‘Dig & hope’ – Nats’ great plan

Written By: - Date published: 10:30 am, March 25th, 2010 - 43 comments
Categories: Conservation, Economy, Mining, national, spin - Tags: , ,

National’s mining policy seems to be ‘dig and hope’. That’s the only conclusion one can draw after Gerry Brownlee admitted he had no idea of the value of the gold and silver that are supposed to be on Great Barrier and Nick Smith admitted the same about the other areas of protected land National wants to open up.

TV One asked Brownlee why he was claiming there is $4.3 billion of gold and silver in the area on Great Barrier when the geologist’s report says $1.3 billion*. He said “until you get something out of the ground, you simply don’t know what the story is”.

Remember, this is National’s lynch-pin economic policy. They are trying to convince us we have to let them dig up these protected lands for the sake of the economy, and they have no idea of the value of what’s there.

They have provided no estimates of the impact of allowing mining in these areas on GDP, on the current account deficit, on jobs,on Crown revenue etc, and over what time period. Because they haven’t got the slightest clue.

Smith’s response was to say that’s why the government is paying for $4 million of surveying. That doesn’t stack up. That surveying will be happening in Kahurangi and Stewart Island. The Nats want to dig up the Coromandel, Great Barrier, and Paparoa on the basis of existing information.

Meanwhile, Brownlee had a be of a temper tantrum yesterday and issued a bizarre angry press release. You’ll have to indulge me because he rambles on for quite a while but I’ve tried to address each of his claims:

Some facts about mining in New Zealand

Press Release by New Zealand Government at 4:08 pm, 24 Mar 2010

Minister of Energy and Resources Gerry Brownlee says much of the noise around the government’s modest proposals to open up a portion of Schedule Four land for possible mining is ignoring the facts about mining’s role in the economy.

“Green mining is not an oxymoron, and the government has made it clear that should Schedule Four lands be released, and should those lands show viable mining prospects, only modest and environmentally responsible mining would ever take place,” Mr Brownlee said.

“As for suggestions that modest and environmentally responsible mining on a small portion of the conservation estate would be ruinous to New Zealand’s international reputation, the facts to date suggest nothing could be further from the truth.”

Fact: There is already mining on conservation land

As at September 2009 there were 82 mines already operating on conservation land.[1] Many permits were issued by the last Labour-led government.

Yes, there are but none of them are on Schedule 4 land. Schedule 4 was established specifically to protect special areas from mining.

Between 2000 and 2008 international tourist numbers to the country increased 37 per cent from 1,789,078 in 2000 to 2,447,208 in 2008.[2]

Which doesn’t mean a thing because we weren’t mining National Parks then. We are in danger of losing our international tourism branding, recent articles in The Guardian and The Economist show the threat. And, anyway, our special conservation areas are mainly for us, the people of this country. They’re not just there to be tourism moneymakers.

Fact: Mining in New Zealand is a $2 billion industry

2008 was a record year of production for New Zealand mining. The industry has been growing strongly in recent years, driven by global demand for our resources.[3]

Actually, mining is $900 million a year. Oil and gas, which are excluded from this minerals policy, are $1.1 billion. Even combined, $2 billion is just over 1% of GDP. Even if the mineral mining industry somehow doubled in size to $2 billion a year (and it won’t do that on the back of the $18 billion in minerals in the areas National wants to delist) that would make an insignificant difference to the economy. Also, there’s the question of who profits from the GDP (foreign-owned companies).

Fact: Mining is an important export industry for New Zealand

In 2009, mining brought in $1.1 billion worth of export receipts for New Zealand.[4]

Notice Brownlee is talking just about minerals now, not counting oil and gas too. $1.1 billion is just 2.5% of NZ’s total exports. Again, doubling this would be insignificant and is impossible using just the land in question.

Fact: Mining employs thousands of New Zealanders in high-paying, highly productive jobs

The mining sector, including oil and gas, directly employs about 6,000 people in New Zealand and thousands more indirectly.[5]

Jobs in the mining sector are highly productive. In the 2000-2005 period the mining sector (including oil and gas) returned an average $360,000 of GDP per full time employee, nearly six times the national average.[6]

Workers in the mining sector average an income of $60,000 per employee – over double the national average.[7]

Mining, including oil and gas, employs just 6,000 people and brings less than half a billion in wages into the economy. The bulk of its $6.8 billion revenue goes to importing capital (mining equipment) and sending profits overseas. Yes, we do ultimately want capital intensive, highly-productive jobs but only if the wealth produced stays in New Zealand and not at the expense of our natural wealth. Mining sends the lion’s share of the money overseas. We get left with the scarred land.

