WINTER 2014
Toxic Clean-up Work will start soon on cleaning up the historic Prohibition Gold Mine site on the West Coast
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Harley gets his wish
Bathurst keeps rolling
Helping youth get started
Visiting Newmont’s Waihi gold mine was a dream come true for a young Make-a-Wish recipient.
Bathurst Resources has finished the year strongly with good production from its operating mines.
Helping young people get a start in the extractive industry sector is a passion for Alistair McIntyre.
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Contents »
WINTER 2014
Contents
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10 All set for AusIMM A packed programme awaits delegates at this year’s annual conference of the New Zealand branch of AusIMM. 16 Cleaning up on the Coast Planning is underway to give New Zealand’s most toxic mine site a much-needed clean-up. 23 Wetlands work a winner Higgins Baldwin’s Quarry has been recognised for its efforts to improve the quality of water being discharged into the Whangamarino Heritage Wetland.
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24 Investing in the future Alistair McIntyre is doing all he can to help young workers get a start in the mining, quarry and civil construction industries. If you have an image you think would look great on the cover, contact us: Toxic Clean-up Work will start soon on cleaning up the historic Prohibition Gold Mine
www.waterfordpress.co.nz
site on the West Coast
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Phone 03 983 5559 Email nick@waterfordpress.co.nz
WINTER 2014
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24
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Harley gets his wish
Bathurst keeps rolling
Helping youth get started
Visiting Newmont’s Waihi gold mine was a dream come true for a young Make-a-Wish recipient.
Bathurst Resources has finished the year strongly with good production from its operating mines.
Helping youth get a start in the extractive industry sector is a passion for Alistair McIntyre.
Cover photo courtesy of CRL Energy
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Cautious optimism still prevailing on the Coast Jo Bailey
These companies are reviewing and looking at their costs in order to position their operations to continue to
112 Wrights Road, Addington PO Box 37 346, Christchurch www.waterfordpress.co.nz These conditions are prescribed for the sake of understanding between the Company and its clients. Advertising is charged for on the basis of space taken up using a standard tabloid page. Actual space may be reduced during the printing process but this will effect all advertisers equally so no credit will be given for any reduction in size due to processing. The Company reserves the right to alter, change or omit entirely any advertisement or article that it considers to be objectionable or which may contravene any law. In the event of a failure on the part of the Company to insert advertising as instructed the Company may publish the advertisement at the first available subsequent reasonable date unless the advertisement features date sensitive material. Every care shall be taken to publish the advertisement in accordance with the advertisers instructions as to page and position but the Company reserves the right for whatever reason to place advertising in a different position and in doing so shall incur no liability whatsoever. Advertisers must advise Mining NZ immediately of any error or omission in advertisements and shall work constructively to remedy the situation which in the first instance shall be a rerun of the corrected advertisement in the next available issue of Mining NZ. Where advertisement proofs have been faxed or mailed to the client 48 hours prior to the nominated printing cutoff time acquiesce shall be taken as confirmation and acceptance. Corrections made by telephone shall be accepted but the Company reserves the right to decide whether a further proof should be faxed or mailed to the client. Accounts for advertising are due for payment within seven days of publication of the newspaper. Accounts not paid within this time may incur a penalty of 3% per month until the account is paid. Any debt collection costs incurred by the Company will be added to the account of the debtor. Views and opinions expressed in Mining NZ are not necessarily those of the editors, Waterford Press Ltd or publisher. Mining NZ welcomes contributions from freelance writers & journalists. All articles published at editors discretion. Mining NZ accepts no responsibilty for loss of photos or manuscripts.
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Exploration programme management Geological mapping and 3D modelling Resource evaluation and certification Mine drainage consulting, research, sampling and testing - Gas content testing of coal
6 Mining NZ » Winter 2014
It’s been a tough few years for the mining sector on the West Coast. However representatives of the major mining companies and Minister of Energy and Resources Simon Bridges remained optimistic about the industry’s future prospects in their presentations to the recent Minerals West Coast Forum. The minister said New Zealand Petroleum and Minerals continued to see healthy levels of permitting activity and was considering an application for further underground coal mining at Roa Mine which produces high quality hard coking coal on the Greymouth Coalfield. Petroleum activity is also high in the region with Ocean Harvest International Limited (owned by Gloriavale) currently intending to drill an appraisal well in an existing oil discovery south-east of Greymouth. Mosman Oil and Gas West Coast is also prospecting for commercial oil near Greymouth, with two cores drilled and oil discovered as part of its Kotuku project. The company’s operations supervisor Nick Whetter told the forum that more exploration testing was needed but if enough oil was discovered to make the project economic, a small refinery could be developed in the region. Jim Hickey, director of Westland Titanium said the numbers stack up on the company’s proposed
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operate in the current environment.”
titanium project. However it is a challenging time to be raising finance. Minerals West Coast manager Peter O’Sullivan says the major gold and coal companies which addressed the forum painted a picture of tight economic times but were committed to the region long term. “These companies are reviewing and looking at their costs in order to position their operations to continue to operate in the current environment,” says O’Sullivan. OceanaGold is winding down its Globe Progress mine near Reefton, but was considering revisiting historic West Coast mines including the Globe Deeps and Blackwater. Bathurst Resources has been granted an Application to Enter and Operate its Escarpment mine by the Department of Conservation, and the company has made a start on construction works at the site. It will focus on sales to the domestic market from its three operating mines (with limited production from Escarpment) until the global coal price recovers.
New Brisbane joint venture - CB3 Ltd Spontaneous combustion testing Combustion analysis and testing Gasification and carbonisation research Advanced nano-materials research and development Coal and minerals processing research
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Solid Energy’s health, safety, environment and community manager Phil Rossiter said the company has started mining at Cypress mine and was setting up open-cast pits at Strongman Mine. It was also looking at two options for Spring Creek mine which was put into care and maintenance in 2012. Simon Bridges also announced the government was awarding five platinum exploration permits to Lynx Platinum, a Canadian-backed exploration company, which he described as the “single biggest new entrant” into minerals exploration in New Zealand in several years. Lynx would spend almost $3 million over the first three years of their permits; three of which are near Murchison, with the other two in Southland. An additional $4.5 million would follow in the subsequent two years if initial work was successful. The minister said despite low international coal and gold prices, there was only a six percent drop in coal production in New Zealand last year, while gold production increased by 20 percent compared to 2012. • MWC Forum well attended - page 8
Coal and combustion testing Chemical analysis on fuels Water analysis - domestic to industrial Magnetic and density mineral separations X-ray diffraction and X-ray fluorescence (XRF & XRD) Acid base accounting and kinetic testing
News »
Straterra says consent ruling questionable The recent decision by the Environmental Protection Authority (EPA) to decline Trans Tasman Resources’ (TTR) marine consent application for ironsands mining in the South Taranaki Bight raises questions about the consent process, says industry lobby group Straterra. TTR had sought consent for a project area of 65sqkm in the exclusive economic zone about 22km off the coast of Patea, in water depths of 20-45 metres. TTR has appealed the Environmental Protection Authority decision to the High Court. Straterra chief executive Chris Baker questioned the EPA ruling when it was announced in June. “The decision to decline hinged largely on there being too much uncertainty in relation to the environmental effects of the proposal and to TTR’s proposals for addressing those effects,” says Baker. “However everything we do in life carries uncertainty, and that the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act has provisions to deal with uncertainty.” “One has to ask the question: has the process let us down and not allowed adequate consideration of the uncertainties and the conditions that would allow these uncertainties to be dealt with. “At issue is an ironsands resource on the seafloor more than 22km offshore at relatively shallow depths where there is natural wave action on the seafloor in any event, and that supports very little life. “Compared to the surrounding area the footprint of the mining operation would be very small,” Baker said. “Modern society needs these resources, as does the New Zealand economy, and it is difficult to imagine that the environmental impact of the proposed mining could not be managed in an acceptable manner.”
Big day: Harley Anderson-Shingleton with Mum Linda and Dad Noel at the Newmont mine - Tim Bird from Make a Wish Foundation at the back.
Harley has a day to remember.... Karen Phelps Make-a-Wish recipient 8-year-old Harley Anderson-Shingleton got more than he had ever dreamed possible recently when he found himself having a quick practice on Newmont’s Big Little Digger (a specially built digger that is on a trailer and used by school students), being driven in a 1900 excavator, making radio callups and pressing the button that initiated the site’s midday blast. “Harley got to make all the radio call-ups required to get into the open pit,” says Newmont Waihi Gold spokesman Kit Wilson. “Each call was acknowledged by a Macmahon staff
member who welcomed Harley to the site and gave him the all clear to proceed.” The blast crew then guided Harley through the blast initiation and once it was safe to proceed Harley joined a worker in the cab of his Cat D9 dozer to check out the controls. Once he had helped to load a truck Harley hopped into the cab of a Cat 777C and was taken up the haul road to the crusher. At the end of the day he was presented with a ‘777 driver’s certificate’ and a scale model of a dump truck. Wilson says he was blown away by Harley’s knowledge of the equipment: “Harley has a thing about Caterpillar machinery. I was amazed because he’s only 8 years old but knew the difference between all the models on site.”
Tim Bird from the Make-a-Wish Foundation, which provides special experiences for children with life threatening illnesses, says that the day was a very special occasion thanks to the efforts of all involved. “From the moment we were greeted on the outskirts of town to our final send-off, we were surrounded by smiley faces and were made to feel very at ease and welcome,” says Bird. “Each element of the wish was delivered to perfection. At Make-a-Wish, we try to create unique experiences with a healthy dose of magic thrown in but we wouldn’t be able to do what we do without the time, expertise and generosity of New Zealand operators such as Newmont Waihi Gold and Macmahon.”
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Winter 2014 » Mining NZ 7
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MWC Forum offers food for thought Jo Bailey There was plenty of optimism at the 2014 Minerals West Coast Forum at Shantytown, despite the recent challenges facing the sector. Peter O’Sullivan, manager of Minerals West Coast, which organised the forum in conjunction with Straterra, says there were around 220 delegates at the event, which was close to its record-breaking attendance reached last year. “We were very happy with the turnout and the positive atmosphere in the room throughout the whole event.” The forum’s theme was ‘It’s all about the People’ with seven sessions on a variety of topics focused on the actions, activities and attitudes at the ‘coalface’; and discussions around the public perception of the mining industry. O’Sullivan says the free Wednesday open session before the forum proper on the Thursday was another popular event, with around 150 people in attendance. MBC Environmental sponsored refreshments for this aspect of the programme which included a ‘Women in Mining’ session; AustMine speed dating exercise; and the annual general meetings for Minerals West Coast and the West Coast Gold Miners’ Association. “The objective of this session is to attract the smaller mining operators, exploration companies and related service providers, who may not be able to take the time off work to attend a day-time event.” “It was a great opportunity for them to mix with some of the larger companies; meet representatives from organisations such as Worksafe, NZ Petroleum Minerals and Straterra; and have a look at some of the products and services on offer from our 18 exhibitors.” Safety was a big focus of the forum, with delegates hearing from New Zealand’s chief inspector of mines Tony Forster; Les McCracken manager of MinEx; and Sue Bonham-Carter, a principal at Golder Associates who provided an overview of risk planning and the risk matrix for those reasonably new to the process.
