What's eating Waihi? Battle lines drawn in the dig for more gold

When plans are being made to move Waihi's historic Cornish Pumphouse, it's clear the town's gold miners have something big in mind.

It weighs 1840 tonnes and the delicate job of shifting the listed three-storey brute of a building less than 200m will cost millions of dollars.

More than a century old, it was last shifted in 2006 from an unstable site on the rim of the giant Martha open pit mine. If the latest plans go ahead, it will find a new home at the top of the town's main street, named after the Premier from the goldfields, "King" Dick Seddon, and humming midweek in winter.

Pensioner housing will be moved to a new site to make room for the relocated building.

OceanaGold has revealed proposals to expand it’s Waihī mine, extend operations 2036 and create up to 300 jobs has been met with backlash from conservationists. Video / Michael Craig

OceanaGold wants to make the huge hole in the middle of the town even bigger as part of a project to unlock an estimated 2.5 million ounces of gold. It's a plan that could take it to a new front — onto conservation land.

Battle lines are already being drawn over the plans, which would extend mining beyond the middle of the next decade.

When Project Quattro was unveiled in July, there was not so much talk about plans to mine beneath forest land at Wharekirauponga, 10km north of the town.

Instead, the emphasis was on the four parts of the plan closer to Waihi.

Phase five of the Martha pit will result in it growing significantly, after repairs are made to its northern wall and access wall following a 2 million tonne slip five years ago that halted production.

The development involves cutting back the Martha pit around its full circumference. The pit is already 265m deep, 800m long and 600m wide — when the work is done, it will be about 40m deeper, 160m longer and 80m wider.

The company already has consent for more underground mining below the pit floor and using part of the maze of tunnels stretching for 50km and linking several mines beneath the town.

OceanaGold's Waihi mine general manager, Bernie O'Leary. Photo / Michael Craig

On the other side of town, OceanaGold wants to dig a new open pit on land it owns near its processing plant. It will carve into Gladstone and Winner hills. The Gladstone open pit will be half the depth of Martha, 600m long and 300m wide and it is hoped full mining operations will be underway within three years of Project Quattro starting.

More mining means more waste and another tailings storage dam will be built.

This part of the plan came temporarily unstuck last year when Land Information Minister Eugenie Sage blocked foreign-owned OceanaGold's purchase of farmland for the storage site. The project was then put back on track when Labour ministers David Parker and Grant Robertson overturned that decision.

A bid by the Coromandel Watchdog organisation to overturn the ministers' decision failed this week and allows Oceana to advance planning for additional tailings storage, but the company stresses any construction will require resource consents under the ''stringent'' Resource Management Act.

The environmental group has been battling mining in the area for decades and brought the case after quickly raising tens of thousands of dollars - a sign that OceanaGold faces a tough fight to get the whole of Project Quattro over the line.

The company, listed in Australia and Canada after delisting from the NZX in 2016 to cut compliance costs, also plans to upgrade its processing plant and build a rock stack that will rise 85m from the ground southeast of the town.

Outgoing Waihi Gold Mine general manager Bernie O'Leary says that when OceanaGold bought Waihi operations from Newmont in 2015, the mine had a life of less than three years.

"We made a commitment then to extend the life of the mine and develop the economic benefits it brings to Waihi and the region. We are a high value, export intensive industry that supports a wide range of businesses and jobs."

Although Coromandel Watchdog chair Catherine Delahunty says the company would just be re-employing many people who had been laid off as mining slowed to a halt in the town, O'Leary says the expansion could create 300 roles.

The jobs pay well above the average wage — about $110,000 a year — in a town that has historically done poorly on socio-economic measures.

In 2018 the company spent about $140 million, with about 40 per cent of that in Waihi, says O'Leary, who resigned this week.

The potential for a further 2.5 million ounces of gold is significant, he says.

"Mining has been happening since the 1890s and up until the 1950s, and to put things into perspective, the old-timers mined about 5 million ounces. Us modern-day miners who have been at it for just over 30 years produced just over 3 million ounces."

Although the old steam-driven stamping batteries are now just industrial relics and the nearby Karangahape River is no longer dead due to cyanide from gold processing, extracting the metal from the ore still involves brute force crushing and grinding, a lot of water and cyanide to leach gold and silver into a solution.

After further processing to extract the precious metals, it is sent to the Perth Mint in Western Australia, where it is further refined to separate gold from silver.

Ore processing is a 24-hour operation at the Waihi mill, which can handle 1.25 million tonnes of ore a year. This will be expanded with restored mill equipment from the Reefton mine, closed in 2016.

Gold prices are hovering around record levels, driven by economic uncertainty and low interest rates. Gold miners look well beyond whatever the price is doing in the present, and take into consideration rolling average prices over long periods, but the price spikes don't hurt, as they show just how high gold can go.

A dinosaur industry

Delahunty, a former Green MP, has been watching with alarm the resumption of mining at Waihi since the mid-1980s.

The company says that besides spending on wages and services, OceanaGold makes regular contributions to schools and up to $3000 for projects and community activities. According to its own data, OceanaGold has paid an average of $5.7m in company tax and $1.3m in royalties annually over the past six years.

It says it also pays "significant" rates to the Hauraki District Council, and in a technical report it released last week says it has $35m of commercial and residential property in the town.

Delahunty, though, is not convinced the company makes much of a difference to the economy.

"They've been mining here for years but millions and millions of dollars have gone out of it — the place should be lined with gold — where has it gone?" she says.

Fighting proposals that promise well-paid jobs in a post-Covid recovery has become a harder sell.

"It's very tough with the gold price and the [looming] recession," admits Delahunty, "but that's not an excuse to commit ourselves to industries that use a lot of fossil fuels, damage the environment and aren't sustainable.

