Mining debate should focus on cinditions, not preconceived notions
Posted in: Perspectives: Friday, 19 February 2010
National Business Review, February 19, 2010
Mining debate should focus on conditions, not preconceived notions
By Richard Michael, CEO, Straterra
The Prime Minister’s announcement that he expects significant changes to be made to Schedule 4 of the Crown Minerals Act signals a sea change in attitudes towards New Zealand’s mineral wealth.
At last New Zealand has a realistic and sensible proposal on the table - one which balances our country’s rich mineral wealth and the high economic worth of the natural resources industry with this country’s strong environmental values.
For many years the potential of our natural mineral endowment to increase economic growth and create jobs was largely ignored.
While Australia developed initiatives around its natural resources and its economy flourished, New Zealand’s languished, the income gap grew wider and our income per capita dropped in the OECD rankings.
A myth that New Zealand had poor mineral endowment was widely accepted – although this couldn’t be further from the truth - and a culture developed that suggested that we could afford to ignore the minerals sector of our economy.
We came to be regarded as resource-unfriendly by exploration companies and this discouraged investment in the NZ minerals industry. Legislation, particularly in regard to Schedule 4, was piecemeal and confused. For too many years there has been no clear policy on what is an important economic and environmental issue.
It was a bold step for the Prime Minister to announce in his Statement to Parliament that, following public consultation, he expects the Government to make significant changes to Schedule Four which could lead to exploration and mining on some areas of the conservation estate.
But it appears to be a step that New Zealand is ready for.
This Government recognises the greater contribution the minerals industry can make to our economy and so, it appears, does the public - more than 28,000 people voted in national online surveys on the latest proposals, with about 55 per cent in favour of increased access.
In reality, the proposed changes will not be such a giant leap as some might suggest. Schedule 4 provides a higher level of protection from mining to certain areas, including National Parks, but a number of minerals projects are already permitted and operating successfully within the conservation estate.
Some of these permits were issued by the previous Labour Government and others by the current administration. They include the Pike River underground coal mine which adjoins the Paparoa National Park.
One of the major problems with the current legislation is that, over the years, areas have been added to Schedule 4 without consultation or regard to other potential land uses and it now includes a wide variety of land types with differing levels of conservation value.
The current proposals provides the opportunity for a national discussion, the chance to assess relative values and to examine the real issue – what are the conditions under which we are prepared to see mining in any particular area? This is where the debate should focus.
Condemnation of the Prime Minister’s announcement by some environment groups, including the Green Party, was swift and predictable. This is an issue of significant economic importance to New Zealand and deserves a reasoned and cooperative dialogue between all stakeholders.
The Government has also proposed establishing a Conservation Fund using royalties from mining revenue on Crown land to fund special conservation projects. This is something Straterra has called for and mining companies are already operating many excellent environmental management and community initiatives throughout New Zealand.
The Prime Minister stressed there would be no relaxing of rules and the industry recognises that even stricter legislation may be required for any mining activity on these lands.
New Zealand’s main on-shore mineral production (coal, gold, ironsands and industrial minerals) already earns $2 billion per year. This uses very small amounts of land – a total of just 40 sq km, less than 0.1 per cent of New Zealand’s land area, and has an export value of $175,000 per hectare. Dairy farming, by comparison, uses 20,000 sq km of land with an export value of $3,500 per hectare. The oil and gas sector is a very substantial additional contributor to our economy.
These factors, combined with the world-class mining techniques used in New Zealand today, mean there is now a very real opportunity for a win-win for the New Zealand environment, for those who use and enjoy it and for the NZ economy.
The industry’s aim is for prosperity through partnership. It recognises that extensive consultation with stakeholders is essential, looks forward to a national discussion on this issue and is eager to work with Government, communities and environmental groups to ensure beneficial outcomes for all.
Ultimately, it is the performance of the mining companies themselves that provides the litmus test and we are confident that today’s industry will stand up to the scrutiny.