Fact: Mining is far more productive than most other land-intensive applications

Mines in New Zealand use an extremely small amount of land (around 4,000 hectares), less than 0.015 per cent of our total land area.

The export value of that land is $175,000 per hectare. Dairy farming by comparison uses 2 million hectares of land with an export value of only $3,500 per hectare.[8]

And a private hospital or a financial institution will produce far more times that wealth per hectare. why not cover the country in private hospitals and offshore financial institutions!.. oh wait, that’s the plan. Anyway, the comparison is fallacious. We couldn’t convert all the dairy farms to mines if we wanted, the minerals aren’t there. And (if you’ll excuse the blatant Avatar line) the real value of this world isn’t in the ground it’s in the world around us, in the bush. Is it worth destroying the Parakawai and Othau Ecological Areas to get at a few tens of millions of aggregate that we could get from elsewhere?

Fact: Mining companies in New Zealand are New Zealand-owned as well as foreign owned

The largest mining company in New Zealand is Solid Energy, which as a state-owned enterprise is 100 per cent owned by the New Zealand taxpayer.

Between 2000 and 2009 Solid Energy made profits of $466 million and returned dividends to the Crown of $90 million.[9]

Yup. Solid Energy is New Zealand-owned. That doesn’t give it the right to tear up (and CEO on Elder is talking about open-cast mining) thousands of hectares of National Park. The rest of the major players are foreign-owned, mostly notably Newmont, which owns the Waihi mine.

In fact NZX listed resources stocks have on average 57% local ownership compared to 43% offshore ownership.[10]

And what about the miners that are not listed on the NZX because they’re wholly foreign-owned, like Newmont? They’re the big players. Also, the 57% is not a weighted average for the size of the companies, it counts the high local ownership of smaller companies the same as low local ownership of the bigger companies.*

“As I said at the release of the government’s discussion paper on the mineral potential of Schedule Four land, New Zealand is a mineral rich country and the minerals sector has an important role to play in growing our economy.

Most of the mineral wealth is not on Schedule 4 land. 60% is outside the conservation estate altogether and 90% is not in the areas that the Nats want to remove from Schedule 4 protection.

“Whether Schedule Four land plays any part delivering greater prosperity, security and opportunity for all New Zealanders by way of mining is up for discussion over the next six weeks,” Mr Brownlee said.

We know how this game plays out, Gerry. You play the bad guy. Key will can the Great Barrier Island idea. And you’ll add some areas safely out of site in Stewart Island.

* Brownlee is now claiming the geologist’s report only covers two of three gold-bearing seams on Great Barrier and it is this third seam that contains the missing $3 billion of minerals. That’s a lie. The report concludes the third seam is exhausted. Phil Goff’s interview on Radio New Zealand is morning was very good. He pointed out the huge quantities of ore that need to be extracted and turned into toxic tailings to get at the gold. He also pointed out that 60% of NZ’s mineral wealth isn’t on conservation land and Labour supports responsible mining of those resources

43 comments on “‘Dig & hope’ – Nats’ great plan ”

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  1. Jim Nald 1
    25 March 2010 at 11:06 am

    Hmm. You reckon this smacks of hollow men taking us a step towards a rebranding to Hollow NZ ?

  2. outofbed 2
    25 March 2010 at 11:16 am

    Every cloud has a silver lining.. I just wanna say thank you Gerry
    Every so often the “green’ movement needs a kick up the bum and Gerry certainly has done that.
    Keep those press releases coming ,Gerry.you should be knighted for services to the “green” movement

    • Rose 2.1
      25 March 2010 at 1:41 pm

      out of bed- message

    • Irascible 2.2
      25 March 2010 at 4:00 pm

      Gerry says that mining is considered as a “green” industry by countries overseas. Ergo National is a green political party. In the UK old mining sites are classified as brown while the existing sites are known as black.
      Something is screwy here. What countries is Brownlee referring to where mining is a green industry?