Other speakers included Alan Broome, chairman of CRL Energy; Lou Sanson the new director general of the Department of Conservation; communications strategist Michelle Boag; Chris Baker from Straterra; Sefton Darby national manager of New Zealand Petroleum and Minerals; Samantha McNaughton group manager for MITO; Colin McDonnell from Tai Poutini Polytechnic; Trevor Watts from Mines Rescue; Chris Ingles CEO of West Coast Regional Council; and James GardnerHopkins from Russell McVeagh. “Representatives from the major West Coast mining companies also provided very good regional industry updates, with the Minister of Energy and Resources Simon Bridges delivering a positive address around future prospects for the sector,” says O’Sullivan. It wasn’t all work and no play, with Shantytown providing the perfect venue for delegates to try their hand at gold panning. A lunch-time competition attracted around 150, with West Coast gold miner Peter Haddock and Drew Tallboys, who runs a local camera shop, finding the two large lumps of gold provided by Southern Gold Buyers for the event. The winners had to take their bottles of gold to the forum dinner that evening for judging by AJ Woodhouse who represented New Zealand at the World Gold Panning Champs. “Remarkably, Peter Haddock’s amount of gold had grown significantly by the time of judging. “However the prize was pretty appropriate for the event – a bottle of whisky which came minus the top and four glasses,” says O’Sullivan. The two finalists in the Minerals West Coast Environmental Award each provided a short presentation to the 145 dinner guests on their entry in the 2014 awards. The winner was CRL Energy, for the research project which they led called ‘The New Zealand Minerals sector environmental research and mine drainage decision-making framework’. “Overall it was a very good conference, with plenty of information and food for thought that delegates could take back to the mine site,” says O’Sullivan.
• CRL Energy wins award - page 15
“Representatives from the major West Coast mining companies also provided very good regional industry updates, with the Minister of Energy and Resources delivering a positive address around future prospects for the sector.”
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News » AusIMM 2014
Packed programme for conference delegates Jo Bailey Delegates to the 2014 annual conference of the New Zealand branch of AusIMM can look forward to another packed programme, says branch chairman Les McCracken. “We have presenters covering a wide range of topics related to the industry both within and outside New Zealand. We have also engaged some highly-regarded professionals to deliver this year’s short courses.” The New Zealand branch annual conference, being at the Kingsgate Hotel in Hamilton from August 24-27, has a theme ‘Staying on top in challenging times’. “The conference aims to address how the local mining industry is responding to the technical, operational, and cost challenges during a period characterised by a market downturn, mine resource depletion and a step change in legislative standards,” says McCracken. Delegates will be welcomed to the conference at a function on the evening of Sunday 24 August, with a farewell function on Wednesday 27 August concluding the event. In addition to three days of keynote addresses and over 50 technical presentations, the conference will also offer a number of pre and post conference short courses and field trips along with social functions and an accompanying person’s programme. The CEOs of most of the major coal and gold mining companies in New Zealand will speak as
part of the keynote sessions, and delegates can choose from a large number of industry-specific breakout sessions. Key Government speakers will also address the conference in a session covering the recent legislation changes in the Crown Minerals Act and Health and Safety in Employment Act. McCracken says other highlights of the programme include a session on iwi issues called Engagement with Maori; a follow up on last year’s ‘major’ session on Pike River; presentations by James Stevenson-Wallace the new general manager of New Zealand Petroleum and Minerals; and Lou Sanson, the new director general of the Department of Conservation. A panel forum on the Public Perception of the Mining Industry,which will feature a keynote speech by Sam Johnson, founder and director of the Student Volunteer Army, is expected to be another highlight. McCracken says one of the more controversial presentations will come from Peter Mitchell of Structured Learning, who is speaking as part of the session on Mining Related Legislation Change and Implications for Industry Training. “Peter’s talk is called ‘We are responsible for workplace injuries and fatalities’. He will explore how behavioural changes in the workplace are just as critical as new legislation and classroom training in the prevention of serious workplace events.” The technical sessions, organised by McCracken, Tony Christie and Dean Ferguson, will cover subjects ranging from: geology,
The Australasian Institute of Mining and Metallurgy represents more than 13000 members drawn from all sections of the industry within both Australia and New Zealand. x
prospectivity and exploration of coal and mineral resources; project case studies, whether at prospect or feasibility stage; mining of gold, coal, ironsands, base metals and industrial minerals; finance, legal and corporate affairs; government legislation; geotechnical, geophysics and new technologies; metallurgy and mineral processing; environmental management; community/iwi relations and partnerships; health and safety; geoscience/resource engineering education; and industry training. Several student presentations have been included in the programme. ”We always provide students with generous subsidies to attend the conference. “AusIMM also gives away between $16,000 and $30,000 a year to Masters and Honours students, and encourages them to deliver papers at the conference.”
Overall McCracken is pleased with how the programme has come together. “There has been a gradual change in the structure of the conference over the last few years from a focus on purely technical presentations to a broad mix of sessions that provide both professional learning, and challenge delegates too. “Once again we have had a high level of interest from presenters, sponsors, exhibitors and delegates, with the conference shaping up to be the major minerals industry event of the year.” The Australasian Institute of Mining and Metallurgy (AusIMM) was founded in 1893 and provides services to professionals engaged in all facets of the global minerals sector. It currently represents more than 13000 members drawn from all sections of the industry within both Australia and New Zealand.
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10 Mining NZ » Winter 2014
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News » AusIMM 2014
AusIMM chair a man of many parts Jo Bailey Mining and metals professional Les McCracken likes the life of an independent contractor as it allows him to work on a variety of projects. “I get bored doing routine stuff. It’s great to be involved with a project for two or three years and have a key part to play in building or creating something before moving on to the next one.” McCracken has worked as a self-employed consultant to contractors, principals and mine owners through his Ashburton-based business, McCracken Consulting since 1998, specialising in project and construction management in the mining and major civil earthworks fields. He is currently working under a 12-month contract to manage MinEx (the mining industry safety council), which has been instrumental in the development of new safety legislation in response to the Pike River disaster. MinEx now encompasses the aggregate and alluvial gold sectors as well as all other mining sectors. “This year we’re continuing this work with the development of new codes of practice and a number of guidelines. We’re also running workshops to help people in these sectors to understand the new regulations and what they will need to do to comply by January next year.” This role will extend into 2015 and McCracken is unsure what will come next. “I never have the next project lined up which used to scare me in the beginning. However I usually end up with the reverse problem that a new, interesting project comes along when I haven’t quite finished the last one. I find those hard to resist.” Some of McCracken’s other recent projects include a three-year contract providing project advice to Bathurst Resources on their Denniston opencast coking coal project.
He was also project manager for the development of Pike River’s underground coal mine, with responsibility for roading access, and building platforms for the processing plant, offices and workshops, and the 2.3 km tunnel and 110 m shaft. His daughter Ellen, a mining environmental scientist, was working at Pike River at the same time, in what was her first job in the industry. “It was neat to be able to work alongside her and help her along with some things.” Ellen McCracken now has her own environmental consulting business at Earnscleugh where she is contracted by Mintago Investments (part of the L&M Group) at its alluvial gold mine. The father and daughter are currently both involved with the New Zealand branch of AusIMM, as branch chairman and branch secretary respectively. “It is a bit of a family affair which occasionally creates minor issues. She doesn’t always do what I want,” he laughs. Prior to establishing his business, McCracken worked in the mining industry in technical, project and operational management roles at senior levels in coal, iron ore and gold mines in New Zealand and Australia. He grew up on a dairy farm at Kati Kati in the Bay of Plenty and Reporoa in the central North Island and decided to get into mining because pure science didn’t appeal. “I wanted to do something with a practical application so went to the Otago School of Mines at Otago University. I think my mother thought I went to Otago to be as far away from home as possible,” he says. After graduating with a BSc Hons in Mining Engineering, he worked as an opencast engineer at the Rotowaro and Weavers mines, quickly progressing through the ranks to senior engineer.
“The gap has definitely got wider and is not helped by the behaviours of some people in the industry.”
Les McCracken In 1980, McCracken went to Western Australia where he spent the next five years with Hamersley Iron at their Paraburdoo mine finishing there as the mine’s principal engineer His next role was as a Rotowaro Expansion Project Manager with State Coal Mines and then Rotowaro Opencast Manager when CoalCorp was formed. From there he moved to the role of North Island production manager for all of CoalCorp’s Huntly mines, then in 1992 became general manager of Doug Hood Contracting, a privately owned national civil and mining earthworks contractor based in Ashburton. After leading several large mining and civil projects with the firm, McCracken was ready to go it alone.
Since then he has worked for many of the major mining companies, completing a number projects for Solid Energy, Couer Gold, Pike River Coal and Bathurst Resources. He was also project manager for the development of Lake Hood, a purpose-built artificial recreational lake and subdivision on a 72-hectare site at Ashburton. McCracken is now director of the joint-venture committee progressing this development to its next stage, which will see the lake size doubled and the subdivision area extended. On the personal front, McCracken and his wife have developed a nine hectare hazelnut orchard as a retirement project, and will soon move into a new home. He says the interesting places and reasonably challenging projects he has worked on have made for an enjoyable career. “I still get satisfaction from looking at something we built or a mine I worked at while I was managing a particular company or project.” Over his long career he says the gap has widened when it comes to the perception of the mining sector from those outside it. “The gap has definitely got wider and is not helped by the behaviours of some people in the industry. This is part of the issue for MinEx – to focus on these outliers with unacceptable performance so they don’t continue to bring the rest of the industry into disrepute.”
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Winter 2014 » Mining NZ 11
Coal » Solid Energy
Cuts continue as price plummets Hugh de Lacy State-owned collier Solid Energy has largely completed the “change proposal” it flagged in June this year in response to the collapse in high-grade coking coal prices two years ago – and those prices show little sign of improvement. In mid-July miners at the Stockton open pit north of Westport had their worst fears confirmed with the layoffs of 185 employees and contracting staff. That brought to more than 800 the total number of workers Solid Energy has laid off since the global steel-making industry slashed the amount it was prepared to pay for coking coal from $US330/tonne ($NZ388/t) at the price-peak in 2011 to $US113 ($NZ132) today. Even with half its workforce laid off, Solid Energy needed a $100m lifeline from the Government to stay afloat. Part of the change proposal was cutting Stockton production from nearly two million tonnes a year – which accounted for most of the company’s coking coal exports - to 1.4 million tonnes, saving it $60 million. Solid Energy still produces a further two million tonnes of thermal coal a year for local industries. Overseeing the implementation of the change proposal has been the company’s newly-appointed chief executive, Dan Clifford, who was recruited from the Australian staff of global mining giant GlencoreXstrata. That company was formed in May last year from the $34 billion merger of Glencore and Xstrata, and Clifford was previously its general manager for the Ulan Complex in the western coalfields of New South Wales, which produced 11 million tonnes of coal a year with a workforce of 900. Aged 42, Clifford is a 20-year veteran of Australian and South African mining, holds a degree in mining engineering with a first-class certificate
Solid Energy is still producing around 3.4 million tonnes of thermal coal a year for local industries. of competency in underground coalmines, and was a member of the Australian Institute of Company Directors. His task of keeping Solid Energy afloat over the next few years is not being made any easier by the continued grim outlook for coking coal prices. A recent report by the respected Moody’s Investors Service forecasts the price of coking coal will not improve much, if at all, in the immediate future.
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12 Mining NZ » Winter 2014
The report said that as much as half the coking coal world-wide is being produced at a loss because the current price is at a six-year low. In fact it’s so low, and so many producers are cutting production, that Moodys said it’s unsustainable at this level, and will have to rise to between $US135 ($NZ159) and $US145 ($NZ170) by the end of 2015 if global steel production is not to be affected. The price slump has been created in part
by China pulling back from the global market to support its domestic coking coal producers, and in part by increased production in Queensland. Moodys said the market is currently being oversupplied by about 30 million tonnes a year, despite production cuts amounting to more than 40 million tonnes over the past two years. American producers are mostly running at a loss and will not be back in the black until the price exceeds $US160/t, the report said.
