By Jonathan Barrett
SYDNEY, Sep 13 (Reuters) - Australian mining billionaire Andrew Forrest has used his private company to apply for thousands of square kilometres of mineral exploration rights over his cattle stations, adding a new twist to an age-old battle between farmers and miners.
While farmers have often tried to keep miners off their land, citing factors such as stressed cattle or damaged water quality, Forrest has taken out exploration rights over much of his pastoral leases, on some occasions rolling them over between controlled companies, so-called "land banking".
Land banking is not illegal, but the practice goes against the spirit of mining laws and the state of Western Australia, which covers Forrest's cattle stations, is currently amending laws to address the issue.
A spokeswoman for Forrest's private investment company, Squadron Resources, said the company was "absolutely not" securing exploration rights on properties leased by Forrest as a blocking manoeuvre.
"Squadron is a bona fide explorer and miner employing a well-qualified and experienced full-time geologist," she said. "Squadron applies for mining tenements in areas it considers are geologically prospective."
Forrest was one of Australia's most prolific explorers in the 2000s when he founded and built Fortescue Metals Group into the world's fourth-biggest iron ore miner, pressuring larger rivals into releasing land they weren't actively exploring.
He also battled fellow resources billionaire Gina Rinehart in the courts after she raised environmental concerns over the operations of Fortescue's primary mine, Cloudbreak, which is located on her pastoral lease.
In recent years, Forrest has dramatically increased his own cattle holdings to cover more than 10,000 sq km (3,900 sq miles), about half the size of Wales.
A Reuters analysis of state exploration leases linked to his private company Squadron found that 34 of the company's 40 exploration and mining leases are wholly or partly on three of his stations: Uaroo, Nanutarra, and Forrest's childhood home, Minderoo.
On at least four occasions, Squadron applied for and took over exploration applications on the Minderoo station that were controlled by another Forrest vehicle, the analysis shows, keeping them under Forrest's control and prolonging their tenure.
Businessman Ross Ladyman, who has sold exploration rights and a mining lease on Minderoo to Forrest, said it was understandable Forrest had built up mineral tenement holdings on his stations.
"I don't think you should be at all surprised that he won't mine the leases. He just doesn't want anyone else disturbing them," said Ladyman. "It will never amount to anything."
CHANGES PLANNED
Western Australia's Pilbara region is the world's biggest iron ore precinct and has underpinned the success of Fortescue, as well as BHP Billiton BHP.AX BLT.L and Rio Tinto RIO.L RIO.AX , helping Forrest become one of Australia's wealthiest businessmen with a $4.2 billion fortune, according to Forbes.
Under state laws, mining and pastoral operations co-exist, with rural land owned by the state but often leased at the same time to both industries.
Forrest has repeatedly raised concerns that some resources companies trying to access his stations had not properly taken environmental concerns into account.
Western Australia's Department of Mines and Petroleum executive director Ivor Roberts told Reuters that all exploration applications, including Squadron's, were "assumed to be bona fide".
However issues around "land banking" were currently being addressed in an amendment to mining legislation now being considered by the state parliament but not yet passed, Roberts said.
The amendment is designed to prohibit the practice of lodging successive exploration applications for particular tenements, thereby quarantining them from rivals, a tactic sometimes used by miners to hold on to prospective ground they can't immediately explore.
Squadron's spokeswoman declined to comment on what ground-disturbing exploration work, if any, the company may have carried out on its leases.
An earlier Reuters analysis of mineral leases found Fortescue found a way to legally apply for just released tenure ahead of the information being made public.