NuCoal announced yesterday that it had received a 40% lower offer by its Japanese partner Mitsui Matsushima for a 10% interest in its flagship Doyles Creek project as the uncertainty over the Hunter Valley project grew, despite the company spending more than $30 million to prove up the resource.

The state government made the unprecedented step last week of moving a bill that would allow it to quash exploration licenses if they were found to be issued corruptly, such as those provided for Doyles Creek and the Mt Penny leases by former mines minister Ian Macdonald.

NuCoal was not party to the corrupt transactions and claims its shareholders are being unfairly punished. Its market capitalisation is now less than a quarter of its intrinsic value because of the uncertainty.

The Independent Commission Against Corruption’s second report on advice to the government over what it should it do with the Doyles Creek and Mt Penny leases is due by the end of the year, but it is believed to be ready for release by next week.

NSW Resources and Energy Minister Chris Hartcher told ILN the government had to act to salvage the state’s reputation in light of the ICAC findings on Doyles Creek and Mt Penny.

“It surprises us how well aware overseas investors are aware of the anti-corruption inquiry hearings,” he told ILN.

“We do live in a global market but I have representatives of major companies that operate in countries that are markets for us raise the issue of the anti-corruption hearings.

“So the investors – maybe not the public in those countries – are well aware of the anti-corruption determinations and they’re concerned to know and be reassured the implications will not affect their operations.”

The state government is determined to win back investor confidence, Hartcher said.

“We are well aware that the great majority of mining companies are not NSW based but globally based,” he told ILN.

“Coal is the major part of the state’s mining industry.

“We are in competition with Mongolia, Colombia, South Africa and now US, which is now in the export market.

“We are acutely aware in a global market.

“We’ve got considerable competition. We’ve also got competition from Queensland but they’re mainly coking coal and we’re mainly thermal coal.

“Once we finalise the new planning policy,[our aim] is to get out there and market NSW as an attractive destination to the global investors which are in London, New York, China and increasingly in India as well as the traditional markets in Japan and Korea.”

NuCoal chairman Gordon Galt will be briefing shareholders in today’s AGM – which is closed to the media -- on options open to the company if the leases are revoked including taking legal action against Macdonald.

Mitsui is now offering $24 million for the 10% stake in NuCoal instead of the $40 million originally planned before the ICAC hearings began.