Fire protection crucial for expensive mine equipment Protecting mining equipment from fire could save companies millions of dollars, says Steve Benseman from Fire Suppression Systems. “If companies have a complete burn-out of one of their key pieces of equipment, it could be out of action for up to a year which would cost them an awful lot of money.” Benseman says the lead time to replace highly specialised mining and construction equipment is currently around 50 weeks from when an order is placed to when it arrives in New Zealand. “That’s why it is imperative companies protect their existing machinery as the combination of large amounts of fuel, hydraulic oil, extremely hot surfaces and electrical components create an operating environment with an inherently high fire risk.” Benseman has 13 years experience in advising, installing and maintaining fire suppression systems at New Zealand mine sites. He says it is important companies deal with a specialist such as Fire Suppression Systems to ensure their systems meet the testing and certified standards required of the industry. “Some of our competitors dabble in fire suppression work outside their core business, but I believe we’re the only company in New Zealand to focus solely on mobile equipment fire suppression.” Fire Suppression Systems offers a full range of systems for the mining, construction, drilling, forestry and mobile equipment industries. Benseman is based in Auckland and employs three mobile technicians who operate from other parts of the country. Between them they visit clients’ often remote sites in fully set-up vehicles that enable them to provide complete equipment install, maintenance and servicing on-site.
We pride ourselves on delivering reliable, proven products that give our customers peace of mind ....” The expert team can also provide clients with advice on preventative measures and maintenance practices they can undertake to further reduce fire risk. Benseman is the New Zealand agent for foam fire suppression system Sandvik NFP 1000. Around 18,000 Sandvik systems are now being used worldwide, he says. The system is fully compliant with the new Australian standard AS5062. A key feature is that it is completely selfcontained so even if there is no electricity or person to operate the system it will still activate in the event of an emergency. Benseman says Fire Suppression Systems recently installed fire suppression systems to 115 machines for the Downer/Solid Energy Stockton Alliance on the West Coast, its biggest single install to date. “We continue to look after every other major mine in the country. “We pride ourselves on delivering reliable, proven products that give our customers peace of mind that their equipment and staff will be protected should a fire incident occur.”
Hydrema 922D - setting the pace The Hydrema 6WD 922D dump truck can work all year round because it has the lowest ground pressure in the market in its size class. Running at just 82kPa it is the obvious choice for driving on soft terrain and in areas that demand the lowest possible ground pressure, says Billy Hart from NZAM Ltd, the company which has had the New Zealand Hydrema agency since 2006. “Hydrema’s three-axle dump truck, with its unique articulated pivot joint and bogies with a wide steering angle, offers superior tractive power and the market’s lowest unladen weight and performance/weight ratio, resulting in extremely low fuel consumption,” he explains. “With electronic suspension, level control, and genuine bogie axles the weight of the Hydrema 922D is spread over all six wheels meaning all wheels stay in contact with the terrain making for a safer performance. “The articulated chassis has pendulum bar and double hydraulic stabilisers in the pivot joint which ensures great stability during tipping operation even when the dump truck is close to maximum oscillating angle.” The Hydrema 922D new cab gives the operator more room and improved visibility. Its high, central location and the steeply inclined, narrow hood give the operator what is probably the best all-round visibility on the market: at the front of the vehicle, beside the engine and adjacent to the front wheels, says Hart. All instrumentation is placed according to careful studies of the operator’s everyday working situation and optimal working positions. “For example when driving the dumptruck, the operator uses the steering wheel most of the time. At the same time, he has to change gear, select his direction of travel and be able to use the tipping function. In the 922D all these functions are integrated into a single joystick in the right arm rest.” The Hydrema 922D has been designed with safety in mind. The completely enclosed, oilimmersed operational brakes and handbrakes
Designed with safety in mind - the Hydrema 6WD 922D dump truck. ensure safe braking, optimal cooling, and durability. The brake system consists of two independent circuits and the handbrake is a spring-activated fail-safe brake. The vehicle has a standard, fully automatic bogie brake, which works without the operator’s intervention and ensures a very stable vehicle during steep downhill driving. The bogie brake is a combination of the engine brake and a newly developed hydraulic bogie brake, which together provide superior braking
ability. The Hydrema 922D comes with a fully automatic or manual gearshift giving more options and control on the job. It can be customized to run fuel tankers, water tankers and hook lifters etc. NZAM Ltd began over 12 years ago as a private family owned partnership and is now part of Hireways Ltd. The company specialises in the hire and sales of both new and used earthmoving, mining and forestry equipment including dump trucks, excavators, loaders, rollers, graders and bulldozers to clients New Zealand wide.
The company operates out of premises in Palmerston North and offers a full workshop employing a dedicated team of mechanics, fabricators and engineers. Hart says that this gives the company the ability to carry out any modifications to machinery that are required by clients such as buckets, guarding etc. The company has its own transporters to deliver machinery direct to clients or alternatively can organize for delivery through partnerships with third party operators.
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Coal » Bathurst Resources
Bathurst underway at Escarpment Jo Bailey Bathurst Resources has commenced work at its Escarpment coal project on the Denniston Plateau in readiness to ramp up to full production when the global coal price recovers. “We’re planning for the recovery and getting ourselves in a position where the mine stands on its own two legs,” says chief executive Hamish Bohannan. The Department of Conservation granted Bathurst an Authority to Enter and Operate the mine in June, the final hurdle before the mining company could start preliminary works at the site. Fencing and signage have since been erected, with Bathurst currently clearing areas for coal storage and site infrastructure; and undertaking earthworks for the installation of water management systems. Bohannan says the project’s soft start is providing the company with a “great opportunity” to set the site up properly without the demands of production deadlines. “We’re conscious that we have to do an exemplary job, and with the pressure off, can take our time to do the job extra well.” Coal recovered at Escarpment during this phase will be sold into the domestic market where demand from the dairy and cement industries remains strong. Initial production will be limited to 75,000 tonnes per annum until the export coking coal prices recover. Bohannan says discussions are continuing with end users in key markets such as India, Japan, Korea and China. Once production for the domestic market gets underway, bulk samples will be taken for trials in the Japanese and Indian markets which already have coal samples from the mine. Bohannan says the necessary infrastructure for the first export shipments is already in place to enable a quick transition to an export operation when market conditions improve. Bathurst Resources finished the financial year strongly with a cash flow positive quarter, having achieved good production results from its three operating mines without a lost time injury or significant environmental incident. The company achieved total coal sales of 80,904 tonnes (Cascade 36,786 tonnes; Takitimu 38,923 tonnes and Canterbury Coal 5,195 tonnes); an increase of 37 percent for the same period last year. “We had an excellent quarter. “The team achieved good results and kept production costs down.
Bathurst Resources’ Cascade Mine - producing for the domestic market. “We are continuing to closely monitor expenditure in the current quarter with sales slightly down due to the normal reduction in demand during winter from the dairy industry.” Bohannan says that the company is expected to return to a cash positive position in the December quarter and for the remainder of the 2015 financial year. Bathurst raised AUD$7.39m in a placement in April, followed by a rights issue which closed in July. Bohannan says that the company’s focus is to maintain its “sound and sustaining” domestic business as a solid base from which to develop its export project once international coal prices recover. Last month Goldman Sachs said global prices may have bottomed out at around $US120/tonne, with recovery back to the $US140/tonne level unlikely before 2016.
We’re conscious that we have to do an exemplary job, and with the pressure off, can take our time to do the job
When this will actually happen is anyone’s guess. However Bohannan also believes the coal price seems to have flattened out. “It hasn’t really moved in six months which I see as quite a positive sign it has stopped falling.
“Whatever happens, we’re in a great spot. If the recovery of global coking coal prices takes longer than the pundits are saying we will continue to bridge the gap with our domestic business and if it happens quicker, we’re ready for it.”
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14 Mining NZ » Winter 2014
Environment »
Research on water quality impacts making inroads Jo Bailey A government-funded research project led by CRL Energy has won the 2014 Minerals West Coast Environmental Award. The company and its project partners Landcare Research and the Universities of Canterbury and Otago have spent the last decade working on the project called ‘The New Zealand Minerals sector environmental research and mine drainage decision making framework’. This has been particularly focused on predicting and managing water quality impacts of mining on streams, drawing together research on rock geochemistry, aquatic chemistry, freshwater ecology, aquatic toxicity, and management and remediation techniques for mining. The first part of the project saw the development of regional patterns in mine-impacted water quality (starting with areas on the West Coast and Southland) which provided regulators, mining companies and landholders such as the Department of Conservation with a baseline for how to approach water quality issues and mine drainage management. “The project has provided a regional understanding of the biological impacts of a certain type of development on the eco-system, especially the aquatic eco-system,” says CRL manager James Pope. “ We have also put together bestcase treatment and management processes for managing, mitigating or remediating water ways in the New Zealand environment.” Pope says New Zealand’s unique geology, climate, flora and fauna make it impossible to import all the information to develop these sorts of practices from off-shore. “A New Zealand-specific take on treatment and management is essential as the unique setting of each resource development is critical to predicting the level of impact.” More recently, the project partners have been funded to look at rehabilitation and management aspects of mining which impact directly on water quality. “It was natural for us to push toward rehabilitation over the last three to four years. “A lot of mining operations will have fully automated or large industrial water treatment plants but don’t want to operate these into perpetuity following mine closure. “We focus on prediction, prevention and
mitigation of environmental issues, and often best outcomes occur when well planned rehabilitation occurs in a timely manner minimising the need for mitigation or treatment.” To date the project partners have produced over 40 peer-reviewed papers; presented their science at up to 60 conferences, and run numerous workshops, field trips and short courses. “Our outputs have been designed to get the message out there to all minerals sector practitioners regardless of experience level. “And for those with specialist skills or qualifications in mine site environmental management there are now many peer-reviewed publications related that provide the next level of detail.” Industry and regulators have also been involved in the process from the beginning, with a governance panel set up including representatives from DOC, the West Coast Regional Council, Environment Southland and senior environment managers from mining companies. More recently engagement with North Island Councils, Iwi groups, Straterra, and Minerals West Coast has also been useful. “Those senior people really helped to shape the outputs and apply the science for the best possible outcome in a very collaborative process. “Having regulators, industry, DoC, around the governance table and regular engagement with other stakeholders means that all parties invest something in the success of the final outcomes. So overall, the process of designing and delivering the outputs is almost as important as producing them.” The finished planning framework is now being used to successfully plan mine drainage and mitigation strategies by mineral resource consent project applicants, landholders, regulators and consultants. Minerals West Coast manager Peter O’Sullivan said the work showcases the advances being made in predicting and managing the environment effects of mining. “The tools and systems that the CRL Energy-led consortium of research providers have developed to ensure that the residual effects on water quality of mining are minimal, will be of particular benefit to coal and gold mining companies throughout New Zealand.” The other awards finalist was OceanaGold for its Globe Progress mine restoration monitoring programme. O’Sullivan was on the judging panel alongside Straterra policy manager Bernie Napp; and Judi
Downstream impact: legacy mine sites in New Zealand often release acidic or trace element rich drainages into the wider environment. Brennan, permissions/SLM manager at the Department of Conservation. The judging criteria included a commitment to environmental excellence; the success of the project; innovation and research employed, knowledge created; and the contribution to industry best-practice. Pope says the award was “really nice
recognition” for the project teams’ years of work, “but in general we see the successful delivery of this project and related work as part of our job”. “The project has gone from strength to strength, with similar research also undertaken in the North Island. It is currently funded until September this year and we are hopeful our proposal for funding beyond this period will be successful.”
