Mining Q&A

What minerals are mined in New Zealand?

Most mining in New Zealand is coal – 4.9 million tonnes of coal were mined in 2008 mostly in the West Coast, Waikato and Southland. There are four grades of coal: ranging from anthracite (the most valuable), to bituminous coal, sub-bituminous coal, and lignite – or brown coal - (the least valuable.) Most coal mined in New Zealand is bituminous and sub-bituminous, but State-owned mining company Solid Energy is expanding mining of the least-valuable and dirtiest coal, lignite.

Other non-metallic materials mined include gravel, sand, limestone and rocks, which are used in construction and roading. A small amount of metal is also mined – 16 tonnes of gold was mined in 2008 mostly from two large mines in Waihi and Otago, and every year around 1.7 million tonnes of iron sand is mined on the west coast of the
North Island.

Mining companies are also exploring the potential of deep-sea mining of minerals over hundreds of square kilometres of the seabed in New Zealand waters.

Who owns our minerals?

The Government owns all petroleum, gold and silver in New Zealand and all other metallic and non-metallic minerals and aggregates on Crown-owned land. Anyone wanting to prospect, explore or mine these substances must obtain a permit under the Crown Minerals Act 1991 and pay fees and royalties. Royalties represent just a fraction of the total value of the minerals, and the mining company takes any profits from mining operations.

Solid Energy is the biggest coal mining company in New Zealand. This State-owned company owns coal mines in Waikato, West Coast and Southland. The Crown has long operated mines in New Zealand as State Coal Mines, but in 1987 Coal Corporation was established as a State-owned enterprise and took over much of State Coal Mines’ activities and assets. Coal Corporation was renamed Solid Energy in 1996.

Solid Energy mines most of the coal that is mined in New Zealand (about 4 million tonnes a year) and plans to expand mining significantly in the next 20 years. Its currents licences and exploration permits cover more than 700 million tonnes of coal.
Other mining companies are privately owned, both by New Zealand-based and overseas-owned companies.

What are the rules?

Permits giving a right to mine are granted under the Crown
Minerals Act 1991, but the environmental impacts of mining are controlled under the Resource Management Act (RMA). The Parliamentary Commissioner for the Environment has identified more than 100 mines that operate on licences granted before laws like the RMA were passed – operating under weak,
outdated and often unenforceable conditions.

What are the effects on water?

Coal mines expose sulphide in rocks to the air and water, which produces sulphuric acid and causes groundwater to become more acidic. Acidic water flows into streams and rivers, so has an impact far beyond the mine. The effects of acid mine drainage on freshwater systems can be severe, killing freshwater life such as fish and invertebrates.
Contamination of waterways is also visually obvious – streams can flow black or brown due to contamination with coal sediment, which also smothers freshwater life.
Gold mining can cause toxic substances and heavy metals such as cyanide, arsenic, cadmium, lead and zinc, to contaminate waterways, with devastating effects on freshwater habitats.

What are the effects on landscapes?

The barren, stripped-bare appearance of open-cast mines has been likened to moonscapes. Mining also leaves behind large amounts of waste rock (known as tailings).

To allow access by machinery and to transport the mined material out, mining usually requires roads to be built, and these also have an impact on the landscape and habitats in natural areas. Ground subsidence and erosion in areas that have been mined, and instability of nearby land, is also common.

What are the effects on plants and animals?

The native plants and animals that live in areas that are mined are seriously threatened by mining activity. For example, Solid Energy “relocated” thousands of the giant native Powelliphanta snails so could remove their entire habitat at Stockton to mine coal, but up to 40% of the snails have died after being transferred, and many are still being kept in fridges.

Many other native species, including kiwi and other native birds, rare tussock grasslands and endangered native frogs, are under threat from mining. Seabed mining also has catastrophic consequences for marine environments and seabed life.

What are the effects on climate change?

Coal is the dirtiest fuel – burning coal is the single largest global source of greenhouse gases, which are causing climate change. Burning coal also causes air pollution which has a direct effect on people’s health.

As well as the carbon released when coal is burnt, trapped methane (another greenhouse gas) is also released when coal is mined.   

What other effects are there?

Mining can also cause problems with wind-blown dust. Activities such as blasting and use of heavy machinery creates high levels of noise and vibration.

Do modern mining techniques cause less harm?

The Government has claimed that “modern” mining methods mean minerals can be “surgically” mined, with little environmental impact, but the reality is very different.
Because most easily-mined minerals in New Zealand have already been taken, those which remain exist in very low concentrations and large amounts of rock must be mined to extract them. That means the impact of mining is much greater.

Up to the 1940s, almost all coal mining was in underground mines, but since then open cast mining has grown to where most coal is now mined in open cast mines (in 2008 five underground and 20 open cast coal mines were operating, and 63% of coal was mined from open cast mines.) Open cast mines remove all the vegetation, soil and rock above the material that is mined. They remove millions of tonnes of rock – sometimes removing entire mountains or ridgelines - and leave massive scars on the landscape.

What rules are there to limit the impact of mining on the environment?

Since 1991, the Resource Management Act has been the main framework which governs activities which may have an impact on the environment, including mining. Permits giving a right to mine are granted under the Crown Minerals Act 1991, but the environmental impacts of mining are subject to the RMA.

Territorial authorities (regional and local councils) are responsible for monitoring and enforcing the RMA consents under which mining activities operate.

Before the RMA the Minister of Energy granted mining licences under the Mining Act 1971 and the Coal Mines Act 1979. Permits that were granted before the RMA was passed still operate under the previous rules.

The Parliamentary Commissioner for the Environment has identified more than 100 mines which operate on licences granted before laws like the RMA were passed – these operate under weak, outdated and almost unenforceable conditions, the commissioner found.

