New Zealand Herald
27 August 2012
Could seabed mining boost our economy [New Zealand], or are we out of our depth?
Seabed mining is the business of sucking huge amounts of sand from the sea floor, extracting valuable minerals from it using magnets and filters, and then pumping the remaining sand back down. Its supporters say it could provide a multi-billion dollar boost to the New Zealand economy and create hundreds of jobs without significantly damaging the ocean ecology. But opposers reckon that current plans will fritter away this resource for precious little return while devastating marine life, our fisheries and our beaches.
According to a recent report from the Royal Society of New Zealand, our seabed holds commercial mineral deposits on the Campbell Plateau, the Chatham Rise, and more potentially valuable sites along several arcs of active and extinct volcanic on the seabed around our shores. The active underwater volcanoes, or black smokers’, also hold out the tantalizing prospect that their continuing formation of polymetallic sulphides’ containing iron, manganese, gold, silver, copper, and zinc could become a sustainable and replenishing stock of these minerals. A six-year study by GNS science suggested that there could be tens of billions of dollars worth of minerals to be found offshore.
Currently four companies have permits to explore this awesome potential. One of the most active is Trans Tasman Resources Limited, which includes former New Zealand Prime Minister Dame Jenny Shipley on its board. The company was created in 2007 specifically to exploit the billions of tonnes of volcanic iron ore deposits in the sands off the west coast of the North Island. The company has been granted exclusive mineral rights out to 12 nautical miles along the Taranaki Bight from the Rangitikei River in the south and the Waikato River in the north.
TTR has completed initial survey work that suggests there are 481 million tones of iron ore available in the South Taranaki Bight alone, buried up to nine metres below the seabed. TTR also holds a Continental Shelf Act Prospecting Licence for a further 3,314km2 in New Zealand’s Exclusive Economic Zone. The plan is to extract iron ore to make steel in specialised plants in China and Russia. And although it can be processed into steel here at New Zealand Steel’s Glenbrook steel mill, TTR’s current scheme favours extracting and processing the ore out at sea, before shipping it direct to Asia. The company estimates that a total of $1 billion needs to be invested to develop the offshore mining industry, although the potential sources of that investment are not yet known.
Andy Sommerville, TTR’s environmental and approvals manager, says the company is ready to lodge applications to start mining South Taranaki Bight area as soon as current changes in the law governing the use of New Zealand’s Exclusive Economic Zone are finalised, something that was due to happen any day as Element went to press.
“If we could get US$100 per tonne for our 480 Mt then that would equal $48 billion,” he says. “If developed at five million tonnes per year, that would equal revenue of $500 million per year and from that costs would need to be deducted. At that rate too, the 480 million tonnes resource would last 96 years.”
According to TTR it is difficult to predict the scale of the industry that could develop and the speed this might happen. Elsewhere around New Zealand a company called Neptune Resources has been surveying the Kermadec region’s black smokers for mining potential, despite the fact that it is a benthic protection area’ in which bottom trawling for fish is already banned and the area around the Kermadec Islands is New Zealand’s largest marine reserve. And Wellington-based Chatham Rock Phosphate is gathering up global investors to begin mining the seabed around the Chatham Islands for the essential ingredient in manufactured fertilisers.
“There has previously been mining for similar product at Waipipi, just out from Waverly, and there is currently iron ore produced at Taharoa, for export, and Waikato North head, for steel production at Glenbrook. Whilst these are onshore they have been established for a number of years resulting in no great rush to develop similar mines.”
Kiwis Against Seabed Mining (KASM) is hoping that no seabed mining happens at all. The group was founded by Tim Rainger, a long time surfer and author of the NZ Good Beach Guide, along with Phil McCabe who runs the Solscape eco-retreat and progressive learning centre and others around Raglan. KASM describes itself as a spontaneous community-based action group strongly opposed to nonessential seabed mining. The group has been busy raising awareness about the current proposals with a range of events and protests drawing hundreds of participants, and hopes to convince current and future governments to rule out any future seabed mining operations.
