Long before pinot noir and tourism, central Otago was famed for its gold. Now, locals fear fast-track consenting for a large opencast goldmine could do more than tarnish the landscape.
In 1990, Rudi Bauer was driving between Wānaka and Cromwell when he saw something irresistible: a gentle north-facing slope. The Austrian winemaker had come to New Zealand on a working holiday visa five years earlier, at a time when our wine was more likely to come in a cask than a bottle. After working at Mission Estate, he landed a job at Rippon Vineyard on the shore of Lake Wānaka.
His timing was perfect. There were then just six vineyards in Central Otago and Bauer became a contract winemaker for half of them. It was just as the region’s first pinot noir vines began bearing fruit and showing promise. Driving through the region, he couldn’t help but scan the landscape for sites with pinot prospects – that perfect spot that might produce wines that could grab the world’s attention.
Then he spied Bendigo. While most people at the time saw little more than a rough, rabbit-chewed hillside, about 10km south of Tarras, Bauer saw gold-medal potential. Typically, the hills and mountain ranges in Central Otago face east-west. Bendigo, however, faces north. Its lower reaches bake in the sun and it is elevated just enough to avoid the worst of the valley’s frosts.
“I was completely struck by it,” Bauer recalls. “My whole world changed.”
Bauer formed a partnership with Bendigo Station owner John Perriam and a local accountant, and in 1998, the first vines were planted at Quartz Reef vineyard. Over the next decade, Central Otago became one of New Zealand’s most celebrated wine regions, its pinot noir’s international reputation rivalled only by Marlborough’s sauvignon blanc. Bauer became known as one of the region’s pinot pioneers and was twice named winemaker of the year.
Today, Bendigo has about 15 vineyards. Driving down the unsealed Bendigo Loop Rd feels a bit like walking down the pinot noir section of an upmarket wine shop, as signs for the vineyards of Mud House, Peregrine, Gibbston Valley, Mt Difficulty, Valli and Prophet’s Rock flash by.
Other prospectors have recently been drawn to Bendigo, too. Not by Quartz Reef’s wines, however, but by the gold-bearing rock that gives the vineyard its name. In January, Australian mining company Santana Minerals announced it had made the biggest gold discovery in New Zealand in four decades. It has since been planning an opencast mine that would span nearly a kilometre in circumference and dive 300m down through the schist rock, just a few kilometres east of wine country.
Whereas the company has been spruiking the potential jobs and government dividends, Bauer sees a threat to the landscape and environment that first drew him to the region, and the reputation on which Central’s wines depend. “It will turn Bendigo into an industrial hub, completely changing this environment and this community,” he says. “If we as a region do not understand the need to protect the beauty of our region, then we’re in danger of losing it.”
Gold Country
To be fair, the miners were here first. In August 1862, two prospectors turned up in Dunedin and deposited 87 pounds of gold they’d panned on the Clutha River, just downstream of Cromwell, triggering the Dunstan gold rush. Within weeks, Central Otago went from a hinterland of establishing sheep stations to one of the most populated districts in the country.
It took only a few months for miners to begin panning Bendigo Creek, about 3km from the Clutha and 20km north of Cromwell, and named it after the Victoria, Australia, gold-mining town many of the miners had arrived from. As the nuggets became scarce, however, they started looking for the source of this alluvial gold – the fabled mother lode.
Rather than romantic riverside panning, mining here took on a more industrial form. Workers would drive shafts deep into the schist to find veins of gold-flecked quartz which were taken to be pulverised in giant water-powered stamper batteries, releasing the gold within.
Because of the cost, mining was done by companies, and miners were paid wages. Nonetheless, Bendigo became the region’s most successful hard-rock mining site. By 1870, a substantial township had been established on the mountainside, boasting seven hotels and later even a school.
But as the century wore on, the returns became patchy and the gold seams petered out. Only one company was ever able to make a profit and by the early-20th century, the mining was essentially over. The sheep returned, although for a long time it seems Bendigo Station was mostly raising rabbits.
Wealth later came with a law change. The station was divvied up in 1994 as one of the first to go through Tenure Review, opening it up to vineyards, lifestyle blocks and pivot irrigators that have transformed the beige river flats to a verdant green.
Then Bendigo made world headlines. In 2004, John Perriam and shepherd Ann Scanlan came across a wool-bound merino that had evaded shearing for six years, hiding among the schist tors. A photo in the Otago Daily Times launched the sheep, dubbed Shrek, to global stardom, and when the merino’s wool was later clipped, it became the most viewed sheep-shearing event in history.
For the most part, however, people were drawn to Bendigo to stroll through the ruins of the old schist cottages, mine shafts and tailings that the miners left behind, providing a glimpse of a time long past.
