Miners press to enter the green zone

By Geoff Cumming

Deposits of valuable minerals lie undisturbed but off-limits beneath New Zealand's conservation estate. Geoff Cumming investigates a vigorous campaign by scientists and mining companies to gain access to protected lands.

Newmont Waihi Gold's underground Favona mine at Waihi. Photo / Richard Robinson
Newmont Waihi Gold's underground Favona mine at Waihi. Photo / Richard Robinson

There's gold in them thar hills. And antimony, beryllium, chromium, rare earth elements and industrial minerals all the way to zeolite.

New Zealand is far from Australia's unlucky cousin in its mineral potential, say mining advocates. "We are a resource-rich nation in a resource-hungry world," says the website of Straterra, a natural resource industry group.

The sky's the limit when it comes to talking up the wealth beneath our land and seabed. In an influential report in March 2008, consultant geologist Richard Barker estimated the potential value of just seven minerals, including gold, copper, iron and molybdenum (used in alloys) at a mindboggling $140 billion. Throw in the Southland lignite field and there's another $100 billion. And that's just onshore resources. Barker says the rewards could be much higher.

But while Australia has made the most of its natural resources, New Zealand has been slow to realise the potential beneath our land and sea, say industry lobbyists. Worse, "vast untapped resources" are locked away in the conservation estate.

We are denying ourselves at the cost of greater prosperity, says Doug Gordon, chief executive of the Minerals Industry Association. Carefully controlled exploitation could create thousands of jobs and raise living standards. Of course most of the profits go overseas but there are royalties, jobs and taxes when profits are declared. Gold exports could help fix the balance of payments ...

With the eternal optimism of a recidivist gambler, the minerals industry has pushed its case to exploit resources in conservation lands, with little success until the National-led Government took office.

Energy and Resources Minister Gerry Brownlee and Prime Minister John Key have been quoting Barker's back-of-the-envelope calculations as if plucking nuggets from a Coromandel stream. Mining uses less than 0.1 per cent of New Zealand's land area but puts dairying in the shade when you look at export value per hectare, says Key. Brownlee echoed Straterra's spiel in a speech to the Australian Institute of Mining last August when he announced the review of schedule 4 of the Crown Minerals Act.

Since 1997 about a third of the conservation estate has been listed under Schedule Four of the act and, therefore, off-limits to mining. These are our most valued ecological and wilderness areas, including all 14 national parks, the Coromandel Forest Park and other land. They cover about 13 per cent of our land area - which, conservationists point out, leaves 87 per cent up for grabs. But the industry argues that 70 per cent of prospective areas are in the wider conservation estate and difficult to get permission to work in. And the third of the estate that's in Schedule Four includes the mineral-rich Kahurangi National Park and the gold-strewn Coromandel Peninsula.

These high-value lands are also the backdrops to our clean, green image, homes to our unique wildlife and major tourism drawcards. How much the Government is willing to ease the access restrictions will be revealed in a discussion paper due out in the next fortnight.

In his now-infamous speech, Brownlee talked up natural resources as playing a big role in improving economic growth and raising living standards. He didn't mention that the industry rates the odds of a new mineral prospect proving economic at 1000 to one.

Brownlee and Key have since been at pains to quieten fears that our most valued conservation areas could soon be scarred by bulldozers and open-cast mines. Key has used the term "surgical" to describe the type of mining that may take place - underground mines using trucks and drilling equipment small enough to fit inside portals not much wider than a one-lane bridge, leaving a relatively small "footprint" on the surface.

But that could depend on what's out there and in what quantities (conservationists say that many minerals are in small concentrations and would require open-pit excavation).

The industry's pitch calls for a "third way" to the placards-at-dawn battles with the conservation movement of the 1970s and 1980s: it does no harm to look to see if we're sitting on a goldmine, or other mineral wealth, in the Schedule Four lands. Then debate the pros and cons of extraction on a case-by-case basis, goes the argument.

Open cast methods need not be used. Companies would go after "high-value, low-volume" minerals like gold rather than large coal or aggregate deposits. Processing need not take place on conservation land. Ore can be carried to processing plants by conveyor belts instead of building roads through kiwi habitat. Tailings can be recycled or treated and buried in pits built to prevent leaching into groundwater and streams. Snails can be moved.

Forget our track record: the toxic legacy seeping into streams from the Tui mine and tailings dam near Te Aroha; the land movement which threatened the Golden Cross tailings dam near Waihi; housing subsidence at the Martha mine; river pollution from the Stockton coal mine; the abandoned "orphan" mines. We know what we're doing now, and here's a bond to prove it. And we'll use some of the profits to improve the conservation estate.

