There’s a hell of a lot of mis-information and confusing numbers about the economic potential of mining around, and that suits Gerry Brownlee and National because it lets them exaggerate the case for opening up the National Parks.
John Armstrong says “Unfortunately for National, cool economic logic has a hard job competing with emotions stirred up by warnings of endangered kauri forests, dead kiwis and mud slides.” But the reality is the numbers aren’t as great as they would have you think. Even putting the environmental concerns to one side, the economic benefits just aren’t that flash.
Let’s have a closer look:
$194 billion: The supposed total value of all the minerals in New Zealand excluding coal, oil, and gas. Mostly, this is silica, ironsand, clay, feldspar, and other stuff of low value that is spread throughout the country in large quantities. This $194 billion figure (which is about one year’s GDP) comes from one man, Richard Baker, who just so happens to be a member of a couple of mining lobby groups. We could never dig it all up, that would be strip-mining the country – like tearing down your house to sell the scrap for a year’s income – and much of it would be uneconomic to extract anyway.
$80 billion: The value of the minerals Baker says are in the conservation estate. This is the amount in the total conservation estate, not the smaller area that is protected from mining by Schedule 4. Again, it’s mainly low-value, bulky stuff that wouldn’t be economical for the most part (after all, most of it is in areas where mining permits can be sought). A lot of it is dirty coal.
$60 billion: The potential value of the minerals on conservation land that Baker says could be economically extracted. This is not the amount that is in Schedule 4 land, and certainly not the amount in the areas of Schedule 4 land the Government wants to open to mining (which is why I cringed when I saw Guyon Espiner had written “Brownlee estimates that there could be as much as $60 billion worth of minerals in the tiny amount of turf to be prospected.” Just keeping up the Espiner tradition, I guess).
$54 billion: The supposed mineral wealth in the Coromandel. Remember that is a total, not the amount that is economically accessible or the amount in the areas of Schedule 4 land the Nats want to open up. Denis Tegg of Coromandel Watchdog tells me that amount equates to 500 underground mines or 27 more Waihi-style open-cast mines.
$18 billion: the estimated value of the minerals in the areas of Schedule 4 land the government wants to open up. That’s three years of current mining production, hardly enough to make a significant impact on the economy when extracted over several decades.
$6.8 billion: revenue of the mining industry (including oil and gas) in 2008. It paid just $500 million in wages and salaries and only $70 million in royalties. Even if it doubled in size, mining would be an insignificant contributor to government revenue and the country’s wages. Mining companies made a $2 billion pre-tax profit in 2008, most of the big miners are foreign-owned and exported their profits.*
$4 billion: The amount being bandied about as the value of gold and silver deposits in the area on Great Barrier Island the Government is threatening to remove from Schedule 4. I don’t know where this number comes from but the geological report accompanying the minerals stocktake puts the figure at only $1 billion.
$1-$2 billion: The possible value of the dirty coal under the 8% of Paparoa National Park that National wants to open to mining. This coal could be used to power coal power plants. We’re meant to be stopping using coal at Huntly because of its contribution to climate change, the ETS is meant to price coal out of electricity generation. Maybe National wants to export the coal for someone else to burn.
A few tens of millions: The value of aggregate identified in the Ecological Areas near Whangamata that National wants to allow mining of, according to the geological report. That report didn’t have access to the latest data from mineral prospecting company Glass Earth, which makes me think they and National know something no-one else does.
40 million: the number of tonnes of tailings left by the Waihi gold/silver mine so far.
24 million: tonnes of carbon dioxide that would be emitted by burning the 16 million tonnes of coal in the are of Paparoa National Park. That’s $30 million worth of carbon credits even with the low cap set by the ETS.
23 million: the area in hectares of New Zealand not covered by Schedule 4.
6,100: the number of people employed in the mining sector currently on a median wage of $57,700. Mining companies made an average pre-tax profit of $386,800 in 2008.
140: grammes of silver and 3.6 grammes of gold per tonne in the main seam on Great Barrier. 4.1 million tonnes of earth would need to be dug up and treated in cyanide then decontaminated and dumped to get the 600 tonnes of valuable metals.
82: mining concessions currently on the conservation estate. None of which are on Schedule 4 land.
5: years before any mine would start producing. By that time Treasury expects the budget deficit will be all but gone, so the argument that we need mining to pay for public services is wrong. And it’s doubly wrong when you consider the small income the government would get from this mining.
less than 2%: Mining’s contribution to GDP. Even if the mining industry were somehow doubled (and it couldn’t get near that on current plans) it would be an insignificant increase to GDP and government revenue. Remember, this is the Government’s one big economic idea.
Less than 1%: The royalty the government gets for letting foreign companies dig up and take away our minerals on our land.
Zero: the likelihood of mining on Great Barrier. It’s classic bait and switch. Aucklanders get all upset about Great Barrier. The government ‘listens’ and decides to let foreign companies dig up more of our wealth for themselves in places like Stewart Island and Kahurangi instead.
Mehdunno: the Government’s estimate of the economic value to New Zealand of the proposed mining. Remember more mining is the government’s one big plan for the economy but they can’t even give a ballpark figure on how much they expect the country to gain.