MAC/20: Mines and Communities

Stripping Aotearoa tonne by tonne

Published by MAC on 2006-08-25


Stripping Aotearoa tonne by tonne

by Frances Mountier

25th August 2006

A Critique Of Solid Energy's

Coal Mining In Buller

CAFCA Wathdog August 2006

Coal extraction by Solid Energy represents a corporate plundering of Aotearoa New Zealand; one that occurs at a national level. Driven by global steel market demands, bound by agreements with massive transnational corporations (TNCs), and backed up by a Government committed to enabling it to rip out More Coal NOW, Solid Energy is selling off Buller tonne by tonne. In part this is an issue about coal; it is also about who has control of resources in this country, who is benefiting from those resources and what is driving the extraction of this particular resource.

This article will examine these issues of economic control, as well as the ecological and social disregard that Solid Energy exhibits. It will look at how Solid Energy maximises the power gained from its position as a State-Owned Enterprise (SOE) – and how the State bends over backwards to accommodate mining companies, be they State-owned or TNCs. Finally, it will examine a symptom of these three issues; the planned desecration of the nationally significant Happy Valley.

Economic Control

Formerly Coalcorp, Solid Energy New Zealand Ltd is the SOE that was created out of State Coal Mines in 1987 – yet it behaves much like any transnational mining corporation would be expected to. Multiple concerns about economic power and control are raised by Solid Energy’s operations.

Local/national concerns relate to short sighted profit-driven business ventures, and to a failure to address the issue of how we are going to meet our long term energy needs in a sustainable fashion. Although many of the concerns about Solid Energy’s operations are centred locally they are in fact generic. The operations reach globally too: most of the coal from the Buller is exported; we are selling off resources without taking the opportunity to gain from any added value. Some of the mining operations are contracted out to foreign corporations. Additionally, enabling the emission of yet more greenhouse gases into the atmosphere is an environmental problem that does not obey borders.

Te Runanga o Ngati Waewae has expressed its concerns about the destruction caused to the Stockton-Denniston plateau by Solid Energy and its predecessors:

“Coal mining and subsequent settlements in the last Century have done very little for the sustenance of our people and their economic well being, we are suffering the effects of the contaminations brought by current and past operations as are many of the waterways, landscapes and taonga species of the Tai Poutini. Many of our people have moved away in order to sustain themselves” (1).

In its submission at the Resource Consent hearing for Solid Energy’s planned opencast Cypress Mine in Happy Valley, the Runanga suggested that underground mining would be preferable as it avoided the destruction of the landscape. “This may make the mine uneconomic and hence in that regard the landscape and taonga species are paying the price of the mine profits and Papatuanuku is picking up the tab again” (2). Solid Energy had engaged in consultation with the hapu – but failed to forward the resulting Cultural Impact Assessment to the local authority commissioners.

Solid Energy’s environmental impact is also phenomenal; in the 2005 financial year it ripped out 4.46 million tonnes of coal. Of these, more than two million tonnes were from Stockton, the country’s largest opencast mine (3), the mining licence of which covers 2,308 hectares. Also in the Buller, at the Terrace Underground Mine, 20,500 tonnes of thermal coal were extracted for South Island industrial customers in the 2005 financial year. Here, Solid Energy aims to almost quadruple production to 80,000 tonnes in the 2006 year. 6,600 tonnes were mined from yet another opencast mine – Island Block, also near Reefton (4). Solid Energy runs another two mines on the West Coast, two mines near Huntly and one at Ohai.

We are currently experiencing the most rapid extraction rate of coal New Zealand has ever seen (5). It is driven entirely by profit. Of the 4.46 million tonnes extracted in 2005, 2.18 million were exported (6). In 2001, Solid Energy set out to double their production to six million tonnes by 2006, and seven million tonnes by 2010 – with two thirds for the international market (7)! (Private coal companies in 2005 delivered 0.74 million tonnes). It is often said that NZ has enough coal reserves to supply our energy needs for 1,000 years.This seems unlikely, given that the estimate does not take into account the increasing demand for coal, or the fact that we likely export the vast majority of it. Even if New Zealanders debated the issues and decided coal was to play some part in meeting our future national energy requirements, we would be better to leave the coal in the ground. Then it could be carefully extracted in years to come to meet high domestic demand (though this may be unlikely due to climate change) – rather than selling it offshore now (8).