MBC wins national safety award Westport based environmental contracting company, MBC has won a top New Zealand Workplace Health and Safety Award. The company was announced the winner of the best health and safety initiative by a small business at the Safeguard New Zealand Workplace Health and Safety Awards gala awards held in June. The judges applauded the company’s initiative to develop and deliver targeted health and safety, leadership and communication training to their staff, to address the challenging hazards found on high hazard worksites. “Having our efforts recognised at this level is tremendous,” says MBC’s Health and Safety Manager, Morgan Newburry. “It is a huge credit to all our staff – they really engaged in the training, and embraced the learning of new skills to keep themselves and their colleagues safe in the field.” The small business category was open to any New Zealand organisation with fewer than 50 employees. It recognises that smaller businesses face similar health and safety challenges as larger organisations, but often with far fewer resources. It is awarded for a successful initiative devised and implemented by an organisation to improve the health and safety of its staff.
Company directors Hellen and Mike Bygate are thrilled to have been acknowledged in the awards. “MBC has come a long way since our days as a sole trader,” said Mike Bygate. “We now have a strong presence on the West Coast and in Canterbury, and we are really proud to be running a company that is providing services over several high hazards industries like mining and asbestos removal, and doing these things safely. “Winning this national award, on top of the recognition we received at the Leading Light West Coast awards is really inspiring.” MBC is an environmental solutions company offering specialist, tailored environmental services to clients throughout New Zealand. Over the past eight years, MBC has grown from a sole trader specialising in animal and weed control work, to a company with an average of around 40 employees. As well as key invasive species control work, it also offers rehabilitation planting, fauna and flora work (such as field surveys, species monitoring, tracking and relocation), environmental services (noise and dust monitoring, water quality, freshwater ecology), erosion and sediment control services, niche waste management and recycling services, asbestos abatement services and effluent management work.
• Flora & Fauna • Erosion Solutions • Waste Management • Invasive Species Control • Heights & Ropes • Environmental Monitoring • Effluent Management • Asbestos
Winter 2014 » Mining NZ 15
Environment »
The old Prohibition Gold Mine at Waiuta on the West Coast has such high levels of arsenic that ingesting a fingernail-sized amount of dust from the site could be fatal. Jo Bailey reports on the remediation plan for the toxic site.
Dave Trumm of CRL Energy with water treatment systems under construction at the Prohibition Mine site.
Toxic mine site set for clean-up
N
ew Zealand’s most toxic historic mine site will soon receive a much-needed clean-up. The old Prohibition Gold Mine at Waiuta on the West Coast has such high levels of arsenic that ingesting a fingernail-sized amount of dust from the site could be fatal, says environmental scientist Dave Trumm of CRL Energy, who has co-authored several papers on the site. “The very high levels of arsenic in the soil and water make it a risk to both people, and the environment, which is why it is a top priority for remediation,” says Trumm. “There is only one other mine site in the world with higher concentrations of arsenic documented in the published literature, which puts the risks into perspective.”
The extent of the danger was determined by Laura Haffert, a PhD student at the University of Otago under Dave Craw and working with CRL in 2005 who was testing historic mine sites in the region. Previous sampling by John Taylor (Solid Energy) had found arsenic contamination at the site. “At the time a Department of Conservation walkway went right through the old ore processing site and mine. Based on those results, Jim Staton of DOC ripped it out and the site was fenced off.” The Prohibition Mine site was contaminated through the processing of ore for gold when an old ball mill was operating there between 1938 and 1951. This included a “roasting” process to oxidise the arsenic-bearing sulphides in the ore which
“There is only one other mine site in the world with higher concentrations of arsenic ..... which puts the risks into perspective.” held the gold. The biproduct from this process, arsenic oxide solids and condensed and precipitated arsenic vapor, has been found on the ground throughout the site and especially near a small condensing tower at its eastern end. Arsenic has also leached out of the sediment into the waterway, leaving the site via a small stream. “The concentrations in the water leaving
The remedial action plan at the historic Prohibition Gold Mine site at Waiuta includes the development of new techniques to remove arsenic from the water.
16 Mining NZ » Winter 2014
the site are over 200 times the drinking water standards and present a risk to the fresh water eco-system,” says Trumm. “The concentrations in the water on site are an additional 50 times higher - so high that drinking only about a litre and a half could be fatal.” Although the mine site has been fenced off, Tumm says that it still poses a significant risk for visitors.
Environment »
Old foundations, concrete, metal and timber is all that remains at the Prohibition Mine, located on the top of a hill just above the historic Waiuta township, which is managed by DOC.
“If it’s a windy day the arsenic could blow towards people walking around the perimeter,” he says. Then there is the issue of uncontrolled access by people who have ignored the warning signs and cut through the fence to break into the mine site. “They have no idea the danger they are putting themselves in. “When the DOC workers go onto the site they wear full protective clothing and breathing apparatus to reduce the risk of exposure.” Old foundations, concrete, metal and timber is all that remains at the Prohibition Mine, located on the top of a hill just above the historic Waiuta township, which is managed by DOC. “There are only two nearby residents. However they are far enough away from the site to not be in danger.” Over the last nine years Trumm, Craw and the CRL team have been instrumental in evaluating the site to determine the risk it poses to people and to the environment and in preparing its remedial action plan, which includes the
development of new techniques to remove arsenic from the water. Since 2005, Staton has worked hard to raise the awareness of the severity of the site and used this information to present the case for cleanup to the government. Last year, the Ministry for the Environment confirmed its support to clean up the site, and a budget was set aside to complete the works. The Department of Conservation will run the clean-up plan which is likely to involve cleaning the condensing tower, removing arseniccontaminated soil and securing it in sealed plastic barrels at a secure off-site disposal facility and capping of the surface around the tower. The removed soil will be replaced with clean fill, and water treatment plants downstream of the site will remove arsenic from the water. However this work has been held up by the discovery of a second contaminated site in the region, says Trumm. “Initially there was a possibility the sites could be remediated at the same time, so work was put off while a full investigation of the second site was
undertaken and tenders were put out to complete the entire works. “The decision has since been made to push ahead with the Prohibition Mine clean-up first,
with the clean-up of the second site to happen later. We expect work to get underway within the next couple of months once the earthworks contractor has been selected.”
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Gold » Industry News
Coromandel on the hunt Hugh de Lacy Even as it closes in on a start to mining at its historic gold prospect on Mount Karangahake, dual-listed New Talisman Gold is sending its whollyowned subsidiary, Coromandel Gold, out in search of further mining targets. New Talisman chief executive Matt Hill said that, following indications in its last annual report, it was looking at new mining targets in the Waihi area to be pursued separately, using its own resources, by Coromandel Gold. Coromandel Gold, though 100% owned by New Talisman, has its own management and board of directors and is keen to seek out its own mining opportunities. Hill told Mining NZ that New Talisman would continue to focus primarily on bringing the historic Talisman mine back into production on a limited scale by the end of this year, leaving Coromandel Gold to hunt out new business.
“We intend Coromandel Gold to operate as a separate entity, looking at all opportunities for an expansion of its portfolio,” Hill said. “This is something we’ve been exploring for some time, and we signalled it in our annual report,” and an earlier strategy document, he said. The 30% slump in the global gold price two years ago prompted a world-wide scaling back in exploration and production, leaving promising projects scrambling for backers both in New Zealand and overseas. Hill reckons that, as a result, now is the right time to be hunting for new opportunities. “We’ve got a view that in 18 months gold will be in a very different state than it is today,” Hill says. “We don’t believe it’s going to $3000 [$US/ ounce] or anything like that, but we take the view that in reality there is a bottom floor to the demand for gold, and supply has been closing down. “Also, the majority of the federal reserves have been net buyers of gold, taking further supply off the market.”
Drilling set for Sam’s Creek MOD expects the Sam’s Creek project to grow after ongoing work shows the deposit is completely open beyond the current limits of drilling. The company has stated that further interpretation of structural data shows the porphyry, which hosts mineralisation at Sam’s Creek, may extend well beyond the area of the current resource. A two-part drilling programme has been proposed to test this potential with 12 targets identified. Five drilling targets have been identified for potential extensions to the current 1 M oz resource and this stage 3 drilling takes in 1500m west of the current resource. The company has now been granted a new prospecting permit, which covers any possible
Bruce Mc Keown
extensions of the 7 kilometre long SE Traverse and Main Zone drilling targets. The new licence PP 55645, known as Aaron’s Creek, is immediately east of the Sam’s Creek and Barron’s Flat permits. This 100% owned permit has increased MOD’s holdings at Sam’s Creek to 101.8 km. Aarons Creek covers any potential extensions of the Sam’s Creek porphyry dyke undercover to the east of the current Main Zone resource and is mainly on private land. Sam’s Creek is by far the largest undeveloped gold resource in New Zealand with an established resource of more than one million ounces. MOD has the right to increase its earning right from permit holder OceanaGold Corporation (ASX, TSX & NZX: OGC) to 80%.
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QUALITY FOCUSED RESULTS
18 Mining NZ » Winter 2014
Gold price tipped to weaken The gold price is going nowhere, averaging a little under $US1300/ounce ($NZ1500/oz) for the first half of the year, and with most commentators expecting it to soften slightly in the second. A Reuters survey of 31 analysts in July found most forecasting an average price of $US1270/oz ($NZ1460/oz) for the third quarter of 2014, down from the first-half average of $US1290/oz ($NZ1483/oz). They predict the average for the full year will be $US1277/oz ($NZ1467/oz), suggesting a second annual fall in a row after last year’s 15.5% drop, to be followed by a third in 2015 when it will drift below $US1250/oz ($NZ1437/oz). The metal actually rose 10% in the first half of this year, buoyed by political upheaval in the Middle East and Ukraine, briefly halting a slide which reached a three-years low in 2013.
The range in which the price has been moving this year has been the narrowest since 2005, with changes coming in the form of sudden moves up or down from one sticking point to the next. Since gold lost a third of its value in the June/July slump two years ago, there has been a drop in new supplies as marginal mines found the going too tough and shut up shop or reduced output. That should be having a positive effect on the major consumer markets of China and India, but it’s not – at least, not yet. Those two countries account for more than half of physical gold consumption, and their failure to respond so far to reduced supply has been exacerbated by India deciding in its recent budget to maintain its 10% import duty on gold and silver unchanged.
Gold » Industry News
New life for beckons for Talisman .... over the last two years
Hugh de Lacy
we’ve probably spent
Goldminers the world over may be battening
down the hatches to ride out the two-year-old slump in prices, but a new boutique operation in an historic old mine is starting up in Waihi’s Karangahake Valley. By the end of the year life will have returned to the historic Talisman Mine, just down the road from Newmont’s fabled Martha Pit, for the first time since 1938. The former Heritage Gold, now called New Talisman Gold Mines Ltd, has secured the finance to extract 400 tonnes of quartz ore a month with an expected yield across the whole resource of 10-12 grammes per tonne, plus about four times that amount in silver. New Talisman is listed on both sides of the Tasman, and the final endorsement of shareholders for the strategy came with a recent successful rights issue, combined with a funding agreement from an as-yet-unnamed Australian financier. Mining is expected to start in December, and after 18 months the total capital invested by New Talisman would be $1.7 million, but by then the mine would have yielded a cash surplus of $1.3 million. Between Heritage and New Talisman, the total amount of capital spent on getting the Talisman working again will have been in the region of $15m. New Talisman chief executive Matt Hill said the exact amount of capital spent so far is “hard to break out”. “But just over the last two years we’ve probably spent $3m on developing our prefeasibility study, and preparing and upgrading the
$3m on developing our pre-feasibility study, and preparing and upgrading the road.”
