Eddie Obeid-linked miners in compensation talks with state

The NSW government is negotiating a compensation settlement with Cascade Coal and NuCoal.

Former NSW Labor kingmaker Eddie Obeid. Picture: AAP

The NSW government is negotiating a compensation settlement with Cascade Coal and NuCoal after they lost their ­exploration licences because of their associations with Eddie Obeid and Ian Macdonald.

The Australian has learned that representatives of the Premier’s office approached Cascade Coal last year to initiate compensation talks for thousands of shareholders who lost money.

The loss of the licences cost both companies about $850m in lost earnings over seven years, but the compensation being sought is understood to be a far less.

Deputy Premier John ­Barilaro, whose office has taken charge of the matter, declined to comment.

In January, Cascade director John McGuigan wrote to Mr Barilaro in an effort to kickstart ­discussions, which had stalled following a series of on and off-the-record communications with the Premier’s office. Mr McGuigan requested that a secretary or deputy secretary be appointed to lead the negotiations.

“Since April 2019, representatives of Cascade Coal have been liaising with senior officers of the Premier’s office and your office on behalf of both Cascade Coal and NuCoal Limited, with the ­objective of seeking redress,” the letter, obtained by The Australian, says. “It is our understanding that the NSW government now wishes to reach a mutually satisfactory conclusion.”

The development marks a turning point in a spaghetti-­tangle of hearings and appeal judgments that began in 2013 with an Independent Commission Against Corruption investigation into the Obeid and Macdonald mining interests.

Five years earlier, NuCoal and Cascade had acquired exploration licences for areas in the Hunter Valley known as Mount Penny and Doyles Creek.

Cascade was not originally awarded the tender to explore Mount Penny but it seized the ­opportunity to do so when the winning company — Monaro Mining — pulled out because of a lack of financing.

NuCoal was never alleged to have done anything wrong, but Cascade’s problem emerged through its link to the Obeid family — they owned properties on Mount Penny and their co-operation was necessary for any mining venture to be successful.

The ICAC inquiry made a number of findings against Macdonald and Obeid, along with Mr McGuigan and others, including a recommendation that the two companies be stripped of their ­licences because of the taint of ­associated corruption.

Within months of the finding, the NSW government introduced legislation to remove the ­licences without compensation, even though ICAC had recommended money be paid to innocent parties. The NSW Crown Solicitor’s Office later found ICAC’s case against Mr Mc­Guigan was a nullity.

“We’ve been at it six years now, and it’s time it got sorted out,” NuCoal chairman Gordon Galt told The Australian.

“Everyone’s in furious agreement that people were innocent, that compensation should be paid. Being compensated by the NSW government would be an appropriate response to a mistake they made six years ago.”

A NSW parliamentary inquiry ruled in October that the government should address the issue of compensation.