Mining the estimated $54 billion of minerals in the Coromandel would net the Government just $1 billion in royalties over the course of a decade, official calculations show.
Responding to Official Information Act requests filed by the Waikato Times, the Economic Development Ministry estimates the Government's royalty take from extracting minerals from the Coromandel would be $108 million a year for 10 years – not even half the amount the Government has previously claimed it needed to borrow every week for the next four years to keep the country running.
In its discussion paper on proposals to remove tracts of land, including areas of the Coromandel, from Schedule 4 protection, the Government noted an estimated $54 billion in minerals could be potentially extracted from the peninsula.
Green Party MP Catherine Delahunty described the potential royalty take as "absolutely pathetic" when compared to the value of other industries potentially affected by expanded mining, as well as the environmental cost. "We can make more out of tourism and aquaculture ... four times that [$108 million per year]."
Energy and Resources Minister Gerry Brownlee's office said royalty income was only "one part of the mining equation", and pointed to the direct and indirect jobs and income tax contributions to the New Zealand economy by mining operations.
The mining industry in 2008 contributed $2 billion to gross domestic product, Mr Brownlee's office said.
Mineral exports were valued at just over $1 billion a year for the year ended March 2009.
Mining was considered an important part of regional economies in areas such as the West Coast and Coromandel.
Asked if an overhaul or amendment of the royalty system would follow removal of land from Schedule 4, Mr Brownlee's office indicated it would.
"As part of the Petroleum Action Plan, officials are undertaking a review of regulatory, royalty and taxation arrangements to ensure they provide the Government with a fair and equitable share of the value of New Zealand's petroleum resources. The review will involve looking at legislation relevant to mineral resources also."
However, the Government would not make any changes to ensure a lesser percentage of mining profits went to off-shore shareholders.
Mr Brownlee's office said the average ownership structure of resources companies listed on the NZX was 57 per cent New Zealand and 43 per cent overseas ownership. It also said the Government had no plans to restrict the repatriation of profits to overseas companies.
In its response to Times queries, the Economic Development Ministry also revealed the relatively low royalty take from gold, silver and other mineral extraction in 2008 – just 1.14 per cent of the "total national royalties for all minerals, including petroleum".
That rose slightly in 2009 to 1.48 per cent of total national royalties.
For the years 2008 and 2009, royalties from mining operations in the Hauraki and Thames-Coromandel districts were less than 1 per cent of the national total.
In 2008, the Government's "aggregates royalty receipts" from mining operations amounted to $2,265,026 for the Hauraki District – home to Newmont Waihi Gold's operations at Martha and Favona – and for 2009 that figure dropped to $1,533,378, less than 0.45 per cent of the national total.
Aggregate royalty receipts from mining operations in Thames-Coromandel were $53,683 in 2008, dropping to $50,435 in 2009, 0.38 per cent of the total national royalties.
- © Fairfax NZ News
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