“The entire sea area from Whanganui to Kaipara, over 20,000 square kilometres, is covered by permits, held by several large companies, including Rio Tinto. If TTR is successful with its first application to mine, it would be natural to expect that similar operations may commence in those areas too. The cumulative impact of several similar strip-mining operations on the west coast would be an ecological tragedy. Obviously the snapper and several other recreational and commercial fish species feed from the bottom, and by disturbing the seafloor and thus removing their food supply, you critically endanger the entire ecosystem.”
Alongside the environmental arguments, protesters also point out that instead of Kiwi companies taking the lead and maximising the value for New Zealand, foreign-held companies like TTR are being allowed to strip-mine our nation’s mineral wealth as if we were an underdeveloped plantation economy. For example, according to Companies Office records only 3 per cent of TTR’s shares are held in New Zealand and Shipley is the only Kiwi at the top. And while Chatham Rock Phosphate is a Kiwi firm listed on the NZAX, Neptune is a wholly owned subsidiary of a US firm. Some indications suggest that beyond the returns the few New Zealand investors in these firms might be expecting, and the relevant taxation the companies might only pay somewhere between 1 – 5 per cent of net revenue from the mining to the government in royalties, depending on the amount of money being made.
However, Sommerville says:
“It is generally assumed that for an operation such as TTR is proposing over 80 per cent of the revenue stays in the country where the resource is located in the form of wages, taxes, royalties and other services.” But adds: “In TTR’s case this topic has not been examined in any detail so I cannot confirm that that will be the case.”
What Rainger finds disappointing is that it was Kiwi ingenuity in the shape of the New Zealand Steel Investigation Company that first developed the technology to process this material in the first place back in the late 1950s. He says:
“There will be few jobs and no real benefit for us, yet we stand to lose a significant portion of our inshore marine environment if this process goes ahead on the unprecedented scale that has been proposed. What the hell are we doing selling this resource wholesale, when we could reap a far bigger reward by processing it here? In so doing we could use the resource at a much slower rate which could possibly avoid the environmental catastrophe that would occur if the government were to allow wide scale exploitation over a long period.” He cites a 2007 Crown Minerals report which states that: “Production of added-value iron and steel products in New Zealand rather than export of the raw material iron sand should be the goal.”
Out of our Depth?
As for the potential environmental damage of seabed mining, the overall consensus is that these remain largely unknown, but it is accepted by all sides that seabed mining destroys every living thing in its immediate path. The key questions are: how big is the path, how often will it be travelled and how long before it recovers?
In the Taranaki Bight the assessment is complicated by the fact that this is an area subject to severe and near constant disturbance from the powerful forces of natural waves and currents. A recent Royal Society of New Zealand report said:
“The seafloor ecosystem undergoes natural disturbances from storms and other events that redistribute sediment and smother habitats on the seafloor. If the size, reach, and frequency of these natural disturbances mimic those of proposed mining activity then the resilience of these habitats to natural disturbance may be a useable proxy for the resilience of these habitats to disturbance from mining.”
In other words, the argument is that things are pretty rough down there for plants and animals, so the disturbance, while severe in the near vicinity and short term, may not represent a severe threat in the long run if it is not done on a grand scale. But the Society’s report does point out that: “if the natural and anthropogenic disturbances act on the ecosystem in a cumulative fashion such simple comparisons would be poor proxies,” meaning if we keep this up we may get more than we bargained for.
Other scientific studies of seabed mining have expressed concern about the possible destruction of seabed features including the black smokers that currently support all kinds of aquatic life, much of it relatively unstudied by science since they were only discovered in the late 1970s. TTR has stated it only proposes to mine sandy areas, generally out of sight of shore, presumably with the aim of avoiding this problem and the additional risk of smothering of more familiar high biodiversity rocky reef habitat near the shore. There is also the impact of large plumes of floating sand and dust in the water, which could inhibit filter feeding, the photosynthesis of plants, or even the ability of fish and plankton in the area to navigate and feed.
Some suggest that sediment plumes could also expose marine food chains to heavy metals, many of which can be ingested by marine animals either directly from the water or cumulatively by carnivorous creatures from the animals they eat. This could lead to cell damage, mutations and reproductive failure at even low levels of pollution and fatal poisoning if the levels are high enough. It might also lead to the poisoning of our own seafood, as has become depressingly familiar with mercury levels in fish.