  3. sk 3
    25 March 2010 at 11:23 am

    What has been missing from this whole debate is that NZ can grow its wealth from exporting of services. Sure we are not Singapore and HK, but NZ wealth are its landscapes and its people. The right growth strategy is to preserve the former,and leverage the latter. Weta workshops has shown what can be done, and beneath the surface it is happening across a range of smaller companes.

    There is more that can be done, such as providing IT services to the west coast of the US, but the gov’t gives this no thought, instead rolling out tired ideas from the 1990’s – such as financial services back offices. Unfortunately, mining as a growth strategy for NZ is straight from the 1890’s.

  4. green branz 4
    25 March 2010 at 11:26 am

    Tourism pros concerned about NZ’s mining ambitions http://www.greenbranz.org

  5. tc 5
    25 March 2010 at 11:49 am

    “There is more that can be done, such as providing IT services to the west coast of the US, but the gov’t gives this no thought…” absolutely SK.

    All this mining debates taking the focus from such election porkys as that super fast broadband we were promised to allow your suggestion above and would unleash more of the sam morgans kicking around……still waiting rejoyce

  6. vto 6
    25 March 2010 at 11:55 am

    Bloody Brownlee is increasingly just a dipshit when it comes to mining.

    How’s his latest… “you dont know how much you’ve got until you dig it up”. ha ha ha ha ha ha ha ah ah ha ha ha ha ha……. Nothing could be further from the truth.

    That is the f..king funniest and MOST STUPID thing ever. And he claims he is Minister of Mines etc?

    Flailing completely. Ignorant of his subject totally. Grossly negligent in fact I would suggest. He should be removed from his portfolio.

    Keep up the attacks on him. He deserves them 100%

  7. Mac1 7
    25 March 2010 at 12:14 pm

    “You don’t know what you’ve got till it’s gone.”

    Joni Mitchell

  8. tc 8
    25 March 2010 at 12:18 pm

    “Flailing completely. Ignorant of his subject totally. Grossly negligent in fact I would suggest. …” that makes him overqualified for sideshow johns cabinet but as there’s a genuine shortage of arrogant anti environment bullies who refuse to answer questions in parliament he’s safe for now.

    The well established practice of exploartion and scoping an orebody before you locate the actual mine’s been missed by browncoal

  9. tsmithfield 9
    25 March 2010 at 12:18 pm

    Marty: “Most of the mineral wealth is not on Schedule 4 land. 60% is outside the conservation estate altogether and 90% is not in the areas that the Nats want to remove from Schedule 4 protection.”

    If that is the case, then it is highly unlikely that any mining will ever occur in schedule 4 areas due to such projects being uneconomical. Mining companies will instead look to the areas where 90% of the opportunities are rather than trying to find the remaining 10% scattered through schedule 4 areas. So you have nothing to worry about.

    This is a good thing about having private enterprise involved in such things. If there is not an economically viable case they won’t do it. On the other hand, governments quite regularly get involved in projects that are quite unecomical; Transrail for example.

    • Bright Red 9.1
      25 March 2010 at 12:28 pm

      Ah, but ts, what you don’t get is that if the private comapnies mine ofn private land, they have to buy or lease that land from the landowner – bye bye big profits.

      On DoC land, they just pay the royalty, which they pay anyway, no lease (or at least that’s the impression since Brownlee et al have made no mention of revneue from leases).

      That’s what makes mining on DoC land with a friendly government so attractive.

      • Bright Red 9.1.1
        25 March 2010 at 12:28 pm

        Plus, it’s the type of minerals that are in the schedule 4 land. the Nats’ links are to goldmining companies. Most of the gold is on DoC land. It’s ironsand, silica and stuff mostly on private land.

      • mark 9.1.2
        25 March 2010 at 5:46 pm

        all minerals under the ground belong to the crown wether on private or public land

        • Doug 9.1.2.1
          25 March 2010 at 6:05 pm

          Not true Crown mineral are limited to Petroluem, Gold, Silver and uranium

          • The Voice of Reason 9.1.2.1.1
            25 March 2010 at 6:29 pm

            Actually, Doug, while Petroluem, Gold, Silver and Uranium are specifically named as Crown minerals, the next clause in the Act indicates that the Crown has a beneficial interest in all minerals:

            Minerals reserved to Crown:

            (1) Every alienation of land from the Crown made on or after the commencement of this Act (whether by way of sale, lease, or otherwise) shall be deemed to be made subject to a reservation in favour of the Crown of every mineral existing in its natural condition in the land.

