Tui Mine Is Not Ratepayer’s Responsibility

BY REIHANA and GEOFFREY ROBINSON

What’s wrong with this picture?

Three private companies get together to mine a Waikato mountainside. Since minerals belong to the Crown, the government agrees to issue a license. The mining scheme makes good profits, and the government collects royalties -- until problems arise. The mining company abandons its mine, declares bankruptcy, and leaves behind one of the worst contaminated sites in New Zealand history. The cleanup bill tops $17 million. So ordinary Waikato residents, who made none of the decisions and saw none of the profits, should take out their cheque books and pay millions of dollars of cleanup costs. Right?

That’s the Tui Mine story. But the worst part is that Environment Waikato councillors, fronted by Hamilton Cr Paula Southgate, think this is a good plan. EW recently announced it intends to spend $800,000 of ratepayer money this year on the mine cleanup, with Matamata-Piako District to stump up hundreds of thousands more. That’s on top of EW’s recently proposed rates increase. If EW doesn’t raise rates by another 1%-plus to fund the cleanup, the council says it may raid last year’s or this year’s budget surplus instead. Either way, it’s ratepayer money.

No one disputes that Tui is an environmental catastrophe that must be remedied. And the initial $9.8 million Ministry for the Environment estimate for government remediation costs has proven to be low. But whose problem is that?

Mining on the west side of Mount Te Aroha in the Kaimais dates back to the 1880s but stopped around 1900. A new limited liability company, Norpac Mining Ltd, was formed to restart the mine in 1967. Norpac was a three-way partnership between Cable Price Downer of New Zealand, North Island Mines (USA), and South Pacific Mines (Canada). Norpac produced concentrated ore of copper, lead and zinc, processing 120 tonnes daily while shipping thousands of ounces of gold and silver as a bonus.

Everything ticked along profitably until 1973 when mercury contamination was found in the ore and Norpac’s main Japanese client stopped buying. Norpac promptly shut the mine and walked away. Within two years the company was in liquidation. Since then, the “orphan” Tui mine site has been leaching acids containing heavy metals like arsenic, cadmium, lead, zinc and copper into the Tunakohoia and Tui streams while more than 90,000 cubic metres of contaminated waste remains behind an unstable tailings dam.

The environmental culprits are long gone -- but are they? Norpac partner Cable Price Downer was formed when the venerable William Cable Ltd and A & G Price Company merged in 1951, and in turn took over Downer Construction in the early 1960s. In 1989, with their Tui mess in the rearview mirror, the companies split up again. And today business is booming.

While NZ taxpayers pay millions for the Tui cleanup, the $5-billion, ASX-listed Downer EDI Limited is paying fat shareholder dividends from engineering, rail, infrastructure and – you guessed it – mining interests. As for machinery specialist CablePrice (NZ) Ltd, it’s now a subsidiary of mega-multinational Hitachi. CablePrice boasts a finance division providing “all types of finance products” – except mine cleanup costs, of course.

Fortunately, the Tui cleanup is well underway. It needs to be finished, but shouldn’t cost EW or Matamata-Piako ratepayers. Tui is clearly the government’s responsibility. And it’s the responsibility of elected local officials to deliver that message and not cave in. If Wellington can find hundreds of millions of taxpayer dollars to bail out finance company investors, it can pay to finish the job at Tui -- itself.

ENDS

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