27 Mar 2012

Warning over mining boom on West Coast

8:38 am on 27 March 2012

An economist is warning of the dangers of a mining boom on the West Coast.

The rising price of gold and coal has led to a mining boom in the South Island.

Permission is being sought for an open cast coal mine on the Denniston Plateau near Westport, while exploratory work is under way at an old gold mine in the Tasman District.

Buller District mayor Pat McManus says mining accounts for more than 1200 jobs in the region, with hundreds more likely if the Denniston Plateau mine is approved.

Grey District mayor Tony Kokshoorn says plans by Solid Energy to expand the Spring Creek mine and open a new mine in the Paparoa Ranges are good news for his region.

But Geoff Bertram, an economist at Victoria University, warns there is a danger that the West Coast will leave itself vulnerable when the minerals run out.

Dr Bertram says lessons can be learned from mining giant Australia.

"Australia is becoming extraordinarily vulnerable ... for example, if the Chinese economy slows and stops, the demand for coal and iron ore drops.

"Australia will have quite a difficult and painful adjustment to make, because in the course of the boom, they've seen the mining revenue squeeze out a lot of other activities - manufacturing, for example."

Dr Bertram says mining also jeopardises the clean, green image that New Zealand uses to market itself to tourists.