It looks like National is about to cave in to public opinion and abandon its ridiculous plans to mine on New Zealand’s most precious land. Good. The economics never made any sense, let alone the environmental case. I note they’re still keen to mine on conservation land, just not land projected by Schedule 4 – it’s more attractive to mining companies because they don’t have to pay leases like on private land.
Abandoning mining on Schedule 4 land does leave the Nats economic ‘plan’ for this country looking even more like a rushed assignment handed in by a first year, though. Bit sad, eh? When it’s either an awful idea or no idea.
Well, here’s something the Nats can do – sort out the minerals royalty and leases on mining concessions.
Last year, the mining industry dug up $6.5 billion worth of minerals that belong by law to you and me and all New Zealand. They made about $1.4 billion in after-tax profits.
For giving them the right to come and take our minerals and sell them for $1.4 billion of profits, we got $6.2 million.
Not good enough.
We’re meant to be getting a 1% cut of the mineral sales, which is already too low. In reality, we’re getting 0.1%. They’re ripping us off for tens of millions of dollars a year. Apparently, they do it by selling the minerals they dig up to shell companies or their parent companies at below-market prices, which artificially depresses their sales for royalty purposes.
Another thing. While any sane landowner would charge big lease for a mining company digging up minerals on their land, we get nothing when mining companies mine the conservation estate.
So, what needs to happen here?
The royalties rort needs to be cleaned up. Rather than charge 1% of sales, we should charge a set amount – $100 per ounce of gold, for example, which is about 6% of current prices – and reset it to match prices as necessary.
We need to start charging leases on mining on public land, when that land is not of environmental value. It’s outrageous that the wealth of public land is allowed to be privatised without even a lease being paid. Is it any wonder that National is so keen to gets its mining allies in on this bonanza? It’s a typical capitalise con – privatise the wealth, socialise the costs.
Private landowners charge leases, so should the government.
If National can stop the mining companies ripping off this country, that will really be something.
I won’t hold my breath.
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