We learned yesterday that Newmont pays no royalties on the gold and silver it digs up at Martha mine. That’s gold and silver that belongs to the New Zealand public and we get nothing for it.
Now, that is the result of grandfathering of a previous special permit when the Crown Minerals Act was passed in 1991. New permits, including Newmont’s other mines do have to pay royalties. But here’s the rub, those royalties are so pathetic that Newmont openly doesn’t give a crap about paying them. Newmont’s man – in what was surely a move that earned him some trouble with the boss – said that as a $193 million a year concern they don’t give a damn about pay $3.6 million a year in royalties on their other mining and would happily pay the less than a million per annum that would be due if the Martha mine’s production was subject to royalties too.
I don’t know about you but it struck me as incredible how blase Newmont is about paying royalties.
But why wouldn’t they be? After all, paying royalties on Martha would amount to just 0.5% of Newmont’s turnover from gold mining in New Zealand and bring their total royalties bill to a pathetic 2% of the value of the our gold that they get to dig up to sell. This is an industry that made a 29% pre-tax profit in 2008, while paying just 7% of turnover on wages and 1% on royalties.
Mining conservation land (or offshore mining and drilling) is even more profitable – no private landlords so no leases to pay – which is why they’re so for it. They’re making off like bandits, and it’s our common treasure they’re stealing.
The first principle is we don’t dig up our most valuable conservation estate – ever. We’ve had the debate on which land should be protected. National, supported by the conservation movement and Labour, created schedule 4 in the 1990s to protect the most precious land. It must stay protected.
Our mineral wealth is a one-off endowment. Once we let someone dig it up, it’s gone forever. We need to get the most for it. Where we do allow mining, which is most of New Zealand and contains most of the mineral wealth, we have to make sure we are getting far larger royalties for our minerals. And, when that mining takes place on Crown-owned land, the Crown must charge leases as private owners do.