There has been considerable discussion about the message and targeting of Labours policy on mining around the conservation estate in OpenMike and some of the other blogs. This is obviously going to be a reasonable large policy platform in the upcoming election in about 18 months (how time flies). So Labour had a clear policy on it over the last decade pleases me greatly. It agrees broadly with my views of balancing the economics between exploitation of extraction and sustainable tourism.
I’m pretty much in agreement with Lew at Kiwipolitico who said
Labour’s campaign against mining Schedule 4 land looks strong, especially at the iconographic level.
The slogan and to an extent the photo frames the issue as a matter of identity, echoing Phil Goff’s ‘the many, not the few‘ and Phil Twyford’s ‘not yours to sell‘ (though the visual style has come a long way since that campaign, and there’s some subject-object confusion). The hard economic matters â€” the cost-benefit analysis between mining and tourism and so on â€” are there, as they should be, but backgrounded to the symbolic concerns.
Goff is clear that he’s not anti-mining, but wants to focus on the 60% of mineral resources outside the DOC estate. That’s the crucial point to make because it draws a bright line between acceptable and unacceptable which is still well north of Schedule 4 â€” to cross that line the government must first gain electoral consent to mine DOC land, and having done that must gain consent to mine the most precious areas of that estate. The point isn’t that mining is all bad; the point is that mining conservation land is worse than the alternatives.
As a political message, this is the case. However if there is a economic case to be made then it should be made looking at the value of alternate uses of the land, both during the lifetime of mining operations, and afterwards. Brownlees proposal has never bothered to do this, either because a case cannot be made, or because he is incapable of understanding it, or both.
Like Labour, I’m not anti-mining – my first degree was in earth sciences. But for me, there appears to have been no actual analysis of the costs and benefits for NZ in proposing to mine conservation estate. What we have are some ‘back of the envelope’ numbers by interested parties based on short-term pricing that is unlikely to survive the next few years. As Marty G pointed out yesterday the numbers that are being blithely thrown about by Brownlee that lack any realistic context. In fact most of them appear to be based more on a fantasy than reality because they look at potential rather than economic practicality. They would require prospecting to prove yields. However we can put a pretty good line under the costs of certain types of mining that Brownlee is proposing now.
There is the outright crap of ‘surgical mining’. For minerals like gold, silver, and rare earths that exist as grammes per tonne and require chemical extraction, there are no economically realistic ways to do these in any way other than open-cast mining. It has been noticeable that the MED and the mining industry representatives who have commented on Brownlees proposals haven’t suggested alternatives.
As sk pointed out back in feb, the political media needs to stop waffling about surgical mining and learn some realities about mining technology
This nonsense over modern mining techiques keeps getting repeated and repeated. Anyone saying that should be frog-marched to Macraes mine in Otago, and made to look down the hole (maybe Jim and Jane could do the show next week from the bottom of the mine). Truly shocking .. . How can a huge hole, slag heaps and hundreds of truck movements a day be â€˜unobstrusive’.
Mining for geothermal emplaced gold at Macraes Flat in Otago runs at 1.6 grams per tonne, and they are currently moving 5 million tonnes of ore per year and chemically treating it. The size of the mine can be seen in this google earth image on the right (click into it to see a larger version) that Draco T Bastard pulled. Draco has put a line along the largest axis, and that line is 7 kilometers long. I could look at the other mines around the country with similar mineral extraction techniques for gold or silver, but they are all pretty much the same. ‘Rare earths’ are also extracted in grams per tonne.
The figure that have been bandied about for Great Barrier Island indicate that they’re optimistically thinking that they can get about 3.6 grams per tonne there for gold, and 140 grams per tonne for silver. Even if those ratios prove out (which I’m deeply skeptical about), then that means to achieve Brownlees possible values of 1-3 billion dollars extracted, they’re going to have to move and chemically process at least 10’s of millions of tonnes of ore. There is no economic way to do it that doesn’t involve vast areas of despoiled land and requiring hundreds of years of care about leaching from tailings.
