Ex-minister cost NSW millions, judge told

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Former NSW Labor politician Ian Macdonald cost the state up to $100 million when he improperly granted a mining exploration licence to a company connected to his friend and ex-union boss, a judge was told.

The then-mineral resources minister granted a coal exploration licence in NSW's Hunter Valley in December 2008 to Doyles Creek Mining.

That company was chaired by former Construction, Forestry, Mining and Energy Union national secretary John Maitland.

Macdonald, 73, who has pleaded not guilty to misconduct in public office, is accused of favouring the interests of the company by directly allocating the licence without inviting expressions of interests or a competitive tender.

Maitland, 76, has pleaded not guilty with being an accessory before the fact, after allegedly encouraging or assisting the minister in awarding the contract.

At their Supreme Court retrial on Wednesday, prosecutor Philip Hogan said Macdonald abused his discretionary powers in showing favouritism to Maitland due to their longstanding friendship.

Mr Hogan said the state lost significant financial contributions from other interested companies by not proceeding by way of competitive expression of interest or a tender process.

He said the Department of Primary Industries estimated a loss to NSW "in a range of $50 to $100 million".

"The Crown says that Mr Macdonald favoured the interests of Mr Maitland and the company over the interests of the state," Mr Hogan said.

He pointed to China Shenhua Energy company which paid close to an additional $300 million after properly securing a competitive contract at Watermark in 2008.

And in 2006 a subsidiary company of BHP paid an extra $91 million following a similar competitive process. Both were awarded while Macdonald was mineral resources minister.

Mr Hogan submitted that at a meeting on January 17, 2017 Macdonald and Maitland put in place their strategy, part of which was to inflate the significance of an "underground training mine" and downplay the large commercial interests of the site.

"In order to create the view that there was a public benefit that would be served by this mine."

The strategy also involved bolstering the significance of a skills and training shortage in the mining industry, despite this gap easing, "especially in the Hunter Valley region," Mr Hogan said.

Out of some 9.1 million tonnes of coal estimated to be mined over 35 years, only about 150,000 tonnes would be mined via the training ground, showing it was a very small component of a large commercial venture, the court was told.

Over that same period the gross income of the mine was estimated at $9.1 billion.

Macdonald in 2007 appointed Maitland as chairman of the Coal Competence Board, and witnesses are expected to tell Justice Hament Dhanji that the pair's interactions were "convivial" over the years.

The court was also told evidence is expected to show that by this time Macdonald was already planning his retirement from parliament

Macdonald in 2006 told now-Prime Minister Anthony Albanese, former state Labor leader Luke Foley and other party members during a meeting that he had the support of the CFMEU's mining division to continue his parliamentary career to "improve his financial position".

But it was decided that he would retire during the next term after receiving pre-selection in the NSW upper house.

The pair were found guilty by a jury and jailed following their trial in 2017. But the Court of Criminal Appeal quashed their convictions in 2019 after finding the jury was misdirected at trial on the state-of-mind element of the offence.

Maitland is representing himself while Macdonald is in custody after he was convicted alongside Eddie and Moses Obeid in a separate trial over a coal exploration licence in Bylong Valley which granted a $30 million windfall to their family.