NuCoal threatens legal action over Doyles Creek licence

Mining company NuCoal is preparing to sue corrupt former Labor minister Ian Macdonald and the New South Wales government for millions of dollars in damages.

The threat to sue follows an Independent Commission Against Corruption investigation into its controversial Doyles Creek exploration licence.

The company is also threatening legal action against NSW Resources Minister Chris Hartcher if he doesn't make a decision on the future of the Hunter Valley tenement by the end of January.

The Doyles Creek exploration licence was issued by Mr Macdonald in 2008. But the decision was referred to ICAC by State Parliament in 2011 as it was granted without tender to a company, Doyles Creek Mining, then chaired by a former union official, John Maitland.

NuCoal acquired Doyles Creek Mining for $94 million in February 2010 and Mr Maitland, who is not a director but remains a shareholder, made millions of dollars from the deal.

In August, ICAC found Mr Macdonald and Mr Maitland guilty of corrupt conduct in relation to the issuing of the licence.

On Thursday, NuCoal chairman Gordon Galt issued a statement to the stock exchange foreshadowing the potential legal action to "protect" the interests of shareholders.

Mr Galt noted that ICAC has said it would issue advice to the NSW government on what to do with the Doyles Creek licence by the end of 2013.

This meant ICAC "will have taken 25 months to reach a conclusion".

Mr Galt said the government had not given a timetable for its decision, which meant "there may be another indeterminate wait until the uncertainty created by the ICAC investigations conclude".

Therefore, NuCoal would take "whatever realistic steps it can to protect the company's legal position".

Mr Galt said ICAC had asked the Director of Public Prosecutions for advice as to whether Mr Macdonald could be charged with the crime of "misconduct in public office".

This was similar to the civil tort of "misfeasance in public office", which, if proven, could be the basis for a compensation claim against Mr Macdonald and the state government, he said.

"The NuCoal board has therefore instructed its lawyers to commence preparation of the necessary documents required to initiate proceedings based on civil [misconduct in public office]," he said.

NuCoal has applied to Mr Hartcher for renewal of its Doyles Creek exploration licence and the granting of "assessment leases", the next step towards a full mining licence.

Mr Galt said NuCoal had written to Mr Hartcher threatening to seek an order from the Land and Environment Court if he has not made a decision on the future of Doyles Creek by January 31.