On Shaky Ground

Waihi tries to come to terms with the mine in its midst

by Alison McCulloch
photo credits Allison Bennet, Newmont Waihi Gold, Coromandel Watchdog, Google Earth, Alison McCulloch

This is Part I of a two-part series looking at mining in the Coromandel town of Waihi, past and present. Part I investigates at how the current mining projects are affecting some of the town’s residents, and what the company and local authority are doing about it. Part II, next month, will focus on the economics of mining both locally and nationally, and takes a look back to the strike of 1912 whose centenary Waihi is getting ready to celebrate

Freight trains, bombs, earthquakes, thunder, gunfire, planes taking off and even a “very loud vacuum cleaner” are some of the descriptions used by Waihi residents calling the Newmont Waihi Gold’s 24-hour hot line set up to handle complaints about its mining operations in town. The calls are listed in a 186-page document obtained by a Waihi resident from the Hauraki District Council.

Included among the myriad colourful descriptions are an equally varied number of concerns: about property damage, health, getting enough sleep, scared cattle and cats, and things shaking on shelves or falling off walls. Some of the callers are reluctant to complain – they support the mine – while others are clearly angry and upset. “I am sick of ringing you about the noise at night from the maintenance workshop,” one resident said in a call early in 2011. “I am not anti mining and I don’t like to complain cause the mine is good for the town but enough is enough.” Another was recorded as “crying saying that they now feel left in the lurch and their house has now been on the market for 3 months and not one person has come through. … ‘I just don’t have the energy to go through the appeal process,’” the caller said. “ ‘My husband has just got out of hospital again.’ ”

Along with the complaints, the document (which includes calls going back to the start of 2005) also details the efforts by the company’s liaison officer on the end of the phone to deal with them – explaining what’s going on at the site (“Yes that was a blast not an earthquake”), arranging for things like environmental monitoring (“Sent Technician to take a reading. … Results were all within compliance”), property checks, maintenance work or passing the complaint up the chain to management. Some residents report that they’re satisfied with the response (“Complainant happy that today was the last day for carting metal and said knowing that made all the difference”), others less so (“resident not happy that mine was working extended hours on Friday night. … ‘don’t care about your monitoring and whether you are in compliance or not.’ ”)

Waihi, a town of around 4,500 residents that sits at the base of the Coromandel Peninsula, has been a mining community for more than a century, but with the news on June 19 that the biggest company in town had formally sought consent for its “Correnso” project, to burrow beneath part of the town’s streets and houses, it’s becoming increasingly clear that Waihi is also a mine.

It’s not easy to keep track of all the operations in and around Waihi. (See map at left.) Alongside its well-known Martha pit opencast operation just off the main street, Newmont Waihi Gold, which is owned by the Denver-based Newmont Mining Corporation, has been working underground at Favona, on the town’s southeastern outskirts for seven years. It is at work on an operation called Trio, to mine under Union Hill about 600 metres west of Favona, and is close to getting approval to explore underneath the Martha pit, an initiative called the Martha Exploration Project (MEP). (An environment court hearing on the MEP is scheduled for 30 July.) Together, the projects are expected to extend mining in and around Waihi until at least 2020.

The narratives and stereotypes surrounding mining in Waihi have, over the decades, become as deeply entrenched as the mines themselves: the pros versus the antis, jobs versus economic decline, the mine versus the environment, the greenies, the stirrers, the workers, the all-powerful company, the toothless local council. It’s an increasingly toxic mix that the current expansion of mining looks almost certain to aggravate.

‘Born on Mining’

“Let’s be clear,” Hauraki’s mayor John Tregidga says, “Waihi was born on mining, been a mining town all its life and will continue to be a mining town.” That may well be true, and Waihi certainly capitalizes on its mining heritage with a “Heart of Gold” brand and focus on mining tourism. But until just a few years ago, residents were readying themselves and their town for the end of mining. Committees were set up to plan the transition, which would involve filling the Martha pit with water and turning it into a lake that the company said would support fish, eels and waterfowl. Amid fears of job losses and an economic hit, there were positives, with some locals relishing the prospect of living in a former mining town and a few out-of-towners taking the opportunity to buy into it. “I have moved 14,000 miles across from the other side of the world to Waihi for some peace and quiet,” one caller told the complaints line in 2007. “I thought there would be a nice lake nearby when mining finished in a year’s time.”

