NSW exposed in mining quick fix

Mining juggernaut Newcrest nearly saw off a pesky legal challenge to its flagship Cadia operations on Wednesday when the NSW government tried to whisk through retrospective legislation late in the evening.

The move was foiled by incensed Greens MP Jeremy Buckingham, who charged that the Liberal government was merely patching up the mess created by the previous Labor government and its disgraced powerbroker Eddie Obeid, rather than undertaking proper reform.

"The only reason this bill is not going through tonight is that this government got caught sneaking through the bushes taking out the trash," Mr Buckingham said during a fiery exchange with Mining Minister Chris Hartcher at 9.40pm.

"I'm sure that the honourable members [of the NSW upper house] have not had the opportunity to consider this bill. This is a serious matter," Mr Buckingham said as the house was called to order.

The effect of the proposed Mining Amendment (Development Consent) Bill would be to end a lawsuit against the government (and Newcrest, which has joined the action) over the validity of mining leases at Australia's biggest goldmine, Cadia, near Orange.

Gold & Copper Resources (GCR), a small explorer controlled by Brian Locke, has brought a suite of cases against the government. And despite Newcrest saying the lawsuits had no merit, GCR notched up a small win earlier this year, battering the goldminer's share price in the process. In a shock decision in May, the NSW Land and Environment Court quashed an exploration licence held by Newcrest.

The licence application in question was made during the stewardship of disgraced mining minister Ian Macdonald in 2008 and renewal was granted in 2011.

The licence in question, EL3856, encompassed about 70 per cent of Newcrest's wholly owned exploration area in NSW and it surrounds its Cadia Valley Operations mining leases. Cadia, the biggest underground mine in Australia, contains about $200 billion in gold. Newcrest has spent $2 billion in its development.

The wisdom of legislators in overriding the judiciary in favour of a large corporation late in the evening hardly lends credibility to mining in NSW.

Further, parliamentary sources said on Wednesday night that the government had sought to garner support for its bill by saying there could be hundreds of job losses at Cadia if it was not passed.

"Using the people of the central west - to say that their jobs are at stake - is not true," Mr Buckingham said in an attack on Mr Hartcher for using jobs as a pretext for the bill. "If GCR did not have a legitimate case, why is this bill necessary? ... This bill cleans up the mess of Eddie Obeid."

Mr Obeid was mining minister when some of the Cadia approvals were made. Although there is no evidence that anything was untoward during the Obeid ministry, a cloud remains over the approvals process, arising from the findings of the state's Independent Commission Against Corruption.

Mr Buckingham has called for a broader inquiry into all exploration licences issued by the former Labor government and a review of the Mining and Petroleum Acts, after ICAC released its damning report recently that found the allocation system had "so many risks and opportunities for corruption, it was almost inevitable that corruption would occur at some point".

The government deserves some sympathy for inheriting a dreadful mess from years of Labor rule. Given the billions spent in development by Newcrest and other miners it would be too disruptive to put a decade of mining and exploration leases up for tender again.

Yet overriding the courts by stealth - and with a quick-fire scare campaign on job losses - is hardly the answer. Debate on the bill was deferred, and when it returns there should be some debate on "root and branch reform", as Mr Buckingham puts it, so that business can begin to have some faith in the state's approval process.