The Talisman Mine entrance is just a 2 x 2 metre tunnel going more or less straight and level into the side of the mountain.
road and all the work that’s been required to get it to the state it’s in today.” In appearance that state isn’t much different from what it’s been since the 1930’s: the mine entrance is just a 2 x 2 metre tunnel going more or less straight and level into the side of the mountain. Mining will be carried out by a Terex digger, which is small enough to spin on its axis inside the mine, which will cart the ore to a truck near the portal.
Negotiations are still under way with both of the country’s big goldmining companies, Newmont and OceanaGold, over who will process it, and a deal will be inked with one or other company within three months. Nor can Hill yet reveal the name of the Australian financier that’s funding the company over the mountainous hump from exploration to production, but it’s not the Chinese interests that were still seeking to become involved a few months ago.
The Chinese wanted to operate the mine rather than just invest in it, but Hill said that brought a strong reaction from shareholders who thought the company was in danger of “selling the farm” if it turned the project over to the Chinese. However an indication of the nature of the funding agreement is that a letter of offer has been signed relating to a converting rate facility. “It’s simply a non-bank financing deal, a case of money being provided on a convertible basis, with our options being to repay it in full, repay it in part and convert the balance to shares, or continue to roll over the facility,” Hill said. The Talisman Mine has a long history with its first ore mined in 1894 near the top of Mount Karangahake. Production at the mine peaked in 1914 at 52,000 tonnes of ore mined, but after producing 3.5 million ounces of bullion in 26 years, it closed in 1920 for want of further areas of payable ore. It re-opened in 1930 under the auspices of the Talisman Dubbo Gold Mining Company in an area that was not part of the original tenement, and continued profitably for eight years.
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Winter 2014 » Mining NZ 19
Gold » OceanaGold
Further cuts as Reefton winds down Jo Bailey Geotechnical issues at OceanaGold’s Reefton gold operation in the second quarter have resulted in a revised mine plan with a “slight increase” in the life of the mine. However this was not enough to hold off redundancies at the mine with around 50 jobs lost in an announcement by the Australian company on August 4. The job losses were not entirely unexpected given OceanaGold’s announcement last June that it would wind down the Reefton operation and head into a care and maintenance phase by mid 2015. However they would still be felt by the local community. Near the end of the second quarter, geotechnical instability of one of the pit walls at Reefton temporarily affected access in the open pit, resulting in less ore being mined and available for processing. A reduced ore feed will continue in the third quarter while company establishes an alternate access. This significantly affected second quarter production and as a result production for the third quarter and full year at Reefton will be lower than expected, which is what prompted revision of the mine plan. In its recent second quarter 2014 financial and operational results, OceanaGold said the operation will remain cashflow positive, including rehabilitation costs under the new plan. It was a similar story at the company’s Macraes mine in Central Otago where the collapse of a wall pit halted operations for a few weeks and lowered production in the second quarter. The company is also winding down operations at both the Macraes open pit and Frasers underground operations after announcing a shortened mine life for each around a year ago. OceanaGold’s Didipio mine in the Philipppines continues to operate strongly, producing 45,266 ounces of gold and 11,185 tonnes of copper in the first half of 2014. Like the New Zealand mines, most of its production came in the first quarter which was largely the result of mine sequencing, where lower grade ore was mined from Stage 3 of the open pit; and a lower mill feed due to a planned process plant shut down for maintenance and de-bottlenecking activities.
Geotechnical issues at OceanaGold’s Reefton gold operation in the second quarter have resulted in a revised mine plan.
The de-bottlenecking was carried out to help the company achieve its planned 3.5 Mtpa throughput rate by the end of 2014. Production is expected to increase again in the third quarter and beyond as the mining operation advances Stage 3 of the open pit into a higher grade zone of the ore body. Overall, OceanaGold posted a first-half year profit of US$56.8 million, a US$120m turnaround from last year’s first half loss. Other highlights of the report include production of 147,399 ounces of gold and 11,185 tonnes of copper, which included 60,831 ounces of gold and 4,706 tonnes of copper in the second quarter. The company’s total revenue of US$297.8 million in the first half of 2014 included US$127.5m in the second quarter. Its net earnings of US$56.8m were followed by a US$2.1m net loss.
We remain focused on enhancing shareholder wealth and positioning the company for new value-add opportunities.”
The report says this was due to lower revenue from lower overall sales and higher cost of sales in New Zealand due to a higher New Zealand dollar and a drawdown of inventory and gold in-circuit. In the last 18 months OceanaGold has repaid around US$94m in core debt, including US$10m in the second quarter. It has increased its cash position to US$46.2m.
OceanaGold managing director and CEO Mick Wilkes said the company is “well on track” to achieve its 2014 guidance and will continue to strengthen the balance sheet through further debt repayment this year. “We remain focused on enhancing shareholder wealth and positioning the company for new value-add opportunities. Our commitment to our stakeholders remains steadfast and we will continue to work closely with them.”
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Gold » Newmont Waihi Gold
Correnso gets funding approval Karen Phelps Newmont Waihi Gold has confirmed final corporate approval for funding for its Correnso underground mine in Waihi. The Correnso exploration development drive, which comes off the Trio mine and heads north underneath residential properties in Waihi East, was completed at the end of April. It was constructed to allow Newmont Waihi Gold to drill into the Correnso ore body to gain a better understanding of the extent and grade of the ore body and involved Newmont Waihi Gold constructing a tunnel over 200 metres beneath the surface and drilling core samples. It was the first time that such a project has been undertaken in New Zealand by the gold mining industry directly under residential properties. Newmont Waihi Gold spokesperson Kit Wilson says that the results gained from the drilling have given Newmont’s Investment Council based in Denver the confidence to provide funding of US$32m. Newmont Waihi Gold has announced that the first phase of Correnso will be completed by mid 2017 by which time it will have produced 300,000 ounces of gold. This phase involves the mining of the known reserve. Wilson says that while this is happening Newmont Waihi Gold will continue with underground exploration drilling. “Trio will be finished at the end of October this year and production from Correnso is anticipated to start mid-2015 so the underground workforce will be able to transition from one operation to the next when Trio closes in a few months,” says Wilson. Wilson says that at this stage the known Correnso resource takes the mine out to mid-2017. “This will mean that we will continue to be a significant employer in the region after our Martha open pit closes in early 2016. “We are continuing with near mine exploration to extend the mine’s life.” Exploration drilling for phase two is already underway. Wilson says it is highly likely that mining at Correnso will be staged due to the volatile gold price and the high cost of production. Under the consent conditions granted by the Environment Court in October last year, Newmont Waihi Gold has consent to construct and operate an underground mine anywhere within the designated Correnso Extensions Project Area (CEPA) area provided that all of the consent conditions are met.
Newmont Waihi Gold says the first phase of Correnso will be completed by mid-2017 by which time it will have produced 300,000 ounces of gold. Much of the CEPA area is the Correnso mine but it also includes the historic mining areas of Empire/ Grace and Daybreak located between Correnso and the open pit. Under the amended consent conditions Newmont Waihi Gold is required to offer people who own properties above the Exploration Development Drive an ex gratia payment of 5% of the market value of the house based on an independent valuation.
If Newmont Waihi Gold plans to mine directly below the property then the company must offer to purchase it at market value. Wilson says because mining of this nature – underneath residential houses – has never occurred before in New Zealand, “all eyes will be on the company”. “We will mine the first stage, look at costs and reassess, then proceed if viable.
“The cost of this exercise has been significant because, unlike normal mining, we will have to buy residential houses and make ex-gratia payments to some owners. “So if the grade doesn’t meet our expectations or there are other intangible factors that come into play then we won’t keep going,” he says. “This project is unique in terms of New Zealand; it’s uncharted territory.”
Restored bogger a drawcard An old mining bogger has retired in style and is proving a tourist drawcard as she sits proudly on the main street of Waihi. The bogger was donated to the local community by Newmont Waihi Gold at the end of its five year working life in the company’s Favona Mine. The Finnish-made Toro 0010 was purchased new in 2006 for $1.8 million and has had a further $2.1m spent on it in maintenance during its working life. The bogger is having a well deserved rest after putting in 20,700 hours digging out coarse ore from the stope and dumping it into trucks to be carted to the surface. Newmont Waihi Gold funded the refurbishment of the bogger for her new life as a town tourism hot-spot minus its 400HP engine which was bought by a forestry contractor. Typically such boggers would be sold for scrap metal at the end of their working life, says Newmont Waihi Gold spokesperson Kit Wilson. However Wilson says that it was good to be able to donate the bogger to a worthy cause like the Vision Waihi Trust who will now maintain the bogger as a town landmark.
“It’s a large piece of machinery – more than 45 tonnes - working underground and few people ever get to see it. “People can stand on the pit rim and look down and all the machinery looks so small. This allows people to get up close to the machine to give people a sense of the scale,” says Wilson. Boasting vital statistics of 11 metres long, 3 metres wide and 2.75 metres high the bogger has a lift-and-load bucket capacity of 16,000 kilograms and a top speed of 27 kilometres per hour. Wilson says that operating such a powerful and heavy centre-articulated vehicle with limited visibility is a specialised skill and generally operators need to have three to five years of mining experience. Re-homing the bogger was a collaborative effort with Edwards Transport moving the bogger from the mine and keeping it in storage free of charge. Hutchins Engineering stripped down the body and restored and repainted the bogger. Carters Contractors prepared the new site from design to constructing and installing security fencing and Kauri Gold cleared the bank behind the site
and planted 100 flaxes there. The Council is funding signage to tell the story of the bogger, the fencing, rear landscaping and the sealing of the surrounding carpark area. The bogger is presently situated at an interim site.
When the town’s new Gold Discovery Centre is built nearby it will most likely be relocated as part of the proposed associated streetscape works. • New Gold Discovery Centre - page 28
Winter 2014 » Mining NZ 21
Quarrying » Quarrying NZ
Worksite safety an ongoing issue Karen Phelps Safety was the working theme of the 46th combined Institute of Quarrying NZ Inc and Aggregate and Quarry Association conference held in Whangarei in July. New regulations and codes of practice imminent for the industry from the commencement of WorksafeNZ as a result of the Pike River disaster formed major topics of discussion with Tony Forster, chief inspector extractives WorkSafe New Zealand, giving the opening address indicating the implications for the industry. Bill Bourke planning and technical adviser from the Aggregate and Quarry Association says that although it is early days for WorksafeNZ it was good for the industry to get an indication of what the organisation would be looking for in terms of safety and compliance. He says a key issue, which has been identified for the above ground extraction industry, was the interaction of light and heavy vehicles on worksites. “It’s probably the single biggest safety issue affecting the industry,” says Bourke.
“In terms of total incidence levels for the industry up to 30-40% are from this type of interaction where vehicles come into contact on site. “Traffic flow on sites needs better organisation and regulation to address this issue as it’s a major area we need to attend to as an industry,” he says. MinEx CEO Les McCracken spoke about the structure MinEx will take in conjunction with WorksafeNZ in order to prepare the codes of practice for the above ground extraction industry. “We’re different from the underground mining industry,” says Bourke. “Rome wasn’t built in a day and to prepare the codes of practice is a massive undertaking. “The first draft we saw was extremely good but there were a few areas that weren’t covered so that’s being re-written now,” he says. The conference is an opportunity for the more than 300 delegates, speakers and exhibitors who attended to celebrate the past year and learn about trends for the future. One trend Bourke identifies as being crucial to the industry is recycling and the opportunities this could potentially bring for the New Zealand industry.
