KUALA LUMPUR, Nov 27 — A top official from the Terengganu Land and Mines Department has denied issuing a mining leasehold to CAA Resources, the China-based iron ore company now under a corruption probe for claiming it went through back channels to reopen the Bukit Besi mines.

According to the state’s department director Mohamad Nor Ibrahim, neither CAA Resources nor any of its Malaysian partners or subsidiaries are registered or have permits to reopen the once-famous mines, or anywhere else in the state.

The director said the company’s chairman and chief executive Li Yang must be “hallucinating” to suggest so.

“Since the new mentri besar took over, there has not been any new mining leaseholds, licences or permits being issued to any mining firms,” Mohamad Nor told Malay Mail Online over the phone, referring to Datuk Ahmad Razif Abdul Rahman.

“In fact, the seven companies operating in Bukit Besi currently are those who were given approvals during former mentri besar Datuk Seri Ahmad Said’s tenure,” he added.

The official then explained the necessary procedures that a company has to undergo before the state grants a mining approval, beginning with a direct application to the department.

“Every applicant must apply directly to the department and their submission must be accompanied by a consultant’s report on the mining plan,” he said.

“We (department officials) will then get reactions from various agencies concerned after which a technical committee meeting chaired by myself will be held.”

Mohamad Nor said that once a green light is obtained from the aforementioned committee, a state mineral committee meeting chaired by the mentri besar will then be held to deliberate the proposal.

“Once it is approved again, it will be tabled at the state exco meeting. That is how the process is,” said Mohamad Nor, referring to the state executive council.

He added that after the exco’s approval, the firm would then have to seek a mining approval certificate from the mineral and geoscience department before commencing business.

“We usually give a five-year period for mining leaseholds regardless of any mineral,” Mohamad Nor said.

Last week, Li Yang, a Chinese national, was reported telling the New York Times (NYT) in an article that his iron ore company CAA Resources was awarded a deal to reopen the Bukit Besi mines earlier this year.

He was also quoted telling the US-based daily that with the support of national leaders and the royalty, “you can do anything you want” in Malaysia.

CAA Resources had in October 2013 acquired 60 per cent stake in the Malaysian property investment firm Red Sun Resources, which owns a parcel of land in Bukit Besi, through its Malaysian subsidiary Capture Advance.

Red Sun is jointly-owned by two Malaysians Ng Chon Aik and Lin Siew Wan who received an advance of US$15.1 million (RM50.6 million) for the acquisition.

A wholly-owned subsidiary Capture Bukit Besi Sdn Bhd was formed in September 2013 for the operation on the plot of land, which CAA Resources believed has around 281 megatonnes of iron ore.

With licence in hand, the NYT report claimed that CAA Resources is now clearing Bukit Besi, famously known as “Iron Hill”, which was once the site of the world’s largest iron ore mine.

After the article was picked up by the local press, the Malaysian Anti-Corruption Commission said it will investigate the allegations made by Yang and will seek to meet with the company chairman.

On Monday, Terengganu Mentri Besar Datuk Ahmad Razif Abdul Rahman denied that CAA Resources was awarded the lucrative deal to reopen the Bukit Besi mines through dubious means, saying instead that no such company even approached the state government for such an arrangement.

In a strongly-worded statement, Ahmad Razif said the claims, made by CAA Resources’ Yang in the NYT article last week, were “blatant lies”.