Tuesday, March 23, 2010

A question

If the total value of New Zealand's mineral resources is $194 billion, and the area Gerry Brownlee wants to mine in is 0.024 percent of the total land area, doesn't that mean that the value of minerals in that area is likely to be a lot, lot less than the total (on the order of $50 million to use Brownlee's favoured back-of-the-envelope calculation method)?

Hardly seems worth it, does it?

(I'm not actually interested in approaching this as a cost-benefit exercise, any more than I'm interested in doing a CBA for cutting off my own arm. But those who are should be aware of the government's spin: that they're conflating the value of a tiny subset with that of the whole. They might also be interested in what Statistics New Zealand, rather than the mining industry, thinks those minerals are worth).