Why more of this land should be mine

SUNDAY STAR-TIMES

PRECISION MINING: The Newmont Favona mine at Waihi is an example of how modern precision underground mining can have minimal impact on the surrounding environment.

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Prime Minister John Key probably did not help his case for a stocktake of underground minerals on the conservation estate when he said modern "surgical" mining techniques would stop landscapes being desecrated.

The word surgical just "inflames people", says New Zealand Minerals Industry Association chief executive Doug Gordon. The industry prefers "precision" mining, he says.

Examples of modern precision underground mining are the Newmont Favona gold and silver mine at Waihi, next door to the open-pit Martha mine that activists view as a typical mining operation, and the new Pike River coalmine in Conservation Department land on the West Coast's Paparoa Ranges, which accesses New Zealand's largest known deposit of low-ash content, hard coking coal.

Favona, 4212 metres long and 332 metres below the surface, has a total surface footprint of five hectares and an entrance or portal "less than the entrance to the Mt Vic tunnel" in Wellington, says Mr Gordon.

The operating surface of Pike River's 2.3-kilometre tunnel to the Brunner coal deposit is 13ha. Semantics are important in New Zealand's $1.5 billion (excluding petroleum) mining industry which many Kiwis still see as being "the work of the Devil", he says.

They are especially important in the developing war of words over the Government's proposal to lift restrictions to minerals in some DOC-managed lands listed under what is known as Schedule 4, legislated 13 years ago.

The Government estimates New Zealand's potential underground mineral wealth is $140b, a potential passport out of national indebtedness to a higher standard of living. But 70 per cent of those minerals are in the conservation estate.

Schedule 4 applies to 13 per cent of New Zealand's land area, about a third of the conservation estate. Its area is more than 30,000 square kilometres, about the size of Belgium. Areas under consideration for removal from the schedule include Coromandel, with significant gold deposits, part of the upper South Island's Paparoa National Park, where there is coal, and part of the Te Ahumata Plateau on Great Barrier Island, said to have excellent potential for gold and silver.

The proposal was announced late last month. Already, the Government has received more than 5000 public submissions.

Mr Gordon's association says New Zealand has great mineral potential by international standards, is producing mineral products with unique properties that command high prices, and has the potential to this year double total annual output from $1b to $2b.

But a strong growth trend is being reversed, exploration investment is inadequate to maintain even existing output, and information and advice on the minerals to the public and Government is inadequate.

The Crown Minerals Office says the mining industry contributes to many sectors of the economy including construction (aggregates and limestone for cement), energy (coal), transport (roading), primary industry, agriculture (fertiliser) and manufacturing (industrial minerals).

The association expands on this: gold, silver and ironsand earn export dollars and ironsand is used for domestic steelmaking; aggregates are used in buildings and roads; industrial minerals are used "by virtually every industry in New Zealand, particularly agriculture; and coal is for export, steelmaking and as a fuel," it says. "In addition, groundwater provides about 40 per cent of New Zealand's water consumption."

The Government intends to spend $4 million this year improving technical knowledge of mineral potential in the Schedule 4 areas it is eyeing for removal. (A recent study by the Institute of Geological and Nuclear Sciences valued New Zealand's potential metallic resources at $85.5b and identified many opportunities for expansion.)

As Mr Gordon says, a proper assessment of the country's underground resources is essential for the public good, not just desirable for its purse.

Investigations can benefit local authorities, infrastructure developers, soil scientists and protected-habitat managers. A mineral prospectors' survey in Otago discovered water reserves.

The investigations will be non-invasive, he says. Airborne geophysical surveys use ground-penetrating radar technology that can "see" 1km into the earth, where minerals give off certain signals. The information is then modelled.

The technology is expensive and has only been used in Otago, Coromandel and the North Island volcanic plateau by exploration company Glass Earth. Its Otago survey cost $4m and that was without the modelling, Mr Gordon says. Glass Earth's surveys yielded 22 potential hotspots.

The Crown Minerals office says there are 39 prospecting permits, 172 exploration permits, 507 permits to mine, and 85 mining licences. Licences are the equivalent of permits, granted before the Crown Minerals Act 1991. In 2008, the latest figures available, just over two million tonnes of gold, silver and ironsand were produced, with a combined value of nearly $645m.

Non-metals mining yielded 41 million tonnes of product with a value of $536.5m. Four million tonnes of coal were produced. Its value was not calculated.

This may sound like a lot of activity but the industry association says New Zealand has chosen not to realise its potential prosperity from minerals and not to compete effectively in an increasingly intense world investment market.

It blames a lack of industry co-ordination and negative public perceptions for the recent fall in production and investment. It says central government "indifference" to the industry and preservationist public land management are symptoms of the malaise.

While activists opposing the Schedule 4 intervention continue to hold up the 30-year-old open-pit Martha mine in the Bay of Plenty town of Waihi as an example of the desecration wreaked by mining, the townspeople and global mining company Newmont tell a different story.

The firm admits that though it got local authority approval last week to extend the life of the mine's eastern face until 2014, Martha is old-style mining. Mining law and practices, and environmental and community attitudes and consultation are different today, says spokeswoman Linda Willoughby.

Newmont sees its future in mining underground, she says.

Martha and Favona employ 350 people directly and a further 370 fulltime equivalents work indirectly in downstream jobs. About 76 per cent of the workforce is drawn from Waihi's 4700 townspeople.

Last year the two mines generated total revenue of nearly $194m, 91 per cent of which stayed in New Zealand, Ms Willoughby says.

About $3.6m went to the Government in royalties and $24.6m in taxes.

The Waihi economy receives about $40m a year from the mine operations, about 22 per cent of the gross town product.

- © Fairfax NZ News