Two mining companies have expressed anger at the New South Wales Government’s decision to cancel three Hunter Valley coal exploration licences, and say they will fight it vigorously in the courts and seek compensation.

Premier Barry O’Farrell says the government will bring in legislation to cancel the licences at the centre of recent corruption inquiries at Doyles Creek, Mt Penny and Glendon Brook.

The corruption watchdog recommended they be cancelled, describing them as “tainted by corruption”.

The licence holders had until last week to make submissions on why they should retain the rights.

Mr O’Farrell announced the cancellations on Monday, saying the licence owners will not be getting compensation.

Cascade Coal holds the licences for Mount Penny and Glendon Brook.

Its managing director John McGuigan is furious.

“(It’s) grossly unjust,” he said.

“We’ve got the government riding roughshod over legal rights for the sake of political expedience.”

Mr McGuigan says he is shocked at the decision and will fight it.

“We will be doing everything we possible can to protect the assets of the company and interests of our shareholders,” he said.

“(It’s) simply a confiscation of assets that one could contemplate in Mugabe’s Zimbabwe or elsewhere.

“It’s unbelievable to think that this is the conduct that’s recommended and proposed in the state of New South Wales.”

NuCoal has the Doyles Creek licence, its spokesman Patrick Southam says it is extremely disappointing.

“The company will now be looking at all legal avenues to pursue both compensation and damages in the order of $500 million,” he said.

Landowners say fight not over

Craig Shaw is the spokesman for the Bylong Valley Protection Alliance.

He welcomes the decision but says the government still has a lot of work ahead of it.

Mr Shaw says the O’Farrell Government’s continued blaming of the Labor party for the mess detracts from that task.

“They don’t get away that easily, they have been in power now for more than two years,” he said.

“Blaming the former Labor party for what they’ve inherited – they’re the one driving the bus.”

Mr Shaw says there is no doubt that areas will be opened up for tender again but at least the process will go back to the start.

“The department had originally want to put out an area that was a bit bigger than Mount Penny about twice the size spreading further to the west,” he said.

“But it was cut down to make the current Mount Penny area.

“So everything else being equal, I would not be at all surprised if the department eventually goes back to plan A and puts out the larger area.”

Jerrys Plains landowner Allen Barry has been fighting the Doyles Creek project since it was first announced, and says it never should have gone as far as it did.

“I can’t see any great personal victory for myself,” he said.

“What it has done is robbed me of months and months of time, it’s destroyed the health of quite a few people involved.

“The only thing that saddens me is that governments didn’t jump on this earlier.”