Dartbrook Coal Mine Gets Six-Year Extension Amid Insolvency and Conflict Allegations

The Dartbrook coal mine in the NSW Hunter Valley has been granted a six-year operating extension by the New South Wales government, allowing it to continue operations until 2033 and permit the extraction of an additional 36 million tonnes of coal. This decision comes as the mine faces insolvency, having entered administration and receivership in mid-2025 due to a default on a $202 million loan. Concurrently, the mine is subject to allegations of undisclosed conflicts of interest involving senior management, which were outlined in an external forensic investigation report.

Mine Status and Government Extension

The Dartbrook mine, a joint venture between Australian Pacific Coal (AQC) and Tetra Resources, was reactivated in late 2024. Less than a year later, in mid-2025, it entered administration and receivership. This insolvency was triggered by a default on a $202 million loan, with an additional $5 million reportedly owed to unsecured creditors. The mine's workforce has been reduced by two-thirds, and AQC, one of the joint venture partners, has been suspended from the stock exchange since October.

The NSW government's approval of the six-year extension allows the mine to continue operating until 2033. Receivers FTI Consulting confirmed that the sales process for Dartbrook is ongoing, and they welcomed the extension approval, noting it could enhance the mine's salability.

Receivers FTI Consulting welcomed the extension approval, noting it could enhance the mine's salability.

Allegations of Conflicts of Interest

An external forensic investigation, commissioned by AQC and conducted by financial firm McGrath Nicol, outlined "preliminary findings" of apparent conflicts of interest by senior managers. The investigation, which examined the mine's finances from January 2022 to June 2024, was initiated after a whistleblower raised concerns regarding relationships between the mine and executives at Tetra Resources, its joint venture partner and manager. The report suggested that "a number of related parties" benefited as preferred suppliers.

Ayten Saridas, then-AQC chief executive, stated she resigned in late 2024, indicating she believed the report's findings were not addressed. She also stated she had escalated concerns regarding governance, operational, and financial management of the Dartbrook Mine.

Tetra Resources, which holds a 20 percent share and managed the mine, was central to the report's findings. The investigation claimed to identify over a dozen transactions between the mine and third parties that may be considered "non-arms length" due to undisclosed professional and/or personal relationships. These relationships were reportedly not formally disclosed or managed by the individuals involved. Investigators claimed $13 million was paid to these third-party contractors, but they were not provided with sufficient information to justify the payments or the work performed.

Specific Contractual Arrangements Questioned

The report referred to Tetra's CEO Michael Mapp and Executive Chair Brian MacDonald, stating they appeared to have been involved in decisions to award contracts to companies they directed.

Examples cited in the report include:

• PBE Ensham Operations: The Dartbrook mine reportedly paid $2.3 million over 15 months for equipment hire. According to ASIC records, Mr. Mapp and Mr. MacDonald are directors of this entity and indirect shareholders through PBE Mining. The report noted that both individuals signed the Equipment Hire Agreement as representatives of both contracting parties.
• PBE Mining (related): Shane Kuflik, Tetra's chief financial officer, was identified as an indirect shareholder of PBE Mining. The report stated this arrangement was not disclosed to the Management Committee or included in the conflicts of interest register.
• SM Mining Maintenance: Linked to Michael Mapp, this company billed Dartbrook $1.1 million for "consultancy services." Investigators stated contracts were not provided, and purchase orders could not be located.
• Apex Trade Services: Also linked to Michael Mapp, this company received $396,000 for "electrician/operator/supervisor" services. Investigators requested contracts but stated they were not provided, and purchase orders could not be located.
• Ram Mining and Training Solutions: This company, whose sole director and sole shareholder shared the last name Mapp, received $309,000 from the mine. Investigators reportedly found only $70,000 approved as a purchase order.
• Back 2 Black Consulting: Directed by Shane Kuflik, this business billed the mine approximately $850,000 for financial services. Investigators stated it was unclear what services were contracted, and metadata on a financial services agreement indicated it was created on the same day it was requested.

The report raised the possibility that Mr. Mapp and Mr. MacDonald may have breached the mine's conflict of interest rules, code of conduct, and the joint venture agreement by reportedly failing to disclose personal and professional links. Dartbrook's code of conduct requires avoiding even the appearance of a conflict of interest, and the joint venture agreement mandates "arm's length" deals or management committee approval for related parties.

Responses and Company Statements

Mr. Mapp and Mr. MacDonald, through their lawyer, provided a statement asserting that Dartbrook Operations acted transparently and in good faith. They stated that all transactions were properly budgeted, disclosed, and undertaken on commercial arm's-length terms, with all relevant relationships known to the Joint Venturers and Lenders. Mr. Kuflik did not respond to requests for comment.

AQC, which has been suspended on the stock exchange since October, declined to comment. The mine's administrators and receivers also declined to comment on the report, though receivers FTI Consulting anticipate a sale of the Dartbrook mine in the first quarter of this year.

Mine Sale Process and Future Outlook

Receivers FTI Consulting confirmed that the sales process for Dartbrook is ongoing, with an update anticipated soon. There are reportedly two interested parties in the acquisition of the mine, which currently has approximately 150,000 tonnes of coal stockpiled. Receivers have indicated plans to transition Dartbrook into care and maintenance mode if a buyer is not secured.

Stakeholder Commentary on Extension

Local political and community leaders offered varying perspectives on the government's decision to grant the extension:

• Dave Layzell, State Member for Upper Hunter: Characterized the decision as a "lost opportunity" for the government to leverage the extension for debt repayment to local operators and contractors. He highlighted the significant coal reserves at Dartbrook and the potential for future revenue.
• Unnamed Local Operator: Expressed dissatisfaction with the decision, citing unpaid amounts and questioning future engagement with the mine.
• Jeff Drayton, Muswellbrook Shire Mayor: Expressed support for the extension, suggesting it will enhance the mine's salability as negotiations continue. He indicated hope for renewed production, job creation, and repayment to local businesses, noting that local debts could lead to bankruptcies.