Green Party MP Catherine Delahunty, who’s been challenging mining operations in the Coromandel for decades and is the Greens’ mining spokeswoman, says the closure that never happened lies at the root of much of the current tension. “It’s always been split in Waihi but never before has there been so much opposition,” she says. “I think that that’s because people genuinely believed that in 2007 the mine was closing and there was going to be this lake in Martha hole.” Tregidga agrees that the prospect of the Martha lake drew people to invest in the town, and says those newer residents are among the most worried by the new plans. “Why wouldn’t you move in? If I thought in a year’s time, 18 months time, I could buy a very cheap affordable home, that within two years I’m going to be looking over a lake. Wouldn’t you?”

Tregidga says he was “disappointed” that Newmont gave the impression the mine was closing, adding that he himself never believed mining was about to end in Waihi. “I was aware of the amount of exploration that was going on, I’m aware that there’s always been a lot of gold there.” If it wasn’t Newmont, it would be another company, he said. “I’ve always thought mining wasn’t going to be finishing in Waihi unless central government under the Crown Minerals Act ended up having a change of heart and my experience is, both governments, whether it was Labour or National, were pretty supportive – certainly this one is.”

Tregidga (pictured left) said one problem was that some people didn’t appreciate that for every resource consent application, mining companies have to include a rehabilitation plan; that without one, they simply wouldn’t have been granted consent. “So each time, they put one in, they said, ‘you’re going to have this lake.’ ” But it wasn’t just the rehab plans that had people anticipating an end to mining in Waihi.

At least until late 2009, Newmont’s community updates continued to refer to the plans for the lake. In an update published in June 2009, the company stated that, “the current mine plan projects that mining at Martha will end in the third quarter of 2010 and Favona will close shortly after that.” To be fair, the statement included the caveat that factors like the price of gold, production costs and legislative change could “provide a different outcome and a different timeline”. Two months later, an August update from Newmont stated: “We are planning for closure, but are also actively exploring for more gold.”

That same year, the company commissioned the Queensland Centre for Social Responsibility in Mining to study how closure would affect Waihi and the surrounding area. (It produced a report that is available on Newmont’s Web site ) One resident who, like several spoken to for this article, did not want to be identified, said she was part of an eight-year process of consultation and meetings around the closure plans. “Eight years of my life,” she said. “And for years, every week of my life, I was involved in that process.”

Her frustration was echoed among a group of six Waihi locals who met one recent Sunday morning to talk to Werewolf about their experiences of living among the mines. One of them, Anna, who asked that her last name not be used, handed over a copy of a letter she’d written to Mayor Tregidga. “This is my story,” she said. The two-page letter details the family’s move to Waihi six years ago into a five-bedroom home on a half acre of “beautiful garden”. “We believed that Waihi offered the very best environment for our four children – clean, beautiful, virtually crime free with a close knit community and good schooling.”

Things were going well, Anna wrote, until she and her husband discovered their eldest child had severe learning difficulties, and that the best hope for his future was a move to Australia for specialized care unavailable in New Zealand.

Anticipating few difficulties selling, Anna’s husband took a job across the Tasman, expecting his wife and children to follow within months. Then, in August last year, Newmont announced its Correnso plans. The family’s property, located halfway between Correnso and the Martha mine was, she says, “virtually unsalable”. “So here I am, trapped in Waihi with my 4 children,” Anna wrote. “Newmont refuses to even acknowledge that they are in any way responsible for our situation.” She closes the letter with an appeal: “Please help us.”

The public face of Newmont in Waihi, External Affairs Manager, Sefton Darby, is familiar with stories like these. When Werewolf visited him in his office in the old PYE factory just down the hill from the Martha pit, he explained he was not long off the phone from someone in difficult straits asking the company to buy his house. “There is a huge amount of financial distress around devaluation of properties,” Darby says. “If I were to say the people who are most traumatised beyond the ones with health issues, it is people who bought a house in 2004-06, something in their financial circumstances has now changed … and they’re in negative equity.”

He, along with the Hauraki District Council, are hoping these cases can be resolved under a new process being set up whereby a partially elected 9-member body, called the Community Forum, will help implement Newmont’s recently announced property policy. (Details of the policy are on Newmont’s Web site )Under the policy, the company will buy some properties outright and provide “top-ups” for others. The top-up programme, which the company hopes will help shore up private property ownership in the town, will see Newmont “paying a purchaser of a property the difference between their offer and the market value of the purchased property”, as the Hauraki District Council explained it in an update for residents.

Tregidga, the mayor, and Scott Simpson, Coromandel’s MP, have commended Newmont for the policy, with Simpson describing it as “more generous than most people were expecting” and noting that it had “taken an awful lot of the steam out of the debate.” “But I accept,” he added, “that it hasn’t satisfied everybody.” Tregidga, too, says he’s “under no illusions” that the policy will fix all the problems. “But it will go a long way to at least starting to address the concern that I have around about how we address the devaluation of your property.”

