Deadlocked: economics versus the environment at New Zealand’s NZ$1bn sand mining project

More than half of the country’s coal mines are managed by pro-Russian separatist militia.

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Mining remains one of the world’s most lucrative industries, and this is especially true of seabed mining, with technology only recently developing to the point where the vast swathes of mineral resources beneath the sea can be reached. TTR’s project alone has a JORC reported resource of 3.2 billion tonnes of vanadium rich titanomagnetite ore reserves, across an area covering no more than 36km² in the South Taranaki Bight, off the south-east coast of New Zealand’s North Island.

‘The mineral recovery operation has the potential to deliver significant regional and national economic benefits, at no cost to the New Zealand taxpayer, with sustainable best practice environmental management practice that has minimal, confined short term environmental impact,” said TTR executive chairman Alan Eggers, before highlighting the project’s significant economic potential. “When approved, the project fundamentals are robust and present a compelling investment opportunity to develop the NZ$1bn project.”

The project’s economic credentials are certainly impressive. Eggers pointed to a proposed NZ$250m direct spend each year on operations and goods and services in the Taranaki region, alongside the creation of 300 new local jobs, a training facility in Hawera, and the development of port infrastructure at Port Taranaki and the Port of Whanganui, as significant impacts for the local economy and population.

Beyond this, TTR anticipates the project to generate over NZ$120m a year in government royalties and corporate taxes, an operational spend of NZ$250m each year, mostly in the Taranaki region, NZ$325m in annual foreign exchange earnings, and a direct boost to New Zealand’s GDP of over NZ$145m.

Furthermore, the project offers a number of technological opportunities. The seafloor sand recovery operation is based on existing technology that will be supplied, commissioned and operated by DeBeers Marine, which has been involved in a subsea mining project with the Namibian Government since the 1990s, where the technology has been deployed in a similar water depth.

Eggers sees this as an opportunity to deploy and operate existing mining processes to recover minerals offshore, which could help demonstrate the efficacy of sand mining while encouraging future development in the sector. TTR has taken steps to refine the technology used by DeBeers, as its sediment discharge system, the process by which sediment is redeposited onto the sea floor, utilises a pipe and diffuser to just 4m above the seafloor, limiting the suspended sediment entering into the water column.

“TTR’s system to extract and redeposit sediment is designed to minimise the plume effect,” he said, discussing the feared ‘sediment plume’ that will be kicked up as mining processes lift around 50 million tonnes of sediment a year, before depositing 90% of the material back onto the sea floor.

“Around 30km offshore, where the mineral recovery operation will take place, the seabed areas directly impacted by removal and re-deposition of the titanomagnetite sand are not ecologically valuable and are readily restored in relative short timeframes as part of the consent requirements,” he continued.

Yet opponents argue that there is a risk associated with using technology that has yet to be tested in New Zealand waters. Namely, that someone and somewhere will be on the receiving end of these industrial experiments, an idea Cindy Baxter, chair of KASM, is not comfortable with.

“We don’t want to be that guinea pig,” said Baxter. "It's an untried and untested technology and it's very clear from Trans Tasman's application [that] they just don't know about the environmental effects. And none of the companies that have applied for seabed mining licences here have done their homework properly."

In response, TTR cited the joint venture between De Beers and the Namibian Government as an example of the efficacy of the process. While the project has been undoubtedly productive, reaching a record production of over one million carats in 2014, it has been criticised for its own environmental impacts. A government report cites “significant” impacts on local habitats and water quality, suggesting the impacts of seabed mining are something of a mixed bag.

Baxter also noted a divide between impacts on the local and national economies, commenting that the very nature of a large-scale seabed mining operation means that only a small percentage of any financial gains will be invested back into the Taranaki region.

“[TTR] was making claims about economic income to the region, but it's 450m offshore, [staffed by] fly-in fly-out [workers] and skilled workers who wouldn't actually bring money into the region; then in comes a ship to offload the ore, and off it goes to the Asian market,” she said. “There might be a helicopter pad or two, but the economic claims they were making would not stand up [to scrutiny].”

In response, Eggers advised that it is not a FIFO operation and all training facilities and workers will be based in the Taranaki region “as far as possible”. TTR’s analysis suggests the project will deliver jobs, training opportunities, tax, royalties, and new infrastructure within six months, building to what Eggers called “significant levels” within four years.

In the first two years, these include a NZ$25 million spend and 25 TTR full-time employees and 15 full-time contractors and consultants across marine science and monitoring, bank feasibility, metallurgical and marketing activities, and staff technical training spending, much of it in the Taranaki and Whanganui regions. 