The commissioner also found there was uncertainty about which agencies had responsibility for monitoring and enforcement of conditions.

Mining operator’s own internal environmental objectives are not always achieved. For example Solid Energy achieved only 6 out of 12 of its environmental objectives in 2008.

Does mining take place on conservation land already?

Although a third of New Zealand’s land is in the conservation estate, it is not necessarily protected from mining. Land managed by the Department of Conservation is open to applications for mining permits, which require the consent of the Minister of Conservation. Consent has been granted for mining in many parts of the conservation estate, including some highly sensitive areas. 

What is “Schedule 4?”

Schedule 4 of the Crown Minerals Act identifies conservation land, which, due to its high conservation values, should be excluded from the possibility of being mined. This land includes national parks, nature reserves and scientific reserves – land considered to be core conservation land. About 40% of the conservation estate (13% of New Zealand’s landmass) is in Schedule 4.

Recently Energy Minister Gerry Brownlee proposed a “stock take” of Schedule 4 land to see if it could be opened up for mining.

However, some permits have already been granted to mine Schedule 4 land, including in national parks. Most mining is carried out on other conservation land outside Schedule 4.

Which areas are most at risk?

Mining companies appear to be targeting the Coromandel and Kahurangi National Park at the top of the South Island for expansion of mining. Both these areas contain important habitat, native species, and have natural environments that are a major drawcard for tourists and a major factor in local residents’ quality of life.

Official information also shows the “stocktake” includes oil reserves in Fiordland National Park and gold and coal in Paparoa National Park.

An Australian mining company was recently granted a prospecting permit to search for coal, iron ore and other minerals in a huge area (3568 square kms) bordering Kahurangi National Park.

How much money does New Zealand get from mining activities?

It is sometimes argued that we need to allow more mining to boost economic growth, but in fact mining contributes relatively little to our economy – and can actually have major economic costs.

Earnings from minerals make up just 3% of New Zealand’s wealth. In comparison, earnings from New Zealand’s conservation land make up 20% of our wealth.
Once you consider the costs of mining, it can actually make a loss. In 2006, the mining industry as a whole made a $236 million loss before tax. That meant a tax write-off for many mining companies - paid for by ordinary New Zealanders.

The total value of minerals mined in New Zealand is $1.6 billion – compared to $21 billion earned by tourism, which relies heavily of the preservation of conservation land.
If more mining was allowed in conservation lands, it would damage the unspoiled natural landscapes, habitats and wildlife that attract tourists from around the world. This damage to our clean, green image and “100% Pure New Zealand” brand could cost us billions.

National has said that exploiting our mineral wealth would help New Zealand “catch up” with Australia in economic performance – but New Zealand does not have the large quantities of valuable minerals which are mined in Australia.

In 2008, 5800 people were employed in mining in New Zealand – compared to 108,000 people who are directly employed in tourism, and many thousands more who are employed in others sectors boosted by tourism, and in conservation. Many of these jobs would be put at risk by expansion of mining into conservation lands.
The experience of towns like Waihi, where mining is based, shows that economic benefits do not always flow to residents – despite gold mining profits being made by the gold mines, the town’s residents still experienced high levels of economic deprivation and unemployment. Highly paid and skilled jobs rarely went to locals.

Who pays for the environmental damage caused by mining?

Sometimes mining companies, having made their profits, go into liquidation, and abandon mines (known as ‘orphan mines’). Then the Government (and taxpayers) are left to deal with the environmental impact of the mines, which can be very expensive. For example, taxpayers are paying $10 million to clean up the damage left behind at the Tui Mine in Te Aroha.

DOC is also paying to remedy the effects of abandoned mines on conservation land in many other areas, and local and regional councils (and their ratepayers) are also footing the bill.

New Zealand taxpayers will also face paying the costs of increasing carbon emissions as those who make the profits from mining coal are not being required to meet their fair share of the cost of its contribution to climate change.

While mining companies are sometimes prosecuted and fined for breach of their RMA consents, the profits made by mining outside the conditions of their consents usually far outweigh the penalties. There is not enough monitoring and enforcement of conditions to ensure they are effective.

Can environmental harm from mining be reduced or reversed?

Most mining operators are subject to stricter conditions and monitoring than in the past, and most follow practices which go some way towards mitigating or remedying the environmental impacts of mining. However, mining will always have some impact on the environment that can never be entirely remedied. In areas that are especially vulnerable, or are home to unique and threatened native species and landscapes, the impact of mining can be severe.

Some mining operators have programmes of “rehabilitation” by replanting mined land with trees, and “vegetation direct transfer” (digging up vegetation and soil intact with a digger and moving it to another location) but neither of these methods can completely replicate the original vegetation and habitat. The Parliamentary Commissioner for the Environment found it is too early to tell whether rehabilitation of vegetation by Solid Energy will be successful.

The impact of mining on water quality can be reduced by stricter controls on waste water discharges, better engineering, water treatment and dosing waterways with lime to reduce acidification, but it is very difficult to completely avoid impact on waterways and breaches are inevitable. Due to New Zealand’s high rainfall, it is especially vulnerable to contamination of waterways from mines.

Some of our plants and animals are so specialised they can live only in relatively small, specific areas. If those areas are damaged or destroyed, they can’t survive anywhere else. For example, the Powelliphanta Augustus snails threatened by Solid Energy’s coal mining are found nowhere else, and translocation is proving to be unsuccessful –which could mean the snails will be lost forever.

If we don’t act now to reduce the amount of carbon being released into the atmosphere by burning coal, we will face irreversible consequences of global climate change.