And, Tregidga says, he has no doubt property values have dropped. “There’s no question in my mind that it is having a detrimental effect on property values,” he said. “There’s no question about that. Whether you’re going to mine under my house or not, if you’re going to be anywhere in close proximity I think [that] obviously it’s going to have a detrimental effect.” The town’s real estate agents appear to agree. In a discussion document put together last November, a group of realtors said that since the first announcement about Correnso in August, the value of properties that would be directly affected and those nearby “have been negatively impacted”. And they predicted that, in the immediate future at least, potential buyers would be “resistant” to buying affected properties.

Three of the six residents gathered around the table are experiencing that “resistance” first hand, and they have little confidence the new Community Forum and the property policy will solve their problems. One lives not far from the Martha pit, so it’s the Martha Exploration Project rather than Correnso that he’s most concerned about. He’s been in Waihi for six years and is critical of both Newmont and the Hauraki District Council.

“It’s all very well saying you’ll top up someone’s property, but the first thing you’ve got to do is sell it – sell an impacted house on to somebody else which leaves you in a pretty dodgy situation, it leaves you having the same scruples that they’ve got basically.” This property owner has been frustrated both over his inability to sell, and to get the company to accept responsibility for damage that he says mining activity has done to his house. And because the Martha Exploration Project is a variation on an earlier existing mining license, it’s not covered by the Resource Management Act, leaving those like him who object with little room to maneuver.

The six also expressed doubts about how well residents like them would be represented on the Community Forum, which will comprise five members from the community (four elected, one appointed), two from Hauraki District Council and two from Newmont. (That Community Forum will, in turn, appoint a three-member expert Independent Review Panel to make recommendations on who does and who doesn’t get top-ups and property purchases.) Nominations for the four elected posts opened in June and close on 4 July, with ballots due to be posted out to voters in Waihi by 20 July. Only two of those seated around the table on Sunday would be eligible to run for the Forum, since candidates must live inside specific mine project areas, though all say they’ve been detrimentally affected by mining.

“We only have a say on 4 of those 12,” said one, a mother who has relatives working in the industry. Because of her connections to Newmont’s operation, she also asked not to be identified. “It’s council and Newmont controlled,” she said of the property policy. Others pointed to the fact that the company plans to offer only 20 top-ups a year and buy a maximum of 10 properties outright.

Darby says it’s hard to know how many residents will seek relief under the property policy, but there had to be limits. “I have to do that,” he says, “otherwise we’ll be broke.” For his part, the mayor says there will “probably” be more applications than can be met. “Newmont’s bucket is not a bottomless pit,” Tregidga says, “so not everyone’s going to get what they want out of it.”

Newmont has been in town only since 2002, when it bought the Waihi mining operations from Normandy Mining. According to its annual report [PDF], the company produced 97,000 ounces of gold from its Waihi operation in 2011 worth just over $155 million (at a price of $1,600 per ounce), and listed 0.4 million ounces of gold reserves. The gold and silver in the Correnso ore body alone is worth around $1 billion. Gold prices have been steadily rising in recent years, with a peak of almost $1,900 per ounce last September. (In late June, it was hovering around the $1,600 mark.) But, Darby says, costs have been rising faster. “We were far more profitable four years ago when gold was $1,250 because our costs are going up far faster than the gold price is going up,” he said.

Last year, although the company had revenues of $214.5 million, it says its profit before tax was only just over $1 million, on which it paid almost that amount in taxes and royalties. Darby says the company “basically made zero dollars last year” and would post a loss this year. (A closer look at the costs and benefits of mining to the town, along with the issue of royalties, will be discussed in Part II, in next month’s Werewolf.) That said, Darby acknowledges that the company “wouldn’t be proposing this if we didn’t think we could make a return on it”.

An Experiment

The Community Forum is a clearly an experiment, a new way of trying to resolve what is now a growing set of intractable problems surrounding private property in Waihi. As one resident, a widow in her 70s who lives inside the Correnso zone told Werewolf, “it’s just going to be a trial and error thing really, to see how successfully it works and which criteria and conditions they are looking for people to qualify for it.” Both the Community Forum and the Independent Review Panel will have an unenviable task. On a town-wide scale, it appears to be a good-faith effort to tackle an extremely stubborn issue; at a personal level, it will mean – for some – placing your future in the hands of a small group – one or two of whom may even be your neighbours – that has no legal standing and no power of enforcement.

