The undecided miner

The last time Q&M visited Newmont in Waihi two years ago we came away with a story about the final closure of Martha and community relations. HUGH DE LACY returns to find the company facing a serious challenge from residents demanding a clear idea of the mining company’s intentions.

Enlightened environmental policies have conferred toleration on a 200-metre deep opencast pit in the main street of a country town, but gold miner Newmont Mining Corporation is battling mounting social unrest over the question of whether it is staying or leaving?

It’s a problem arising from the widely-held local perception that, after buying the old Martha Pit mine from fellow global giant Normandy Mining in February 2002, Newmont would have shut up shop, filled the hole with water and beautified it with landscaping by the end of 2006, and pretty little Waihi – population 4500 – would have started a new life as a tourist destination on the banks of a lovely man-made lake.

Now Newmont Waihi Gold is evaluating an eastern layback at Martha that could extend the pit’s life to at least 2013, and is spending between $8 million and $11 million a year on exploration that could result in its stay in the eastern Bay of Plenty being extended indefinitely.

Blame it on the steadily rising global price of gold and the richness of the pickings in this corner of Hauraki District, but many of the otherwise tolerant citizens of Waihi are suffering from what they describe as “the mirage of closure”.

This mirage creates its own personal and social costs quite separate from the largely economic ones – already well documented (and to a considerable extent prepared for) of closure itself, that include a huge drop in the town’s gross domestic product and the loss of 150  jobs in the pit, and a similar number when the Favona underground mine closes in April 2011, along with about $3.5 million in annual wages. The town could lose 400 people, plus a further hundred from the coastal resort of Waihi Beach 12 kilometres down the road, and with a subsequent drop in the rolls of the of the local schools and the loss of the $250,000 a year Newmont provides annually in community donations and sponsorships, of which $100,000 is to education.

What would be left behind, aside from the landscaped lake – which itself might create subsidence problems from the re-watering – would be a $21 million legacy to the district’s mining history in the form of a tourist-oriented Gold Discovery Centre, funded jointly by Newmont, the New Zealand Mint, the Ministry of Economic Development and the Hauraki District Council.

The event which has, more than any other, created the mirage of closure so disconcerting was Newmont’s signalling in September 2007 that it was intending a cutback on the western side of the Martha Pit. Even though the company decided against it in June the following year without getting as far as making an application for resource consent, this was the first confirmation many had that, far from closing, the pit operation looked set to continue – as indeed it has on the other side of the hole.

While declining to give any firm date for the closure of Martha, Newmont this year offered four scenarios for its continued presence in and around Waihi.

The “current activity” scenario is for completion of the southern layback at the pit next year and the cessation of mining at Favona the year after. Filling of the pit with water would take from mid-2011 to 2017, the mill and water treatment plant would stop operating in 2012, the tailings storage facilities would be closed in 2016 and the process of final closure and rehabilitation would extend beyond 2021.

The second scenario, “under feasibility,” sees the eastern layback keeping the pit operating until 2013, with the filling of the lake completed by 2019, the milling and water treatment ceasing in 2014, and the tailing facilities closed in 2016.

The third option, “exploration,” foresees a new underground mine within the current mining footprint postponing the completion of the lake filling until 2022, with the milling and water treatment continuing until 2017, and the closure of the tailings facility two years later.

The fourth scenario, “Regional Exploration,” offers no timelines, just the continued targeting of underground deposits within 100 kilometres of Waihi.

Waihi residents’ frustration over the mirage of closure is currently expressed through the Distressed Residents Action Team (DRAT), formed back in 2001 in response to the Barry Road subsidence when in December 2001 when the ground opened up and swallowed a house in Barry Road and forced the evacuation of 25 people from 12 houses, two of which were destroyed and the rest of which had to be re-located.

DRAT’s secretary is Colette Spalding, who up until 18 months ago was an active member of Waihi Community Vision (WCV), the Newmont-funded community group set up to prepare the town for the company’s eventual departure, and now grappling with the likelihood of its staying.

A lifetime resident of Waihi, Spalding told Q&M that when mining of the Martha Pit recommenced in 1987 after a 35-year lay-off, the community was given “finite timeframes” for a 10-year operation. The original New Zealand owners subsequently sold the mine to Normandy, which went on to gain an extension to its mining permit that put closure off until 2007.

Newmont seemed to confirm that closure date after it bought out Normandy in 2002 but began hinting at unspecified extensions about four years ago. Spalding, who had a decade earlier bought a home affected by the blasting in anticipation of it ceasing, felt cheated.

“You buy in good faith based on the information available at the time, only to find everybody else in town is laughing at you because they never believed for a moment the mine [company] was going anywhere,” she says.

Newmont Waihi chief executive Glen Grindlay offers sympathy and regret for the current uncertainty, but says the future of the company and mining in Waihi is dependent on the results of ongoing exploration – “and it’s not really the sort of thing you can predict. We’ve said before this is a country of choice for us, and it’s a great district so we’d like to stay here as long as we possibly can.”

He concedes the company did give the community the perception that it would close in 2006, “and it was wrong.” What has changed has been has been the resurgence in the gold price, and the remaining riches in the earth around Martha, one the world’s historically great gold mines.

The only consolation he can offer is Newmont Waihi’s proven record of community involvement, no less than its environmental sensitivities.

“People shouldn’t focus on the ‘what’ that we do: it’s on ‘how’ we do it – and that’s where we’d like to see the debate.”