Gerry on mining
Gerry Brownlee has an op ed in the Herald on mining. Good to see the Government front footing this to put thiings in context:
Try going a day without any goods or services that don’t require or depend on a product that has been mined.
From your inner-spring mattress to your car (or even your bike), computer, cellphone and medical equipment; the activities that make up our day and enhance our lives are in most cases only possible because someone, somewhere, has mined something.
A good point.
Many New Zealanders will not know that mining already makes a sizeable contribution to our economy. Mining in 2008 was a $2 billion industry and contributed $1.1 billion to exports.
Including oil and gas, the mining industry employs around 6000 people – and those jobs are highly productive and highly paid, relative to other sectors of the economy.
Mining is an important part of regional economies such as the West Coast and the Coromandel.
The Government is currently borrowing around $240 million a week and we have more than 100,000 people unemployed. The tradables sector of the economy has been in recession for the past five years.
That is unsustainable and the Government accepts the challenge of improving our economy and living standards.
Labour have already pledged to lower our living standards by cancelling any mining permits on reclassified land if they get elected.
We are therefore proposing to open up to possible mining just 7058ha of land that is currently protected in Schedule Four of the Crown Minerals Act.
That is only 0.2 per cent of all the land that is protected in Schedule Four, and it is a tiny amount compared with our total land area.
If prospecting that land showed potential for mining, it’s likely no more than 500ha of the 7058ha would actually be mined. That’s less than the size of the average sheep or beef farm in New Zealand.
But the economic return on that land is many times greater than any sheep, beef or dairy farm.
What I would like to see is an economic analysis for each site proposed in the consultation. I don’t think one can generalise over all sites.
Some people argue that New Zealand would not see any benefit from increased mining and that all the profits go overseas.
Yet the largest mining company in the country, Solid Energy, is 100 per cent state-owned. All its profits go straight towards spending on government services. There are also many New Zealand-owned mining companies active on New Zealand land.
The average ownership structure of resources companies listed on the NZX is 57 per cent New Zealand and 43 per cent overseas ownership. Others that are fully overseas-owned pay both company tax and royalties in New Zealand.
Some argue that the royalties from mineral mining are small, meaning it’s not worth it for New Zealand. But royalties are just an added bonus from mining.
The real benefits from mining are the jobs created and economic activity generated inside the country. That activity generates company tax revenue for the Government as well as economic growth.
This is the data I want to see though, to make a sensible decision. Not just an estimate of mineral wealth, but a range of projections for what mining in a specific area will do for job creation, royalty revenue, tax revenue, increased local consumption, and impacts on the trade deficit, the current account deficit and the level of crown debt.
Now of course it will be ballpark figures as such an early stage, but even that would be good.
Many New Zealanders are rightly concerned about protecting our natural environment and some say mining is inconsistent with that goal. The Government shares this concern and we will make sure any mining on conservation land in New Zealand is done responsibly and carefully.
Mines in New Zealand are subject to strict environmental tests. The higher the conservation value of the land concerned, the stricter the test. That fact will rule out open-cast mines on Schedule Four land.
Modern mining is totally different from its image in the past. Companies are required to rehabilitate the land after they leave and mitigate the effects of their activities as much as possible.
It is worth stressing that point – removing Schedule 4 protection is not an automatic licence to mine. It merely allows an application to be made that goes through the normal RMA process.
The Government believes a small increase in responsible mining could contribute to our goal of improving the economy’s performance and providing high-value jobs.
We want to hear what Kiwis are thinking. I encourage people to have their say by making submissions on the discussion document that you can find at www.med.govt.nz/schedule4.
Don’t complain about a decision, if you don’t take advantage of the opportunity to have your say. If you support greater mining – say so. If you are opposed to any change to Schedule 4, also say so. If you are in favour for some areas, but not others again have your say.