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OceanaGold less confident in regulatory regime

Thursday 23rd May 2019

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OceanaGold says the surprise rejection of a land purchase for a new tailings facility has reduced its confidence in this country’s regulatory settings.

The rejection of its planned 178-hectare purchase – due to a split decision between Lands Minister Eugenie Sage and Associate Finance Minister David Clark - “baffled” the company, corporate affairs manager Alison Paul told lawmakers today.

The company has sought clearance for transactions 85 times under the Overseas Investment Act and been granted every one, she told parliament’s economic development, science and innovation committee

OceanaGold believed it had established a track record as a firm of good character, which delivered on its development promises and met its environmental and social commitments.

So having two ministers take diametrically opposed positions on the proposal was a shock.

“They are not even close,” Paul told the committee.

“That does have an impact on the confidence that we are able to put in the regulatory environment when we make investment decisions,” she said.

“We are still confident and we have every intention of being here for another 30 years. But it certainly causes us to question the confidence we’ve put in it in the past, and that will inevitably cause us to look at our risk settings around investment.”

Green Party MP Sage shocked the mining industry and her coalition colleagues earlier this month when she rejected OceanaGold’s proposed purchase for a new tailings dam near Waihi. She argued gold mining was inherently unsustainable and that there was no net economic benefit in extending by nine years the life of a mine that employs 360 people and accounts for half a percent of the region’s GDP.

The company is still considering whether to seek a judicial review of Sage’s decision, Paul told BusinessDesk.

OceanaGold was submitting on a petition lodged by Coromandel Watchdog urging the government to extend the ban on mining in the Coromandel Forest Park – effective through Schedule 4 of the Crown Minerals Act – south as far as Te Aroha. That would take in Waihi and much of OceanaGold’s exploration acreage in the area.

The 4,687 petitioners also wanted a ban on further blasting, underground and open cast mining within residential zones or within 400 metres of any residence in the Coromandel/Hauraki region.

Paul told the committee that a consensus was reached between the company, environmental groups and the broader community in 2017 on how gold mining would develop in the area.

That process, part of the update of the Thames-Coromandel District Plan, was fully public and covers the conservation zone on the Coromandel Peninsula and extending into Hauraki District. Within that zone there will be no open pit mining, no processing and tailings facilities, she said.

“The difficulty with Schedule 4 is that it prevents exploration and without exploration you won’t have mining.”

In December, an independent hearings panel cleared the company to continue mining at Waihi for about another 12 years.

Earlier this month, OceanaGold sought a mining permit over its Wharekirauponga discovery in the Coromandel Forest Park about 10 kilometres north of Waihi. While surface mining is ruled out, the company believes there is potential to tunnel from outside the forest park and carry out any processing at Waihi.

Fletcher Tabuteau, NZ First MP and parliamentary under-secretary for regional economic development, surprised the committee by urging them not to relitigate the “incredibly robust” Resource Management Act process OceanaGold had been through.

While he respected the views of those lodging the petition, he said every indication was that OceanaGold was operating well within the expectations of its consents.

The petitioners had had their opportunity to be heard in an open and rigorous process. The committee should thank them for their petition and take no further action, he said.

(BusinessDesk)

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