Cyanide, and a tiny frog: The controversy over a proposed $4b goldmine

Monday, 16 December 2024

There’s $4b of gold in the hills behind Waihi. Problem is, it’s on conservation land and it’s home to an endangered frog. Can it be mined without affecting flora and fauna? And will it skirt around protections if it’s given fast track approval? Explainer Editor Lloyd Burr visits Waihi.

Waihi is synonymous with gold. People have been digging it out of the town and its surrounds for 154 years. There’s a gold museum, a gold education centre, a gold discovery centre, gold bus tours, gold bike tours, and dozens of walking tracks around long-abandoned gold extraction infrastructure.

When I was growing up, my primary school class visited Waihi. We toured Martha Mine (the open pit), got up close with massive dump trucks, saw the 3km-long conveyor belt in action, and saw century-old chopped-off miners’ fingers preserved in jars at the museum.

The murals and aesthetics of Waihi are mostly gold-industry inspired (the roundabouts are decorated with hundreds of steel ball bearings left over from the crushing drums). It’s no wonder the town’s motto is: ‘Waihi: New Zealand’s Heart of Gold’.

But that heart could be about to have some serious surgery. Mining company OceanaGold wants to dig deep under the conservation land behind Waihi and extract $4b worth of gold and silver using the Government’s controversial Fast Track Bill.

It would allow consent to be given quicker with fewer bureaucratic hurdles. However, it’s created a backlash with environmental groups who are concerned about the impact on the native Archey’s Frog, the forest’s ecosystem, and the use of cyanide in tailing ponds.

Others are concerned Waihi won’t benefit and the profits will be sent offshore. Then there’s the allegations against OceanaGold in the Philippines: human rights abuses, forced land grabs, and a local getting shot in the arm by a security guard. (More on this further down).

Current operation

One thing that’s hard to miss in Waihi is the massive open pit Martha Mine next to the town centre. It’s been closed since 2015 but mining in Waihi didn’t stop. OceanaGold’s been digging around 130km of tunnels underneath the town itself where rock is drilled, packed with explosives, blown up and trucked to the surface to begin the extraction of gold and silver. The tunnels are then back-filled.

OceanaGold is a Canadian-listed company with mines in the US, and the Philippines. But it was founded in 1990 at Macraes Mine in Otago under the name Macraes Mining Company Ltd. Its name changed to GRD Macraes Ltd in 1998, and to OceanaGold in 2004. Its main offices are in Brisbane and Vancouver.

There are four main veins of gold (called Martha, Correnson, Favona, and Trio) and the tunnelling follows precise geotechnical plans based on core samples showing where the gold is. Explosions are detonated between 1-2pm each day (property owners above the tunnels are compensated too). It’s a 24-hour operation with 387 full time workers and around 100 contractors.

FUN FACT: The underground workers don’t come to the surface during their shifts. They have their own lunch room with a kitchen, wifi, and Netflix. There’s a mechanics bay underground too so vehicles can be serviced down there too.

How the gold is extracted

Once the rock reaches the surface, it’s tipped into a jaw crusher and broken into smaller stones. It then gets poured into a massive rotating drum that’s filled with solid steel balls which help crush the rock into sand-sized fragments. It then goes into another tumbler with even smaller steel balls and crushed into a very fine powder (similar to talcum powder).

The powder’s mixed with water and cyanide and cycled through a series of tanks. The cyanide separates the gold and silver elements from the rock particles. Carbon (in the form of burnt coconut husks) is then added, which the gold and silver adhere to. From here, it’s filtered to separate it from the carbon, and melted down into bullion bars.

The water-cyanide-tailings mix is piped to a tailings pond where the sunlight eventually breaks down the cyanide and the tailings settle to the bottom. The pond grows in height as more tailings are added and over the years it’s resulted in two mountains with ponds on top, and dairy farms on the slopes.

FUN FACT: Waihi’s mine produces far more silver than gold. Each melted bullion bar of ore contains 75-90% of silver and 10-25% of gold. Gold fetches a much higher price though.

The planned new mine

The $4b worth of gold and silver is called the ‘Wharekirauponga orebody’ and it’s around 400m underneath Department of Conservation forest north of Waihi township. OceanaGold’s plan is not an open pit mine but a network of underground tunnels similar to the current operation underneath Waihi.

They would drill two parallel tunnels to the orebody from a new processing site they plan to build on a farm they’ve purchased at the end of Willows Road. Each tunnel would be around 6.8km long and the reason for two of them is for ventilation and preventing congestion.

Those tunnels would be linked to the surface with three or four ventilation shafts (which also act as an emergency egress) that would require around a single garage-sized area of forest to be cut down for each of them.

