Concerns increase about gold mine's prospects as application paused
Friday, 26 June 2026
A financial analyst has suggested delaying a decision on whether Santana Minerals’ controversial Central Otago gold mine goes ahead, could increase political heat about the project.
On Thursday, the Australian mining company announced it was temporarily suspending its Fast-track application to build a large open pit mine near Cromwell, from midnight Friday, in order to give it more time to obtain information.
A final decision on whether the mine is given the go-ahead or not was due to be made by the Fast-track expert panel currently considering Santana’s application, by October 29.
However, Santana’s request for a suspension of processing their application now means a decision may not be made until late November - after this year’s election.
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Forsyth Barr analyst Paul Laxton Koraua said the delay adds an element of political risk to the project, particularly if there is a change of government after the November 7 election.
Labour has shied away from suggesting it will interfere with any Fast-track decisions, despite being opposed to the legislation, which compresses the timeframe for considering major projects such as the mine.
But Koraua said Labour’s potential coalition partner, the Greens, had been outspoken about revoking Fast-track mining consents, including those for hardrock gold mining such as Santana is proposing.
Santana has not said how much extra time it will need to provide additional information to the Fast-track panel, but has suggested it will be at least 20 working days. In addition, the Fast-track panel has this week requested further information, but it is unclear whether this would further extend the suspension of Santana’s application.
All extra time taken while Santana’s application is suspended will be added on to the panel’s final decision deadline.
While Koraua acknowledged it might be unlikely a coalition could be formed in the weeks after the election that would then stop Santana’s plans, he said “the noise around political risk just increases a little bit.”
On Thursday, Forsyth Barr issued an analysis of Santana’s project, and the likelihood it would be approved.
It stated that while the market, based on the company’s share price, suggested there was a 63% chance the project would be declined, Forsyth Barr was more bullish about its prospects.
Koraua believed it was more likely the project would be approved, with conditions set by the Fast-Track panel to help mitigate risks and concerns.
If this was the case, the question arose of how much these conditions would cost Santana, and whether they could make the project economically unviable.
He pointed to issues such as increased water monitoring and treatment, and concerns about environmental stewardship after the mine closes, which could add significant costs.
At recent Fast-track expert conferencing, it was suggested by Santana’s own expert that saving and relocating more than 100,000 geckos and skinks from the proposed mine area would cost “tens of millions of dollars”, with no guarantee any of them would survive.
But even though the gold price had fallen 25% this year, Koraua said the mine’s economics were still quite attractive.
“So there would have to be very meaningful conditions - hundreds of millions of dollars extra spend - before you got to a point where, actually, it’s not that commercially viable.”
The other risk Koraua pointed to was continued iwi opposition.
Kā Rūnaka, made up of four rūnaka representing southern Ngāi Tahu hapū with interests in the mine area, has consistently opposed Santana’s plans, and called for the project to be rejected.
“The one key thing that can actually stop the project in its tracks is if the panel finds that approving the project would be inconsistent with the Treaty settlements that Ngāi Tahu was granted,” Koraua said.
While noting there was nothing in the panel’s documents currently indicating this would happen, Koraua said the issue could cause delays, and add increased political focus.