So what we wind up with at the end of the mining is a landscape that requires long term control and expense.
The question is what benefit does NZ get from this despoilment of the conservation lands? Well not much. The royalties for the crown are typically about 1% of the value which brings the ‘billions’ of dollars of value to NZ down to mere millions.
Modern mining is an exercise in highly capital intensive equipment and procedures. Most of the capital equipment will have to be imported at the start of the project. Our capital markets will be insufficient to finance such ventures, so it is most probable that overseas firms will own and operate the mines. They will repatriate most of the profits offshore.
The jobs present in the mines would measure in a relatively few thousands, many of which will be offshore workers with experience, and nothing compared to the hundreds of thousands of people involved directly and indirectly in tourism.
So what are the long-term alternate uses of the land that we’d destroy buy mining them?
We have a 21 billion dollar per year tourism industry that relies in a large part on having the conservation estate available, accessible, and relatively untouched. This will be increasingly hard to achieve when some of the destinations of tourism operators will be involved in the large plumes of dust and leachate in rivers from mining.
The Brownlee policy has been attempting to frame the debate about it being a ‘stocktake’ of minerals. However the first step would be to have some reasonably accurate material available about the costs of extraction, techniques available, and the potential benefits. Brownlee and the MED have spectacularly failed to produce any of these things. They are expecting the public to make submissions with vastly inadequate information in 5 weeks. That is a ridiculous position to take, and screams of a political con-job.
Of course our political media are so technically gormless that they’ve swallowing Brownlees bullshit and regurgitating it almost verbatim. They clearly haven’t bothered to engage even their basic intelligence to investigate the realities of mining for gold, silver, and rare earths. I’d suggest that they have a close look at existing mines and the effect on the surrounding countryside. Then have a look at mining sites from over a century ago with unstable tailings and leachate problems downstream. They should also look at the lack of a framework for extracting more value for NZ in the MED proposals than the pathetic royalty systems, and the actual real returns to the economy. And for gods sake, you don’t exactly look anything apart from stupid by replaying the one guy in Great Barrier Island who thinks that mining would be a good idea, over and over again…
Labour is right to call Brownlee on his inadequate proposal. Brownlee has failed to provide the basis to have his vaunted ‘rational debate’, because he hasn’t provided the information that would allow it to take place. Under these circumstances with a obvious con-job underway from Brownlee and the MED, the only rational response from Labour is to increase the risks of prospecting or mining to investors. They have done this by stating
We Must Unite Against The Review of Schedule 4.
Labour stands firm against the review of Schedule 4. We’re against the idea of mining in our national parks and conservation areas. As proud New Zealanders, we consider it our responsibility to look after our country for future generations. We know there’s money in mining. But our biggest treasure is far more precious than gold.
That is the correct approach, and one that National was following in the 1990’s when they put schedule 4 into legislation. It was setup to preserve some of the areas that we require to maintain a strong tourism industry.
If Brownlee was ever interested in having a ‘rational debate’, then he has clearly failed to put in the groundwork for that to happen. Both he and the MED have been bullshitting throughout the whole of the debate so far.
There appears to be no cost-benefit analysis weighing the current value of the conservation estate that he wants to put at risk against the probable returns. That isn’t the way to have a debate, it is how you try to run a PR con-job. I suspect that the real debate will happen after Brownlee bulldozes his legislation undemocratically through parliament in his usual style. It will happen during the lead up to the next election as people realize the economic risk that opening up schedule 4 places on currently viable industries depending on our 100% pure marketing image.
If any prospecting licenses or even mining in conservation lands are granted under this sorry Brownlee policy then Labour should revoke the licenses without compensation when they next have the opportunity. Trevor Mallard said on it in Red Alert and if that isn’t Labour policy, then it damn well should be. It will be a hell of a message to run as part of a campaign next election.
In the meantime, mining companies should assess the risk and realize that the Brownlee policy is simply too dangerous to rely on. It has little political support and is likely to be reversed at an elections notice.