Another tunnel nearly 5km in length would link the new farm processing site with the current processing site. This means the existing crushing, extraction, and tailings infrastructure doesn’t have to be moved.

The plan also includes building a third tailings pond next to the existing eastern-most one.

OceanaGold says the new mine would enable them to maintain the current workforce of 387, plus add an additional 300 full time jobs, and 1,300 new indirect jobs (on top of the current 1,000 indirect jobs). They claim their annual contribution to the economy will increase from the current $164m to $270m.

The concerns

There are many stakeholders in this proposal and they have passionate views. I outline these further down the article, but the main concerns are summarised here, with OceanaGold’s response to each of them.

1. Archey’s Frog

They’re one of three remaining native frog species and it’s our smallest - growing only to 37mm in size. Unlike most frogs, they don’t live in water and their offspring don’t go through the tadpole stage, instead being born in wee egg sacks. Their main habitat is damp parts of Coromandel forests, including the area above the Wharekirauponga orebody. They live a pretty stationary life and barely leave a square-metre-sized area over the course of their life. They feed on insects and bugs that just so happen to wander through.

They’re predated by wild pigs, cats, rats, mice, stoats, hedgehogs, possums, and other non-native frogs. It’s not known how many Archey’s Frogs are in existence but DoC says it’s somewhere between 5-20,000. However research by OceanaGold-paid scientists estimates there are between 31,096 - 152,774 of the frogs in the 314ha above the planned mining area, and possibly as many as 50m in total across the whole peninsula.

They have no eardrums and opponents to the mine are worried the sound and vibrations from explosions in the ground beneath may have an adverse effect.

OceanaGold’s response:

Its Senior Environmental Advisor Cassie McArthur - who used to work at DoC - says underground mining poses far less of a threat to the frogs than the high numbers of predators in the forest.

“We've probably done the most frog surveying work out of any company - including DoC - and what we are proposing to do with the underground mine, we don't think it's going to have an effect on those frogs.

“We're actually proposing to do a big pest control project that we think will actually have a net gain for the frog,” she says.

It will include “intense predator control” in 632 hectares above the mine and normal pest control across 18,870 hectares which will cost at least $8.4m over 13 years, she says. It’s been designed in consultation with local iwi.

In response to concerns over vibrations, McArthur says they’ll be fine.

“We have found frogs that have persisted alongside another mine that's close to here - the Golden Cross Mine - and we have also found frogs that are right alongside a carriageway that has logging trucks going up and down it that would be similar levels of vibration to what we're expecting here,” says McArthur.

2. Felling and draining the forest

The sites where the ventilation shafts will be installed, as well as the numerous drilling sites have to be cleared of trees and vegetation. There are also concerns about water. Hundreds of kilometres of tunnels would see groundwater leech into them and be pumped out, and it could have an impact on the forest above by draining the water it needs to survive. The current balance of river catchments might be altered as a result too.

OceanaGold’s response:

McArthur says the sites will be reforested once they’re finished but it won’t include re-planting.

“We'll lay the slash back over the site so it regenerates instead of replanting it. The risk of bringing in weeds is too high and you also might get a little patch of forest that isn't actually representative of what's around it,” she says.

“If you just save the slash when you clear the site, you can actually get the seed source from what was there originally and just put it back on the site. That's the better way to do it,” she says.

On the topic of draining the forest, McArthur says that’s not a realistic concern given the vast amount of rainfall the Coromandel gets.

“There is predicted to be some groundwater drawdown but the effects on the surface water bodies are going to be barely measurable,” she says.

3. Cyanide

Cyanide has been used in Waihi for many decades (old concrete cyanide tanks from the very early days are now a feature of a nearby forest walk) but there are concerns it could leak into waterways from either the processing plant and the tailings ponds, or that wildlife would get poisoned from it. There are also concerns about an earthquake weakening the pond embankment and sending a lahar of cyanide and other toxic materials into the Ohinemuri River catchment.

OceanaGold’s response:

Kerry Watson is the Head of Closure Planning and External Affairs and says he understands the public concerns over cyanide. It’s stored on site in massive purple tanks and Watson says it’s strictly monitored when being transported and used.

“It's an emotive topic but it does exist out there in the natural world and we have a proven experience in managing it over the last 30 odd years,” he says.

“Once it’s in the ponds, the sunlight gets in and helps to de-nature some of that cyanide and that's the start of the process of it breaking down. Then we finish that off in the water treatment plant.”

Regulations allow 50 grams per cubic metre of what’s called WAD cyanide, which is essentially weak residual cyanide compounds. Watson says Waihi’s tailing ponds currently average 4 grams per cubic metre of water.

