Australian mining company threatens constitutional challenge

Australian mining company NuCoal Rosources on Tuesday expressed its disappointment over the New South Wales (NSW) government's decision to cancel its Doyles Creek coal exploration license, saying "it will take whatever action is necessary to protect its interests".

"NuCoal is shocked and extremely disappointed by this decision, "NuCoal's Chairman Gordon Galt said in a statement released to the Australian Stock Exchange on Tuesday.

In December 2013, the Independent Commission Against Corruption (ICAC) recommended the licenses for Doyles Creek and Cascade Coal' s proposed Mount Penny and Glendon Brook mines be cancelled.

The recommendation came months after it handed down corruption findings against former Labor Member of Parliament Eddie Obeid, former mining minister Ian Macdonald and union official John Maitland.

NSW Premier Barry O'Farrell on Monday announced the cancellation of the licenses and said no compensation would be provided for the cancellation under the proposed legislation.

NuCoal's Chairman Galt said NuCoal's submission clearly pointed out legal and factual errors in the bases used by the ICAC for its recommendation to cancel the license.

"The fact that no compensation is to be payable under the proposed legislation is grossly unfair," he said.

"NuCoal will take whatever action is necessary to protect its interests and that of its shareholders, including by way of a constitutional challenge to the legislation once introduced."

Meanwhile, Cascade Coal's Managing Director John McGuigan said the government's decision was "grossly unjust".

"We will be doing everything we possibly can to protect the assets of the company and interests of our shareholders," McGuigan said.