Kevin Hackwell: Coal mining - is the Government about to screw up again?
OPINION: To properly understand the economic absurdity of the Government's latest plans to embark on destructive coal-mining projects in the Buller region, it is worth taking a look back at recent history.
In 2008, the Australian mining industry was booming, and New Zealanders were flocking across the Tasman to high paying mining jobs. That year, the National government came to power, promising to catch up with the Australian economy. If Australia was doing well on the back of mining, then so should we.
The new government set about encouraging the expansion of mining. The NZ Petroleum & Minerals section of the Ministry of Business, Innovation and Employment (MBIE) was expanded as the rest of the public service suffered significant cuts. The Government embarked on controversial block offers for oil and gas, and announced unpopular plans to open up national parks and other high-value conservation land for minerals exploration.
But these are boom-and-bust industries. Now, New Zealanders are returning home, fleeing an Australian economy that has seriously suffered following the collapse in demand for its minerals. There has been a similar downturn in mining in New Zealand. Coal mines have closed in Waikato, Southland and the West Coast. The state-owned coal miner, Solid Energy, has gone into receivership. Its Stockton mine on the Buller plateau – New Zealand's largest coal mine – has lost around 350 jobs and has been on the market for some time.
Just south of Stockton at Denniston, on high-value public conservation land, Bathurst Resources' Escarpment mine has been mothballed in its early stages of development, meaning that the promised 225 jobs have evaporated.
The Stockton mine has resource consents for another 12 years of mining, and the Government has spent years unsuccessfully trying to sell the operation on the international market. Now it is looking at a "fire sale", to BT Mining – a partnership between the Australian Bathurst Resources and Motueka-based food company Talley's.
But even after offering bargain-basement prices, and taking responsibility for more than $200 million of Solid Energy's environmental liabilities, the Government is further sweetening the deal by throwing in some extra areas of public land that are currently not consented for mining, with the added bonus of guaranteeing fast-track approval and reducing environmental standards for any new mines.
The Government recently confirmed that, for many months, it has been secretly looking at giving away remaining areas of high conservation value on the Denniston Plateau and in the adjacent Waimangaroa Valley. Opening up these new areas for mining would only extend operations on the Plateau for a few more years.
MBIE recently acknowledged that the Government's economic case for the extra mining is based on an assumed US$150/tonne for coking coal. The international price for coking coal is extremely volatile. In November it peaked at US $308/tonne, only to plummet to just half that in February. While it has since rebounded due to temporary supply issues following Cyclone Debbie, it is forecast to fall, and remain below US$150/tonne over the next decade.
In addition, China is reducing its steel production, President Trump is expanding the US domestic coal output, and, in an attempt to reduce the carbon footprint of steel production, markets are looking to increase recycling and use electricity for steel manufacturing rather than coking coal.
The long-term outlook for coking coal is not great. Yet the Government is quietly planning to flog off more of our precious public conservation land to mining interests, in the highly questionable hope that the production of coking coal is going to make a sustained rebound.
We should all be extremely wary of such a deal.
If it made sense, the Government wouldn't be working so hard to keep it secret.
If it made sense, the Government would not be blocking Forest & Bird's Official Information Act requests seeking the public release of information about its plans.
If it made sense, the Government would be open about the fact that mining will increase the likelihood that the animals, plants and outstanding rocky landscapes that are found only on the Buller Plateau will
be destroyed or driven to extinction.
The reason for the secrecy is that the Government knows that its proposals to destroy more high-value conservation land will be opposed by the majority of New Zealanders.
In 2010 the new National Government suffered its first major policy reversal, when massive public opposition forced a back-down on its proposal to allow mining in our national parks and other precious conservation areas. Back then, 50,000 people marched down Queen St to say no to mining in high value conservation land.
Sacrificing our unique environment in a vain attempt to prop up the dying coal industry would be a disastrous move. Let's hope the Government works this out before it's too late.
Kevin Hackwell is Forest & Bird's chief conservation adviser.
- The Dominion Post