Overseas around 15% of the overall use of aggregate is recycled material. If New Zealand is following this trend then that indicates huge potential for the industry here.”
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The conference also included a field trip to Dicksons Quarry.
Dr Susan Tighe from Canada - who in 2006 was named one of Canada’s Top 40 Under 40 for her leadership and vision with respect to the Canadian Transportation Community - spoke about the establishment of a laboratory at the University of Waterloo, Toronto specifically to examine aggregate recycling. Bourke believes this is something the New Zealand industry could benefit from. “With diminishing resources in New Zealand we need to look at how we can recycle aggregates rather than always using virgin material. Economies of scale will be a key challenge for us to be able to achieve this in the New Zealand market but there are a number of quarries with the space and equipment to be able to do this – for example crush recycled concrete for re-use.”
Bourke says a key challenge for the organisation will be to identify how much aggregate is currently being recycled in New Zealand in order to ascertain potential demand. “Overseas around 15% of the overall use of aggregate is recycled material. “If New Zealand is following this trend then that indicates huge potential for the industry here,” he says. The conference also included a field trip to Dickson’s Quarry where delegates witnessed a demonstration of a remote controlled flight vehicle drone, which flew over a blast area and fed footage back so that delegates could view the blast in safety. The award for the best trade stand at the conference, sponsored by AJ and RJ Loader, was this year won by Total Lubricants.
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Quarrying » Environment Awards
Higgins Baldwin’s Quarry has worked to substantially improve the quality of water discharged from the quarry prior to its release into the Whangamarino Heritage Wetland.
Baldwin’s wetlands work a winner Karen Phelps
T
here was a high calibre of entries at this year’s The Institute of Quarrying New Zealand and Aggregate and Quarry Association of New Zealand awards, with major prizes handed out in recognition of the achievements of the industry over the past year. The Aggregate and Quarry Association of New Zealand awarded the Mimico Environmental Excellence Awards which saw Higgins Baldwin’s Quarry, Waikato, taking out the top prize for its voluntary initiative to improve the quality of water discharged from the quarry prior to its release into the Whangamarino Heritage Wetland. More than 15,000 indigenous trees and shrubs have been planted which has produced an excellent wild life habitat, but it was the way the initiative was undertaken that really impressed judges.
Kerry Reilly, the quarry owner when the project was initiated, was the champion and conceived the design and sold the proposition to his neighbour, farmer Peter Buckley. Working with his neighbour, he then sought support from local Iwi, Department of Conservation, Fish and Game and local district and regional councils. Mr Buckley donated several hectares of pasture and wetland land on his property to be used for the project. The wetland was a major investment, approximately $500,000 by Baldwin’s Quarry and $100,000 by Peter Buckley and family. “This is a truly outstanding initiative that will be an ecological asset for the quarry, the Buckley farm, Iwi, and the wider community, far into the future,” says MIMICO Environmental Excellence Awards judge, Dr Morgan Williams. Winstone Aggregates’ Hunua Quarry in Papakura Well done: Kerry Reilly, left, Baldwin’s Aggregates operations manager, with Cobus van Vuuren, Higgins Aggregates manager, and the MIMICO Environmental Excellence award.
More than 15,000 indigenous trees and shrubs have been planted at the wetland.
took the Silver award for its work to relocate Auckland Green Geckos, which were an at-risk species. Holcim’s Bombay Quarry at Pokeno and Winstone Aggregates’ Pukekawa Quarry both took out Bronze awards. Holcim was recognised for its efforts to reduce blasting vibration levels felt by locals and Winstone Aggregates who aimed to reduce or eliminate water takes and discharges back to the Waikato River during the processing of sand from a dredging operation by relocating the operation. Dr Williams says that all four entries illustrated proactive environmental management that demonstrated the value of being a good neighbour and operating a challenging business in an environmentally sustainable way. “They were also weaving their environmental management matters into the fabric of their business practices along with health and safety, community and tangata whenua relations, energy efficiency and so on,” he says.
Meanwhile winners of The Institute of Quarrying New Zealand’s annual awards were Dickson’s Transport & Quarries which won the Winstone Aggregates Safety Award. A new award was the Porter Equipment Quarry Leadership Award and The Institute of Quarrying president Gordon Laing says there were a good selection of nominees but was won by Steve Ellis. The B R Webster Family Educational Scholarship was won by Shawn McLean and Andrew Dronjak. Gordon Skeggs took out the Southern Cross Engineering Rocktec Innovation Award for his innovative work on the Oreti Beach plant where he significantly managed to reduce the cost of the project by being able to refurbish some equipment and achieved reduction in material handling by a third. George Kelcher was awarded the Lyn Jordan Trophy and Joanne Dickson won the Niemac Award while Rob Smith was presented the RD Hassed Trophy for outstanding services to The Institute of Quarrying for the year.
Winter 2014 » Mining NZ 23
Focus » Industry Training
‘Doug’ giving back to the industry It’s been a long, hard road for Alistair McIntyre to get to where he is today - inspiring and helping the next generation of industry workers. He talks to Karen Phelps.
I
t wasn’t so long ago that Alistair McIntyre was sitting on a mat in a primary school classroom surrounded by children decades younger than him. He wasn’t a parent helping out or a guest speaker – McIntyre, aged 37 years old at the time was there to learn to read and write better. Now, aged 54, McIntyre has written his own books and is spearheading changes to promote the mining, quarry and civil construction industries as professional career paths to those very same children he sat next to not so long ago. McIntyre is the first to admit it’s been quite a journey to get to where he is today. He was introduced to machinery at a young age when his civil engineer father used to take the young McIntyre to work with him on weekends and school holidays. “I grew up around the motto – listen, look, learn. If you couldn’t do those things you had to get off the site. That was the attitude of the old guys,” he says. “When I pulled my first lever on a machine I was hooked.” McIntyre left school at 15, with what he admits were questionable reading and writing skills, and by the time he was 17 ran two small businesses of his own in cartage and contracting. McIntyre was on the up until a work accident saw his right arm crushed in between a truck and a building. McIntyre could no longer work in the job he loved and, with a lack of other career options, 10 years later was broke. That’s when he had a dream about writing a book. McIntyre says it wasn’t the obvious career for him to pursue considering he could barely read or write. So he scribbled some stuff down on a piece of paper and went to visit his old primary school teacher – Jean Smith - who he hadn’t seen since he was seven years old. “That was the time I’d turned off in school because I believed that all you needed in life was to learn to pull levers,” explains McIntyre. “So I decided to go back to primary school.
Whether I was allowed to do that or not I don’t know – I just did. “The first day I went to school with my little bit of paper and the teacher told the kids I was going to read them my story. I shook like a leaf. I’d never read out loud like that before. I got through the first sentence and asked Ms Smith if she’d help me. She said ‘I’ve waited 30 years for you to say that’.” McIntyre continued on at school, improving his reading and writing, editing his story and reading it aloud to the children. The result was the first of his Doug the Digger books, stories educating children about important lessons on the work site that he had learned himself as a child based around – listen, look, learn. Understandably given his past experience safety is a major theme. “You only have to look at a busy sandpit to see that children really relate to a love of machinery. The books were my rehab. I needed to do something positive with my love and passion of the industry and being around machines.” The books, which McIntyre self-publishes, also focus heavily on the importance of reading and writing no matter what your chosen career path. “Even guys operating machines have to do paperwork these days. It’s become more important. “You can be the best digger driver in the world but if you can’t fill out a time sheet you can’t get paid. If you can’t work out a plan how will you do the job?” Doug the Digger was released in 2000 on McIntyre’s 40th birthday. McIntyre door knocked around bookstores and the books were eventually sold in Whitcoulls and small bookstores. Duffy Books in Homes, the charitable organisation started by writer Alan Duff to promote literacy, took note and asked McIntyre to come on board. He has now told his story at over 700 school assemblies from Cape Reinga to Bluff. It is his up-front, honest, pulling no punches attitude that is winning him young fans as McIntyre
“You can be the best digger driver in the world but if you can’t fill out a time sheet you can’t get paid. If you can’t work out a plan how will you do the job?”
Valuable insight: Youth into Industry students on a site visit to Fulton Hogan in Whangarei.
24 Mining NZ » Winter 2014
Alistair McIntyre, with Youth into Industry students on a site visit to Cookes Bridon in Whangarei. arrives chilly bin in hand (“my brief case”) and shows kids how he wrote the books and organised the illustration, graphic design, publication etc, which he describes as being “just like contracting”. McIntyre indulges his love of machinery and encourages kids and teenagers in this career path by bringing a CAT digger he has dubbed ‘Little Cutie’ to schools and universities. He sets the area up like a work site and then takes students through a safety induction before they are allowed to operate under instruction. “I ask the students to write the safety steps down. That’s to encourage them in the importance of reading and writing. Often they might be reluctant readers and writers but when they get out there in a machine their concentration, hand and eye skills are way out there. The teachers freak out because they
have had difficulty getting some of them to read and write. It’s about giving these kids something hands on to do. I can pick these kids out a mile off because I was once one of them myself.” But it is not just young people that are hearing McIntyre’s inspiring message about the industry as well as overcoming adversity. McIntyre is an associate member of the New Zealand Contractors Federation and spoke recently at the Institute of Quarrying NZ Inc and Aggregate and Quarry Association conference. But as much as he loves the industry, McIntyre is also critical of it. Feeling that the industry was not taking a big enough interest in students and bringing on the next generation he decided to put his money where his mouth was and set up his own course called Youth Into Industry for 16-18 year old students. The course covers important industry skills such as safety and people skills. Before they are even accepted for the course each student must be selected and successfully pass a drug test. McIntyre has formed links with around 30 local companies such as Hirepool and quarries where students can gain experience and complete site visits to see what the job entails. Students can also complete unit standards and often achieve work placements leading into full time jobs. One particular success story stands out in his mind, possibly as it mirrors his own. “There was one kid, I could hardly read his writing when he started, and he completed seven unit standards. I suggested he carry on and he completed 35 unit standards in the end. Now he’s on a casual contract job and the company is looking at offering him an apprenticeship but 18 months ago he could hardly read or write.” Despite his success he is also aware there is still a lot of work to be done in other parts of New Zealand: “The problem I see is that the industry is still not professionally promoted at schools. Young people often only enter the industry if they know someone working in it like I did. With the right support what I am doing could be rolled out around the country. I do this because of my love and passion for the industry and giving back to students some of the opportunities I had as a young fella. “It’s always the importance of reading and writing and how they present themselves. It opens up doors for them. It’s about training our youth, investing in the future.”
