Mining company NuCoal Resources says planned NSW legislation to cancel its Doyles Creek mining licence is "grossly unfair" and it will mount a constitutional challenge to protect its interests.
Premier Barry O'Farrell on Monday announced the new laws to cancel coalmine exploration licences for Doyles Creek and Cascade Coal's proposed Mount Penny and Glendon Brook mines.
He said no compensation would be provided for the cancellation of the licences and the legislation would indemnify taxpayers from any possible claims relating to the issuing or cancellation of the licences.
ICAC recommended last December that the licences for Mount Penny, Doyles Creek and Glendon Brook be cancelled.
The recommendation came months after it handed down corruption findings against former Labor MP Eddie Obeid, former mining minister Ian Macdonald and union official John Maitland.
In a statement to the Australian Stock Exchange on Tuesday, NuCoal's chairman Gordon Galt said the company was "shocked and extremely disappointed" by the decision.
He said there had been no consultation over the matter and only three working days had elapsed since NuCoal's submission against cancellation of its licence was lodged.
"The submission could not have been given genuine consideration having regard to its length, the arguments raised in it and its technical detail," Mr Galt said.
He said NuCoal's submission clearly pointed out legal and factual errors in the bases used by the ICAC for its recommendation to cancel the licence.
"The fact that no compensation is to be payable under the proposed legislation is grossly unfair," he said.
"NuCoal is nothing but an innocent party in this matter as was admitted by the premier prior to the commencement of the ICAC inquiry."
Mr Galt said the government had "focused on the easy target and the destruction of a demonstrably innocent company and its 3400 shareholders".
"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," Mr Galt said.
Cascade Coal said in a statement on Monday night it will take "all steps available" to protect its assets and the interests of its shareholders, and said the "grossly unjust" decision will raise significant questions about sovereign risk.
NuCoal's shares on Tuesday slumped by 4.3 cents, or 56.6 per cent, down to 3.3 cents each.
When asked on Tuesday if the proposed laws would stand up to NuCoal's threatened constitutional challenge, Mr O'Farrell said the government had made its decision on the basis of legal advice.
He also rejected concerns the licence cancellations would create uncertainty for other mining companies thinking of investing in NSW.
He said there was "no evidence that any other mining lease has been subject to the corruption findings of these two", the premier said.
"These are a two-off situation ... nothing that ICAC has unveiled since suggests that it's a widespread practice."
When asked if there should be any consideration of compensation to affected shareholders, Mr O'Farrell said "any investment in the stock market is speculative, full stop".
When asked about Cascade Coal's likening the licence cancellations to something that would happen under the Mugabe regime in Zimbabwe, Mr O'Farrell said: "Well, he would say that, wouldn't he?"