$1b mine looks doomed Billion-dollar mine ... Cascade Coal's plans for Mount Penny was going to make some of Australia's richest men even wealthier. CASCADE COAL'S plan for a $1 billion mine at Mount Penny, which would make some of the nation's richest men even richer, appears doomed after Barry O'Farrell said corruption allegations would be considered when deciding the application. The decision, following advice from the Independent Commission Against Corruption, almost certainly means the government will block any attempt by Cascade to turn its exploration licence into a mining licence. A likely loser is the family of the Labor powerbroker Eddie Obeid, who still retain a hidden 9.3 per cent stake in Cascade. Once valuable ... farmland at Mount Penny. Photo: Brockwell Perks Cascade lodged a development application for the mine, in the Bylong Valley, in December 2010. But the exploration licence, approved by the former Labor minister Ian Macdonald, has become the subject of sensational allegations at the ICAC. The commission has heard Mr Macdonald corruptly granted the licence, which has delivered $30 million of a promised $60 million payout to the family of his Labor colleague Mr Obeid, with the possibility of $100 million more should a mining licence be granted. Cascade is the private company set up by "the Magnificent seven" - mining magnates Brian Flannery and Travers Duncan, who are each worth half a billion dollars, as well as former Baker & McKenzie partners John McGuigan and John Atkinson, banker Richard Poole and former RAMS Home Loans founder John "Kingy" Kinghorn. The seventh member was Mr Macdonald's close friend Greg Jones, who kept his share in Cascade hidden to avoid questions that the tender, which Mr Macdonald oversaw, might not have been above board. A spokesman for Cascade said that the company had "at all times acted in good faith in regards to applying for and acquiring the Mount Penny exploration licence and have not been involved in any corrupt conduct." The Cascade statement also said that the directors "on the relevant evidence, were misled and deceived by other parties" and therefore the conduct of those other people, which they did not name, should not affect their plans for Mount Penny. Cascade has a licence to explore, not to mine. The ICAC has heard that should a mining licence be granted, the mine could be worth up to $1 billion. Mr O'Farrell told Parliament that cabinet had decided that if a development application is lodged by Cascade for the mine it would take into account "matters raised before the ICAC and these include allegations of corrupt conduct associated with the grant of an exploration licence." The Premier said cabinet would consider if legislation was needed "to protect the public interest in ensuring probity and propriety in the future granting of mining and exploration licences and project application approvals." The decision potentially affects another exploration licence issued by Mr Macdonald at Doyles Creek, also due to be examined by ICAC in an inquiry codenamed Operation Acacia. The owner, NuCoal, has plans to apply to the NSW government for a mining licence. The ICAC will examine whether Mr Macdonald corruptly awarded the licence to a company, Doyles Creek Mining, bought by NuCoal in 2010. The then chairman of Doyles Creek Mining, John Maitland, is a former union boss and close friend of Mr Macdonald's who received shares worth more than $10 million in NuCoal. A spokesman for NuCoal said: "In the interests of our shareholders, and in accordance with our obligations under the NSW Mining Act, NuCoal Resources will continue to explore Doyles Creek. We note that Operation Acacia is examining a period in time long before NuCoal had any interest in [the exploration licence]. Commissioner David Ipp's advice, delivered to Mr O'Farrell on Wednesday night, is partly based on a legal opinion from Bret Walker, SC. It points out that a minister can take into account "irregularities of a sinister kind" and "nefarious connections" of applicants for mining permits during the approval process, including evidence given at the ICAC. Mr Walker says the application is being dealt with under the old Part 3A system which relies on the director-general raising the issues with the minister. If the government wanted to be sure, he suggests, it could declare the project a "state significant development."