Key and Brownlee have given qualified assurances that the most prized conservation areas, particularly national parks, will remain off limits. They point out that not all conservation land is pristine.

Conservation Minister Tim Groser says mining could be done in "small, discrete areas" and deals could be struck to boost pest control and preserve new forest areas.

So why is the conservation movement not yielding - even a little? On the Coromandel, environmentalists were out in force over the summer holidays, buttonholing motorists on the Kopu bridge, waving petitions and holding meetings in peninsula towns. The Green Party and anti-mining group Coromandel Watchdog are leading the charge. The Greens have twice embarrassed the Government after obtaining documents exposing the gap between political assurances and official thinking. In the first, Ministry of Economic Development officials urged that the Coromandel forest park and the Kahurangi, Fiordland and eastern Paparoa national parks be included in the review. The Coromandel had considerable potential for new gold and silver discoveries, said the paper. Kahurangi had minerals including zinc, lead, copper, rare earth elements, tin and tungsten with an economic value conservatively estimated at $50 billion. The Waitutu area of Fiordland had significant oil potential.

Then in December, the Greens unearthed a confidential memo in which officials recommended removing the northeast corner of Mt Aspiring National Park from Schedule Four status. The area, which includes Haast Pass and covers 20 per cent of the park, is rich in carbonite deposits containing rare earth elements (used in electrical and solar technologies) and tungsten. The park is thought to be prospective for at least 11 minerals.

The Greens pointed out that Mt Aspiring was one of our top tourism drawcards and mining would threaten its status as part of a World Heritage Area.

As late as yesterday, Brownlee refused to rule out open cast mining in Schedule Four areas - saying he would not comment ahead of the review's release.

Forest and Bird's Kevin Hackwell dismisses arguments that within the scheduled areas are pockets that don't merit high-value status.

"It's our national parks, our ecological areas, nature reserves like Kapiti and Little Barrier and Codfish - you are talking about the highest value lands.

"Digging up your core natural assets is fundamentally against our clean and green brand."

Hackwell is an advocate who usually persuades with even-tempered logic. But on this issue he is spitting tacks.

"Please explain to me where we don't have high conservation values. The Kahurangi is a huge wilderness area known for the Heaphy track and the Wangapeka track, but it's mainly this fabulous, untouched area.

"It's because these areas are unusual geologically that they have a unique flora and fauna ecology. The idea that you are going to find places to mine in Schedule Four under a bit of gorse - it's never going to be."

For Hackwell, the big problem is that many of these minerals are in such low concentrations that mining would require far more than "surgical" operations to be economic.

"The carbonites in Mt Aspiring contain rare earth minerals and, as the name suggests, you don't find them in very large seams. The only way to get them out is by crushing tonnes of rock to get the couple of grams you are after - and that is not going to occur with a little hole in the hill.

"The idea that Schedule Four is holding back the economy is nonsense - by the industry's own estimates there is $170 billion worth of minerals outside the Schedule Four land yet to be exploited. Why would you wreck something else when you don't have to go there?"

He doubts the economic benefits of mining would outstrip the tourism gains of leaving Schedule Four areas untouched. He points to the tax losses which exploration companies declare and the small numbers employed in mining compared to tourism. For Waihi, having a gold mine on the doorstep has not proved a path to riches, with welfare dependency higher than in neighbouring towns.

"This is hardly a reliable winning bet for the Government to be backing right now. It is not going to be the road to economic salvation and equalling Australia."

Coromandel Watchdog spokesman Denis Tegg won't have a bar of "discrete" mining. "The idea that you can have surgical mining shows ignorance of the actual effects of mining, says Tegg, a Thames lawyer. "You still need the road to get access and a processing plant to crush the rock and chemicals to separate the gold and then you need to dispose of the tailings. These are major environmental impacts."

Tegg also dismisses arguments that mining could be allowed on less valuable conservation land. "Stewardship land may be damaged but it acts as a buffer for species between rural land and conservation land.

"The Coromandel is the closest native forest and coastal playground to two thirds of New Zealand's population. So it has a higher intrinsic value because of its location. The walk to the Pinnacles is one of the most popular in the country."

It could be that the Government has heard the conservationist outcry - as well as some negative feedback from private polling. Release of the review, originally planned for November, has twice been delayed. The signals are that the discussion document will limit opportunities in Schedule Four land.