            (1A) Nothing in subsection (1) applies to pounamu to which section 3 of the Ngai Tahu (Pounamu Vesting) Act 1997 applies.

            (2) For the avoidance of doubt, every mineral reserved in favour of the Crown by any enactment shall continue to be reserved in favour of the Crown, notwithstanding the repeal of that enactment.

        • Marty G 9.1.2.2
          25 March 2010 at 6:24 pm

          And that only means they get royalties on them.

    • Bored 9.2
      25 March 2010 at 3:11 pm

      I like the mining being uneconomic.

      I think with regard to governments doing uneconomic things (Transrail etc) you may protest too loudly. As I walk to work and around the city I see lots of things built the government or paid for by the government that all of us use every day. The countries infrastructure is mostly delivered from the public purse (Vogels rail being a good example). Private enterprise has a habit of benefiting and not paying the true cost. You might be better to have a look at who benefits and the transfer costs which may or may not be paid. Road versus rail is a point in case.

      Howzabout doing some empirical research and giving us the real numbers.

  10. Ianmac 10
    25 March 2010 at 1:35 pm

    Do remember that the mining will take a few years from now to become actioned. Is mining a smokescreen for …….umm? They politicians are pretty good at deflecting attention like any good magician.

  11. tc 11
    25 March 2010 at 3:20 pm

    Ask the folk at waihi how that tailings dam and underground collapsing tunnells are working out for them.

    When sideshow John claimed we’d catch up to Oz he forgot to lay waste to vast tracts of forest/etc to create the desserts that mining thrives in…..Oz have plenty of known high value mineral deposits in and around the Kakadu/daintree/coronation hill etc but they will not touch them for exactly the resaons the nat’s are finding out now….if they’re listening that is.

  12. tsmithfield 12
    25 March 2010 at 3:22 pm

    Bright Red “Ah, but ts, what you don’t get is that if the private comapnies mine ofn private land, they have to buy or lease that land from the landowner bye bye big profits.”

    I can’t imagine that private land that is quite remote would be very expensive in the context of the project. If the project is worth $1billion in revenue and the land costs $1million, then its bugger all. Plus there would be a lot less costly mitigation requirements on non-s4 land. Therefore, I still say it would be more economical to mine where it is known that 90% of the minerals are.

    Bright Red “Plus, it’s the type of minerals that are in the schedule 4 land. the Nats’ links are to goldmining companies. Most of the gold is on DoC land. It’s ironsand, silica and stuff mostly on private land.”

    But gold has a very high pay-off for the volume collected. If the gold is in seams that are concentrated in a small geological area, then the pay-off for a small, targeted mine could be very high in comparison, say to coal, where much bigger quantities are required to make it viable and hence a much bigger footprint on the environment.

    • Bright Red 12.1
      25 March 2010 at 3:29 pm

      “I can’t imagine that private land that is quite remote would be very expensive in the context of the project. If the project is worth $1billion in revenue and the land costs $1million, then its bugger all. Plus there would be a lot less costly mitigation requirements on non-s4 land. Therefore, I still say it would be more economical to mine where it is known that 90% of the minerals are”

      Um. You just mae up those numbers, so not very useful. And since mining anywhere is subject to the RMA I think you’re overblowing the mitigation cost savings.

  13. Bright Red 13
    25 March 2010 at 3:33 pm

    “But gold has a very high pay-off for the volume collected. If the gold is in seams that are concentrated in a small geological area, then the pay-off for a small, targeted mine could be very high in comparison, say to coal, where much bigger quantities are required to make it viable and hence a much bigger footprint on the environment.”

    Oh dear, the stupid, it hurts.

    Yeah, the amount of gold is small but the amount of mining reguired is not. If you’ve got 3g per tonne, which is a good seam, then you’re talking 10 tonnes of ore per $1500 ounce of gold. And the real environmental footprint of gold, and any metal, is the tailings.

