NZIER overstated case for Taranaki seabed mining scheme, submitters claim

Friday, 31 October 2025

Protesters at East End Beach in New Plymouth in June.

The New Zealand Institute of Economic Research has greatly exaggerated the economic case for mining iron sands from the seabed offshore from Taranaki, the Parliamentary Commissioner for the Environment has suggested.

Australian-based company Trans Tasman Resources is seeking consent to extract up to 50 million tonnes of iron ore from the South Taranaki Bight.

An “economic impact assessment” of the controversial seabed mining scheme it commissioned from NZIER, and which was updated in March, forecast the mining operation would increase New Zealand’s annual GDP by $265 million and create 1365 jobs.

NZIER’s findings have been strongly critiqued in submissions made to the fast-track expert panel that is considering whether or not to consent the project.

Parliamentary Commissioner for the Environment Simon Upton said economists in his office had voiced concerns that the modelling approach used by NZIER overstated the benefits.

Its analysis indicated the upside to economic activity would only be $98m a year and that it could increase nationwide employment by about 397 jobs, the former National Party minister told the expert panel.

But NZIER’s analysis also failed to weigh those projected benefits against the costs of the scheme, including the environmental impact and the “opportunity cost of restricting other uses of the ocean space”, he said.

NZIER has not commented publicly on criticisms of its research, but says it has submitted a “statement of evidence” to Fast-track review panel.

“Factoring in these additional economic costs would reduce the net economic benefit even further.”

Upton said it could take decades or “even centuries” for marine ecosystems to recover from the mining operations and there were other considerations that might not have been accounted for, such as the potential for the mining activity to release carbon dioxide stored in marine sediment.

“The panel needs to satisfy itself that it has a sufficiently robust economic analysis with independent verification on which to base its determinations,” he said.

“In this case, the analysis has been based on cash flow models provided by the applicant. Understandably, it is in the applicant’s best interest to provide input to an analysis that favours its proposal.”

Former productivity commissioner Ganesh Nana, representing iwi, also advised the Fast-track panel to exercise “significant caution” interpreting the results of NZIER’s modelling.

NZIER had used a “multiplier model” which attempted to quantify the flow-on benefits of the project as well as its direct effects, but that was usually more suitable for smaller-scale initiatives, he said.

Sporting bodies often use the multiplier model to emphasise the flow-on benefits of cities hosting major events.

But Nana submitted that “considerable adjustments are required to reach any assessment that could be properly viewed as the net economic impact” of the mining scheme.

A consultant report commissioned by Trans Tasman Resources projecting large economic benefits for its mining scheme is under scrutiny.

“Whether such a net economic impact would be found to be positive or negative … remains considerably moot,” he said.

Nana also blasted NZIER for what he described as an “egregiously incorrect” estimate that the mining scheme could increase exports by 1.3%.

He said that calculation was based on the assumption that New Zealand’s exports totalled $66 billion in the year to June 2024 but had failed to take about $30b-worth of services exports into account, which meant the potential boost to exports should have been stated at 0.9%.

NZIER chief executive Jason Shoebridge told The Post it had responded to the points raised in “various reports” in a statement of evidence that had been submitted to the Fast-track review panel and had no further comment to make.

Neil Loftus, chairman of Auckland-based metallurgy firm Sanofex Group, has raised separate concerns about TTR’s economic assumptions in a report that was presented to the Fast-track panel in “collaboration” with Whanganui District Council, which has submitted against the mining project.

Loftus submitted those assumptions, which fed into the NZIER study, were significantly inflated due to unrealistic assumptions about iron ore and vanadium pricing, freight costs and operational efficiency.

“No revenue from primary production of vanadia can be expected,” he said.

Based on his own assumptions, the mining operation would not break-even within 10 years, which he suggested meant it would not attract financing.

TTR chairperson Alan Eggers has responded to Loftus’ submission, saying the company stood by all its Fast-Track Approvals Act expert reports and the information they contained.

“Our response is available on the Taranaki VTM Project Fast Track website. We have nothing further to add,” he told the Taranaki Daily News last week.

The fast-track panel must reach a decision on TTR’s consent applications by March 18.