Exports

Perhaps by the time this hypothetical scenario arrives, the Government will have realised how ludicrous it is to destroy high conservation value areas with opencast mines, and invest in underground practices. Currently, Solid Energy plans a 256ha mine at Happy Valley where more than 90% of the coal will be exported (9). This is a short sighted business venture. Coal is extracted from the Coast and transported off the Coast as a primary resource. Much of it then leaves the country - for example for use in steel manufacturing – still as a primary resource, rather than being used by New Zealand industry as an energy input. Not an uncommon phenomenon in this colony Land of Milk & Honey. Consequently, the West Coast remains as it always has since Pakeha immigrated: resource rich and capital poor. For decades, the extraction of these resources has made our cities rich and left the Coast with limited development (10).

New Zealand coal leaves the country to go to Japan (41%), India (23%), South Africa (14%), China (8%), Chile (8%), Brazil (3%), Australia (2%) and Europe (1%). There it is used in steel manufacturing and other industries; China and Japan are the world’s largest steel manufacturers.

Solid Energy has partnerships with Nippon Steel and JFE Steel (11). In Japan, Solid Energy has signed up to long term partnerships with three major corporations: Mitsubishi Chemical Corporation (30 years, from January 2006), Mitsui Mining Company (25 years, from June 2005) and China’s Baosteel Corporation (15 years, from March 2005) (12). Much of the coal from the West Coast is bituminous; demand from international coking markets makes up about 75% of Solid Energy’s exports (13). There are varying degrees of environmental regulation in the countries to where the coal is exported – but this does not seem to be registering on our Government’s conscience.

NZ is a country that continues to rely heavily on primary resource exports and masses of imports (since we fail to nurture our domestic industries). A poorly managed economy means that, in 2006, we have just hit the worst ever May trade deficit. Cabinet does not appear to care about biodiversity protection, climate change, conditions of employment or even if their SOE makes a profit, returns a dividend or pays in much tax. The Government seems committed to pleasing Big Business and maintaining the status quo – rather than instigating any policy which would create sustainability in the West Coast economy or reduce climate change emissions.

Climate Change, Greenwash And Foreign Investment

The critical fact is that we will reach a point where we can no longer mine coal. Neither we nor, ultimately, any other country, will no longer be able to ignore the realities of climate change. This truly global environmental problem is predicted to cause massive social and environmental effects, unless we dramatically reduce our greenhouse gas emissions. For every tonne of coal burnt, 2.4 tonnes of carbon dioxide are created. The reality is, there is no such thing as “clean coal”.

Misleading phrases such as “coal is coming clean” and “we are investing heavily in clean coal technologies” are used to get around this problem. Clean coal is a public relations phrase invented by coal companies. The technology to remove carbon dioxide emissions from burning coal does not exist on a large scale, and if implemented would double the cost of producing electricity using coal – making renewables a far better option, even in a short-term economic sense.

A vast amount of money has been invested in “clean coal” technologies in the last decade, with fairly dismal results. This money could have been much better spent on renewable technologies, rather than attempting to prolong the decline of an outdated energy source. Yet the Government seems happier to ignore this reality and continue to promote the export-driven expansion of Solid Energy – over PUBLIC LAND. Solid Energy is selling off New Zealand – tonne by tonne of coal extracted by heavy machinery and explosive and aerial cableway to be shipped offshore. This is a corporation acting in the best interests of corporates. As CAFCA clearly states: “New Zealand Big Business interests are collaborating with foreign companies in the exploitation of its own country - its only loyalty is to improve profits” (14).

And where that has “required” foreign investors to invest in and profit from State-owned (publicly-owned? Earth-owned? Maori-owned? unowned?) resources, this also has occurred. For example, in 2004, Solid Energy was recruiting miners from outside New Zealand (especially for the Terrace Mine in Reefton) – due to the “continuing skills shortage” and the “all-time low unemployment rate” (15). Yet when the issue of the endangered land snail Powelliphanta Augustus arose, it claimed that not mining those five hectares of habitat would undercut the entire West Coast economy. Amazing! In March 2006, Solid Energy announced that it would be “contract[ing] for overburden stripping and coal extraction at Rotowaro to a subsidiary of Leighton Contractors Pty Limited”. Prior to that, the contract was with Henry Walker Eltin (HWE), another Australian company (16).