“We have requirements here that if we find birds that are deceased, they go in for an autopsy to check and make sure that cyanide isn't related to those deaths. And since the operation has been running, it's not had one of those incidents,” says Watson.

Stuff checked with Waikato Regional Council which confirmed there have been no cyanide-related bird deaths. A spokesperson says dead birds were found near the ponds earlier this year but tests showed the cause of death was avian botulism.

Regarding concerns about the ponds bursting in an earthquake, Watson says the earth structures have been engineered to survive a magnitude 9 quake and the embankment angles are much flatter than most of New Zealand’s earth-based hydroelectric dams like Benmore and Matahina.

4. Profits going offshore

Given OceanaGold is listed on Canada’s Toronto Stock Exchange, there are concerns the bulk of the profits will end up there and with investors, rather than in Waihi. Its global net profit over the last 12 months was US$100.7m (NZ$172m).

While the New Zealand government gets royalties, these only average around 2% (the amount varies because the calculations are complex). There are also other mining companies that get royalties from certain veins: Idaho’s Coeur d’Alene Mines gets 2.5%, Japan’s Osaka Gold gets 2% and Colorado’s Newmont gets 1%.

OceanaGold’s response:

Kit Wilson is the company’s communications manager and arguably the mine’s staunchest supporter and defender. He says the mine is the lifeblood of Waihi and not just because of the 387 full time employees and 100 odd contractors.

“We’ve been underground today, and we've got overalls that are very dirty. The local laundry is going to wash those. If we aren't getting our gear washed on a regular basis, the laundry isn't working,” he says.

“If our 387 people aren't working here, then there aren't as many supermarket checkout operators. There aren't as many doctors. There aren't as many volunteer firefighters,” says Wilson.

He says 78% of staff and 86% of contractors live within a 30 minute drive of the mine. Nearly 30% of staff identify as Māori, while a quarter of staff went to Waihi College. Last year, the company spent $48m on wages for its Waihi operation, up from $37m the previous year.

In 2022, Wilson says OceanaGold spent 91% of its total expenditure in New Zealand, which totalled $164m, of which $53m was spent in the Waihi area.

“It's not just the Waihi economy. We have an impact across the region. We're called the ‘lifestyle mine’ where you can finish your shift at seven o'clock at night and be in the surf at half past seven at Waihi Beach,” he says.

“Productivity data shows mining has been the most productive industry in New Zealand for 14 of the last 15 years. The gold and silver we produce results in significant export earnings for New Zealand which are subject to tax”.

Wilson adds that OceanaGold’s Waihi office spent $445,775 last year on sponsorships and donations to 57 groups, organisations, and charities in the area.

5. Human rights record

There’s controversy surrounding OceanaGold’s treatment of locals on land it needed in the Philippines for its gold and copper mine. The allegations include forcibly evicting 180 families from their homes in 2008 in order to build the mine, residents being shot, beaten, intimidated, and harassed, and the local river being contaminated with heavy metals.

The UN Office of the High Commission for Human Rights (UNOHCHR) was involved and you can read its letter to OceanaGold here where the allegations are outlined.

OceanaGold’s response:

The company’s official response to the UNOHCHR is here. In short, they reject most of the allegations. They say 180 families were not forcibly evicted. Of the 635 affected landowners, agreements were made with 609 of them while 26 went to an arbitration panel. That resulted in two forced evictions, with the homes bulldozed.

They claim there were no beatings or harassment, but admit one of its security guards did shoot someone in the upper arm during a “skirmish”. The victim was hospitalised, recovered, and the matter was settled.

Regarding the river, OceanaGold agrees that it’s contaminated with heavy metals but says that it pre-dates the mine.

“We strongly refute allegations of human rights issues relating to our Didipio Mine, made in 2019,” a spokesperson says. “At the time, we engaged fully and transparently with the UN Office of the High Commission for Human Rights”.

“We are also committed to engagement on an effective and genuine basis with all stakeholders impacted by our operations, including global and local civil society groups,” says the spokesperson.

6. Fast-tracking would skirt around environmental protections

The Government’s promising to introduce laws that fast-track 149 projects through the resource consenting process. The Waihi mine expansion is on the list and while the law hasn’t been passed yet, it will mean fewer checks and balances on the proposal. Opposition parties say it’ll see environmental protections overridden, with damaging consequences.

OceanaGold’s response:

“Currently, if we want to apply for a mine, we have to go through a whole series of consent hearings and applications with a number of regulators,” says Wilson.

“For example, Hauraki District Council, Waikato Regional Council, Ministry for Primary Industries, Heritage New Zealand and Land Information New Zealand. And every one of those takes time. And every one of those tends to be sequential and many of them are duplicating the work,” he says.

