Mining Below The Floorboards

An unprecedented proposal to mine underneath residential homes in Waihi raises the question: Is there anywhere it’s not OK to mine?
by Alison McCulloch
Photo credits: Newmont, Te Taru White, Alison McCulloch, Kearoa Marae

There was little surprise among locals last month when the mining giant Newmont won consent for a new operation in Waihi. But what’s been surprising since is the lack of wider public interest in a project that will, for the first time, see a 24-7 gold mine operating directly underneath privately owned residential homes. Correnso, as the project is known, will tunnel and mine beneath 45 properties in East Waihi for the next seven-and-a-half years to produce around $1 billion worth of gold, a move even the three commissioners who gave it the green light made clear was without precedent in New Zealand. But because Waihi is already a “mining town”, this move into uncharted territory appears to be giving few people beyond the town itself very much pause.

For the commissioners, the project’s singular nature did mean taking what they called a “precautionary approach”, and as a result, they didn’t give Newmont everything it wanted. The company was knocked back, for example, on how much of the town it would be allowed to mine. Instead of the whole of “area L” (see map) – which would have affected more than 600 properties – it was limited to the area around the Correnso ore body itself (the yellow section on the map labelled “Correnso”). And, in an effort to address one of the residents’ most pressing concerns, the commissioners insisted Newmont establish a $16 million fund to shore up property values, which have already fallen by at least 20 percent since the project was announced last year.

Neither demand went down well with Newmont, which has responded by appealing these and other conditions, meaning the Correnso project is now headed to the Environment Court. Several resident groups who oppose the project have also appealed the commissioners’ decision.

The divisions and debate over mining in Waihi are well-rehearsed and long-running. (I’ve written about them previously here in On Shaky Ground and The Gorilla in Their Midst.) And while this may be just another chapter in Waihi’s story as a mining town and a company town, it also represents one of those line-in-the-sand moments that raises broader questions about what price we are willing to pay for what economic benefits.

Or perhaps it’s better seen as what price we are willing to have others pay. That’s how Waihi resident Rob McCarthy sees it. “Waihi is a life raft,” he says. “It’s got an east end, a middle and a west end. The people in the middle and the people in the west end all had their say. Two thirds of Waihi said, ‘good idea mine the east’. So the people at that end of the lifeboat were sacrificed for the good of the others.”

McCarthy, who is engaged in his own battle through the Real Estate Agents Authority over what he says he wasn’t told when he bought his property, sees Newmont as a corporate coloniser and Waihi residents as akin to an ill-equipped stone-age population naively accepting blankets, firewater, axes and assurances. Residents would have done better, he says, spending Newmont’s gifts on hiring a QC to fight the consent.

Newmont’s new external affairs manager Andrea Durie (she replaced Sefton Darby, who is now working for the government’s petroleum and minerals arm) agrees that the question of whether or not there are some places that simply shouldn’t be mined is worthy of debate. “I think that’s a really interesting debate to have,” she said, but one “New Zealand definitely has not had”. “You’ve got a lot of loud voices on the other side of the fence that get heard or get air time, and people are happy to pick up on those messages,” she said, “and that starts then resonating with people, without getting the facts in front of them.” Durie says that if Newmont wasn’t mining in Waihi, someone else would be, and because of its commitment to social and environmental responsibility, “the town’s better off having a Newmont”. She points to the compensation the company pays in Waihi as “beyond precedent in New Zealand or Australia”.

Newmont does have a compensation policy, but for objectors and those wanting to leave town, it’s too little and the company has too much control. Called PCIP, or the “Property and Community Investment Policy”, Newmont unveiled it early last year in preparation for its Correnso application. It provides for the company to buy 6 to 10 properties outright in each of the next three years (in the first round that’s just ended, 52 property owners applied to be bought out, and 7 got the go-head); for a fund to “top up” the sale price of up to 20 affected properties a year (around 30 top-ups have been OK’d since the end of March 2012); for a modified “Amenity Affects Programme” under which those directly impacted have been paid an average of $700 a year; and for a continuation of Newmont’s community-wide donations (around $400,000 a year) and insulation programmes (the latter will start shutting down this month in parallel with the wind-up of the government’s own insulation scheme).

That property policy is voluntary, and Newmont has been praised for it, including by the commissioners. But it’s also about as far as the company appears to want to go. In its appeal, Newmont argued the commissioners had no jurisdiction to modify the policy, and no legal right to require a $16 million-plus property fund. “It is generally accepted,” the appeal says, “that effects on property values are either irrelevant, or that to take them into account would be inappropriate”. For Newmont, conditions on things like vibration, blasting, dust and so on are the legitimate route to protecting property values, not mandatory compensation. And according to Durie, that condition could be a deal-breaker for the company. “We can’t live with an open cheque-book,” she said. “No business can.”