Environmental Disregard

At Mount Augustus, on the western edge of the Stockton mine, Solid Energy is about to drive an endemic species to extinction. Solid Energy intends to opencast the last remaining five hectares of habitat of the giant land snail Powelliphanta Augustus in order to meet a supply contract with South Korea. Official Information shows that it signed the contract months before it had been granted permits to kill the snails. Forest and Bird went to the High Court to prove that mining companies are not exempt from abiding by the laws surrounding “absolutely protected” species. However, Chris Carter, the Minister of Conservation, decided to grant the permit for the snails’ demise anyway, succumbing to Solid Energy’s misinformation. It is utterly unacceptable that a species be driven to extinction so that some company can make a little extra profit in 2007 by exporting coal (17). The designation as an “absolutely protected” species is worthless if it does not apply across the board – including in coal licenses.

This is a company with a shocking environmental record. At Stockton, Solid Energy continues to open new pits but still has no effective water treatment – in particular for Acid Mine Drainage, the main polluter. At Happy Valley, approximately 25km northeast of Westport and also PUBLIC LAND, it plans to destroy habitat that is a kiwi refuge. If the Happy Valley mine goes ahead, not only will the striking landforms be ravaged, but the delicate mosaic of vegetation will be destroyed as it is removed to reach the coal strata. It will be impossible to reproduce the current complex hydrology – especially that of the wetlands. If Solid Energy goes ahead, and it does not even meet its (ridiculously inadequate) mitigation commitments, all that the environment is left with is a “variable bond”. Happy Valley would be irreversibly damaged (18) - and all to excavate another five million tonnes of coal over ten years.

Kyoto Protocol

In New Zealand, coal produces 14% of the energy that we consume, mainly in electricity production at Huntly and steel making at Glenbrook. New Zealand is in a unique position as most of our electricity is generated from renewable sources. “ Unfortunately there are more than enough fossil fuels left – especially coal – to trigger catastrophic warming” (19).

Globally, we need far more significant reductions in emissions than those agreed to under the Kyoto Protocol; industrialised countries will need to reduce emissions in the order of 60-80% (20). New Zealand is committed to reducing emissions to 1990 levels during the period 2008-2012 – yet we are going to fail to achieve this. In 2003, carbon dioxide emissions were already 37% higher than 1990 levels.

The predicted social impacts of climate change are massive. “ Even though the ultimate consequences on human lives and livelihoods coannot be precisely quantified, they will impose a far greater burden on the poor than on the rich” (21).It has been estimated that a temperature rise of two to three degrees Celsius could put 100 million more people at risk of coastal flooding, 50-120 million more people at risk of hunger (causing malnutrition and related diseases), and more than three billion more people at risk of fresh water shortages (22).

Workers

Unsurprisingly, Solid Energy also shows a blatant disregard for its workers (except when it needs them onside in a campaign of misinformation to the Minister of Conservation, for example). When the miners’ union took strike action (as part of the Engineering, Printing and Manufacturing Union’s “Fair Share” campaign) in 2005, demanding a 6% pay rise, the negotiations were slow – yet Solid Energy’s Chief Executive Officer, Don Elder, earns in excess of $670,000 per year. When two miners set up Ngakawau Riverwatch, to hold Solid Energy accountable for cleaning up the waterway, they were not offered their contracts again (23). At Christmas, Solid Energy’s contractors lay off their staff. In 2002, a 29 year old miner was killed when the roof collapsed at Ohai. The mining industry is not motivated by providing decent employment; rather it constantly increases extraction and downsizes the workforce.

Despite Solid Energy’s claims, the entire West Coast economy does not rely on five hectares and the planned mine in Happy Valley. However, the shift away from coal mining in Buller (either because Stockton runs out of coal or climate change makes it unacceptable to continue mining it) highlights a concerning facet of Government policy. It has encouraged Solid Energy to expand production on the Coast, yet mining jobs can only ever be short term. It is time the Government invested in diversification and development of other industries on the Coast.