Rise and Shine
Then the gold miners returned. In 2014, Kiwi exploration company Matakanui Gold gained permits to look for gold in Bendigo near some of the abandoned mines. With promising results, it began a million-dollar drilling programme in the Rise and Shine Valley in 2018 along a rough 4WD track up the side of the Dunstan Mountains, at about 900m. It found more colour, but needing investment to shore up the find, sold to Santana Minerals in 2020.
Santana raised $7.5 million on the Australian stock exchange to begin drilling in earnest. At that stage, the site had a modest inferred (meaning low-confidence) resource of 18,000 ounces of gold at a concentration of 1.2 grams per tonne of rock.
Within a year, it became a company-making find. The seventh drill hole revealed a 40m-thick seam flecked with gold at more than two grams a tonne. Further drilling showed the seam to be about 150m wide, plunging diagonally down into the earth between two layers of schist.
Plans soon turned to the logistics of a full opencast mine. At first, it garnered little attention, perhaps due to the boom-and-bust nature of gold exploration, but then the stars seemed to align.
First, the price of gold began a historic bull run. In the past two years, it has increased by 60%, from $2905 an ounce to a record high of $4657 in October before easing slightly.
As the economics improved, some barriers receded. A year ago, the most mining-friendly government in recent memory formed, with plans to fast-track applications for projects of national significance. Mining figures prominently in the agenda.
Then, in January, Santana announced it had made the biggest gold discovery in New Zealand in 40 years. The inferred deposit had reached 2.9 million ounces, spread across a cluster of three sites on the mountainside. About 1.3 million ounces of this was later upgraded to the more bankable category of “indicated”.
The latest estimates are that the Rise and Shine deposit alone could bring in 110,000 ounces a year (about $505m) throughout a 10-year mining programme – eight years open pit, four years underground, with a two-year overlap.
It could bring in more than $5 billion over the decade, with more than $1b in revenue for the crown through taxes and royalties. It would employ about 250 people directly, and a further 750 related jobs could be created.
Vintners’ Luck
Not everyone is so enamoured with the prospect. “I don’t think people have any idea of the scale of what’s planned,” says Bendigo resident Rob van der Mark. He and wife Cherry bought 11ha at Bendigo in 2013 and planted the slopes in pinot noir, chardonnay and riesling, sold under the label Ariosa.
The couple – Rob is Dutch and Cherry a Kiwi – later swapped their careers in the pharmaceutical industry in Melbourne for a new life among the vines.
The peace and quiet they had come for soon looked set to be shattered. In July 2020, Christchurch Airport announced plans to build a major international airport at nearby Tarras, capable of catering for the largest jets able to carry millions of passengers a year.
The flight path would take planes right over the property, with the airport potentially operating 24 hours a day. The van der Marks’ life went on hold. They halted plans for a new house on the site and dedicated their time to stopping the airport.
The breakthrough they hoped for came in February this year. Christchurch Airport announced the project was being put on hold as it came under increasing scrutiny from its majority shareholder, Christchurch City Council.
In the meantime, Cherry spotted a new sign on Bendigo Loop Rd. She went home and googled “Santana Minerals” and the couple learnt they had another fight on their hands.
“Suddenly, we might get a massive industrial project in the middle of this pristine environment,” Rob says.
They found an ally in neighbour Hayden Johnston, who started Tarras Vineyards on the slopes above Quartz Reef in 2002. He later expanded to open an event venue, The Canyon, after trucking a disused restaurant in from Cromwell and plonking it atop a terrace that overlooks the vineyards out to the snow-capped Pisa and St Bathans ranges.
The mine would be about 5km from Johnston’s property and 10km from the van der Marks’ place. Although it would be out of sight, concealed behind a ridgeline, the trio believe they will be able to hear the mine’s blasting and the industrial rock-crushers used to pulverise the quartz.
Their main concern, however, is that the mine could erode the environmental and landscape values that underpin the region’s tourism industry and its vineyards’ international reputation.
Along with the open pit, there would be an extensive tailings dam filling a valley, and a large industrial plant to process rock. The tailings would have high concentrations of arsenic, a chemical that naturally occurs in the schist rock but can more readily enter the environment after being crushed. To prevent an environmental catastrophe, the tailings dam would have to be maintained in perpetuity.
“It’s an environmental sort of impact at a scale of which people have no comprehension,” Rob van der Mark says.
The mining process also requires cyanide to dissolve the gold from the quartz. The chemical breaks down in sunlight, but has to be carefully managed and disposed of. Any accidents potentially carry a high environmental risk.
On the other hand, the trio see little benefit for the region, or at least not compared to the risks, as most of the profits will go to Santana’s offshore shareholders.
