A ban on mining on conservation land will not produce the environmental benefits its proponents suggest, yet it will have serious impacts on the New Zealand economy. Under the proposal we risk losing investment, jobs, overseas revenue, taxes and funding (that can help manage and improve the conservation estate). Most importantly we risk destroying the livelihoods of large sections of the community in many rural areas.
Mining productivity is high compared to other land uses as well as other economic activities generally. The average annual wage in mining is $101,500 (compared with $58,900 for the economy as a whole).
Mining provides economic benefits for our regional and national economies. Productivity in the mining and exploration sector is $547,400 per FTE worker, compared with $107,400 across the economy. In fact, the resource sector, including mining, is the number one ranked sector and at the other end of the spectrum is the accommodation and food service sector, with an average productivity of only $39,600. (Source: Infometrics)
It has been said that places such as the West Coast would do well to move out of mining and shift into tourism and that a conservation land ban would encourage this. But a shift out of mining would hurt regional economies because of the sector’s high productivity and high wages relative to other industries. Furthermore, it would not be easy for many miners to retrain in the hospitality industry.
Nationally, mining generates around $1.0 billion in annual export earnings. According to a KPMG study, around 86 percent of OceanaGold’s revenue stays in the country as salaries, taxes, rates, royalties, levies and payments to suppliers and contractors. Profits taken offshore are a fraction of this.
Importance of minerals to the modern economy
As well as the economic impact of the mining sector, the products of mining are an essential contributor to the modern economy and this won’t change.
Mining is also concentrated in small parts of the country so its impact on the economic development of certain regions is significant. The West Coast, for example, is particularly vulnerable to the proposed ban.
81% of the area of the West Coast is conservation estate.
Mining in the Buller District, for example, directly contributes $88 million of GDP, or 17.7% of the district’s total. This is the number one ranked sector ahead of dairy farming at number two with 14.7%.
Mining and exploration directly employs 339 people in Buller. This is 8.1% of its total workforce. The indirect contribution to employment is many times greater. Buller is more dependent on mining than Wellington is on the public service.
The 8 arguments against the ban (click each argument to see more detail).