TTR’s own reporting has also downplayed the potential environmental impacts of the project, noting a total absence of local seabird colonies which may be affected by the mining, and a negligible number of sightings of sea creatures within range of the project. According to TTR, only one whale has been sighted within 15km of the proposed mining area, and no pygmy blue whales, a species considered endangered.

Doctor Simon Childerhouse, senior scientist of marine mammals and marine ecology at the Cawthron Institute, who has worked with TTR, reported that “the water depth within many kilometres of the permit area is too shallow for whales to regularly, if at all, visit, forage or calve in.”

Yet Baxter points to different scientific thought to argue that TTR’s initial environmental impact assessment fell short of what was needed, with many regions with confirmed whale sightings overlapping with mineral exploration permits.

“Almost the entire northern portion of the South Taranaki Bight (STB) and in waters less than 150m is permitted for either petroleum exploration and extraction or mineral and coal mining,” wrote Leigh Torres, associate professor at the department of fisheries and wildlife at Oregon State University in a 2013 paper. “24 of the 31 blue whale sightings examined in this study (77%) occurred within a permitted seabed mineral extraction area. Evidence of elevated blue whale presence in the STB includes increased density of blue whale sighting records in the STB relative to other areas around New Zealand.”

Baxter supported this assessment, saying that “there’s interesting new research coming out, as the research [suggests] New Zealand has its own population of blue whale, the pygmy blue whale, which feed and possibly calve in the South Taranaki Bight, right in this area.”

The court case has persisted amid a backdrop of broad public support for further mineral development in the Taranaki region, with Eggers citing TTR polling data to support the project.

“The project has wide community and business support in the Taranaki region, with over 14% of the company’s shareholders and issued capital held in Taranaki. Independent polling by TTR showed, among its key findings, that more than 80% of people living in Taranaki agree with the development as long as the environment is protected,” he said.

Yet environmental concerns remain a key issue for many locals, with TTR’s own polling data showing that, if offered the opportunity to give feedback to TTR on the project, 17% of people would ask for greater clarification of its environmental effects, the largest proportion behind 30% who had no opinion. Indeed, 12% wanted assurances over the project’s environmental impact, and 15% said they would like more information on the project before drawing conclusions, suggesting a somewhat messy and unclear debate that has influenced even the New Zealand court system.

Baxter and KASM claim that an EPA reshuffle helped contribute to the ultimate verdict. EPA policy enables the agency to appoint a committee of anywhere between three and five members to oversee the award of permits, and the use of a four-person committee led to the split vote which ultimately went in TTR’s favour.

“The government leant on the EPA, which changed the way it held hearings and made its decisions, taking it from a five-person committee to a four-person committee and stacking it with business interests,” said Baxter. “Then two of that decision-making committee were completely against it, and there was a split decision with the chair making the casting vote.”

The chair in question was Alick Shaw, a former deputy mayor of the Wellington City Council. An EPA document published in 2017, investigating potential conflicts of interest within the four-person council, found that Shaw had announced “a connection” with Buddy Mikaere, a consultant who ultimately testified on behalf of TTR. Furthermore, two other decision-making committee members, EPA board deputy chair Kevin Thompson and former Wind Energy Association chair Gerry Te Kapa Coates, had each had a “professional connection” with TTR employees.

While these informal relationships are not damning of an EPA-TTR conspiracy, and were said to be “false and denied” by the miner, they do reveal a closeness between private interests and supposedly neutral arbitrators, a potential conflict of interests that underpins the legal uncertainties and disputes that have characterised the permitting of this project.

Ultimately, it is difficult to accurately predict the outcomes of the court challenges. However, what is clear is that legal uncertainty has entangled and delayed the project to the point where there is no clear end in sight.

“This is a matter that is still before the courts,” said an EPA spokesperson. “It is premature – and inappropriate – to discuss what our response will be if the ultimate outcome of the litigation is that the decision is referred back to the EPA for reconsideration.”

Baxter, speaking at the start of May, summed up this deadlocked state of affairs by saying that: “The legal process is very slow. I think there are another fifteen days to go before they have to put in all the submissions to the Supreme Court as part of their seeking leave to appeal. And then we have another fifteen days to respond, and you'll get the Supreme Court making a decision which could take another couple of months.

“And then we wait for a hearing, and that won't be until next year, then there will be a month after the hearing for a decision.”