In the evidence it presented to support its application, Newmont’s economics consultant argued that the current drop in property values in Waihi was likely to be temporary. What’s more, he suggested that if Newmont stopped mining in town, property values would fall even further, something with which Hauraki District Council’s own expert concurred. Predicting property value is a risky business and McCarthy, himself a realtor for 28 years, disagrees. He also says he knows of sales that have gone through where the seller took a 50 percent loss, not 20 percent, just to get out. “They should buy all of the properties,” McCarthy says of Newmont, “and we’ll rent them back”.

For residents wanting to leave, and Werewolf has spoken off-the-record to several, there’s an on-going concern about speaking publicly, for fear of jeopardising the possibility of either being bought out by Newmont or getting a top-up payment for a lower sale offer. (Durie says opposing the mine would not be a factor in PCIP decisions.) Last year, Werewolf spoke to a widow in her 70s living in the Correnso zone who said she no longer felt safe in her home because of the shaking and cracks that had appeared, and she wanted to be relocated. A year later, she’s still hoping to find resolution, and was reluctant to comment further, saying only that she was “completely exhausted mentally, physically and emotionally”.

Similar stories emerged during the hearings, like that of Brenda Kurukaanga, who told commissioners that she had invested all her money into her property for her old age and future. “It was not done to resell or have been damaged or devalued by someone else or some company.” She continued: “I do not want to leave this property, but I’m finding it very hard to cope with the proposed mining under my home. The constant vibrations, noise, dust and damage is of great concern.” (While around three-quarters of the 500 submissions received supported the project – most often citing jobs, economic benefit and Newmont’s donations to the community – the picture was different if only submitters from within the affected area were counted, with just over half of them opposing Correnso outright. That said, only around a quarter those in area L made a submission.)

For the most active opponents of Correnso, property is the primary issue, not mining per se. “It’s supposedly good for the economy, it’s supposedly good for Waihi,” McCarthy says. “We just don’t want to have to pay for it. We’re J-V partners without getting a share. They don’t want to buy our land they want us to suffer for their good. The rest of town wants us to suffer for their good,” McCarthy says. He points out that on the same day as the Correnso decision came out, a permit expanding gold exploration on the other side of town was given the go-ahead. “It would be very interesting to ask the central and west dwellers, those people who supported mining, what they think now.”

Andrea Durie, the Newmont spokeswoman, played down news of the extended exploration permit in the west. “To suggest that there will be a mine there – it takes anywhere between 15 to 20 years to get to the stage where you are talking about there being a mine. And this is what mining companies do ; they explore,” she said. “With what’s happening at the moment, it’s that whole connection of ‘are we next’, and that’s certainly what some of the conspiracy theorists are proposing.” Asked if it the west would be next, Durie said: “If we knew that, we would be very wealthy. We don’t know.” No seams have been found, but “we can’t say we won’t” find them. “It’s that whole guessing game. People want certainty, but if we had a crystal ball we wouldn’t waste time looking in areas that end up being duds.”

Green MP Catherine Delahunty, who was an objector to another Newmont project in Waihi that got the go-ahead last year, sees Correnso as “like Christchurch, only it’s man-made”. “Basically we’re deliberately putting people’s homes at risk. Deliberately creating situations where they’re either forced out or forced to put up with an unacceptable level of uncertainty and vibration.”

For their part, the commissioners appeared somewhat sceptical of Newmont’s argument that much of the concern will die down once people realise the effects of mining “prove to be less than expected”. In the decision, the commissioners wrote that the reaction of residents to Correnso mine proposal was “already having a profound social effect. The fear of adverse effects has divided opinion within the town and caused some to decide to leave if their property can be sold”. They also cited a clinical psychologist, who testified for Newmont and recommended trial blasts so residents could “experience the vibration effects”, as well as providing those who wanted them with pagers or other blast warning systems and “educating people to the difference between earthquake and blast vibrations”.

Delahunty also has concerns about the environmental impacts, even if they aren’t uppermost in the minds of some affected residents. That lack of focus on the environment is partly because so much of what would spark objections in the case of a project in fresh territory – issues like water usage and waste disposal – is already in place for Newmont’s other mines in town: the Martha pit, and the Favona and Trio mines.