“What fast track we hope will do is simplify the system by having an expert panel who can understand what's happening, and investigate and look at all of those applications at the same time. It doesn't mean that anything changes and doesn't mean that anything becomes less stringent,” says Wilson.

Stakeholders positions

Department of Conservation

It doesn’t have a position on the mine yet. Stuff put questions about environmental concerns, frogs, and cyanide to DoC’s Hauraki Operations Manager Avi Holzapfel but they refused to answer the specifics, saying the proposal “has not yet been formally notified”.

“DOC has not formed a position on the impact of the proposed activities on conservation values - including on native frogs and water, and any proposed mitigation - as some key information is still outstanding,” says Holzapfel.

Waikato Regional Council

“OceanaGold's Waihi gold site has some 75+ resource consents that currently authorise its operations,” a spokesperson says. “It is generally managed in accordance with the requirements as set out within those consents”.

The council says there have been no major breaches of environmental regulations and all water testing has passed.

“The treated water that is discharged is required to comply with specified limits within the consents. The data shows compliance with the cyanide limits set out within the consent conditions”.

Coromandel Watchdog of Hauraki

Former Green MP Catherine Delahunty is the chair and she fiercely and passionately opposes the project.

“There are long term implications from hard rock gold mining including the vast quantities of toxic waste and heavy metals post-the gold extraction process that are stored locally in earth dams, the effects on underground water and the risks to biodiversity from this and blasting beneath habitat,” she says.

Regarding the Archey’s Frog, she says it’s the world’s most threatened amphibian, according to the International Union for Conservation of Nature.

“They have no ears and experience everything through vibration effects on their skin. International research on rare frogs shows vibration can affect reproduction rates and population health,” says Delahunty.

Even with OceanaGold’s predator eradication plan, she says there’s no guarantee the frog’s population will increase. She calls it an “offset to justify the risk they are creating”.

“You can't kill something off and say: ‘It's okay, we've just killed it off there because it's going to be fine everywhere else.’ That's not how it works with rare species that can't be moved,” she says.

As for the tailings dams, Delahunty says OceanaGold is “creating a toxic legacy for our future far greater than previous gold mining” and worries about the stability of the dams in 200 years.

Ours Not Mines

The anti-mine group has a myriad of reasons why it opposes the mine, but it concludes that “OceanaGold suck”.

“Why would we want a huge mine under a very special part of the Hauraki Coromandel with potential for contamination of watercourses, local extinction of a taonga species, and transforming a rainforest into an industrial zone?,” the website says.

“Holidaymakers, and local people do not want a heavy industry on their doorstep. Kiwis do not want further destruction of our beautiful motu. The only people who want this mine are the shareholders of OceanaGold.”

Forest & Bird

It opposes the new mine, claiming it threatens unique habitat and biodiversity including the Archey’s Frog. Its regional conservation manager for Taranaki and Waikato is Elvisa Van Der Leden who says the fast-tracking of the project will lead to even worse outcomes for the environment.

“There is no way the project will not adversely affect the natural environment, from the construction phase of clearing forest areas to build the vents, to taking from local freshwater sources for ongoing operations,” she says.

“With the plethora of threats that the Archey’s Frog population faces from the mining project alone, Forest & Bird are not confident that the proposed trapping efforts will help increase the population.”

Regarding the new tailings dam, she says the bright orange Ohinemuri River earlier this year “shows that mining can impact freshwater species decades into the future”.

Resources Minister Shane Jones

“All industrial endeavours on land will have an impact on the land. But projects of this type operate under the RMA framework which requires a high standard of mitigation and remediation,” he says.

When asked about concerns the Archey’s Frog could be lost forever, Minister Jones says those claims are hyperbolic. “There is zero chance the Archey’s frog will be lost.

“There is a large body of evidence which shows predator control benefits native species,” says the minister.

Asked whether he had concerns about the forest being drained, or about cyanide, he simply replied: “No.”

Gold Discovery Centre

Eddie Morrow runs the Gold Discovery Centre which is essentially a visitor information centre for schools and tourists. He also runs bus tours around the region, including in and around OceanaGold’s existing operations. Morrow is also a board member for Conservation Volunteers New Zealand.

“If mining was to stop here, I think from an economic perspective, you’re left standing on the edge of a pretty big cliff,” he says. “It flows through the town in a whole lot of different ways”.

“It’s important to have some really good mature conversations about the new mine and what the outcome should be for the community because it's got to be win-win at the end of the day,” he says.

Predator Free Hauraki Coromandel

Stuff reached out but didn’t get a response.

Hauraki District Council

Stuff reached out but didn’t get a response.