    The tailings dam in Waihi is 50 stories high and holds back 40 million tonnes of tocix slurry. That toxin doesn’t go away – except for leaching into the surrounding water (see acid runoff at the tui mine)

  14. Bearhunter 14
    25 March 2010 at 3:49 pm

    As an aside, if I was Brownlee I’d fire my PR writer. No one, but no one should ever use the phrase “a modest proposal” in any non-satiric way, especially someone who actually looks like he would eat a small child.

    http://art-bin.com/art/omodest.html

    • The Voice of Reason 14.1
      25 March 2010 at 7:39 pm

      Good point! And thanks for the link. It’s not getting better for Gerry. Doesn’t think there’s any significant opposition, admits never having been to Gt Barrier Island and signs off with the phrase ‘I’m not a geologist’.

      Gerry ‘I’m not a geologist’ Brownlee. Certainly knows how to dig a hole though.

  15. tsmithfield 15
    25 March 2010 at 4:05 pm

    Bright Red: “Um. You just mae up those numbers, so not very useful. And since mining anywhere is subject to the RMA I think you’re overblowing the mitigation cost savings.”

    Not really. Undeveloped land anywhere is not worth a heck of a lot. Here is the Harcourts website that points to a couple of properties in the 0-$2000000 price range.

    http://www.harcourts.co.nz/Property/Rural?pageid=-5&search=&formsearch=true&location=&proptype=56&min=0&max=2000000&minland=2000000&maxland=10000000

    The one that is priced at $2000000 is 610 acres and includes buildings etc. So, I would say that completely undeveloped land would be a lot cheaper.

    Bright Red “Yeah, the amount of gold is small but the amount of mining reguired is not. If you’ve got 3g per tonne, which is a good seam, then you’re talking 10 tonnes of ore per $1500 ounce of gold. And the real environmental footprint of gold, and any metal, is the tailings. The tailings dam in Waihi is 50 stories high and holds back 40 million tonnes of tocix slurry. That toxin doesn’t go away except for leaching into the surrounding water (see acid runoff at the tui mine”

    Not necessarilly. There are now mining methods that greatly reduce, or don’t require these chemicals.

    http://www.iconcentrator.com/gold-mining/environmentally-friendly/no-mercury-gold-concentration-reduce-gold-mercury—iconcentrator-enhanced-gravity-concentrators.html

    • Bright Red 15.1
      25 March 2010 at 4:20 pm

      You have no idea where the minerals on private land are, so you can’t just go guessing the land’s value.

      The mining techinique you refer to is for small scale mining. Not processing millions of tonnes of dense ore extracted from deep seams. And it only reduces the amount of cyanide used. And it’s not actually developed yet.

  16. Bored 16
    25 March 2010 at 4:11 pm

    Dig and hope, no way! There is a plan!!!

    It is to use mining tailings for embankments on the John Key Memorial Cycle way. Trundling mining machinery into National Parks will open up the way for intrepid cycle adventurers to blaze new trails for which the government will take the credit. Photo opportunities of new clean green vistas will appear for the Minister of Tourism (behind the mine, reverse camera angle). The proposed conservation fund (paid by a levy on the mining profits from wrecked areas) will pay for new “conservation’ areas to wreck up and down the country, all to be linked and voila the John Key Memorial Cycleway Reinga to Bluff via lots of holes in the ground.

    Vision, boldness, clarity, what do you mean dig and hope?

    • Bright Red 16.1
      25 March 2010 at 4:22 pm

      funny you should say that.

      One proposed leg of the John Key Memorial Cycleway is at Dun mountain near Nelson. It’s currently Schedule 4. They want to remove it for mining.

      What will it be – cycleway or mine?

  17. tc 17
    25 March 2010 at 4:40 pm

    It’ll be a cycleway around a mine as they’re awesome tourist attractions apparently…..as long as you’re upwind of the plant and tailings dam which could play havoc with the old breathing and allergies…..aside from that she’ll be beauty matey.

