Taxpayers left with costly environmental liability from Solid Energy mines

Forest & Bird says evidence of corporate welfare and dirty deals is mounting up as the Government’s sale of Stockton coal mine progresses.

“This sale is a terrible deal – for the environment, and for taxpayers,” says Forest & Bird’s Chief Executive Kevin Hague.

Last week the Overseas Investment Office approved BT Mining’s purchase of three Solid Energy coal mines including Stockton. BT is paying $46 million for the mines.

Documents obtained by Forest & Bird under the Official Information Act show that in July 2016, Cabinet agreed to take responsibility for Stockton’s environmental liabilities to the tune of $57 million, to improve the likelihood of the mine being sold.

This comes on top of existing Crown environmental liabilities from Solid Energy mines - valued in 2014 at over $150 million - a large proportion of which relates to acid mine drainage at Stockton.

“The Government has effectively given these mines away, leaving taxpayers with responsibility for a toxic environmental mess, and a financial liability that dwarfs the sale price,” says Mr Hague.

“This is corporate welfare at its worst.”

“But the Government hasn’t just given these mines away. They’ve gone the extra mile to make a terible deal even worse.”

“We’ve seen Government Ministers working for the last year to make high value conservation land on the Buller Plateau available for mining by Stockton’s new owners.

“We have seen officials investigating a Special Economic Zone for the Buller Plateau, which would allow the Government to circumvent environmental protections and public involvement to enable the new coal mines.

“Just this month Ministers announced a new streamlined approval system for mining applications on the West Coast, one that will inevitably lead to a further loss of DOC’s advocacy voice,” says Mr Hague.

“We are deeply concerned that we are about to see fast, poorly made decisions as a result of the Government’s desire to satisfy their industry mates.”

The OIA documents also state that if an operator on the Plateau gets into financial difficulty the Crown may need to take on further liability for environmental pollution.

“That is a worrying situation, given the boom and bust nature of the coal industry,” says Mr Hague.

The Buller Plateau is a spectacular and unique landscape, containing rare ecosystems and threatened species such as Great Spotted Kiwi, West Coast green gecko and koura (freshwater crayfish).

“Further coal mining will drive our threatened species towards extinction, and pollute our waterways and our climate,” says Mr Hague.

“There is so much at stake here, environmentally and economically. Forest & Bird will be fighting any attempt to bend the rules to enable more toxic mining in one of our most precious places.”

BT Mining is set to take over at Stockton on September 1.

Background notes 

  • The information regarding Crown liability for Solid Energy’s environmental pollution is contained in this briefing from officials to the Ministers for Conservation and Energy & Resources, dated 24 March 2017.
  • Acid mine drainage (AMD) is caused by coal mining, when sulphide in rocks becomes exposed to the air and water, producing sulphuric acid. Acidic water and heavy metals flow into streams and rivers, and is toxic to aquatic life such as fish, plants and invertebrates. In the case of Stockton, the Ngakawau river has become heavily polluted as the result of AMD. AMD is costly to remediate.
  • BT Mining is a joint venture between Australian mining company Bathurst Resources and Motueka food company Talley’s Group. Their purchase of the mines required Overseas Investment Office approval because the majority of Bathurst’s shareholders are based offshore. Bathurst’s approval from the OIO can be viewed here
  • Photos of the Buller Plateau can be found here