Why the miners are so keen on public land

Written By: - Date published: 10:19 am, May 3rd, 2010 - 36 comments
Categories: assets, business, capitalism, Mining, national, privatisation - Tags:

If the government’s experts are to be believed, most of this country’s mineral wealth is on private land ($80 billion of $194 billion is on the conservation estate). And there would be nothing like the public reaction to mining on private land that there is on protected conservation land.

So, why the mad plan to take those limited parts of the conversation estate that have been specifically protected from mining because of their outstanding natural value and let mining companies come in to rip them up?

Obviously, National just wants to do favours for its mining industry allies. So, why would the mining companies be so keen on this particular land – what’s so different about mining on public land when there is so much sitting on private land?

Leases.

If a mining company came to you and said ‘there’s gold under your property, we want to dig it up’ you might say a flat ‘no’ or you might say ‘ok, for a price’. You’re not just other people come in to your land, dig up the value beneath and walk away with the profits. You’re going to make sure you get a slice of the action with a lease or something similar.

That’s going to eat into the mining companies’ profits. But if they mine on public land, in all National’s protestations of the benefits of mining have you heard them mention leases? No. Sure, the miners pay a royalty on the minerals but they pay that if the minerals are on private land too.

Mining on private land: Sales revenue minus production costs minus lease minus royalty minus corporate tax minus = profits

Mining on public land: Sales revenue minus production costs minus royalty minus corporate tax minus = bigger profits

That’s what’s so important mining in protected land. It’s not that they couldn’t get the minerals elsewhere, it’s that it wouldn’t make them so much money.

Essentially, they’re playing us for saps and bigger profits. Once again, National is campaigning for the privatisation of public wealth.

36 comments on “Why the miners are so keen on public land ”

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  1. ianmac 1
    3 May 2010 at 10:30 am

    I do hope that the outcry against Mining on the Conservation Estate is not limited to Coramandel and Great Barrier? Will there be as much support to protect Stewart Island?

    • r0b 1.1
      3 May 2010 at 10:41 am

      Me too! In fact – post coming up about that at 1:34…

    • HitchensFan 1.2
      3 May 2010 at 10:53 am

      Yeah I was wondering that too Ianmac. And beautiful Aspiring National Park, which I have spent so many years in climbing and tramping (I bet from looking at him that fat pig Brownlee has never set foot in the place or he wouldn’t be advocating tearing it, or any other Schedule 4 land, up.)

      But I hope the outrage we saw in Auckland on Saturday does extend to all Schedule 4 land.

      I asked this question in an earlier thread but will ask it here too. Is there a plan to have a similar demonstration in Wellington? (Forgive me if it happened in March, I was climbing overseas out of contact with any form of technology so may have missed it).

      Cheers,

      • Lew 1.2.1
        3 May 2010 at 11:02 am

        Brownlee declined an invitation to spend part of the summer break tramping in Mt Aspiring National Park with Darren Hughes, turning it into a Brokeback Mountain joke. So I’d hazard that you’re not wrong.

        L

    • Bill 1.3
      3 May 2010 at 10:53 am

      I’d imagine the opposition would be very much more vociferous in relation to Stewart Island. Sure, there is a smaller population base, but that population stays on Stewart Island for a reason…broadly speakng that reason is that it’s not the Mainland.

      Mining would turn the island into just another piece of mainland shit with a bit of water between it and the rest.

      Meanwhile, how do you transport plant to Stewart Island? Whose cooperation do you need? Not happening.

  2. Sookie 2
    3 May 2010 at 10:39 am

    A mining company would still need to take out a lease with DOC and pay them an annual rental plus comply with a number of conditions of that lease, though the concessions process, which runs parallel to the resource consent process on public conservation land. However, the rent for activities on DOC land is laughably cheap compared to what a private landowner would charge. Rent from leases and other activities on DOC land goes into the Crown Account, which does not necessarily go back to DOC. So the government makes money from the minerals extracted and the rent charged.

