Editorials 24 March 2010

All four editorials are on the same issue today – mining.

The Herald says:

Energy Minister Gerry Brownlee says these locations represent the relative size of a post card placed on the turf of Eden Park’s main field. Conservationists are alarmed, one noting that news of these recommendations was as if the country had been asleep and had awoken again in the dark, mining days of the 1980s.

Both views are overstated.

Mr Brownlee’s because it is not the size but the impact on value and utility of the land that matters. The anti-mining lobby ignores the fact that substantial advances in conservation of the past two decades are largely retained. The country’s habitats will remain better off than before. …

Yet there is nothing in the stocktake about the possible economic upside, either in jobs or general benefits to GDP or direct financial gains for the Crown.

The amounts the Government might expect as royalties from private companies exploiting non hydrocarbon deposits are likely to be small. The absence of an economic case, even theoretical, is an important omission.

National is trying to make its case for elevating real economic advantages of mining over the intangible values of preserving flora and fauna, but it does not do so. …

So far, all we know is the potential downside, a reduction in the area of land given high protection. Without the economic benefits, that grand $194 billion figure is meaningless.

I think this is a very fair point. It would be good to see some figures along the lines of if say $20 billion of minerals was mined, what would be the likely impact on GDP, on the current account deficit, the balance of trade, on jobs, on Crown revenue etc etc, and over what time period.

The Press says:

It is true that there are currently 82 concessions for mineral extraction in the total conservation estate, but there are only two mines on schedule 4 land. Ultimately, whether the proposals proceed could depend on the response of the mining industry. Some companies might be deterred by the small amount of land which would initially be opened up for mining, or by the costs of underground mining and other environmental protections.

Faced with a tepid industry response and a political backlash, the Government would have to conclude that discretion is the better part of valour.

It would be interesting to hear from mining companies, which areas they are most likely to want to mine at – ie where they think there is enough minerals to make an economic return on investment. If, for example, no company thinks mining in a particular site is feasible, then why remove from Section 4?

And the Dominion Post:

Ideally, the Government would have been able to test public opinion in lower-value conservation areas, but that does not appear to have been an option. If the Government had excluded from the exercise all the areas to which New Zealanders are emotionally attached, there would have been little left to mine. Mr Brownlee has a public relations fight on his hands.

New Zealanders want to close the economic gap with Australia, but they also like the country, or more particularly the countryside, the way it is.

The challenge facing the Government, and the mining industry, is to convince the public that the industry can now do what it says it can do, rather than what it has historically done. That is, surgically extract mineral resources from sensitive land without laying waste to the landscape, and poisoning rivers and streams. If it can, many of those now burrowing in clothes drawers for old “No Mining” T-shirts will give up the hunt. If it cannot, the Government is doing what it has studiously avoided doing until now – putting itself on the wrong side of an issue with the potential to politicise entire communities.

And finally the ODT:

Mr Brownlee wants a “rational conversation” and argues that the amount of land involved is very small and should be viewed in its proper context.

That is fair comment, but the “conversation” ought not be limited to rhetoric but include a thorough cost-benefit analysis, site by site, and, in broader terms, the potential of mineral exploitation to have a deleterious impact on our other established industries, including tourism, and particularly on the value of the New Zealand dollar and the likely effect on exporters.

It should also include details of proposed royalties and tax arrangements – and the level of present interest by mining companies in the sites.

I find it interesting that to some degree all four editorials are saying much the same thing. None of them have endorsed the proposed changes to Section 4, but none of them have said they should not happen either.

The common theme is more information is needed and the Government needs to make a more convincing case than merely relying on an estimate of potential mineral wealth in each area.