The invisible industry

John Rae, the managing director of the Stevenson Group, a family owned, diversified investment company with operations in quarrying, mining, agriculture, building products, engineering, transport and property, provides an outside review of the industry.   BY ALAN TITCHALL

John Rae’s background is in finance and investment, having worked in corporate advisory roles here and overseas for the past two decades, so he has a unique inside view of the quarrying industry as someone relatively fresh on the scene.

Quarrying is one of part of Stevenson’s cornerstone assets and the company operates two greywacke quarries, the largest is at Drury south of Auckland. The three quarries currently supply about three million tonnes of aggregate a year to the Auckland and Waikato markets, while the Drury operation, producing 2.5 million tonnes of aggregate annually, represents about 25 percent of Auckland’s current aggregate demand.

Rae says the company has acquired large blocks of land surrounding the Drury Quarry for a future resource.

“Around the Drury Quarry we own some 2000 acres of land and another 1000 acres at Huntly. I am sure you can understand, these zones are both extensive and expensive,” he says. At current extraction rates, there’s around 150 years of rock available at Drury and 100 plus years at Huntly.

“However, there is a huge difference between having a resource and being allowed to extract it. In the current Auckland political climate in particular, there is absolutely no guarantee that we will be allowed to see out this resource’s full potential, and this is despite an increasing shortage of proximate aggregates in the region.”   

Rae says a significant chunk of his time at Stevenson is focused on securing operational longevity of these quarry resources.

“In other words – fighting for our ‘licence to operate’. Not surprisingly, my first observation is that NZ quarrying faces some big challenges. The Resource Management Act, NIMBYism and a challenging political climate, together with the uncertainty of construction projects, are but a few of the issues that make our lives difficult.”

Making the situation worse is the difficulty of finding and retaining good people to work in the industry, adds Rae.

“However, it is my view that all of these issues pale into insignificance when compared to what I consider to be the biggest problem currently facing the quarrying industry... visibility!”

Rae says the one thing he still finds “fascinating” about the extractive industry is how apologetic it has become. “Most responsible quarry owners and operators have taken to hiding from officialdom – hoping like hell local politicians and the local regional council have lost sight of the fact that their quarry even exists.”

Quarry operators in particular are paying big time for adopting this approach, he says.

“As an industry, we are mostly so well hidden that local, regional and central government has absolutely no idea how vulnerable they are to the quarrying industry. No one understands that they can’t live without us.”

During its recent plan change process Stevenson discovered that planning bodies such as the Auckland Regional Council and local council staff had no idea of the importance of the quarrying industry, other than the obvious compliance aspects.

“Initially I was stunned and annoyed at their apparent ignorance. Subsequently it became obvious to me was that it was the quarrying industry that was mostly to blame. We have assumed that politicians and bureaucrats understand how crucial proximate aggregates are to their economic and development agendas. In reality they mostly don’t.”

And it’s the quarry industry’s fault. It cringes under their radar and views itself as messy and noisy activity that might get pinged if it pops it head up too high, he says.

“If we want these people to understand the importance of our industry then we need to have the balls to be up-front and leading the charge at local, regional and even central  government level.  We need to present the positive face of quarrying  – in much the same way as the likes of Fonterra and the airlines are on the front foot painting a positive face on their activities that are also tarred with a similar negative brush.”

Quarrying is a crucial component of the country’s future economic success and prosperity yet is deafeningly silent in a public sense, both individually and collectively. “Could you imagine Federated Farmers being such a shrinking violet? Can you see Fonterra and the rest of the dairy industry cowering from the challenge of sustained criticism of its burping, farting and crapping dairy herds? Not a chance!”

Rae admits it has only been in the last three or four years that Stevenson has done anything about lifting its own profile. “We felt we’d been there doing our thing for 70 odd years and had rights that others should respect. Boy, have we paid the price for this position. Out of sight, out of mind. Successive councils felt free to make decisions based on the facts that they saw presented to them – mostly from everyone else.”

The noisy wheel gets all the attention and while Stevenson was invisible and ignored, others such as land developers, lifestyle block owners and other squeaky wheels suddenly had the upper hand. This was to the point that three years ago Stevenson had almost given up on its prize asset at Drury. “And it has only been through a huge commitment to engage at local, regional and even central government level that has given us a reasonable shot at our licence to operate.”

 The industry needs to start fighting for its corner and doing so in a consistent manner and not just when it needs something, he says.  

“Our commitment to political visibility means loads of speeches and presentations to councils, councillors and various council committees, it means presentations and personal  attendance at community groups, annual plan reviews, council plan changes and the like.  It means we make the effort to present a submission at every relevant hearing at any Council that is remotely related to us.

“It means making submissions to any public sector enquiry that might listen. It means standing up at council award ceremonies that we sponsor and presenting our positive face along with the assumed negative one that goes with being a quarry operator. 

“It has been a big commitment and has been hard work, but I can commend the approach to both the industry and to individual quarry operators. It is worth it.”

Equally important is community visibility. Stevenson now takes it for granted that it has to invest in a whole range of community-based initiatives that allow it to stay in the game, he says. This involved a widely publicised Jimmy Barnes rock concert Stevenson hosted in the pit of its Drury Quarry in July 2004. The 2000 guests included all of the quarry’s neighbours, local politicians and other community representatives.

“It was a significant undertaking and crucial event that humanized something that, up until then, had only ever been a source of problems for many of the guests. And despite  atrocious weather the event was a stunning success and importantly  people are still talking about it.”

Stevenson has planned an open day at the quarry later this year for the community.  “Ultimately our goal is to make our neighbours and community feel like it is their quarry as much as it is ours.”