Wednesday, March 24, 2010

Mining for defeat

The National/Act Government’s plans to mine sensitive conservation land is only the latest in a series of colossal blunders that make it look like it may be a one-term government. So far, National/Act have been all about rewarding the rich and the corporate elites (especially foreign-owned corporations), without giving anything to ordinary New Zealanders.

The government says that there are “billions of dollars” in minerals under sensitive conservation land, yet actually has no idea. They claimed that a mountain on Great Barrier Island had over $4 billion worth of chiefly gold and silver, but TVNZ’s “ONE News” checked out that claim and found that the best guess from a geologist was approximately $1 billion.

TVNZ also showed how little return New Zealand gets from that: The royalties paid to the New Zealand Government on minerals extracted are a mere 1%. The Government’s “yeah, but…” response was to claim there will be many jobs created—with no evidence that, in fact, there will be any.

Even announcing the plans has started to damage New Zealand’s tourism industry, the largest single earner of foreign money in New Zealand: It’s worth $22 billion a year and employs 185,000 people. No less than the Economist has blasted the proposal in an article criticising the country’s green credentials, indicating that media in our biggest foreign tourism markets pay attention to what happens here.

Green Party co-leader Metiria Turei used Question Time to force Prime Minister John Key, who is also Tourism Minister, to admit that his government hadn’t even bothered to enquire about the potential impact of the mining proposals on the tourism industry. Incredible. Key and his government are willing to risk a sustainable business worth $22 billion on the off chance they might get a few dollars in royalties from the foreign-owned mining companies.

This National/Act Government is now finding itself in the uncomfortable position of being fact-checked on every claim, no matter how small and silly. Energy and Resources Minister Gerry Brownlee claimed that the amount of land to be mined would be like “a postcard on Eden Park”. TVNZ checked that, too: They had a mathematician look at the claim, and he found that if New Zealand were reduced to the size of Eden Park, the amount of land to be mined would be 121 postcards.

National isn’t used to such intense public scrutiny of its plans. Labour Leader Phil Goff has promised that when Labour becomes Government, it will reverse these absurd plans. The way things are going, they may get the chance sooner rather than later.


Anonymous said...

I have done the maths, and the Govt's figure do not stack up.

Brownlee alleges there is $54 billion of potential gold on the Coromandel. The huge open pit mine at Waihi mine produces gold worth $225 million per annum. Average life of a mine say 10 years. Therefore total "value" of production $1.25 billion

Divide $1.25 into $54 and you get 24. So 24 is the number of open pit mines you need on the Coromandel to extract this grossly exaggerated estimate!! Underground mines have production rates about say 1/20th smaller so we need 500 underground mines on the Coromandel.

this is bollocks! Help fight this idiocy at http://www.watchdog.org.nz

d said...

I'm not sure where the "1%" figure came from, but for oil and gas, royalties are paid at 20%. It's a HUGE number.

Having said that, though, I'm completely against going after protected land for any kind of extraction. The key is reducing our need for such minerals, not ruining even more land to get at them. Because eventually they WILL run out. How about we plan for that?

Arthur (AmeriNZ) said...

I forgot to reply before, D, but the 1% refers only to minerals and metals, including gold and silver. Oil is handled differently. National is claiming the economic benefits will mainly come from job creation and the spending that will trickle-down through the economy.