Council gets multimillion-dollar payment to allow controversial gold mine to proceed
Monday, 2 February 2026
The Central Otago District Council has done a behind-closed-doors deal with Santana Minerals to let the company use public roads for its controversial Bendigo-Ophir gold mine.
Without the council’s approval, Santana’s proposal, for what it describes as New Zealand’s most significant gold discovery in 40 years, could have been dead.
But now, the Australian company will pay the council $1.25 million a year for the crucial access over public land to its mine sites.
While the mine has yet to receive consent and is currently going through the government’s Fast-track process, today’s announcement clears a fundamental hurdle for Santana.
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Central Otago mayor Tamah Alley has hailed the deal as a way for the community to get something in exchange for Santana’s use of public assets, if the mine gets the go-ahead.
But mine opponents have criticised the secret discussions that led to the deal, saying the public has been locked out of a decision that will have widespread effects and consequences for the region.
Santana’s proposal would see four open pits dug into the hills at Bendigo, near Cromwell, the largest of which would be 1km long and 300m deep. Underground mining would also begin after seven years.
The mine would have a 1km long processing plant where rock was crushed, and gold extracted using up to 1900kg of cyanide a day. A 2km tailings facility to store toxic sludge would remain forever, and the four pits would not be filled in.
The mine would operate around the clock for 14 years, though its life could be extended, as has occurred with other New Zealand goldmines.
Santana’s proposal has attracted strong criticism on environmental and economic grounds, with opponents including Hollywood star Sir Sam Neill and artist Sir Grahame Sydney, who live in Central Otago, as well as local residents.
But Santana is promising 350 direct jobs, and $1.8 billion in tax and royalties, on the back of rocketing gold prices.
The agreement between the council and Santana covers Thomsons Gorge Road and the Shepherds Creek paper road, including a 20-metre strip on either side of those roads.
If roads are blocked, the council says Santana will pay for an alternative route to be constructed to ensure continued public access.
The annual payment would begin six months after commercial gold production started, which Santana estimates could be mid-2027 if consent is granted by the Fast-track panel this year.
The money would be put towards infrastructure projects to help manage Central Otago’s growth, and economic development initiatives.
Councillors would remain in control of the money, it would not be used to reduce rates, and its spending would be recorded in the council’s accounts.
Alley admitted the council’s decision to allow the mining company access would split the community, but she denied the council had been bought off by Santana.
She stressed the agreement was just part of the regulatory puzzle surrounding the mine’s consent, with the council not being responsible for the decision whether it goes ahead or not.
And Alley reiterated the council had not taken a position for or against the mine.
But the council’s deal with Santana has led some to question whether a decision to allow the mine had been predetermined.
And the manner of the decision, taken in a publicly-excluded session of the council last week, has also raised concerns.
Alley said despite the huge public interest in the project, the decision to keep the agreement with Santana behind closed doors was normal in matters where there was a commercial negotiation about money, and she believed the council had “followed proper process”.
But a spokesperson for Sustainable Tarras, the main group opposing the mine, said the council’s announcement of a deal with Santana was “disappointing, to say the least”.
They pointed to numerous unclarified issues and concerns in the deal, especially as the agreement hadn’t been publicly released.
Sustainable Tarras had been in discussions with the council for more than six months about the road access issue, but only learnt of council’s decision on Monday via a press release.
The group said the council had “made it clear that community is secondary to their private negotiations with Santana.”
A spokesperson told The Post that $1.25 million a year was “peanuts”, given the inevitable loss of public access in the area, and the liabilities the council would bear forever due to the mine.
And they questioned why the payments would only kick in six months after Santana commenced commercial gold production, and not from now, despite Santana already doing groundwork, preparing for the mine being granted consent.
They said Shepherd’s Creek Rd will end up under 200 million tonnes of waste rock that would be holding back a toxic tailings dam with 18 million cubic metres of toxic sludge, and part of Thomsons Gorge Rd would be carved away and replaced by two open pits.
Santana CEO Damian Spring welcomed the deal, which he said had taken 12 months to finalise.
“This agreement does not approve mining and it does not pre-empt the Fast-track decision.
“What it does do, is show the project moving through a required step, sorting access, roading, and community arrangements upfront, exactly as the process is meant to work.”