Xstrata considers legal action over Aussie mine probe

Vancouver – Swiss mining giant Xstrata (XTA-L, XSRAF-O) is considering legal action after a corruption investigation revealed it lost a $20 million law suit following a corrupted West Australian parliamentary inquiry into the closure of its Windimurra mine.

According to a published report in the Sydney Morning Herald, Western Australias Corruption and Crime Commission (CCC) found that former Labor Minister John Bowler leaked a confidential parliamentary committee report to a lobbyist named Julian Grill, then made changes to it based on feedback from Grills client, Precious Metals Australia (PMA-A).

The CCC said this report was instrumental in Precious Metals Australia wining a $20 million lawsuit against Xstrata.

Reached in London, England, Xstrata spokeswoman Claire Divver said the company was examining all options, including “legal action.”

Our view is that the official inquiry into the closure of the Windimurra vanadium mine was corrupted, she said.

Therefore the committees final report is discredited and we are considering all options available to us at this time.”

PMA held a royalty interest in the Windimurra mine when Xstrata elected to close the unprofitable operation in 2004. Claiming the closure was unnecessary, PMA commenced legal action against Xstrata, while employing Grill to assist in the dispute.

The CCC said Bowler, [at a time when he was a back bencher] initiated a committee investigation into the closure of the mine at the urging of Grill.

Months later, according to a published report, Bowler leaked to Grill the committees draft report, just 38 minutes after he received it, despite being instructed not to, the CCC inquiry was told.

After Grill received feedback from PMA, a significant number of the suggestions made by PMA ended up in the final report, tabled in November 2004. In some cases, entire blocks of text ended up in the report verbatim.

Bowler was recently sacked from cabinet and told to leave the Australian Labour Party.