After Cabinet considered the proposals on Monday, Key said he was comfortable the Government could achieve a balance between protecting our clean, green image and extracting valuable minerals from the conservation estate. He was not backing away from the proposal in the face of public opposition. "We are reflecting on what we think is right and what is achievable. I think we've got that balance about right."

Cynics suggest the heat being generated over Schedule Four may provide a smokescreen for other reforms the mining industry wants: easier access to the other two-thirds of the conservation estate, removal of the Conservation Minister's sole power to veto applications and streamlined consenting processes (involving changes to DoC practices as well as planned Resource Management Act reforms).

Certainly, the industry seems relaxed. The Minerals Industry Association's Doug Gordon says the industry could double its contribution to GDP without touching the Schedule Four resources.

"Improving access to the other two-thirds of the Department of Conservation estate would be fantastic and would send a signal to the industry and foreign investors," says Gordon. "If we do the right thing in lower-value areas then, in time, trust will be built."

But what's to stop them at the moment?

Richard Barker says a combination of factors has suppressed mining company interest in New Zealand in recent decades including remoteness, small size and cumbersome regulatory and environmental hurdles.

He says opening up Schedule Four areas for exploration would send a signal to the industry that New Zealand is serious about mineral exploitation.

Government funding for aerial surveys to improve knowledge of resource potential would also be welcomed. "The Government has put a lot of money into offshore surveys for oil but not any funding for airborne geophysical surveys."

Gordon agrees it's about appearances - and since the 1970s New Zealand has not set out to encourage mining.

"It's largely attitudes and a lack of a defined national interest in minerals exploration - until this Government got in."

HARD TO PRONOUNCE - AND HARD TO FIND

It's not just gold in which geologists see potential economic salvation - there's molybdenum. Silvery-grey in colour, it has high strength at high temperatures, making it useful in steel and iron alloys, says an Institute of Geological and Nuclear Sciences (GNS) factsheet.

As hard to trip over as it is to pronounce, it is often found in combination with copper in quartz veins resulting from volcanic activity.

Consultant geologist Richard Barker estimates New Zealand's molybdenum resources have a potential value of $33.7 billion. But with supplies plentiful overseas, low prices have deterred past exploitation in New Zealand and, since 1997, the main deposits have been off-limits: they are in Kahurangi National Park.

Barker admits his is a ballpark figure but with the Kahurangi also prospective for copper, tungsten, tin, zinc and rare earth elements, molybdenum could conceivably be extracted as a byproduct if access to Schedule Four conservation land was eased.

Rare earth elements are another highly-touted prospect with obscure names like neodymium, thorium and monazite. They have high electrical conductivity and are in increasing demand for renewable energy technologies including photovoltaic cells, fuel cells and wind power. Long used as catalysts in crude oil refining and in catalytic converters, recent uses include batteries for laptops and mobile phones, in televisions and fluorescent lights and in the nuclear industry. The GNS factsheet had their 1998 value ranging from US$6/kg to US$5700/kg ($8.7 to $83,000).

Monazite is found in Nelson, Westland, Fiordland and Stewart Island while other rare earth elements are found in Paparoa and Mt Aspiring national parks and in the Nelson lakes district. Trace elements are found in West Coast ilmenite sands and in gravel deposits in Buller.

Barker's 2008 study into New Zealand's natural resources also points to the potential for platinum in northwest Nelson and northern Fiordland and titanium in West Coast beach sands to generate extra billions.

Our resources stretch even to lithium and gallium, minerals used in renewable energy technologies. Extraction could prove a little expensive - they are contained within the Taupo geothermal field. But trials were conducted in the 1980s to recover lithium from geothermal waters.

Exploitation of most of these minerals was thought uneconomic in the past. But with demand from new high-tech industries and boom economies like China, and global supplies dwindling in some cases, they could be looked at again.

But Barker's study, which updated a 1999 GNS report, sees most potential in the old standards: gold - in Otago, the Coromandel, northwest Nelson and Nelson and alluvial gold on the West Coast and Otago rivers - is estimated at $45 billion, while ironsands on the North Island west coast are tagged at $26 billion.

His report has been seized on by industry lobbyists and politicians including Prime Minister John Key and Resources Minister Gerry Brownlee. But it comes with several riders that the politicians have glossed over: the estimates are not predictions of what is achievable in future and are based on the probability of finding deposits of specific geological types.

"Finding economic deposits of gold is like looking for a needle in a haystack," says Barker. "Technological advances mean we can find high-grade concentrations more effectively than in the past. But in the end, the only way you can test is to drill holes."

- NZ Herald

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