"I'm not denying that [high] wages and jobs aren't an issue, but if it's the only one, we're never going to think about the alternative."

Catherine Delahunty, chair of Coromandel Watchdog at the Martha Mine. Photo / Micheal Craig

Delahunty says Waihi is a company town where few people are prepared to make a fuss, but she says it must be one of the only places in the country where residents are paid to cope with nuisance: the locals get up to $3000 every six months to compensate for the effects of underground blast vibrations.

The company says they're similar to a large truck rumbling past your house and it has an alert system for people who want to know when blasting is on.

Looking into the dormant and damaged open pit, Delahunty says it looks like a car wreck.

"This is a dinosaur industry that should not be encouraged to expand at the expense of community and the environment. We think it's a project that will rip out more gold and leave more holes in the heart of Waihi."

And she points out that there is an alternative.

"We could mine our e-waste and get as much gold as we need."

She offers the example of Mint Innovation, an Auckland start-up attempting to scale up a patented process to extract precious metals from e-waste including phones, TVs and circuit boards, using gold "eating" microbes rather than cyanide.

"There are jobs in mining the landfills. We could mine our e-waste and get as much gold as we need."

Dr Jeff Seadon, a waste management expert at Auckland University of Technology, says from the figures he's seen, the concentration of gold in the Waihi mine averages 2.9 parts per million (at its lowest concentration this is 3.4 times less than e-waste) and the silver is 30 parts per million (at its lowest concentration this is 6.6 times less than e-waste).

"The concentration of gold in e-waste, in most cases, exceeds those in conventionally mined ores," he says. "Hence, extraction from e-waste should be cheaper than extracting from traditional gold mining."

"It's a bit like fluoride"

Hauraki District mayor Toby Adams says the plans are divisive.

"From an employment opportunity it's great but from a council point of view it's a bit like fluoride. People are for it and people are against it."

He's been in the area for 17 years and on the council for 11 of them.

"There's a lot more people in Waihi who are accepting of the gold mine than in the past - obviously the Coromandel Watchdog stance will never change and that's their right and they should be listened to."

The consent process will start late this year and he says it creates a big workload. Mining permits come from central government while the council-administered Resource Management Act takes care of the environment.

Martha mine. Photo / Getty Images

Hauraki District Council will use an independent planner to assess any applications received from OceanaGold and independent commissioners to make decisions on the applications.

There will be a chance for people to make formal submissions on what OceanaGold proposes and the council will employ experts to assess possible noise and vibration effects on people and the environment.

"We're very neutral on it - we do understand the benefits it has but it will go through the robust process," says Adams. Dairy and mining play a big role in the district's economy, he says.

"There are a lot of people who do stress. As soon as the gold price goes down or there's an indication they're changing their regime and how they process or scaling back, there is a bit of an impact - there are a lot of businesses which are supported by that."

On the planned pensioner houses, Adams says it's a win-win. The half-dozen residents get new accommodation and OceanaGold pays to build it.

A frog named Archey - and an election

Over the currently estimated life of Wharekirauponga, OceanaGold claims it could produce 190,000 to 230,000 ounces of gold a year. The company has been investigating the area for 15 years and last month the Ministry of Business, Innovation and Employment granted it a 40-year permit to mine gold under public conservation land which is south of Whangamatā.

The permit grants OceanaGold the exclusive right to the Wharekirauponga mineral resource in the Coromandel Forest Park - but the company offers its assurance that no mining will be allowed until consultation and a detailed RMA application is made.

OceanaGold says there will be no processing or tailing storage facilities on conservation land and few surface structures, such as ventilation shafts.

Any mine would have its portal outside conservation land and tunnel underground to the minerals, with all ore processing using existing facilities at Waihi.

Delahunty says it is another example of breaking a pledge made in 2017 in a speech from the throne that there would be no more mining on conservation land.

"It is appalling that this Government has broken the promise that Department of Conservation land would be protected from new mines. Many people believe that Department of Conservation land cannot be mined and will be very disappointed."

Archey's frog (Leiopelma archeyi) is this country's smallest native frog. Photo / File

The area is popular with hikers, has kauri forest and is home to one of the world's most endangered frogs.

Archey's frog (Leiopelma archeyi) is this country's smallest native frog, growing up to 37 mm long and has been described as a modern-day dinosaur, almost unchanged from its 150 million-year-old fossilised relatives.

Labour is in a bind over mining. On the West Coast - a seat its MP Damien O'Connor has held for most of the past 27 years - it would face strong pushback if it banned mining or exploration on the DoC estate, which makes up more than 80 per cent of the land area.

Energy and Resources Minister Megan Woods says Labour's detailed policy manifesto is yet to be released, but in principle the party recognises the importance of gold mining to support jobs and the economy.

"It is our intention that if Labour is in Government after the election we will continue with the second tranche of reforms of the Crown Minerals Act to ensure we have a regulatory regime that is fit for the future."

In regards to OceanaGold's Waihi operation, any access to public conservation land that may be required is not considered as part of a mining permit application.

"Access arrangements to the land are required before any mining takes place and there is a separate process. Any surface disruption to the public conservation land will require a land access arrangement from DOC," says Woods.

"Access to public conservation land is not considered as part of a mining permit application."

The Green Party candidate for Coromandel, Pamela Grealey, says she is appalled by the decision to grant new mining permits at Wharekirauponga.

"The Green Party is absolutely committed to no new mining on or under public conservation land, and I don't want to see any mining on the Coromandel Peninsula," she says.

"Our future lies in sustainable green jobs, not the profitability of an international mining company. Waihi once had a flourishing electronics industry and the idea that Waihi could be a future centre for retrieving and recycling precious metals from e-waste is very appealing."