It’s time to mine New Zealand’s potential

Following the recent national elections in November 2011, the thorny issue of mining in New Zealand is back on the agenda. NZ prime minister John Key has put economic growth and jobs at the top of his agenda, with the prime slots in his new cabinet handed to ministers whose main role will be to boost the economy. Steven Joyce has been appointed the new jobs tsar’ and given responsibility for lifting economic growth. A key task will be to sell the advantages of mining exploration to the NZ public.

The need to look at mining is now a serious discussion in NZ. New Zealanders know that Australia’s mining industry has been the catalyst for its economic growth in the past decade. Large quantities of minerals and resources are found in Australia and they are in high demand in China. This demand has led to massive Chinese investment in Australia’s mining industry. From 2007 to 2010, Chinese investment in Australia amounted to nearly US$60 billion. Australia’s mineral exports grew by 55 per cent to US$139 billion in 2010 and are projected to reach US$180 billion in 2011, thanks to China’s strong economic performance.

The Key coalition government is keen to emulate Australia’s mining success. In 2009, Gerard Brownlee, the then minister of energy proposed a series of changes to the Crown Minerals Act, which under Schedule 4 protects national parks and conservation reserves from mineral exploration and extraction. He also called for a loosening of access requirements to lands administered by the Department of Conservation.

NZ is rich in natural resources and has great potential for the discovery of new, high-value minerals including platinum, gold and other metals. The mining sector in NZ is currently much smaller than its tourism sector, but its economic impact could triple over the next 20 years. An important report by Richard Barker, a consulting geologist and a trustee for the Australian Institute of Mining and Metallurgy, shows that NZ is sitting on a huge amount of valuable natural resources: US$140 billion of metallic minerals, with brown coal alone worth at least an additional US$100 billion. Plus NZ has great potential for the discovery of new oil and gas resources.

The development of the natural-resource sector would create thousands of new jobs, boost the wider economy and be a key element in the future growth of NZ. The greatest value of the mineral sector to the NZ economy is through its vital, supportive function for other industry sectors and its contribution to export income. Growth sectors such as the dairy industry depend heavily on fertilisers and road transport, for which industrial minerals and aggregates are essential. Coal, lignite, gold, iron, sand and industrial minerals like china clay and bentonite are all in high demand in the export market. Within NZ, industrial minerals can be used for construction, electricity generation, papermaking, manufacturing, steelmaking, gold-ore processing, water treatment and farming.

Investing in this sector could deliver improved export performance, develop key infrastructure within NZ and bring with it huge benefits and advancements in science and technology and other spin-offs, such as the growth of the engineering sector (as can be seen in Australia).

Adding to the case for exploring the mining potential of NZ is the fact that the commodity market (minerals and energy in particular) is now among the most profitable industrial sectors in the world. In February 2011, Jim Rogers, co-founder of Quantum Funds with George Soros, announced that he was setting up a global resources equity index which will focus on the top companies in agriculture, mining, metals and energy sectors. He believes that power is shifting from the financial centres to the producers of real goods, particularly commodities, raw materials and natural resources.

So it would seem a no-brainer for NZ to explore this potentially lucrative market. But environmentalists have been quick to challenge the mining proposals. Greenpeace accused the Key government of attempting to drag NZ back to the nineteenth century. Senior Greenpeace spokesperson, Simon Boxer, claimed that, ‘the National Party’s rudimentary approach to economic development is fast consigning “clean green” New Zealand to the historical dustbin. Its rip shit and bust approach to growth is destroying everything we stand for as a country.’

Forest and Bird, a prominent NZ environmental group, also raised the alarm in 2010, with its estimates that 40 per cent of conservation lands (approximately 14 per cent of the country’s total land area) would fall under Schedule 4 and so ruin many areas of outstanding beauty in NZ. In reality, mining uses less than 0.1 per cent of NZ’s land area and sites of former mines are now rehabilitated for other uses.

Forest and Bird claims that mining has limited potential for NZ’s economy but carries immense costs to the environment. It believes that mining is inherently in conflict with the protection of natural NZ and the ‘100% Pure’ brand that NZ’s tourism, agricultural and innovation industries use to gain market advantage. Again the reality is very different: there are at least 82 mines already operating on conservation land and this has not impacted on tourism. In fact, international tourist numbers to NZ rose from 1.8million in 2000 to 2.45million in 2008, thanks in large part to increasing numbers of visitors from China.

Campaigns led by Forest and Bird have already hindered mining development in NZ. Four years ago, controversy erupted over the rare powelliphanta augusta snail. Solid Energy, the largest coal-mining company in NZ and a state-owned enterprise, wanted the coal from the snail’s habitat at Mount Augusta Ridge Stockton mine, the home of 6,000 of these snails. Under pressure from environmentalists and keen to demonstrate its ‘green’ credentials, Solid Energy agreed to remove the snails, with 4,000 relocated and the rest kept in captivity to safeguard the population from extinction. Approximately 1,300 of the evacuated snails are still living in small two-litre ice-cream containers in fridges. A lot of work and money – well over $7million so far – goes into keeping the snails alive. Solid Energy provides regular updates on the progress of the snails on its corporate website and has even produced a DVD of the snails’ adventures!

Forest and Bird’s real opposition to the government’s mining proposals becomes clear when reading the emotive language on its website, which explicitly states that ‘having survived an ice-age, numerous volcanic eruptions and earthquakes, our native species have endured some life-changing circumstances, but nothing has been more disruptive than the arrival of humans (my italics). Human-induced threats to our native wildlife include felling of native forests for timber, damming of lakes and rivers for hydro-electric development, destruction and contamination of native habitats by mining, clearing of native vegetation and draining of wetlands for farmland, over-fishing and “by-catch” of marine mammals in our oceans and run-off of fertiliser and effluent from agriculture in our waterways.’

Groups like Forest and Bird and Greenpeace view humans as merely giant consumers, plundering and destroying the earth’s natural resources and species for our own narrow interests and greed. These groups claim to support mining in principle, yet the conditions and restrictions they would attach to mining constantly undermine it in practice. Such groups have lost faith in humanity’s ability to solve difficult problems through ingenuity, creativity and production and have little confidence in our ability to deal with the natural challenges thrown up by mining through technical innovation or geo-engineering solutions.

With such a diminished view of humanity, it is not surprising that environmental groups draw pessimistic conclusions about mining. These groups view trying to make NZ richer as counterproductive. It is seen as undermining the quality of life of New Zealanders and damaging to the environment – killing off rare indigenous species and threatening planetary disaster.

Because of this conservative, anti-human outlook, things that could help grow the NZ economy are continually thwarted and delayed. Not surprisingly then, New Zealanders are hesitant to embrace the resource-development strategy. Last year, thousands of New Zealanders took to the streets to protest the government proposal (the largest demonstration in NZ in many years).

However, despite this, a significant proportion of New Zealanders are open to the idea of increasing mining on protected conservation lands. New Zealanders do recognise that Australia has benefited hugely from its mining industry and its close ties with China and the other emerging economies in Asia. They also recognise that NZ could join in the economic growth and dynamism that is being generated by the demand for minerals and coal in the region.

Much has been written about the changing shift in global economic power in recent years, with China fast catching up with the US as the leading economy in the world. NZ is well placed to take advantage of this economic shift. NZ and China have a free-trade agreement in place and China is now NZ’s second largest trading partner. NZ stands at a crossroad. It needs to decide if it wants to ride the Pacific Rim wave or whether it will continue to be held back by anti-mining conservatives at home.

Theresa Clifford is a digital strategist and writer based in Auckland. Visit her personal website here. Follow her on Twitter @TheresaClifford.