    I’m not trying to be smart ass, I just have intimate knowledge of DOC concessions. Its still a bargain for mining companies to pay pathetic annual rents to DOC than pay a savvy landowner.

  3. Lew 3
    3 May 2010 at 10:40 am

    If only the solution was for the government to simply charge leases for mining, with the rate indexed to the sensitivity of the land. But it isn’t, really — it would raise the threshold and exclude some of the more geologically marginal and sensitive areas in the interim, but would permit mining companies to become entrenched as a loss-leading position, and allow future governments to use the lease rates as political-economic leverage, like tax cuts are used at present to make NZ internationally “competitive”.

    L

    • uke 3.1
      3 May 2010 at 10:56 am

      Agreed. Any move at charging leases would just be a thin end of the wedge. In other words, this should not be seen as a “reasonable” compromise.

  4. Maynard J 4
    3 May 2010 at 11:00 am

    It seems everyone has given up on the Paparoa Natinoal park areas – & that’s where it will happen. Coromandel and GBI will be removed from the plans, and the West Coast will wear it.

    Everything I have read lately ignored those areas – and the comments above too…

    and from NZH:

    “The Labour Party says it expects the Government to back off the prospect of mining on Great Barrier Island and in Coromandel in the wake of one of the biggest protest marches in New Zealand’s recent history.”

    • Bright Red 4.1
      3 May 2010 at 11:05 am

      yeah and the Paparoa would be open-cast coal mining, nasty stuff.

      Still, if all the Nats get out of this is a little more coal mining land, when there’s already plenty of that, then their claims that this will be an economic boost will be thoroughly discredited, and they will have worn a huge political cost for no gain.

      • Jim Nald 4.1.1
        3 May 2010 at 11:18 am

        Not ‘will’ but they are already thoroughly discredited.
        Some of the turkeys around cabinet table can see a goose leading them. And the goose is being cooked.

    • Lew 4.2
      3 May 2010 at 11:58 am

      Then there’s the fact that, unlike Aucklanders and Coromandelites, Coasters are overwhelmingly in favour of more mining in their region, in national parks or out. So if we see the streets of Westport full of marchers, they’ll more likely be welcoming the proposal.

      Watch for the equivalence being drawn — and watch for a change in the framing of mining from a national economic development issue to a regional economic development issue, with town set against country, etc.

      L

      • exbrethren 4.2.1
        3 May 2010 at 12:05 pm

        Paparoa was the main focus of the Nelson march, plenty of people were ready to defend it against Brownlees plan.

        No one has given up in this area.

        • HitchensFan 4.2.1.1
          3 May 2010 at 12:09 pm

          Agreed, ex-brethren. And we in the North Island who feel passionately about this haven’t given up on it either.

        • Lew 4.2.1.2
          3 May 2010 at 12:10 pm

          Nelsonites, yeah. Not Coasters. If the government and mining lobby can paint a picture of Nelson as a town of latte-drinking greenie liberal lifestylers begrudging their honest hard-working brethren on the other side of the hill a chance at the riches of the land, then it’s a classic town/country divide of the sort they’re very used to exploiting.

          At present one of National’s critical errors (aside from bringing it up in the first place, and making up numbers on the spot, and so on …) has been allowing mining Sch 4 to be discussed as a national issue, rather than a regional issue. This means they now have to listen to Aucklanders and Wellingtonians who object to mining in places they’ve never been and would struggle to place on a map.

          Don’t get me wrong: I think we all should have a say, since they’re national parks — but it would be better for the mining lobby if we didn’t. So expect the debate to be reframed to attempt to exclude those without a direct, immediate, local stake in the lands in question. Expect GBI and Coromandel to be scrapped to appease Aucklanders, and expect Paparoa and so on to go full steam ahead on the back of strong local support (although the rest of the country hates the idea).

          L

          • Bill 4.2.1.2.1
            3 May 2010 at 12:25 pm

            If your only employment comes through logging, and you or your family are employed by the logging industry, then you’ll defend logging, not necessarily because you think logging is a fantastic thing, but because you’ve got mortgages to pay and a standard of living to protect.

