Former coal buddies in royalties battle
EMBATTLED mining magnate Nathan Tinkler and his former business partner Matthew Higgins are facing off in a legal battle over royalty payments from the New South Wales coal mine deal that propelled them from Hunter Valley pit electricians to millionaires.
Mr Higgins, who used to run Mr Tinkler's maintenance business in Muswellbrook, is taking civil action in the Brisbane Supreme Court to gain access to the financial records of Oceltip, in which both are directors and shareholders.
The case includes allegations that Mr Tinkler has diverted funds from Oceltip's bank account without Mr Higgins' knowledge or approval.
Oceltip was set up in 2007 after the then friends famously sold or invested everything they had to scrape together a $1 million deposit to buy a neglected coal tenement at Middlemount, in Central Queensland, for $30 million, through Mr Tinkler's company Custom Mining.
Mr Higgins, who ran the drilling team at Middlemount and spent his evenings with Mr Tinkler at the local pub, had a 20 per cent share in the company that was sold in about a year to Macarthur Coal for $65 million in cash and shares valued at up to $210 million.
After the deal Mr Higgins walked away, from the business and the friendship, with a reported $53 million in cash from an initial investment of about $200,000. Mr Tinkler went on to sell his Macarthur shares months later for $442 million.
But before selling Custom Mining the pair, who no longer speak, struck a coal royalty agreement that would bind them for the life of the Middlemount mine.
Their Newcastle-based company Oceltip, 75 per cent owned by Mr Tinkler's wife Rebecca and 25 per cent by Mr Higgins' wife Ruth, receives $1 for every tonne of coal mined from Middlemount, with payments due every quarter.
Oceltip's quarterly royalty payments started in September 2009 at $3685 and grew to $484,519 in March and $519,355 in June this year.
Neither man has spoken publicly about what severed their solid friendship, with this legal battle the first insight into the relationship.
An affidavit submitted to the court on November 29 by Mr Higgins' lawyer David Schwarz details months of correspondence between the former friends' legal teams and frustration by Mr Higgins over missing bank statements, no company ledger and allegations some of the royalty payments were diverted to one of Mr Tinkler's private companies.
Mr Tinkler's Sydney-based public relations spokesman refused to comment yesterday and Mr Higgins did not respond. The matter is listed to be heard in the Brisbane Supreme Court on Friday.