Doyles Creek resource played down

Former mining union head John Maitland and his associates played down the size of the Doyles Creek mine coal resources when seeking NSW state government approval for a training facility, the corruption watchdog has heard.

The Independent Commission Against Corruption was told that talking down the size of the coal resource made the training mine more plausible.

But the resource has actually since been estimated to be four times the size of what was originally communicated to the government.

A week after former mining minister Ian Macdonald issued the coal exploration licence for Doyles Creek, an email sent by the mine’s chief executive Glen Lewis on December 24, 2008, to another investor, Craig Ransley, gloats about a 550 million-tonne resource, SMH reports.

Their original application to the department estimated the deposit to be 125 million tonnes.

''We were conservative on the overall tonnage as we only wanted to indicate a sufficient resource to justify the training mine,'' Lewis wrote.

The ICAC is currently investigating whether Macdonald acted corruptly when he granted the exploration licence without tender to a group of Newcastle investors which included Maitland.

Former senior staff within Macdonald’s department have told the ICAC they advised the minister against the decision at the time and that Maitland was a close associate of Macdonald.

Ransley also forwarded the information to some shareholders who were heading off to China to secure investment.

''When you read this you will understand why I can't wipe the smile off my face. Merry Bloody Christmas,'' he wrote.

Previously the ICAC heard evidence that Doyles Creek investors always planned a major coal operation, with a small training operation as ''an adjunct''.

Mine engineer Colin Randall, who was working with the geologist who identified the resource, Guy Palese, has stated he was aware Doyles Creek was to be a major mining operation as early as 2007, before any approval had been granted.

Randall claims there were meetings in April 2007 where the pair discussed a finder's fee for handing over the geological information identifying Doyles Creek.

According to Randall the first meeting was held to discuss a 200 million-tonne resource and the duo had sought a 40 per cent share of the venture fee for their geological find.

''Guy is not going to spill his guts for nothing,'' Randall said at another meeting.

Randall said he was unaware Palese had already done so.

Later, Randall attempted to modify the fee to be based on the size of a 200 million-tonne resource which would’ve been about $3 million.

The fee was never paid.

Randall said Maitland seemed confident he would gain a licence by direct allocation.

He said Maitland mentioned several meetings with the Macdonald and they seemed to have ''an affinity''.

The hearing continues.

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