On the Government’s Greenlight to the Mining Industry

Gerry Brownlee coal cookie monster – national park mining - Image: Fredd Marshall
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Well, we learned yesterday that Forest and Bird leaks had been right all along, and that the government is indeed planning to take 7,058 hectares of land currently under Schedule 4 protection (because it had been judged to be crucial to the conservation estate) and to hand it over to mining companies.

To mining companies that will then conduct the keyhole, environmentally sensitive, pinpoint exploitation that John Key, Energy Minister Gerry Brownlee and Conservation Minister Kate Wilkinson assure us will be the only form of mining allowed in these sensitive areas on the Coromandel, Great Barrier Island, and the Inangahua section of Paparoa National Park. If you believe there is such a thing as mining with an invisible footprint, yesterday was a very big day for you.

The maths of the exercise though, are still completely wonky. At Brownlee’s press conference I asked him the estimated potential mineral value of the 7,058 hectares in question. “Something in the vicinity of $60 billion,” Brownlee replied, adding : “ I stress that this is totally back of the envelope…Until you have someone recovering that resource you just don’t know..”

And with reference to the $18 billion allegedly now up for grabs in the Coromandel region, Brownlee said much the same thing : “These numbers are only indicative of the sort of resource… the reality is that until there is activity going on, you just don’t know what that flow of cash might be. But that’s a number… that’s big enough that it may encourage you to do the investigation that may lead to mining.”

So if you’re a mining company… just suggest a big enough number for the value that might be there, and chances are, the Key government will deem it worthwhile to let you to go drilling in some of our most sensitive ecological areas … just to, you know, find out how accurate your initial rosy guestimates really were. Does that sound responsible – or does it sound more like the government is playing Russian roulette with the conservation estate?

Moreover, Brownlee and John Key have both been stressing that the government will finally decide on whether this mining should proceed only after it has weighed the proper balance between the likely economic benefits to the nation and the environmental risks that mining would pose.

Yet according to Brownlee yesterday, we won’t know anything resembling accurate economic values until after the companies have actually started doing the mining! How then, can the balance be assessed beforehand? Obviously, it can’t. The figures being plucked out of the air are really about wooing public opinion – look, there’s an El Dorado waiting for us out there. They have little or nothing to do with realistic economic planning.

This is where the further problems with the maths kick in. Within the discussion document, the estimated value of the main ingredients of the mineral wealth of New Zealand are said to amount to $194 billion. Yet, as Brownlee has said, the allegedly surgical exploitation (the access roading and millions of tons of toxic waste? Why, you won’t even notice them!) of this tiny Schedule 4 area to be infringed is estimated to be worth $60 billion – which is nearly one third of the estimated value of the mineral wealth of the entire country. It doesn’t make sense. Either these estimates are completely cockeyed – or else some very heavily intensive mining of these areas is being contemplated.

As Scoop has already reported, the government has chosen to be entirely reliant – when it comes to assessing the potential economic value of the minerals it is enabling the mining companies to plunder – on the work of Richard Barker, a mining industry consultant and office holder within the mining industry.

As indicated above, the industry has a vested interest in talking up the potential economic values, and the government seems quite happy to be the mining industry’s captive on this crucial point. So much for Key’s assurance – at last week’s press conference – in a reply to a question from Scoop as to whether the government would be relying on its own independent valuation of our mineral reserves, or would be reliant on figures supplied by the mining industry, “Primarily the former,” he replied. Plainly, that is not the case.

The government’s latest estimate of our potential minerals wealth is now $194 billion, and is still almost entirely Barker reliant. As the discussion paper reveals, the government has simply added his initial figure (derived from his highly speculative 2008 study) of $140 billion nationwide, to a $47 billion figure that he had elsewhere estimated for Northland alone, and then added $7 billion from another mining industry study and rounded them all up to $194 billion.

This figure could hardly be more shonky, and represents a ‘back of the envelope’ exercise – as Barker has confessed it to be in the NZ Herald last year. Even then, this figure is for gross worth. It bears no relation to the figure that would actually accrue to New Zealand, once foreign-owned mining companies have extracted the mineral wealth, and taken the lion’s share of the profits offshore.

Regardless, this $194 billion figure is being peddled to the public as the economic justification for opening up Schedule 4 lands to the mining industry, and with the prospect of more to come – since the 7,058 hectares proposal looks like a pilot study for further mining activity in future. If the government can get away with its current proposal, additional large scale mining on conservation land will almost certainly follow in its wake. Public submissions on the 7,058 hectare plan will close on May 2nd.

As a sop to environmentalists, some of the royalties from mining on conservation land will be diverted into a new Conservation Fund, with those royalty contributions to be capped at a maximum of $10 million a year. The monies in the Fund will then be used to support community conservation projects around the country.

Leave aside the irony of a major plundering of the conservation estate being the funding source for minor conservation projects elsewhere in the community – at yesterday’s press conference, Conservation Minister Kate Wilkinson was asked whether the “independent” panel that will be overseeing the disbursement of those monies will be forbidden to fund front organisations linked to the mining industry. This is a genuine concern, given that in the recent past, Timberlands had fostered community groups on the West Coast that publicly supported its activities. In reply, Wilkinson cited with approval the environmental efforts of companies like Solid Energy. “I’m not ruling anything out or ruling anything in,” she concluded.

In time then, the Conservation Fund could well end up funding the community P.R. branches of the mining industry. Neat.


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