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Economy

Myth: Mining does not benefit the economy because nearly all the profits go offshore.

Reality: Mining companies pay taxes, royalties, salaries, local suppliers and contractors. Of course, any net profits or dividends may go offshore. The shareholders expect some return or they wouldn’t invest, and that is true of many industries in NZ. The wine industry is more than 80% foreign owned and no one complains about that. Less investment = less mining and other activities = fewer jobs and a lower level of services, e.g. health, education. The three largest mining companies in NZ are Solid Energy, OceanaGold Ltd, and Newmont Waihi Gold, and, in 2010, only a small percentage of the aggregate gross revenue generated by these companies was paid as profits or dividends to overseas shareholders or entities. Mining has potential to benefit the national economy significantly. In 2008 there were 14,800 people directly and indirectly employed in the industry in NZ. 

Myth: Mining impoverishes society because of the “resource curse”. A few gain and the rest of society is made worse off than they were before.

Reality: This is a complex issue. While this may occur in some parts of the world, this is not the case in New Zealand. Several factors are in play. New Zealand is the second least corrupt nation in the world, next to Denmark. The rule of law holds. NZ miners are well paid. Taxes, royalties and environmental compliance are paid for. New Zealand has a social welfare system that covers health, education, superannuation, accident compensation, unemployment.       

Myth: Mining companies pay little in the way of royalties.

Reality: Royalties are imposed on Crown-owned minerals, and the level of royalties is largely determined by reference to international norms. The statement misses the point and is generally offered by opponents looking to score cheap points! The key issue is that mining, like any economic activity, provides returns to the Government through wages, taxes etc.  In addition to these positive outcomes, the Crown obtains royalties because at some point in our history the Crown nationalised what is, in many other countries, not nationalised! This statement takes inadequate account of the risks and uncertainties faced by mining companies investing in prospecting, exploration, and, sometimes, development. Sure, royalties should be paid where appropriate. If there is a concern, it should be taken up with the Government. The Crown Minerals Act 1991 and associated minerals programmes are currently under review.   

Myth: Mining and tourism are incompatible.

Reality: Mining and tourism are very compatible; visit the West Coast. Around 300,000 visit the Punakaiki pancake rocks every year, one of the most visited attractions in NZ and in the heart of mining country. Both historic and current mine workings are tourist attractions in their own right. Around 40,000 visit the Martha mine in Waihi, Coromandel, every year.

Myth: Mining detracts from NZ’s brand

Reality: Many mining companies in NZ are world best-practice in terms of management of environmental impacts, site rehabilitation, and post-mine closure site management. Most mining companies have biodiversity conservation as part of the conditions of their operation, and aim to achieve a net positive impact on the environment. Certainly, the conservation work done by many companies occupies an area that far exceeds the footprint of development. Mining can be and should part of the solution, not the problem, to maintaining NZ’s native species and ecosystems and our standard of practice should in fact be seen as enhancing our brand, not detracting from it!