Meanwhile, increased noise on the seafloor has been implicated in the disturbance of sea mammals like the critically endangered Maui’s dolphin, altering feeding patterns and possibly leading to increased boat collisions and strandings. Environmental group WWF has called for no seabed mining to be allowed inside the Maui’s dolphins habitat as part of a its mission to help protect the last 55 individuals over the age of one believed to survive.
The increased shipping traffic to service the mining would add to the disturbance, as well as potentially increasing the risk of invasive marine species due to the discharge of ballast water as the bulk ore carriers load. Not to mention the potential for shipping accidents near our fragile coastline so dramatically highlighted by the Rena example.
The doomsday scenario is that the cumulative effects could be sufficient to severely disrupt the ocean’s food chain in large areas of our seas, threatening all kinds of ocean animals, as well as our fisheries, our marine recreation and our tourism sector. Even surfing could be affected, as the sand bars that create the breaks get shifted around.
Perhaps best placed to understand these effects is the National Institute of Water and Atmospheric Research. But some of their scientists have been commissioned by TTR to do this research for the company, and so the institute is currently refusing to comment on the issues.
“Amongst the many experts that TTR has employed are a number of NIWA scientists looking at the existing environment and developing models to predict the effects of the activities. Relevant findings will be made public as part of the resource consenting process.”
But the ultimate spanner in the works for some seabed mining companies may prove to be economic, rather than environmental. Business analysts and China watchers have noted in recent months that huge stockpiles of iron ore appear to be building up on delivery at Chinese ports, indicating that while China is still importing large amounts of ore, it doesn’t seem to be using it at anything like the same rate.
TTR is confident it can provide cost-effective competition to current suppliers, and exploit its niche market successfully.
Rainger hopes they don’t get the chance.
“In the absence of a cohesive plan to manage the coast in a sustainable way, our group feels that the safest position is to do nothing,” he says. “So we will oppose any plans to mine it at this stage. In another environment, with win-win proposals on the table, we may have a different position. But currently, we do not support giving away large amounts of our natural capital for a pittance so China can keep producing unwanted steel at low cost.”
Whose sand is it anyway?
Some might argue that granting foreign companies the right to mine New Zealand’s seabed is inappropriate while controversy continues over who really owns it.
It had been widely assumed since European colonisation in the 1840s that the Crown owned the nation’s seabed. This was partly done by arbitrarily applying UK rules here, and partly as an assumed extension of the rights gained when coastal land was legally acquired. Meanwhile, various legal decisions as well as government policy documents and pieces of legislation have recognised a range of customary rights for Maori in relation to the seabed and oceans.
The controversy came to a head in 1997 when eight iwi of the northern South Island applied to the Maori Land Court to have the foreshore and seabed of the Marlborough Sounds designated as Maori customary land. The High Court then ruled that the seabed belonged to the crown as of British common law. But in 2003 the Appeal Court ruled that it was up to the Maori Land Court to decide.
However, the Government then stepped in and created the Foreshore and Seabed Act 2004. This reaffirmed Crown ownership, except where a group claiming customary rights had used an area of the public foreshore and seabed exclusively since 1840, and had held continuous title to the coastal land adjacent to it.
After widespread protests, and the decision by the Waitangi Tribunal that the Act was in breach of the Treaty, this Act was repealed and replaced with the Marine and Coastal Areal (Takutai Moana) Act 2011. This removed the need for continuous title to the coastal land near the seabed in question, but at the same time restated that every mineral other than pounamu is owned by the Crown.
Since then those opposing the legislation attempted unsuccessfully to force a referendum on the issue, and the debate has become immersed and enmeshed with new controversy over the government asset sales and Maori rights regarding freshwater. It could yet re-emerge as a sticking point for seabed mining.
Seabed mining and the law
At the time of writing parliament is debating the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill. This is intended to set up an environmental management regime similar to the provisions of the Resource Management Act for New Zealand’s Exclusive Economic Zone and continental shelf, which would mean seabed mining anywhere in the EEZ could require a new kind of ‘marine consent’.
The legislation is currently being amended after widespread criticism that it did not go far enough, particularly in failing to establish clear environmental principles and absolute limits on commercial activity.
Whether the final Act will offer these safeguards remains to be seen: in recent speeches environment minister Amy Adams has continued to talk of ‘trade-offs’, and has stated the government has no plans to ban seabed mining.