  18. TightyRighty 18
    25 March 2010 at 5:12 pm

    “Phil Goff’s interview on Radio New Zealand is morning was very good. He pointed out the huge quantities of ore that need to be extracted and turned into toxic tailings to get at the gold. He also pointed out that 60% of NZ’s mineral wealth isn’t on conservation land and Labour supports responsible mining of those resources”

    He would know, being part of a government that handed out, on average, a permit a fortnight.

    but the qoute isn’t complete. it should read

    “60% of NZ’s mineral wealth isn’t on conservation land and Labour supports responsible mining of those resources both on and off conservation land”

    • Bright Red 18.1
      25 March 2010 at 5:21 pm

      Not a single permit on schedule 4 land.

      goddam you’re dumb some times righty. the issue isn’t about mining full-stop, it’s about mining on areas that have been specifically excluded from mining because of their natural value.

      • TightyRighty 18.1.1
        25 March 2010 at 5:28 pm

        your right BR, I am dumb. seeing as you are so smart, why don’t you explain to me why phil goff said conservation land, and not specifically schedule 4 land? is that because he is all right with mining on conservation land, but just says catergorically that he isn’t? and wasn’t one permit in particular on land deliberately left out of schedule 4 because of it’s mining value? despite it being identified as being worthy of schedule 4 protection?

        • Bright Red 18.1.1.1
          25 March 2010 at 5:49 pm

          oh noes, goff said accidentally used a general phrase once when takling to the public rather than a technical phrase his audience might have not understood. I guess that overrides all labour’s other comments that have made it clear they are talking specifically about ‘our most precious land’, the stuff in Schedule 4.

          shit.

          I guess you’re right Tighty.

          Bring in the bulldozers.

          – This is sarcasm, by the way.

          • TightyRighty 18.1.1.1.1
            25 March 2010 at 7:34 pm

            silly me, thinking that conservation land, actually meant conservation land, like national parks, whether S4 or not. my bad, thanks for clearing that up.

    • Draco T Bastard 18.2
      25 March 2010 at 5:35 pm

      Trying the spin cycle again I see TR.

      You see, the argument is about mining on schedule 4 land which is protected by law from mining not about mining per se.

  19. Draco T Bastard 19
    25 March 2010 at 5:19 pm

    Another “Mining is good” press release by the Granny.

  20. tsmithfield 20
    25 March 2010 at 6:06 pm

    Bright Red “The mining techinique you refer to is for small scale mining. Not processing millions of tonnes of dense ore extracted from deep seams. And it only reduces the amount of cyanide used. And it’s not actually developed yet.”

    You are contradicting yourself.

    In my first post I contended that small-scale mining could be viable and less intrusive due to the relatively high value of gold compared to other minerals. You responded by claiming that mining for gold was large scale and caused lots of pollutants. I provided a site that showed examples of small-scale mining. You then complained because those mines are small. Yet this is what I argued for in the first place. Why does it necessarily have to be big? Who do you think you are? Goldilocks? Do you want a mine thats “just the right size”?

    Furthermore, even without the developmental technique, small mines by definition will produce a lot less pollution. Although the technique mentioned is still under development, it may be available by the time any mining ever takes place on s4 land. Another advantage of small-scale mining, as per the link I pointed to, is that it could well be utilized by smaller local companies rather than large overseas operations thus keeping the money in New Zealand.

    • Marty G 20.1
      25 March 2010 at 6:26 pm

      ts. I’ve had a look at your link. It’s talking about subsistance mining in the third world, not mining of underground seams on a commercial basis.

      • tsmithfield 20.1.1
        25 March 2010 at 6:59 pm

        I did realize that, Marty, and didn’t claim otherwise. However, it still supports my point that gold-mining doesn’t have to be large scale to be successful. If big was the only way to make a profit out of gold, then no-one would bother panning for gold.

        I agree that if the seams are deep then larger scale mining will probably be required. However, since it is s4 land that may not have been considered for mining previously, it might be that there is gold in these areas that is relatively easy to get at and can be obtained quite profitably on a smaller and more sustainable scale.

        • lprent 20.1.1.1
          26 March 2010 at 1:06 am

          They aren’t going to be panning for gold. It simply isn’t economic. Same with building tunnels to follow veins of gold. That isn’t economic either.

          That is why we don’t have vast numbers of people panning and building micro-mines. It isn’t economic…

          What we will get for gold, silver and rare earth mining is big opencast mines. They are economic, although sometimes just barely when the price goes down.