Darby, who will almost certainly be one of the two Newmont reps on the Forum, remains optimistic the new mechanism will succeed, and argues it’s the best option for resolving the kinds of issues facing Waihi. The company wanted to stay at arm’s length, he says, to avoid “sitting as judge and jury” on property sale decisions. Indeed, from Newmont’s perspective, this new process is intended to preclude the very complaint expressed by some of the residents who spoke with Werewolf – that the property policy is “company controlled”. “By having a lot of credibility behind it by going through a public election process, it creates a body with a huge amount of legitimacy that can then, rather bluntly, whip us in public if we behave appallingly, so I think it’s the power of moral suasion,” Darby says.

And while, as Tregidga says, “There’s no legal requirement for them to do this at all,” it’s also clear the company needed to come up with some way of dealing with Correnso’s impact on property values in order for it to have any chance at getting its consent application approved. Darby says that in getting consent for its Trio mine, the environment commissioners warned of the stresses faced by a community forced to wait until production starts before a property policy comes into effect. “If we’d turned around and said to wait until Correnso starts producing gold,” Darby says, “you would have had a community sitting there for four years of uncertainty and our view is that that probably would have destroyed our ability to get a consent.”

But there is another sticking point with Newmont’s approach to property concerns, and it is linked to a broader issue of why almost all of the residents spoken to by Werewolf said they were unwilling to be identified. These residents refer to it as the “shut-up” clauses – clauses written into the deeds for top-up sales that the purchaser and vendor “agree that they will not make submissions against mining projects”, as a May 2012 Newmont document outlining the policy puts it. The company has similar clauses in tenancy agreements for properties it owns and rents out.

Darby points out that there’s a difference between “objecting” and “complaining” and that recipients of top-up money can certainly continue to complain about Newmont’s operations. “That’s actually a condition of our consents,” he says, “we can’t actually restrict people from complaining about our operations.” But he acknowledges the clauses are controversial. “We had a meeting with some of the community groups, and they gave us hell over it.” The company, he said, had an internal debate about whether to “stick to our guns or not” but decided to stand firm.

He describes the clauses as protection from having Newmont money used to oppose its own projects. “Let’s say I put in $40,000 of top up to someone which they then use to fund their environment court appeal against us. At that point, this company will say, well this property policy was about improving the chances of the project happening not worsening the chances of it happening.” Pressed as to how likely it was that a property owner would indeed spend money from Newmont on a court objection, Darby says there was a comparable case over the Trio mine application. “It’s not a made-up boogeyman,” he said. In the end, he calls it a trade-off. “We’re stimulating the property market, you are buying the property in the full knowledge that there is going to be mining in this area.”

Hauraki Mayor Tregidga has some sympathy with the residents on the question of the deed clause. “That’s an issue I’m still having with the company,” he says. “I think that this is about receiving a sum of money for the effect you might be having on me. It should not be in any way a process to stop people having the democratic right to object.” According to the residents spoken to by Werewolf, the deed clause is just one of a number of factors that make it difficult to speak out about the impact of mining. And several of them repeatedly pointed out that they weren’t opposed to the mine, they just wanted its impact on their lives fairly dealt with.

The resident with relatives in the industry said the limitations around going public were “ginormous”. “They are wide and long and varied but they are very real and it’s all around fear, around fear about if that information gets out, really what this town is about and the types of things that go on here, we’ll never get out, we’ll never sell our home.” In addition, she said, came the fear of harming relationships with one’s family and friends, and the fear of jeopardizing their jobs. She, like the others, said the entrenched constraints around whether or not you were “for or against” mining caused strain within both the community and individual families. “It’s not necessarily anti or pro mining,” she said. “The issues are really, ‘I’m affected, help me out here’.”

In an in-depth article on Waihi mining in the July issue of North & South, journalist Jim Robinson met a similar resistance. “How extensive opposition is across town, it’s hard to say,” he wrote. “Most residents have connections to NWG through work, family, school or club and not everyone wants to speak out.” Robinson cited council research that showed more than 80 percent in support or neutral, but quoted a local real estate agent as telling him “I think if you ran a survey now and asked people – ‘Would you support mining under your house?’ – they would answer differently.”

Among those who has told her story publicly is Christine Mallett. Titled “Living in Waihi – A Personal Account” (and available on the Web site of Coromandel Watchdog) Mallett details everything she “should have known” before moving to Waihi in 2001, including “that a mining company is never going to leave, despite anything they may say”; “that the noise of the rock crusher and mining carries in the wind for amazing distances”; and “that once a mining company is dug into an area there is nothing which anyone can do, or, in the case of local government, regional environmental organisations or national government – that they have a will to do – to change or challenge what the mining company chooses to do”.

