30 Mar 2010

Government estimates on mining 'greatly overstated'

6:02 am on 30 March 2010

Environmentalists say loopholes regarding the royalties from mining mean Government estimates of the benefit are greatly overstated.

The Government says it expects significant gains in jobs and taxes from its plans to allow mining in protected conservation land.

It has released a discussion document outlining plans to open up 7058 hectares of Crown land for mining.

The proposals target land in the Coromandel Peninsula in the North Island, the Inangahua sector of the Paparoa National Park in the South Island and on Great Barrier Island.

Royalty payments for precious metals were recently doubled from 1% to 2% of sales value.

But Statistics New Zealand figures show that in 2009, the mining industry made sales of $6 billion and paid royalties of just $6.5 million.

A former president of anti-mining group Coromandel Watchdog, Mark Tugendhaft, says the figures show what little benefit new mines would bring.

Mr Tugendhaft says before calculating royalties, companies deduct the cost of extraction and advance-sell the gold at less than market price.

He believes new mines will disrupt the land for decades, with little benefit to communities around them.