“And it’s not as if the world needs more gold to be dug up,” van der Mark says. “Almost 40% is dug up and put back underground.”
According to the World Gold Council, about 45% of the world’s gold goes into jewellery and 39% is held as gold bars and coins stored in vaults, often underground. Central bank reserves account for almost half of this. The remainder is mostly used in electronics, as it is highly conductive and malleable. As for the prospective jobs, Johnston notes the region has one of the lowest unemployment rates in the country and also has a housing shortage. Santana itself struggled to attract staff during its exploration phase.
The group says the proposed mine might be easier to stomach if the company’s claims about economic and employment benefits and environmental safeguards were subjected to public and expert scrutiny and an appeals process. But in October, Santana’s was one of 149 named projects selected by the government for its fast-track consenting regime, expected to become law shortly. Under the Fast-track Approvals Bill, selected applications will go to a government-appointed panel – operating under a resource management framework tilted to favour economic gains over environmental concerns – for a decision. Santana’s application could be approved within six months of its being filed; Johnston says the idea that such a large and complicated project could be assessed in such a short time frame without public input is outrageous.
“When it’s the first opencast mine in the region in 34 years, it’s crazy to have a fast-tracked process. It’s undemocratic.”
By contrast, when Johnston wanted to start an events venue at Bendigo his resource consent application was notified for public submissions and then went to the Environment Court. Consent conditions still prevent him from having live music outdoors past 6pm. “And that’s just to have a party, not to start mining a mountain.”
Manage and Mitigate
Whereas van der Mark views the mine as a permanent gouge in the landscape, Santana chief executive Damian Spring says it will look like little more than a chip in the windscreen when driving along the valley below.
“It’s there, but it’s not dominating,” Spring says. “The Dunstan Mountains are still the dominant feature. It’s called big sky country for a reason.”
Spring has been a mining engineer for 30 years, based in Arrowtown for the past 20. He understands the concerns of those who live nearby, but says the effects can be managed or mitigated.
“If somebody wanted to open a gold mine up the Arrow River, I’d be peppering them with questions, too. They’ve built their livelihoods in that area. But the amount of work we’re going through to demonstrate what the effects are and how we’re going to control them should ultimately demonstrate, at least on a scientific basis, that it can be done.”
In particular, the tailings dam will be buttressed with 200 million tonnes of overburden, ensuring it will be extra secure, he says. “This is not a fly-by-night operation that leaves a legacy for someone else. These dams are reputable and work internationally and are built to New Zealand specifications, including to withstand a 1-in-10,000-year earthquake.”
The company plans to lodge its consent application early next year, and Spring says whatever the outcome the mine will still have to comply with strict environment and safety standards. He is also committing to publicly releasing reports related to the consent application for scrutiny.
Santana claims 60% of the mine’s revenue will remain in New Zealand and about 40% of its shareholders are Kiwis (the company listed on the NZX in July).
Since September, it has held weekly information sessions in Tarras and at its headquarters on Chardonnay St in Cromwell. Spring says the response has been overwhelmingly positive.
“There’s a lot of positive feeling out there and a lot of people come in asking for jobs, and [the open days] help solidify that we are trying to do the right thing.”
Gold Rush Redux
For Rudi Bauer, these words do little to assuage his concerns. “It would only take one tanker of cyanide to roll to create an environmental catastrophe,” he says. “If anything goes wrong, the local community suffers. We take all of the risk with little benefit.”
Beyond Bendigo, Bauer’s greatest concern is the precedent it could set. As the Kawarau River exits its eponymous gorge, the vineyards of Felton Rd and Bannockburn Inlet begin to line its banks. Behind these river terraces rises the Carrick Range, where another mining company is preparing to drill at another gold-rush ghost town.
Earlier this year, Canadian company KO Gold announced it had gained a five-year exploration permit covering 10,000ha on the edge of Bannockburn. It plans to spend $3.6m drilling sites near the old hard-rock mining gold fields of Carricktown, where hundreds of miners fed rock into stamper batteries in the 1860s and 70s.
The company said New Zealand was “fast becoming one of the most attractive gold mining jurisdictions in the world” and that Central Otago’s goldfields were “underexplored”.
Unlike the Santana mine, which is somewhat shielded by the surrounding landscape, Carricktown overlooks the whole Cromwell basin.
If more mines are approved, Bauer fears it could also lower the bar for other industrial developments. And by the time the impacts are understood, it could be too late.
“If we don’t do anything and it’s a walk-over, then in 20 years’ time, people will say, ‘Why didn’t you stand up against it?’” Bauer says. “Once they put a spade in the ground, there will be no return.”
