ICAC’s Doyles Creek inquiry hones in on former union boss

The corruption watchdog has this week heard the now notorious former mining minister Ian Macdonald awarded a mining licence in the New South Wales Hunter Valley, which a former union boss set to benefit from.

The allocation of the licence went ahead despite recommendations from his office cautioning him against the decision.

The Independent Commission Against Corruption has heard awarding the licence provided a hefty financial windfall for a former union boss and his associates but to the detriment of NSW taxpayers.

Operation Acacia has investigated the events surrounding Doyles Creek Mining’s allotment of the licence in 2008.

“It was a financial disaster for the people of New South Wales and a goldmine for John Maitland and his associates,” Counsel-Assisting Peter Braham SC said.

ICAC Commissioner David Ipp said the inquiry was looking at the handling of the tender process and the nature of any profits made by shareholders of NuCoal Resources, the owner of Doyles Creek Mining.

The exploration licence was granted over a 62 million tonne coal resource for the purpose of a training mine.

The ICAC heard that Maitland paid about $165,000 for shares in NuCoal Resources, an investment which three years later was worth $15 million.

Braham said those who benefited from the licence were laughing all the way to the bank.

Just a year on NuCoal announced it would mine 4.5 million tonnes of coal a year from Doyle Creek’s now 500 million tonne reserve, the AFR reported.

The projections equate to 12,000 tonne of coal a day, which begs the question, when would there be time for training?

Never-the-less the market responded positively to the announcement and shares jumped to 62 cents in February 2011, making NuCoal a $300 million company.

NuCoal shares closed at 13 cents this afternoon.

To date it has been reported Maitland has sold $8.4 million of stock.

Ipp explained the inquiry would examine Macdonald's relationship with former CFMEU national secretary John Maitland, who was chairman of Doyles Creek Mining and a shareholder in NuCoal, ABC reported.

He announced the operation’s scope had been “widened” to enable the investigation of allegations that Macdonald, Maitland and associates attempted to cover up benefits received in connection with the licence.

Ipp said he would consider whether Macdonald breeched his duties as a minister of the Crown, acting "recklessly or negligently".

The ICAC will also present recommendations to the State Government as to whether legal proceedings should commence against individuals or companies linked Doyles Creek licence.

Braham said the Doyles Creek licence was "gifted to a group of entrepreneurs, including John Maitland".

"The state gained almost nothing from this allocation of hot property to John Maitland and his associates," he said.

"It was a financial disaster for the people of New South Wales and a goldmine for John Maitland and his associates."

Braham described the process Macdonald used to allocate the licence as "astounding".

The inquiry will begin hearing evidence from about 60 witnesses tomorrow, a list that is expected to include a number of current Labor MPs.

The launch of Operation Acacia follows the long-running Operation Jasper investigation into the Mount Penny licence issued by Macdonald in the same area.

The previous inquiry heard allegation Macdonald rigged a 2008 tender to the benefit of fellow Labor colleague Eddie Obeid, whose family stood to make up to $100 million from the coal licence.

Ipp will hand down his findings into both inquiries at the end of July.

In a statement the Construction Forestry Mining and Energy Union (CFMEU) moved to distance itself from the allegations before the ICAC.

The union said it refused to back Maitland's proposal for a training mine at Doyles Creek.

"While Mr Maitland certainly has a strong record in mine training and mine safety, we didn't believe the Doyles Creek proposal stood up to any rigorous examination in terms of contribution to training in the industry or transparency of process," general secretary Andrew Vickers said in a statement.

"We were not willing to put the union's reputation on the line to support it."

The union said Maitland retired two years before the Doyles Creek licence was granted.