Mallett told Werewolf that things hadn’t got any better since she wrote that article in 2010, they’ve gotten worse. “There’s no point in attempting to sell our houses. We are stuck here listening to 50 decibels of noise 12 hours a day. Fortunately the wind changes frequently.” The group of residents who spoke with Werewolf clearly feel caught in a vicious circle, wanting to tell their stories, to break out of the for-or-against narrative, but fearing if they do their homes won’t sell, they won’t get a top-up, they won’t have their complaints addressed, they’ll be labeled troublemakers.

One resident who has been speaking out publicly for years, and who herself acknowledges she’s considered one of the prime troublemakers, is Collette Spalding of the Distressed Residents Action Team or DRAT. Though she took part in the Sunday meeting, Spalding didn’t organise the gathering, which was not a DRAT affair. She did, however, take Werewolf to visit the widow in her 70s – an example of someone who clearly didn’t fall into an anti or pro mining camp, yet who has increasing concerns about her home and her own safety. “I’ve asked them to relocate me because I feel unsafe here,” the woman said. “It’s not very pleasant living with a vibration in a house that’s shaking.”

Like the others, she agreed to speak on condition that she not be named. She lives in the Correnso “zone” and is worried about what life will be like when work on that project gets under way. “I don’t want to be here when the tunnels go through this road along here, because I don’t feel safe now and I won’t feel safe at night when they go through. It’s only going to be 150 metres, 200 metres under the ground just outside here. And with the cracking and the change in this building now … I think there’s going to be disastrous results.”

She showed Werewolf cracks in her house, and other damage including doors that were out of alignment and loose internal wall panels. She says the damage appeared during heavy levels of repeated vibration from the nearby Favona mine, which started operations in 2005. She has had BRANZ building experts, who are routinely sent out to report on claims of property damage, come to look at the house but so far there’s been no resolution. She says she approached the council asking for mediation over her situation but it never came to anything, and just petered out. “I think they’re waiting for this new committee to be formed and it’s probably going to be processed through them. But then we’ll be back to the same position: they’ll be deciding our future.”

One of the biggest frustrations expressed at the Sunday meeting was the lack of an effective pathway to have unresolved issues dealt with, something these residents laid primarily at the feet of the council. One of the six emphasized that’s where the focus should be, rather than on Newmont. “I expect my council, through policy from central government right to local government, to protect the equity in my town alongside what I have invested,” she said, “not just for the interests and rights of a private company but for everybody else who lives here, otherwise it’s a mining town and the mining company own the town.” She described the council as toothless and lacking imagination. “They could be lobbying central government on our behalf because our situation is extraordinarily unique in New Zealand.”

Tregidga says the community thinks the local authority has more power than it actually does. Under the Resource Management Act, he said, councils can’t assess whether minerals should be extracted from the ground. “The only issue the council can evaluate under the RMA is the effects of the operation, and that is still the case, so we only assess the effects. So we have a fair bit of power in putting consents on, and conditions on, to ensure the effect on people is either remedied or mitigated. We don’t have a veto right.” It’s the bit about ensuring the effects are remedied or mitigated that the residents Werewolf spoke to take issue with. “Many of us already have long existing issues and we’re exhausted from fighting for independent mediation,” one of the residents said.

Darby says he hopes the new Forum and Review Panel process will be able to play the role a mediator would have. It’s an issue, he said, that had been going on for a while. “There’s not anything in our consents that says ‘though shalt go to mediation’”, but he said the company would be changing its own Standard Operating Procedures to say that “whenever a resident feels they have been unable to come to resolution through the usual complaints process, they should go to the Independent Review Panel”.

The residents Werewolf spoke with, meanwhile, want action on two fronts. They want the company to, as Spalding put it, “buy the houses that you affect or relocate those families at a fair rate and hold on to the houses while they’re mine affected”. And they want more support from the Hauraki District Council. “We can’t stop the mine,” one of the six residents said. “What we can do our only option is to have a council that can represent our concerns as reasonable fair ratepayers or anybody in this community who wants to maintain their equity and wants their support.”

Waihi can still be a mining town, and can continue that legacy, the resident who worked on the closure plan said. “But don’t deceive ordinary people who come to live in a quiet rural village with rivers, mountains and beaches.”

Next month: How much does gold mining help Waihi – and New Zealand – and how much does it hurt? Also, a look back to the 1912 strike and what it can tell us about the tensions facing Waihi today.