Solid Energy: SOE

Solid Energy has attempted to side-step scrutiny and silence opposition. The company previously tried to intimidate Forest & Bird and the Buller Conservation Group by seeking $379,342 in “costs” for the Environment Court case. This was a type of Strategic Law Action Against Public Participation (a notorious SLAPP suit, which is frequently used by Big Business against environmental activists in the US. Ed.) (24). A Landcare Research scientist employed to give evidence against the mine was forced to pull out when Solid Energy warned that contracts were at risk. In 2005, it threatened to seek reparations of $US150,000 for a train blockade by two Save Happy Valley members.

The Department of Conservation is pressured to accommodate Solid Energy – to the extent that it left coal resource areas off the Recommended Areas for Protection in the Ngakawau Ecological District. The Environment Court believed Solid Energy when it said it will transfer a wetland, and decided to leave the selection of those on the Peer Review Panel – for monitoring activities at the (proposed) Happy Valley mine - up to Solid Energy. The West Coast Regional Council and the Buller District Council failed to enforce the minimal environmental standards that exist, and the Minister of Conservation was so misled by exaggeration that he went against the advice of his own scientists and signed a species into extinction. Crown Minerals promotes ever accelerating growth in the industry, and Helen Clark hails coal as the answer to New Zealand’s energy “problems”.

There is all this collusion between the State and SOEs – yet at the same time, Solid Energy is conveniently distant enough from the Government for Ministers to claim “operational matters” are outside the Government’s jurisdiction, comment or investigation. Internationally, the institutions that finance mining tend to be those key players in corporate globalisation, and increasingly guaranteed by governments (25). In this case, the Government is actively encouraging Solid Energy – its company. The State simultaneously allows private companies to do the same thing.

While Happy Valley enjoys (precarious) protection by campaigners, roads are ploughed into the Paparoa National Park in order for Pike River Mining Company to establish the country’s second biggest coal export mine. It intends to extract one million tonnes per annum. New Zealand Oil and Gas has a 69% stake in the company and Saurashtra Fuels Private (an Indian coking coal company) has a 10.6% stake. The plan involves an access road over 3.6 kilometres of public conservation land and mining under the Paparoa Range (26). It should never have been granted permission by the Minister of Conservation. But Chris Carter did it anyway. Since it is underground, much of the workforce comes from overseas too; however they are making an effort to use local contractors. The West Coast is totally incidental to the operation.

Saving Happy Valley

The threats facing Happy Valley are a combination of a fundamental national issue – preservation of a nationally significant, rare and fragile ecosystem - and a fundamental international issue, namely the threat to the biosphere at a time of reckless increases in greenhouse gas emissions. Concerns have been voiced by Te Runanga o Ngati Waewae, local groups, and environmentalists from around the country. An aggressive State company that returns no dividend as it drives its way into vegetation and landforms on high value public lands; this is Timberlands West Coast all over again. The Labour government must not strip Happy Valley into an opencast mine.

The campaign has included court action, lobbying, letter writing, public awareness raising and non-violent direct action. Save Happy Valley Coalition has led the latter two, with public meetings, stalls, leaflets, presentations, postcard campaign, media events and other activities to stimulate discussion on these issues. We work to prevent this mine from going ahead – through public opposition and non violent direct action.

Visit our Website www.savehappyvalley.org.nz or write to us at SaveHappy Valley Coalition, Box 9263, Te Aro, Wellington for more information.

Five ways to support the campaign are:

Talk with others about Happy Valley, Powelliphanta Augustus and climate change.

Send a postcard set to the Minister of Conservation, Minister of State-Owned Enterprises and the Prime Minister.

Join our update list, by e-mailing contact@savehappyvalley.org.nz with “Announcement List” in the subject line.

Make a donation. These are much needed to run the Augustus court case (and as always for printing, communications, occupation etc)

Get involved in the Coalition – be it by giving out postcards, running a stall or joining your local group.

Since the end of January 2006, the mine site has been occupied in a concerted effort to stop this impending disaster. E-mail occupation@savehappyvalley.org.nz if you would like to join the campsite for a few days.