            Same thing if mining provides your employment. Meanwhile, I don’t think there exists anywhere in the world a miner who wants to spend their life underground.

            If mining and logging disappear from the coast is there any prospect beyond that of a series of ghost towns? Insofar as no other possibilities are being articulated (market orientated or otherwise), it would seem safe to assume that is the only future on offer.

            Would you accept that if it was you and your family?

            Given the apparent national paucity of imagination and alternatives, any chance of taxpayers paying locals to not mine? And to not log?

            Or at least joining with Coasters to fight such a fight?

            • Lew 4.2.1.2.1.1
              3 May 2010 at 12:31 pm

              Steady on, Bill. It almost sounds as if you’re advocating some sort of welfare state!

              L

              • Bill …
                3 May 2010 at 1:02 pm

                Well, seems to me that the West Coast would be an apt location to launch a step change in Social Welfare!

                ‘We’ wanted coal and generations of workers paid in terms of chronic ill health and premature death.

                ‘We’ don’t want coal? Why should those same workers pay for that too?

                The West Coast might be offering a starker contrast than is evident throughout much of the rest of contemporary NZ, but the day of that same stark choice being presented to the rest of us…of to continue in destructive employment and contribute to the market driven digging of our communal grave, or not and be plunged into ever deeper levels of market driven individual destitution…isn’t too far away.

                In the context of a continuing market economy, welfare is the only option, if indeed there is to be an an option, to the suicidal business as usual scenario.

          • prism 4.2.1.2.2
            3 May 2010 at 12:35 pm

            Lew You are spot on in your prognosis. We have heard and seen SI West Coasters before. At their worst they are the killers of hapless gays and Asians. The rest of the people are rather paranoidly, warily friendly and the males tend towards the extractive industries. Their leading group managed to lose a lot of money backing an attempt at new local industry when they lost much of the Postie Plus mail order clothing business and tried to go into sock-making and plastics I think. That was done with funds from Labour to assist new directions from the previous mainstay of felling native timber.

            Now they have the dam proposal, although the tourist industry enjoys paying to see the river as it is. But the electricity from it will be a cash cow that they won’t be able to lose money on. I have talked to an environmentalist who says that it is possible to fell a limited number of native trees etc and that regrowth would be enhanced by very limited roading. Perhaps the matter could be looked at again without the rigid environmental fundamentalist input, in exchange for dropping the flooding of another wild and wonderful tourist river attraction.

            Really good thinking going on in this thread – government should be coming here for advice.

            • Draco T Bastard 4.2.1.2.2.1
              3 May 2010 at 2:40 pm

              If we lived within the ecological limits set by nature then we could do as we pleased. The problem is that the capitalist market economy requires perpetual, exponential growth which destroys the ecology (the true source of wealth) in its quest for profits.

              Capitalism – it’s a cancer of the world.

              • Bored …
                3 May 2010 at 4:44 pm

                Nice analogy, never thought of it as cancerous in terms of constant growth till it kills things, well said.

  5. just saying 5
    3 May 2010 at 11:15 am

    I’d thought about the minerals under private land too Marty G, but differently.
    Doesn’t the govt have the authority to compel home owners to sell their homes in the interests of the “greater good”, like new motorways. I’d love to see the fall-out if they tried using the same authority to uproot farmers for the current market value of their land, to get at crown-owned minerals under the ground.
    Always the double standard.

    Maybe we should demand to know exactly where the minerals below private land are, and that they send in a few dig-and-see research teams, just to see how commited this govt really is, to their stated determination to mine our way out of our financial woes.

    • vto 5.1
      3 May 2010 at 11:34 am

      just saying “Doesn’t the govt have the authority to compel home owners to sell their homes in the interests of the “greater good’, like new motorways. I’d love to see the fall-out if they tried using the same authority to uproot farmers for the current market value of their land, to get at crown-owned minerals under the ground.”

