Jan Wright: Costly ecological timebomb ticks in dated mining rights

Taxpayers will pay $10 million to contain mercury at the abandoned Tui mine in Te Aroha. Photo / Sarah Ivey

Mining has long played a major role in New Zealand's history, and has created controversy in regard to its effects on the environment.

The environmental effects of coal mining in particular have been of concern to the Parliamentary Commissioner for the Environment.

In 1992, the first commissioner, Helen Hughes, released a report about her concerns regarding the environmental management of coal mining.

Then Dr Morgan Williams, as the second commissioner, made a commitment in 2006 to investigate the environmental management of Solid Energy's coal mine at Stockton, on the West Coast of the South Island.

Last year, I set out to determine what improvements had been made since Dr Williams' report.

Solid Energy has made significant progress. Investment into engineering solutions and implementing an environmental management system have paid off.

The water of the scenic Ngakawau River, for example, now has lower levels of sediment and is much less acidic than in 2006, although it is too early to assess the success of the restoration of soil and vegetation.

While carrying out this investigation I became aware of another issue of national significance.

Stockton mine, it turns out, is operating under a licence granted many years ago, under an old regime with few environmental safeguards. Indeed, Solid Energy's improvements at Stockton are not enforceable, but are voluntary.

The mining licence granted under the old regime contains environmental conditions that are weak and difficult to enforce.

The improvements at Stockton mine have been made in spite of the regulatory regime under which it operates, not because of it.

You may be wondering what the environmental condition of a coal mine on the West Coast of the South Island has to do with the rest of the country. A great deal.

My investigation discovered there are more than 100 of these old mining licences still in existence, covering a combined area equal to more than three-quarters the size of Lake Taupo. The majority are in Waikato or on the West Coast.

These old licences with their weak environmental protection are from an era when we thought children didn't need to "buckle-up" in a car. Over time our values about the environment have shifted as have our concerns about child safety, yet the environmental regime of these old licences still dates back to that former time.

Many of the licences will not expire for more than 20 years. The last will be Solid Energy's Goodwin licence, for an open-cast lignite mine in Southland, which will remain operative for another 53 years.

How we ended up with these mining licences, with limited environmental conditions, is a complex story of the evolving regulatory landscape in New Zealand in the 1980s. I am asking the Government to review these old licences to see if there are significant environmental risks requiring action.

The extent of the environmental damage caused by a mine is dependent on many factors. In general, open-cast mines are more damaging than underground mines. Coal mines that expose sulfide in rocks to the air can make the groundwater more acidic.

This acidic water flows into streams and rivers, so damage can extend far beyond the boundary of the mine. Gold mining operations can result in cyanide in streams which is worse than sediment from a quarry.

As well as a legacy of environmental damage, mining can leave a financial burden on the shoulders of taxpayers. If a company operating under an old licence goes into liquidation, the result is very likely an "orphan" contaminated site.

The Tui mine on Mt Te Aroha is one such orphan site. It was abandoned in 1975 and left behind a large pile of tailings contaminated with mercury. The Ministry for the Environment has budgeted $10 million to stabilise the tailings dam and keep the polluted water out of local waterways.

Should we be concerned about the risk of a legacy of environmental damage, given the good example set by Solid Energy at the Stockton mine? Solid Energy has indeed gone beyond the environmental conditions associated with this old mining licence, but it is a State Owned Enterprise and in New Zealand for the long haul.

Private companies, especially small companies, face different incentives, and going into liquidation to commit remedial costs is a real possibility.

Orphan contaminated sites, be they abandoned mines or others such as the former Fruitgrowers Chemical Company site at Mapua near Nelson that was contaminated with pesticides, are like leaky buildings.

The taxpayer and maybe the ratepayer end up footing the bill.

And our children and grandchildren may end up with a degraded environment since no amount of money or effort can restore much of the damage.

In my report "Stockton revisited: The mine and the regulatory minefield", I have made recommendations to ministers. My intent is give them practical ways to make progress on this problem of old mining licences, and I look forward to their response.

Mining of some minerals and other resources will continue to be a part of New Zealand's future, but we must ensure that it is done with far more sensitivity, discrimination, and good environmental management than has been done in the past.

* Dr Jan Wright is the Parliamentary Commissioner for the Environment.