology".
It is believed that the technology is GCR's large scale gradient array induced polarisation technology, which has been used at the Oyu Tolgoi mine in Mongolia.
Newcrest has dismissed the legal claims, stating that "these matters are not material and do not adversely impact either day to day operations at Cadia or the commencement of commercial production at the Cadia East project".
The miner has been operating at Newcrest for around 15 years, and is planning to invest $1.3 billion into Cadia East over the next five years.
The problem for Newcrest now is, even if they do hold legitimate licences to the mine site in question, all dealings made involving Obeid, mines minister Ian Macdonald and former planning minister Tony Kelly will most probably be reviewed in detail and the government may be forced to act.