Delahunty says she has a particular worry about the tailings dams just outside Waihi, which will store Correnso’s processed ore waste. During its lifetime, the mine will yield several million tonnes of ore, with the by-product of the sodium-cyanide process that’s used to extract the gold (estimated at around 570,000 ounces) sent to the two existing dams. (Other waste rock will be backfilled into the mine itself.) “That dam is getting higher and higher,” Delahunty says. “I’m very concerned about the integrity of that structure in the long term.”

A hundred or so kilometres to the south of Waihi, in Te Arawa country, gold mining is also on the radar, with mounting concern over the government’s plans to open up more than 8,000 square kilometres of land to gold exploration in what’s known as the Taupo Volanic Zone. Around 30 members of several Te Arawa iwi gathered on 8 June at Kearoa Marae just south of Rotorua to discuss the planned tender for exploration permits, and were given a briefing by tribal representatives as well as conservationist Dean Baigent-Mercer of Forest & Bird, who cited both Newmont’s Waihi operations and the current push for gold mining in Northland in urging Te Arawa to be vigilant.

Unlike the current battle in Waihi, environmental concerns were at the forefront at the hui, particularly water safety and waste issues. But there was also anger at what some saw as a government that was railroading the process through. An announcement of the tender was made in late March, with a 28 May deadline for submissions, but few Te Arawa groups seem to have known about it, and only a couple of submissions were made.

Te Taru White, the Deputy chairman of the Te Arawa Federation of Maori Authorities (FOMA), said the consultation appeared to have been a mass email that was like “throwing the dart at the dart board of a number of iwi that they’ve got on their list”. He told the hui that Te Arawa FOMA intended asking that the time for consultation be extended at least until the end of July. White said there would be immediate opposition to the way the “consultation” was being carried out. “We’re not against development, we never have been,” he said. “We’re opposed to being bulldozed in decisions when we’re unaware of the detail.”

Consultation with tangata whenua has been an ongoing issue in Waihi, too. No cultural values assessment was included in Newmont’s original application, and local iwi Ngāti Hako has opposed the project throughout – arguing, among other things, that a 2003 agreement it had with Newmont to close the Martha mine by 2006 has not been honoured. The Martha pit was once a maunga known as Pukewa, and the commissioners noted it was likely to have contained a burial site that was destroyed during mining. And while they urged Newmont to continue consultation with Māori, what the commissioners called “tangata whenua matters” were, in the end, given relatively short shrift in the Correnso decision.

With the deadline for appeals past, the parties are now moving toward Environment Court hearings in the spring, and Newmont is hoping for a final decision by the end of 2013. For its part, the Hauraki District Council is obligated to defend the decision of the commissioners – which is by law the council’s decision – so is reluctant to comment on the conditions the commissioners laid down. Asked about whose responsibility it ultimately was to protect property values, Hauraki District Mayor John Tregidga said in an email message that it would be up to the appeals process to decide, “but it’s not the Government’s role under the RMA”. “The Commissioners did not accept that property conditions should be addressed by way of an Augier (voluntarily offered condition outside the scope of the RMA) condition,” he said, “but rather as enforceable conditions of the consent and they clearly saw it a matter to be funded by the applicant.”

Also asked to comment on the project in the wake of the decision by the commissioners, Simon Bridges, the Minister of Energy and Resources who is also the MP for neighbouring Tauranga, said he did “not intend entering into a debate on the merits or otherwise of the Correnso gold mining project” while it was subject to appeals. Property issues, he said, were not matters for the Energy and Resources Minister, and he offered the standard official reassurance that the consent process was “robust and transparent”.

There’s some truth to the transparency argument, but it’s only a limited truth. For those engaged in this battle – and indeed anyone who’s interested – there are certainly scores and scores of publicly available documents covering every aspect of the proposal. Hauraki District Council’s Web page on the project links to several hundred PDFs – from submissions to technical reports to evidence to appeal documents and more. And while objectors hope to get some funding for their case through the Environment Ministry’s Environmental Legal Assistance Fund, theirs is an uphill battle.

As Rob McCarthy put it, you need a great big pile of money to fight this. “One of these groups here was struggling with income to pay for a solicitor at the application stage,” McCarty said. “We tried to run a jumble sale on Trade Me to sell odds and ends that they’d accumulated. There weren’t any odds and ends. They didn’t have spare stuff to sell, there’s no money here and there’s no enthusiasm. These guys, in their 70’s and some of them in their 80’s, they’ve already had their fights, they’re worn out.”

(For a discussion of the economic pluses and minuses of mining in Waihi, see Werewolf article from August 2012: Gorilla in Their Midst.)