A mine on conservation land was under-bonded, “potentially by hundreds of thousands” giving DoC few options when reductions to previously agreed rehabilitation terms were suggested.
The bond on a conservation land mine was set so low Department of Conservation staff suggested the mine operators would likely “walk away” if it was increased to the correct level.
Reductions to rehabilitation measures were approved by the Department of Conservation (DoC) as the best outcome for the conservation land.
The site is now signed off as rehabilitated, barring some ongoing weeding. It’s been described as a “moonscape” by a conservationist. A large pit remains, there’s little topsoil and no replanting has been done.
The originally agreed terms included re-contouring of all areas, stripped topsoil and vegetation to be re-spread, revegetation of one area through spreading slash and planting indigenous vegetation at a rate of 5000 viable stems per hectare and replanting a second area at a rate of 2500 stems per hectare.
Drone footage shows the scale of the pit left behind. A person, just visible in orange at the start of the video, becomes ant-like as the drone rises. Video: Neil Silverwood
The land in Mikonui Valley, south of Hokitika, was most recently mined for gold by NZG Limited. At the time the company’s directors included James Blackwell, Julia Jiyan Xu, Stone Shi, and David Wong-Tung. The first three of these directors are also directors of Oravida NZ Limited. Wong-Tung, who is married to National MP Judith Collins, is a former director of Oravida NZ Limited.
Wong-Tung stood down from NZG Ltd as of 30 June. He has threatened to sue Newsroom over a previous story about the mine published on June 2, saying it defamed him and implied he and NZG Ltd are in breach. Newsroom is satisfied no retraction or apology is needed in relation to that story.
Documents received under the Official Information Act show NZG Ltd did breach a condition but this was not in relation to rehabilitation and DoC chose not to penalise the company. The agreed amount of land disturbance of 6 hectares grew to 7.6 hectares. All other conditions were met through variations to previously agreed rehabilitation conditions. These variations were approved by DoC.
When Newsroom first inquired about the changes to the rehabilitation conditions, Hokitika district acting manager for DoC, Suvi Van Smit said:
“More than half of the site was covered in topsoil. There was not enough topsoil stockpiled to cover the whole site due to the area being previously mined, which reduced the available topsoil. The site was located on moraine terraces and these landforms characteristically have naturally sparse topsoil profiles. The rehabilitated area without topsoil has a cover of fine materials and sediments and will regenerate naturally through gorse.”
The price of rehabilitation and bonds
Bonds are held so if a miner walks off the land or goes bankrupt without rehabilitating the mined area to the level agreed, DoC can undertake rehabilitation work itself.
In internal correspondence DoC outlined the situation it found itself after not setting the bond at the correct level.
“Over the past 12 months the Department has attempted to get NZG Limited to rehabilitate the site in accordance with their approved Rehabilitation Management Plan (a natural looking valley type landform). It is estimated the site is significantly under-bonded (potentially by hundreds of thousands).
“NZG have submitted an Annual Work Programme (AWP) and amendment to their Rehabilitation Management Plan that would see rehabilitation commence and rather than a natural looking valley landform; a basin would be left where the mine pit is located.”
According to the memo this new plan didn’t include the replanting of natives: “Due to costs and the presence of goats etc the area would be left to revegetate naturally, with gorse becoming established and dominating for the next ~30 years before being out-competed by self-seeded natives.”
NZG Ltd also suggested DoC do weeding and send an invoice to the company. This approach was rejected.
“It is estimated that the costs of implementing the proposed amended Rehabilitation Management Plan would significantly exceed the bond that is currently held by the Department, and would likely result in the best outcome for the site (i.e calling on the existing bond would not achieve much rehabilitation and NZG Limited would likely ‘walk away’ from any increase in bond).”
DoC’s senior permissions advisor, who penned the internal correspondence, recommended NZG Ltd’s amended rehabilitation management plan be approved.
A letter sent to Newsroom by David Wong-Tung’s legal representative says NZG Ltd paid more than $200,000 to re-contour the land.
Newsroom does not know what the bond was set at and considered to be potentially “hundreds of thousands” too low as DoC redacted this information from documentation.
Questions about bonds
Last week Newsroom put several questions to DoC on why the site was under-bonded “potentially by hundreds of thousands” and why an increase of bond in 2016 due to an expanded area didn’t pick up the shortfall.
Newsroom also asked if any other mines on conservation land are considered under-bonded, or if there have been any changes made in the process of setting bonds since the situation at Mikonui.
DoC said these questions would need to be answered as part of a separate Official Information Act request. These take up to 20 working days.
Newsroom has also attempted to contact NZG Ltd via its listed accountant. No response has been received.
Mines on conservation land
The promise made in Prime Minister Jacinda Ardern’s Speech from the Throne of no new mines on conservation land has not eventuated. A public discussion document due out in September 2018 has not been released and there’s no due date.
Until there is a change, all new applications to mine conservation land must be processed as per normal. Between November 2017 and January 2020, 21 mining applications have been approved. Fourteen of these are on land which hasn’t been mined before. The remaining seven applications approved were issued for land that had previously been mined or were re-issues of previously approved mining access permissions that had lapsed.
The following timeline is taken from information previously released under the Official Information Act.
March 2016 – NZG Ltd granted access for alluvial gold mining over 12.24 ha of Totara – Mikonui Forests Conservation Area for a term of five years over two sites.
NZG Ltd reported by DoC to have come to an agreement with a neighbouring miner. This miner had finished mining in 2015 and left a large pit. NZG Ltd arranged to use part of that site and backfill the pit which DoC described as “abandoned”.
(In a previous OIA response to Newsroom, DoC has said: “Our records show no mining companies have left sites that have not been rehabilitated to the satisfaction of the Department of Conservation on public conservation land in the West Coast area.”)
12 July 2016 – The Access Arrangement was varied to extend the mine over an additional 9.96 hectares. The bond “was increased to cover the growing liability of rehabilitating the site”.
24 November, 13 December 2017– NZG told it had breached condition 76 of its Access Arrangement by disturbing an area of 7.6 hectares. It had permission to disturb 6 hectares.
20 May 2019 – DoC permissions advisor recommends the amended rehabilitation conditions be accepted.