Corruption probe report impacts mega-miner Xstrata, include Resources Minister and Precious Metals Australia

A growing scandal resulting from a West Australian corruption investigation has resulted in the firing of two cabinet ministers, and possible litigation by Swiss mega-miner Xstrata.

Australian news media reports say the West Australian Commission and Crime Commission (CCC) revealed this week that former Resources Minister John Bowler, leaked a November 2004 confidential parliamentary committee report that helped Precious Metals Australia (PMA) secure an AU$18.5 million out of court settlement from Xstrata.

A report published Wednesday in the Australian newspaper, claimed disgraced former West Australian Premier Brian Burke and his business partner Julian Grill, a lobbyist for PMA, were paid at least Aus$1 million for their part in the affair. The leaked draft report was reportedly used by PMA to force Xstrata to drop its lawsuit and pay PMA Aus$20 million in a settlement over the Windimurra vanadium mine.

The Sydney Morning Herald quoted Xstrata Communications Manager James Rickard, who said that “Xstrata has paid close attention to the findings of the CCC in Western Australia.” He told the Herald that it is clear that the official government inquiry into the closure of the vanadium mine was “corrupted.”

Xstrata closed the mine shortly after buying it from PMA, which asserted that the closure was not needed. PMA sued Xstrata in the New South Wales Supreme Court. The CCC report said that Bowler, then a Member of Parliament, initiated a committee investigation into the closure of the mine, according to the Herald.

The CCC said Bowler leaked the committee’s draft report to Grill, just minutes after receiving it. Bowler was fired this week by West Australian Premier Alan Carpenter, along with two other cabinet ministers who allegedly had ties to Burke and Grill.

In a statement to the Australian this week, PMA Managing Director Roderick Smith denied claims that PMA paid Grill and Burke for corrupting the report. In the document, Xstrata was criticized for not doing enough to sell the Windimurra operation to other miners and making it more expensive to reopen the operation.

The document was subsequently used in parliament in an effort to block Xstrata’s effort to acquire Australian miner WMC Resources. In April 2005, Xstrata settled out of court with PMA to defuse a possible threat to its takeover bid. However, BHP would eventually acquire WMC through a higher bid offer.

source:www.mineweb.net