Friday, December 04, 2009

Digging up Coromandel

The government has granted a mining permit to Heritage Gold to mine on DoC land in the Karangahake Gorge, near Paeroa. The company wants to extract more gold from the historic Talisman Mine, and believes it can extract around 1.4 tons (worth US$40 million) a year. But to get that, they'll have to dig out 200,000 tons of rock a year, crush it, put it in a pile, and pour cyanide all over it, with all the horrific environmental consequences that entails.

The good news is that this is only a mining permit [PDF], and that they do not yet have permission from DoC to effectively privatise and contaminate public land, or resource consent for the blasting, digging, crushing, and cyanidation (and resulting effects on air, land and waterways) necessary to restart mining. But under this government, the former is probably a mere formality. Which means it will likely all come down to the resource consent applications.

Meanwhile, I'm again astounded at the wealth transfer here. That gold belongs to the people of New Zealand. But under prevailing royalty rates, the government is giving it away for around one percent of its value (less, if the mining company hires some sharp accountants - and what are the odds of that?) So not only do we get to see our environment destroyed in the name of greed - we also get ripped off into the bargain. It's a lose-lose situation, unless of course you're a foreign-owned mining company.

Which tells us that instead of giving our mineral wealth away to foreigners essentially for free, we should be having the government run the mines (assuming we want them at all), and invest the profits for the future benefit of all New Zealanders, as Norway does for its oil revenues, rather than effectively privatising them at corruptly deep discounts for the exclusive benefit of a wealthy few.