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Macraes gold mine – three new issues

August 27, 2001 - Wellington


Macraes gold mine – three new issues

Forest and Bird today raised three new issues about the proposed GRD Macraes mine at Reefton. These new issues are:
- How serious is GRD Macraes about mining at Reefton?
- What benefit does mining really bring to local communities?
- The private sector’s poor record in major dam projects.

Issue 1: How serious is GRD Macraes about mining at Reefton?

GRD Macraes has had the necessary legal permission (resource consents, access etc) to establish a large mine at Reefton in 1993. At the time, the granting of the access agreement was controversial. Yet since then GRD Macraes has not started mining. Instead GRD Macraes has altered the proposal, steadily enlarging it and guaranteeing it would be more controversial. Why?

“Enlarging the mining proposal may increase GRD Macraes’ book value. In effect GRD Macraes may have increased its value without doing any mining,” said Eric Pyle, Forest and Bird’s Conservation Manager.

Gold prices have been flat/declined since the early 1990s. “We suspect gold prices need to increase substantially for this mine to be really profitable,” said Mr Pyle.

Forest and Bird understands that the previous access agreement was a close call by the former Minister of Conservation. “GRD Macraes must have known there was a very high likelihood that this huge new mine proposal would be declined by the Minister of Conservation,” said Mr Pyle. “Is GRD Macraes simply stalling for time, waiting for the gold price to increase, but at the same time attempting to increase its book value?”

Issue 2: What benefits does mining bring to local communities?

“If mining brought real long term benefits to local communities, why aren’t the West Coast and Coromandels the wealthiest areas of New Zealand?” said Mr Pyle. “Whilst the West Coast has good growth now, it is not due to mining. The region’s economic growth is much more based on the natural values of the region than dirty, extractive mining.”

“Waihi, a mining town, has high unemployment – (8.0% compared to 5.7% for the Hauraki district and 5.1% New Zealand as a whole) and poor socio-economic status in New Zealand (71.6% of people on low incomes compared to 53.1% for New Zealand) and is the most deprived area in the Hauraki District,” said Mr Pyle. “Mining does not appear to have brought big benefits to Waihi. Will it bring similar “benefits” to Reefton?”

Issue 3: The private sector’s poor record in major dam projects.

Many private sector dam and hydro projects have a poor record in New Zealand. The Ruahihi, Whaeo and Opuha schemes have all suffered major failures.

“The proposed tailings dam is a huge engineering project,” said Mr Pyle. “Does the New Zealand private sector really have the capacity to design and build a large dam in one of the most difficult, high risk areas of the country.”

Further, GRD has limited mining experience. Reports commissioned by DoC have highlighted serious engineering uncertainties in Macraes’ proposals. “The company only owns one mine at Macraes Flat in Otago,” said Mr Pyle. “Has Macraes got the expertise to develop a huge mine safely in this very difficult terrain?”


- The New Zealand Herald on Saturday, 27 August, 2001, “Plunderer deserves no sympathy” has further information on issue 1: How serious is GRD Macraes about mining at Reefton?
- “Waihi rates 10/10 on the NZDEP’96 index, and has the highest percentage of adults on low incomes in the district – a very high 72%. Waihi also has the district’s highest unemployment rate at 8% and the highest percentage of single parent families (38%).” This quote and statistics from Hauraki District Council’s Community Census Report (1996) pp. 22-33.

Contact: Eric Pyle, Conservation Manager – phone 04 385 7374 work; 025 227 8420; email;

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