      It aint just “public good”, the authority can be used for “private good” too. Witness the despicable fact that Central Plains Water have been made a Requiring Authority for just that purpose. Stinks to the high heavens…

      And re knwing exactly where the minerals are.. In South Oz all info discovered by a minerals exploration outfit must be turned over to the govt (public domain) after a short period of time. The reason is that it adds to and benefits the wider public through efficiency (not having to repeat he exploration). NZ never had this and I think it is still lacking..

      • insider 5.1.1
        3 May 2010 at 2:18 pm

        It’s required under petroleum exploration permits. From memory it is held secret for the life of the permit or five years whichever comes first then it becomes public info.

  6. george 6
    3 May 2010 at 11:55 am

    Mining of most of the Coromandel sites could be done from private land in much the same way Pike River mines Paparoa but again access would be a lot more expensive.

  7. RedLogix 7
    3 May 2010 at 12:37 pm

    I’m less than convinced by this particular argument Marty.

    The reason why the most interesting exploration areas are in the Conservation estate is pretty much the same reason why the land is in the estate in the first place.

    Most privately held rural land is valued for it’s farming potential, which is pretty much in direct proportion to soil fertility and ease of cultivation. It was of course the river flats that were the prized farm land, with hill country very much second best. Anything with actual hard rock and real mountains is useless for farming…and yet these are the places you expect to find valuable minerals. (The obvious exceptions are of course gold/silver dredging and lignite coal, but we already have plenty of that kind of extraction happening on private land anyhow.)

    It was the left-over land that no-one wanted for farming that became the Conservation estate, and over time has been valued for it’s intrinsic beauty, wilderness and a last refuge for many threatened species. Of course not that any of these things mean much to big corporates looking to make short-term profits at our long-term expense.

  8. Zak Creedo 8
    3 May 2010 at 4:38 pm

    marty,

    I’m surprised to find this line of argument here. One immediate inference — and yes I took a look at sookie’s comment above — is that the government (or someone) could up the DOC rent and miners could go ahead.. for it to be okay with you.

    Given redlogix’ s pov, too, that cons areas are likely leftovers, the whole push for mining explore/exploitation would pass to them at their own risk. More justifiable propositioning..?

    What we’d really wanna know for sure is well just what are miners after.? Something, someone not telling..

    The matter of damage and damages is something else. Miners doing it for nothing is a real bad look as the BP Deepwater — yeah they’re mining for their own stuff — is making clear elsewhere.

    Suggest you sort this out..

  9. Kleefer 9
    3 May 2010 at 6:07 pm

    Simple solution here. Sell off all public land. If the conservation value of the land is so great people and/or environmental groups are willing to pay more for it than what the mining companies are prepared to pay for the mineral value beneath then they can purchase the land and look after it.

    Private landowners generally make much better stewards of land than governments because of the financial and emotional investment they have in it. They can charge for access to the land to help cover the cost of maintaining it and they can choose who they allow to enter that land. They can even (heaven forbid) tell the mining companies where and how they are allowed to mine on the property (or they could tell them to sod off).

    Considering the number of people that turned out to protest mining on the weekend it shouldn’t be hard to raise enough funds to purchase considerable amounts of conservation land, particularly when you’ve got wealthy celebrities like Lucy Lawless involved.

    But I suspect many of these protesters think that other people should pay to protect the things they value. It’s easy to put other people’s money where your mouth is.

    • Lew 9.1
      3 May 2010 at 7:54 pm

      But then it won’t be public land any more. It won’t be “ours”. That’s the bit that matters — why people care about mining it — because it’s ours.

      If you care to test my argument, form a political party based on the promise to sell it all off and see how far you get.

      Oh, wait. Heh.

      L

    • felix 9.2
      3 May 2010 at 9:25 pm

      So your “simple solution” is that those with the biggest wallets decide everything.

      Simple indeed, Kleefer.

  10. Jim Nald 10
    4 May 2010 at 2:51 pm

    Was watching questions in the House.
    Turei was asking questions.
    Brownlee appearing now to be advocating a “balanced” diet of mining and conservation?
    Can someone assure me he is not very quickly slimming facts and trying to starve the truth?

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