The Save Happy Valley Coalition exists to save this particular ecosystem and also the Augustus snail species. We also work to challenge Solid Energy’s environmental atrocities in its race to meet international demand for high quality coal. We higlight the disregard Solid Energy shows for the environment, climate and public opinion. We call on the New Zealand government to address how we are going to drastically reduce greenhouse gas emissions and take the first step away from reliance on climate changing fossil fuels.

Time To Challenge Big Business

These are times in which big businesses pummel the earth on an ever greater scale, leaving scars in their wake and carbon dioxide in our midst; in which corporations maintain and recreate their purely profit driven existence. These are the times in which the threat of climate change looms and strikes; times when SOEs are granted permission to wipe species out of existence. These are the times in which Solid Energy sells off Aotearoa New Zealand tonne by tonne.

And now is the time for that to be challenged.

www.savehappyvalley.org.nz

(1) Rick Barber, Land and Environment, Te Runanga o Ngati Waewae. Oral Submission to the Hearing in the Matter of the Solid Energy Resource Consent Application to Open Cast Mine the Area of Headwaters of the Waimangaroa and Ngakawau River Catchments.
(2) Ibid.
(3) http://www.coalnz.com/download/AR_05.pdf p20.
(4) Solid Energy Coals of New Zealand, Annual Report. 2005. http://www.coalnz.com/download/AR_05.pdf p24.
(5) http://www.solidenergy.co.nz/download/Coal_Research.pdf p11.
(6) Solid Energy Coals of New Zealand, Annual Report. 2005. http://www.coalnz.com/downloadAR_05.pdf .
(7) http://www.solidenergy.co.nz/newsletters/1202.pdf.
(8) Information gained from an Official Information Act request suggests that even the bituminous coal from the ridgeline at Stockton (that Solid Energy says is very pure) currently sells for $160 a tonne.
(9) Pete Hodgson, Acting Minister Responsible for Climate Change Issues, answer to Oral Question 12 on climate change and Solid Energy mining, 28/3/06.
(10) KA Sampson, 2003. “Industry adjustment and community change: impacts of the cessation of indigenous production forestry in rural resource communities of South Westland, New Zealand”. Unpublished Masters Thesis (Sociology), University of Canterbury.
(11) http://www.solidenergy.co.nz/ab-press-details.asp?id=102.
(12) http://www.coalnz.com/download/AR_05.pdf.
(13) http://www.solidenergy.co.nz/nzcoal-int.htm .
(14) http://canterbury.cyberplace.co.nz/community/CAFCA/about.html.
(15) Solid Energy Coals of New Zealand, Annual Report. 2005. www.coalnz.com/download/ar_05.pdf p30.
(16) Solid Energy, “Record half-year on the back of exceptional export prices”, press release, 16/3/06. http://www.coalnz.com/ab-press-details.asp?id=173.
(17) Save Happy Valley Coalition Inc. currently has a case before the Environment Court seeking declarations and enforcement orders that will ensure the survival of the species.
(18) Solid Energy was originally required to pay a bond of $5 million per annum but this was changed to the “variable bond” by the Environment Court as a result of a Solid Energy appeal.
(19) Ibid. p14.
(20) “Up in Smoke”.
(21) “Up in Smoke: Threats from, and responses to, the impact of global warming on human development” www.foe.co.uk/resource/reports/up_in_smoke.pdf p5.
(22) http://www.climatenetwork.org/docs/CAN-adequacy30102002.pdf p5.
(23) Ngakawau Riverwatch appealed the Cypress decision but settled out of court, having gained stringent water conditions. However, even conditions are no assurance with a company with an environmental record as dreadful as Solid Energy.
(24) SLAPPS are defined by Sharon Beder in “ Global Spin – The corporate assault on environmentalism”. Viola Palmer’s review of this book can be read in Watchdog 92, December 1999, online at http://www.converge.org.nz/watchdog/92/11revie.htm. Ed.
(25) Evans, Goodman & Lansbury. “Politicising Finance”, in Evans, Goodman & Lansbury (eds.) “Moving Mountains”, 2001.
(26) http://www.minesandcommunities.org/Action/press298.htm.

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