BUSINESSMAN Andrew Forrest's tactic of having friendly companies hold exploration rights over his farm in Western Australia's Pilbara to stop rivals digging up the land has, for now, come unstuck.
A mining warden in Perth recommended Mines Minister Bill Marmion refuse exploration licences over vast areas of Mr Forrest's Minderoo station applied for by Richcab, a private superannuation company owned by Mr Forrest's friend Christopher Dale.
The warden refused the prospecting licences. This could open the door to other companies making mining claims over Mr Forrest's station.
Warden Kevin Tavener raised concerns about Richcab's ability to prospect and explore for minerals given it is a superannuation trustee propriety company, which needed to make investments with an intention for appreciation in value or providing income.
Richcab applied for 10 exploration and prospecting licences, totalling 1351 square kilometres, located exclusively over the Forrest family station.
In his judgement, Mr Tavener accepted Richcab's argument that its trust deed allowed for the involvement in mining activities.
But he said the mining investments needed to be acceptable to the Commissioner of Taxation and that Richcab should have gained a private ruling from the Australian Tax Office before seeking the licences.
"In my view, where the circumstances are that a superannuation trustee propriety company, with no prior exposure to mineral exploration, is seeking to engage in activities under the Mining Act, it must seek approval from the ATO, by way of a private ruling, to confirm its acceptability," he said.
Mr Tavener said the relationship between Mr Dale and Mr Forrest may need to be addressed, depending on the response from the tax office.
Richcab made the applications after Fortescue Metals Group, Mr Forrest's company, relinquished control of the tenements last year.
Fortescue applied to explore Minderoo months after Mr Forrest bought the family farm in 2009.
In his role as a pastoral leaseholder, Mr Forrest objected to the applications, which triggered a process of "negotiations" between Fortescue and Mr Forrest that lasted several years.
They included securing more than 10 adjournments in the warden's court, as both sides argued they needed time to negotiate land access.