Minerals » Industry News
CRP upbeat on marine consent Lynx awarded
platinum permit
Hugh de Lacy Chatham Rock Phosphate (CRP) is “very, very confident” its marine consent licence to mine phosphate nodules from the Chatham Rise sea-floor will not be stymied by the Environmental Protection Authority (EPA). The listed company was last December granted a 20-year permit to mine the sea-floor for fertiliser, and the EPA submission is now the only hurdle standing in the project’s way. Company chief executive Chris Castle told Mining NZ that “on the basis of the law and our interpretation of the Act” the EPA would not stand in the way of mining. Since the granting of the licence, elements of the deep-sea fishing industry have claimed that mining would lead to devastation of the marine environment. However Castle said CRP’s research proved the environmental impact would be negligible, and that’s what would be taken into account by the EPA. “It’s a decision-making committee that forms a view based on the evidence we put up,” he said. CRP has spent $27 million of investors’ money getting the project this far, and will need to raise more money to take it through the end of the year. However the company has decided to hold off on its plan for an initial public offering (IPO) on the London Stock Exchange’s secondary market, AIM, until the EPA’s decision. which does not now look likely to arrive before December this year. “The directors have decided it is preferable to have an IPO in London after we receive the marine consent,” Castle said. To further simplify the EPA submission, CRP had also decided to remove nearly 5000sqkm2 from its consent application. This would reduce the total area by about half, something Castle said would have no major impact on the company’s first 15 years of mining.
Chris Castle: “We have a strong business case for what is a very strategic material.” CRP’s Mining Permit was the first granted under the amended Crown Minerals Act which came into force in May 2013. “We had applied under the previous legislation, so our application was transferred to the new regime. With new staff working to a new Act, the decision making process took a bit longer than expected.” Castle says the project will contribute around $900m to the New Zealand economy and around $250m a year in exports and import substitution. Chatham Rise rock phosphate has proved effective as an ultra-low cadmium direct-application fertiliser which can reduce run-off effects on New Zealand waterways by up to 80 percent, he says.
“We have a strong business case for what is a very strategic material. If there was a disruption in supplies from Morocco where most of the world’s phosphate is currently mined, it would create huge issues for the planet.” Castle says CRP’s current marine consent application is a “much better document” than the preliminary version written in April, and the company is confident of a successful outcome to the process. “Unlike the Mining Consent, the Marine Consent process has a statutory time limit of six months before a decision has to be made. All going well we will be fully permitted by December this year and mining by late 2016 or early 2017.”
Lynx Platinum Limited has been awarded the only exploration permits announced as a result of the New Zealand Platinum Tender 2013. Lynx Platinum Limited is a wholly owned subsidiary of Coronado Resources Limited, a Canadian exploration and development, power generation and retailing company. Lynx has been awarded three exploration permits covering 355sqkm near Murchison and two exploration permits covering 168sqkm north of Invercargill. Each permit lasts for five years and allows the company to explore for metallic minerals. Energy and Resources Minister Simon Bridges says the permits constitute the most significant new minerals exploration activity in New Zealand by one company in several years. “It is encouraging to see a new minerals operator enter the New Zealand market, especially when the international price of metallic mineral commodities is low and investors are understandably selective about where in the world they put their money,” says Bridges. The tender process included assessment of Lynx’s financial and technical capability, and its ability to meet health, safety and environmental requirements. Land access must be negotiated with landowners and mitigating environmental impacts must be agreed with the Department of Conservation. Lynx has to comply with local council requirements under the Resource Management Act and seek a mining permit. Lynx will spend around $3 million over the first three years and if successful in its explorations this figure could rise to $7.5m within five years. Separate to the tender process Lynx Platinum Ltd has also applied for a minerals exploration permit in the Bluff area, which is currently being considered by New Zealand Petroleum and Minerals.
Winter 2014 » Mining NZ 25
Industry Comment » Legal
RMA: shifting the goalposts? T
he purpose of the RMA is to achieve “sustainable management”. In general terms, and relevant to mining, the Courts have up until now determined whether this purpose is met by taking an overall judgment approach to the economic benefits and environmental effects of a particular proposal, and have steered away from applying environmental bottom lines, with some exceptions. The most recent high profile example of this was Buller Coal Ltd’s consent applications to mine at Denniston Plateau. When applying the overall judgement approach consents were granted, but the court noted that it was a finely balanced decision weighing economic benefits against adverse effects. The question is, in the future, will such finely balanced matters fare the same way as the Supreme Court has shed doubt on the appropriateness of an overall judgment, preferring an approach that applies a strict interpretation of planning documents, when they are worded in prescriptive terms, and corresponding application of bottom lines. This has implications for the mining industry, as the content of planning documents could make or break a particular proposal.
Maree Baker-Galloway
Miners are advised to take a strategic approach to future-proof opportunities for mining, by taking part in the statutory plan making processes from national policy statements down, to ensure that any future mining proposals can be considered on their merits. In April 2014, the New Zealand Supreme Court released its decisions on two appeals in relation to New Zealand King Salmon’s (“King Salmon”) proposals to establish salmon farms in the Marlborough Sounds in areas of outstanding natural landscapes. The decision on Environmental Defence Society Inc (“EDS”) appeal will have a direct effect on decisions made on district and regional plans, fundamentally changing the approach away from an “overall judgment” to a more specific disciplined focus.
In the coastal environment this will have significant implications for mining, quarrying and other extractive activities, both onshore, and in the marine environment.
The Supreme Court decision’s influence on resource consent decision making is yet to be determined. The decision will affect the manner in which the New Zealand Coastal Policy Statement (NZCPS), and potentially other National Policy Statements (NPS) are applied in relation to Part 2 of the RMA. The decision finds that decision makers need not turn to Part 2 at all, (and do an overall broad judgement) when considering the making or changing of a plan within the scope of the NZCPS. Whether or not this reasoning applies to other NPS is likely to depend on the particular drafting of that NPS and the circumstances in a particular case. All regional policy statements, regional plans and district plans are required to give effect to the NZCPS. The Supreme Court interpreted the NZCPS as setting a bottom line, when it came to protection of outstanding natural landscapes. Subordinate plans must require the ‘avoidance’ of adverse effects on outstanding landscapes and areas of outstanding natural character, as stated in the NZCPS, and this requirement can’t be watered down by subsequent application of the overall broad judgement. In the coastal environment this will have significant implications for mining, quarrying and other extractive activities, both onshore, and in the marine environment. Where an area is classified as “outstanding” stringent controls will then be required, both at a rule level, and reflected in strongly worded policies.
In respect of environmental bottom lines, the Supreme Court found that while section 5 is open textured and sets the RMA’s overall objective, there is a “protective element” to the concept of sustainable management. As such it is legitimate for an instrument such as the NZCPS to give effect to that protective element by setting environmental bottom lines. The effect on resource consent decisions, as opposed to the changes to plans and policy statements, will be less direct, and the NZCPS is only a matter to which regard must be had, rather than “give effect to”. However despite this, the decision has elevated the importance of protection of outstanding landscapes in a general sense, and it is quite possible that decision makers will be under pressure from stakeholders to place more emphasis on landscape and natural character matters. In conclusion the significance of this decision could be wide ranging. It has direct implications on the content of coastal plans around the country. Its influence on the content of other regional and district plans - as they relate to NPS and even regional policy statements - is yet to be determined, but there is no doubt that it will be the focus of participants in planning processes from now on. It is also likely that the Supreme Court’s statements in respect of environmental bottom lines and the appropriateness of the overall judgment approach will be tested in the context of decisions on resource consents. Maree Baker-Galloway Partner-Owner Anderson Lloyd
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I have been a customer with James ever since he became established in NZ. In 1998 there was no one who could manage the size of radiators we have in the mining industry nor was anyone able or willing to turn them around in the same time frame as it took to change an engine out. I have been impressed with his ‘can do’ attitude & his ability to work within the tightest schedules & delivery times... even to the point of direct delivery to site if transport is going to be a problem. I have not experienced any deficiency in work quality nor required any re-work where Industrial Radiators have been involved & will continue to utilise & support their services for this industry. Cliff Webb, Group Maintenance Manager, OGL (NZ) Ltd
40 Hands Road, Middleton, Christchurch 8024 Ph: (03) 338 8016 | Fax: (03) 338 8017 | Email: jimmy@industrialradiators.co.nz
26 Mining NZ » Winter 2014
www.industrialradiators.co.nz
Industry Comment » Straterra
Legislation overdue for overhaul The Conservation Act is outdated and demands a thorough overhaul, writes Bernie Napp, policy manager, Straterra.
L
ast week the media reported Conservation Minister Hon Dr Nick Smith’s view that he “may tweak” the Conservation Act 1987 in relation to the NZ Fish and Game Council. This body is mandated under the Act to manage wild trout, salmon, ducks, pheasants, quails and such. The controversy concerns its advocacy on freshwater conservation. While you are about it, Minister - please review the entire law. The reasons for so doing are many. The Department of Conservation (DOC) administers around 4500 businesses on conservation land, including 110 mines and quarries. Yet, there is no mention of economic activity in the definition of conservation (section 2), or in DOC’s functions (section 6), other than to “allow” tourism. Despite the recent DOC restructuring, aimed at working more in “partnership” with businesses and other stakeholders, there is no statutory requirement in the Act for staff to do so. While there are many competent DOC staff who engage constructively with minerals businesses, the feedback to Straterra is that the time frames can be long, and the processes followed, uncertain or convoluted. As a typical example, the applicant for an access arrangement or concession submits to DOC a piece of requested information, which is then followed by a request for something else, and so forth. In such circumstances, it is impossible for the applicant to manage adequately its part in the process or its costs, even if it has an otherwise excellent relationship with DOC. We also know of cases where businesses are asked to obtain approvals under heritage legislation before lodging an a/a application, which unnecessarily extends time-frames, where an a/a application did not progress for reasons unknown, and where conditions on the concession are incompatible with conditions in the a/a. There are two sides to every story of course, and it is possible that some applicants may be deficient in their handling of their part in regulatory processes. That would be a source of frustration for DOC. Either way, the interaction between minerals businesses and DOC could be improved, a call to action for Straterra and DOC to work together to resolve the issues. But that would be only an interim fix. Our advocacy would be more convincing – and effective - if there were a stronger basis for it in legislation. The Minister’s foreword in the DOC Statement of Intent 2013-2017 to the effect that DOC “intends to increase business partnerships” is a fine sentiment but is not supported in the Act. That is also the case for similar wording in the new draft Conservation
Mining companies seeking to operate on conservation land may require up to five different approvals under separate pieces of legislation Management Strategies (CMS’s), which are DOC’s statutory land management planning documents. At issue is the sequential passing and amendment of resource management legislation in New Zealand without synthesis or integration. As a result, mining companies seeking to operate on conservation land may require up to five different approvals covering environment and heritage under separate pieces of legislation. As to the Conservation Act, its focus on enactment in April 1987 was the conservation of natural and historic resources for their “intrinsic value”. Immediately, the status of electricity generation and transmission schemes, roading, grazing licences, mines and quarries on conservation land became unclear, noting that skifields, hotels and other “tourism” infrastructure could be “allowed”. The 1990 amendments brought in, eg statutory land management planning, and the rationalisation of community advisory bodies into several conservation boards and the NZ Conservation Authority, responsible for approving national park management plans and CMS’s, and for providing policy advice to the Minister. Fish and Game replaced the earlier acclimatisation boards. In 1993 heritage matters were transferred into the new Historic Places Act (replaced in 2014), with
It is difficult for DOC to be accountable to the Government if its land management plans are approved by others.”
functions transferred to the Minister of Culture and Heritage. Nonetheless, DOC still manages historic heritage on conservation land. In 1996 the concessions provisions were bolted onto the Act as Part IIIb, to rationalise the regulation of economic activity on conservation land. This system captures ancillary infrastructure to mines, such as roads and processing plants, where these lie outside the footprint of the operation (covered under the access arrangement provisions, introduced in 1991 into the Crown Minerals Act). The above is a source of confusion and anguish, to all with an interest in minerals exploration and mining on conservation land. While public participation is integral to most mining-related resource consent applications under the Resource Management Act 1991, that is not always the case under the concessions or wildlife permit regimes. We have previously suggested aligning resource consent, access arrangement and concession processes into one process managed by the Environmental Protection Authority, at least for significant projects. That would provide better for public participation. General Policies were introduced in 2005 to provide for place-based conservation management under CMSs, i.e., for management to be attuned to the values present at each place. Arguably, that makes land classes such as “stewardship areas” (sections 25 and 26) obsolete. Discussions on this matter are an unnecessary distraction, as Bathurst Resources found out on the Denniston plateau. In our view, the 2013 Parliamentary Commissioner for the Environment (PCE) report on stewardship areas is largely irrelevant, except on land swaps (section 16A, inserted in 1990). Such are allowable if the conservation values in conservation land are improved overall as a result. That was an early consideration of “net conservation benefit” in New Zealand, though difficult to quantify because the values in the land cover biodiversity, recreational opportunities and historic heritage.
