“Poor management” of mining backfill left a large hole on public conservation land. Farah Hancock reports. 

A problem caused by “poor management” of backfill at a mine on public conservation land would have cost hundreds of thousands of dollars more than the mine was bonded by to fix.

The mine in Mikonui Valley, south of Hokitika, was most recently mined for gold by NZG Limited. It was supposed to be replanted with thousands of native plants and recontoured. Instead it has been left bare for gorse to repopulate and a large pit remains.

The site is now signed off as rehabilitated by the Department of Conservation (DoC), barring some ongoing weeding.

Newsroom has made several queries to DoC about its process and decisions in regard to the mine. These have included Official Information Act (OIA) requests, through which internal correspondence was released.

Why there’s a hole left over

The site had been previously mined and DoC anticipated “some legacy mine pit or hollow” would remain even after recontouring by NZG. It said it sought to have this “minimised and made as natural as possible”.

DoC’s director for western South Island Mark Davies said the agency sets bonds as one of a range of ways to protect conservation land against risks from mining. The bond can be used to fix up projects where conditions have been breached, or a miner abandons the site.

For large-scale mines, bonds are set by independent experts. For medium and small-scale mines they’re calculated on the likely cost of rehabilitating the mine. DoC said just as a landlord doesn’t bond a house for its full replacement cost, it also sets a bond on a likely level of risk: “… it is not realistic for the Department to bond a miner for every possible eventuality.”

For the Mikonui mine, DoC said a problem arose with backfill. This problem wasn’t discovered until the mine was close to closing down and most of the soil at the site had been spread.

“Due to poor management of backfill by the miner, a steeper-sided and deeper pit than was initially sought by the Department has remained,” Davies said.

In internal correspondence released as part of an OIA request, DoC staff outlined the situation at the time: “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’s estimated the site is significantly under-bonded (potentially by hundreds of thousands).

At that point there were two ways to fix the hole. The entire site could have been reshaped, but Davies said this may have resulted in the loss of soil.

“The only option that remained to resolve the pit shape and size would have been sourcing and transportation of backfill from offsite which is impractical due to the volume of fill that would have been required. Importing significant volumes of additional fill also carries the risk of introducing further weeds to the site.”

He said the reference to the site being under-bonded by hundreds of thousands of dollars was in reference to the likely cost of trucking in soil to fill the hole.

“It would have been highly unusual to have anticipated the need to bring backfill from elsewhere or to have required a bond to cover its cost. In terms of cost benefit, very little if any ecological gain would have been achieved for the high cost of transporting fill.”

DoC’s senior permissions advisor, who penned the internal correspondence saying the site was under-bonded, recommended an amended rehabilitation management plan submitted by NZG Ltd be approved: “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).”

Native plants were not planted at the site due to the presence of goats. It was decided self-seeded natives would eventually replace gorse after around 30 years.

Newsroom has attempted to contact NZG Ltd via its listed accountant. No response has been received. A former director of NZG Ltd, David Wong-Tung, the husband of National Party leader Judith Collins has threatened defamation action against Newsroom over our coverage of the mine rehabilitation.

Avoiding future pits

DoC is satisfied other mines on public conservation land have bonds which are adequate. Where they’re not, Davies said negotiations were underway to address this.

“However, the Department is aware that on any given day a mine may be considered under-bonded if the nature and scale of mining has changed since the last time the site was monitored by the Department.”

Davies said the processes for managing mines were constantly being reviewed, including learning from the Mikonui site.

More talking may have resulted in a smaller hole left in public conservation land.

“Maintaining better ongoing communication with the miner to understand their longer-term expectations about mine progress, rather than bonding, would have better avoided the imperfect final mine landform.”


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.

June 2018 – NZG representatives tell DoC they are waiting for management to visit the site and discuss rehabilitation, saying the plan is to reduce the disturbed area as soon as possible.

September 2018 – During a monitoring visit DoC staff noticed the pit was deeper than it was in May. Contractors were finishing work and removing machinery. DoC sent a letter to NZG asking how the breach to the Access Arrangement was going to be addressed, and advising NZG the bond was being reviewed.

October 2018 – DoC met with NZG to discuss a deadline for rehabilitating the mine. NZG asked for a grace period as it was trying to sell the mine

March 2019 – NZG told DoC it would develop a rehabilitation plan for the closure of the mine.

20 May 2019 – DoC permissions advisor recommends the amended rehabilitation conditions be accepted.

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