The PCE, Dr Jan Wright, argued against land swaps where high values are present in stewardship areas, a frequent occurrence. We hold the opposite view - this option should be extended to all conservation land not listed in Schedule 4 of the Crown Minerals Act (where mining is prohibited, eg national parks) because the safeguards exist. At issue, if there is an issue, is the interpretation of section 16A. Instead of reclassifying stewardship areas, as Dr Wright proposes, this land class should be abolished, and the CMS planning system and General Policies would also work better as a result. While proposing solutions, the conservation boards and the NZCA should have their role amended to avoid interfering unreasonably in DOC’s exercise of its functions. It is difficult for DOC to be accountable to the Government if its land management plans are approved by others. These statutory bodies too have become anachronisms with the evolution of DOC, the science, and communications technologies such as the Internet and email. Taken together, the case for reviewing the Conservation Act is substantial. There would still be conservation land, and economic activities occurring on it would still have to meet conservation-related legal tests, under the Act and CMS’s. There would still be the opportunity for DOC and businesses to work in partnership, when enabling development, and in pursuit of conservation objectives. The crucial difference is that economic activities would be explicitly recognised in the Act as integral to conservation and DOC’s functions. It is time to accept that mining – subject to high standards - is a natural part of the public conservation estate in
New Zealand. Bernie Napp worked previously for the Department of Conservation in communications and policy and is the author of “A short history of DOC: 1987-2007”
Winter 2014 » Mining NZ 27
Industry News »
Celebrating ‘heart of gold’ Real Steel
gets ESCO dealership
Karen Phelps Waihi is aiming to strengthen its ‘New Zealand’s Heart of Gold’ brand with the opening of the $2.6 million Waihi Gold Discovery Centre. Eddie Morrow, chief executive of the Vision Waihi Trust which was set up to manage the project, says that the centre will be a key driver in transforming Waihi, Hauraki and the Southern Coromandel region into a significant visitor destination generating positive economic growth for the town of Waihi and the wider region through extra visitor spend. The concept originated from a community consultation process that began in 2003. Led by Newmont Waihi Gold at the request of the Hauraki District Council, the public was asked to discuss what the Waihi community would do post mining. “When you have one industry that is a major economic driver in a small community we asked what the impact would be of losing that major industry,” says Morrow. “The Waihi Gold Discovery Centre was seen as one project which would greatly build our tourism.” Gold was first discovered in Waihi in 1878 and the 500sqm centre will tell the story of the town’s long-running relationship with the precious metal. Morrow says the centre is a unique proposition as it not only tells historical stories but also the modern story of mining in the town as it exists today. He says that the centre will offer a “hands-on experience” for visitors and has been designed with input from some of the team that set up Te Papa.
28 Mining NZ » Winter 2014
The new Waihi Gold Discovery Centre will tell the story of the town’s long-running relationship with the precious metal.
Visitors will be able to engage in activities such as feeling the shaking of a 1900’s air leg hammer drill as it bores into a wall of rock and pushing an explosive plunger to set off a simulated explosion. The exhibition also includes a 3D hologram style theatre and other interactive displays. As well as the discovery zone, the centre will house a contemporary iSITE. The centre is a public-private partnership and includes assistance from the Hauraki District Council, New Zealand Trade and Enterprise and Newmont Waihi Gold.
It is anticipated to attract around 30,000 visitors per annum, employ approximately nine staff and generate around $1m per year in turnover. “It’s quite exciting to be on the cusp of seeing the centre open as it’s been a very lengthy process,” says Morrow. “It’s great to see a project like this open that is so relevant to the town.” • The Waihi Gold Discovery Centre is due to open in September. For more information see www.golddiscoverycentre.co.nz
New Zealand company Real Steel Ltd has signed a dealership agreement with US-based ESCO Corporation. ESCO Corporation is a leading independent designer, manufacturer and provider of highly engineered wear parts and replacement products used in mining, construction, industrial, and oil and gas applications. The company operates in 28 countries on six continents, including an expansive network of 27 manufacturing facilities and more than 50 sales and distribution offices. The arrangement with Real Steel gives New Zealand customers full access to ESCO’s quality wear products, including the market-leading Ultralok hammerless tooth system which brings unparalleled safety and performance to customers with small- to medium-sized loading units. Customers also receive the benefit of Real Steel’s nationwide sales support on the ground, a wide range of complimentary products and ten years of GET experience. “ESCO’s presence in the New Zealand market is bolstered through the Real Steel relationship, which will mean customers benefit from local, tailored service and supply with immediate access to the company’s global expertise and technical strength,” says Steve Lennard, managing director for ESCO’s Australasia region. Wellington-based Real Steel is a family-owned business specialising in the design, build and supply of high strength and wear resistant plate and wear parts for the quarry, mining, forestry, transport and recycling industries.
Industry Comment » Tax
Keeping the taxman away... I
t’s one of the most recognisable expressions around: “An apple a day keeps the doctor away”. I am not sure what the fruit of choice is for your average taxman – but there certainly are things you can be doing to keep him away! The first thing to do is keep on top of the simple things. Make sure your various tax returns (income tax, FBT, PAYE, GST) are filed on time. Not filing on time signals to Inland Revenue that you are disorganised – and a disorganised taxpayer is less likely to get things right. This will also prevent late filing penalties – which arise even for the late filing of nil returns. You should also make sure that you pay your various taxes on time. Paying late is also a signal to Inland Revenue that you are disorganised. Late payment penalties will almost always be higher than the cost of borrowing to pay. Helpfully, Inland Revenue’s website has an interactive questionnaire which allows you to generate a list of due dates that apply specifically to you. An interesting area is Inland Revenue’s approach to voluntary disclosures. A voluntary disclosure is where a taxpayer has identified that they have made a mistake and have contacted Inland Revenue to disclose the mistake. Some taxpayers worry that disclosing an error will invite unwelcome attention from Inland Revenue. In practice it can be quite the opposite. Inland Revenue view voluntary disclosures as a good thing. They derive comfort from the fact that a taxpayer
Don MacKenzie
has processes in place that detect errors and that when an error is detected the taxpayer puts their hand up rather than trying to hide it. In other words the taxpayer is showing that they take reasonable care by making voluntary disclosures. Inland Revenue has told us that not making voluntary disclosures is one of the factors that are used to select which taxpayers to audit. Making a voluntary disclosure can also prevent the imposition of a shortfall penalty of up to to 20% of the tax shortfall. To identify errors you should have robust procedures in place for ensuring that the returns you file are correct. This can include multiple levels of review, or at least having the return prepared by one person and reviewed by another. You should also document how returns are prepared and what reviews are undertaken. Inland Revenue will often ask what documentation exists. Having documentation shows that a taxpayer is methodical and more likely to have got things right. This will often result in fewer questions from Inland Revenue.
Inland Revenue may ask a taxpayer for information. Sometimes this is part of an initiative into a particular industry. Other times it is just random. The speed and accuracy with which you respond can indicate the quality of your records and how in control you are of your business affairs. A taxpayer with poor record keeping is more likely to invite further scrutiny. Inland Revenue has invested significant resources collating industry benchmarks. These benchmarks may relate to anything from number of employees through to gross profit. If you fall outside the benchmarks that Inland
Revenue consider should apply to your business or industry then you are at increased risk of extra attention. Inland Revenue has increased its sophistication for selecting taxpayers to focus on significantly. It has large amounts of information available to it and is increasingly using this information to identify which taxpayers are most likely to be making mistakes. Some of these selection criteria are in your control. Don’t put your hand up for any unnecessary extra scrutiny. Don MacKenzie (Partner - Deloitte)
Inland Revenue has told us that not making voluntary disclosures is one of the factors that are used to select which taxpayers to audit.
Winter 2014 » Mining NZ 29
Accuracy, reliability in weighing SI LODEC is the company to turn to for electronic weighbridge, conveyor belt and onboard weighing solutions. The company offers the finest quality weighbridge solution with standard weighbridge sizes ranging from eight metres through to 25 metres with a maximum capacity of 80 tonnes. The platform’s superior design and construction is comprised of various removable panels and utilises advanced welding techniques which guarantees both a high level of strength and wear resistance with a perfect fit between panels. Each panel is constructed of 6mm u-shaped beams topped by 8mm checker plate ensuring the vehicle adheres to the surface perfectly. The weighbridges can be mounted either directly onto an existing hard surface or pit mounted. All weighbridges come with fully hermetically sealed (IP68) stainless steel load cells and offer one of the lowest profiles on the market today, and with electronics backed locally in New Zealand with support available 24/7. SI Lodec is able to offer a wide array of packaged options specifically suited to the customer’s site requirements, from a basic display simply offering weight only through to a fully automated unmanned weighbridge complete with numberplate recognition and barrier arms and able to link directly into their
invoicing system to streamline their accounts process. And because it can tailor a solution specifically for its customer’s needs this means the client does not pay for features that they don’t require. The company’s conveyor belt scales provide outstanding accuracy in conveyor belt weighing with reliable in-motion weighing and optional connectivity to a printer, PLC or computer. SI Lodec’s conveyor belt scale solution features an easily installed modular design. A wide range of products and accessories is also available. Another thing that sets SI LODEC apart is its unparallelled before-and-after sales support and service. SI LODEC’s promise is to remain committed to customers before and after they have made a purchase. This is just another part of what makes them the leader in electronic on-board weighing. “Once our weighbridge or conveyor scales have been installed either by our customer or by one of our factory trained staff we will calibrate the scale specifically for our customer’s requirements and train their operators in its use and functions.” Even after this training is complete additional support is available from SI Lodec 24-hours a day 7 days a week. SI LODEC started more than 20 years ago in
Once our weighbridge or conveyor scales have been installed we will calibrate the scale specifically for our customer’s requirements.”
SI LODEC’s BeltWay conveyor belt scales complement the weighbridge systems.
New Zealand and since that time has remained at the forefront of innovative electronic weighing technology. It is this experience that allows it to create weighing solutions for even the most complicated situations. Product is manufactured under strict international standards ISO 9000 and SI LODEC provides full warranty on parts. SI LODEC has always been dedicated to sourcing and manufacturing product of the highest quality to meet its customers’ requirements. SI LODEC is the only company offering a vast array of extra add-ons and features as
off-the-shelf solutions. It is almost always able to tailor specific requirements to meet its customer’s needs including printers, remote displays and overload warning systems. The company is able to interface with most of the available GPS and fleet management systems in use today. “At SI LODEC we constantly strive to develop and improve on our products.” “Our R&D Department is continuously coming up with improvements and tailoring solutions for the ever-changing requirements in today’s modern transport industry.” www.silodec.co.nz
cantly reducing down
OIL DISTRIBUTORS KEEPING NEW ZEALAND INDUSTRY MOVING