Mining: a multiple balancing act

Kate Wilkinson unintentionally put her finger exactly on the issue over mining on conservation land. “Let’s stop all the grandstanding,” she said. The Economist magazine agreed.

Wilkinson, bottom-of-the-cabinet Conservation Minister, was bollocking green and political attacks on cabinet No 3 Gerry Brownlee’s mining ambitions. The Economist, reporting those ambitions, was bollocking the tourism industry’s “100 per cent pure” slogan, which Tourism Minister John Key extols.

Essentially, the Economist called the slogan a lie. Certainly “100 per cent”, an absolute figure, hardly fits Prime Minister Key’s all-things-to-all-people pursuit of “balance”.

The Economist said all countries juggle environmental and economic growth considerations. But, it said, New Zealand has been grandstanding on purity. The magazine wryly suggested a “sustainable” slogan is needed.

Unlike the Guardian, with its “greenwash” article in November, the Economist carries real weight with the global professional and business elite (the Guardian pitches to a cadre of western social-liberals). The Economist’s global elite commands high personal incomes and business investment.

It also travels. Mining has tourist operators in a tizz.

The tourist industry is not infested with sandal-wearing greenies. It wants truckloads of visitors and profits off them. But it has also been finding that foreign tourism wholesalers have become picky about which facilities their customers use. The industry has an environment quality grading system.

It knows that streams and rivers contaminated with fertiliser and effluent runoff from heavy dairy farming don’t fit the natural-experience expectations of rich-country foreigners who, in their feedback, marvel at rubbish, old cars and buses and other scruffy habits.

Add in the horticulture and wine industries’ experience that “retail chains are the new regulators”. These chains command vast segments of rich-country consumer markets and growing segments of enriching Chinese, Indian and other Asian middle-class markets. So they are setting their own safety and naturalness standards, which New Zealand suppliers will have to meet or take a price discount if they don’t.

Marks and Spencer, the iconic British chain not noted for being soft in the head about profits, this month set out 80 new environment-friendly “commitments” to consumers for its purchasing.

It is against this shifting global backdrop that Key and Brownlee want miners in here to take some more percentage off the 100 per cent pure. Key will need all his balance-worshipping poise to manage the atmospherics.

Why is Key buying this argy-bargy? Regardless of how big the pickings are, not much money will flow until well through his second term and maybe not until into his third term, should he win them. Prospecting and exploration take a long time and then it takes time to get permits and actually start digging (or keyholing). The bonanza, if there is one, will likely swell the next Labour-led government’s war chest.

The answer is that Key has to demonstrate a step-change in economic performance in order to embed in the public subconscious a sense that with him incomes will grow. Apart from his niceness, that is his most powerful argument for re-election.

So promising a mining bonanza round the corner — a bonanza Brownlee has been puffing up into a bubble the size, person-for-person, of Australia’s — conveys an impression that the government has real plans to get us all richer, not just a cycle track.

But is Key actually promising a bonanza? This past week he was trademark Key. One: let’s dig the stuff out and get rich. Two: let’s keep our country green and cuddly. So, three: not too much mining, in carefully monitored places and with all the Resource Management Act safeguards, just a pinprick, a postcard, a postage stamp. But four: let’s get on with it; it will make us rich.

Key has to dance this entrancing gavotte because this country has spawned a lot of anti-mining activists, has set aside vast areas in national parks and reserves and has sold itself as “100 per cent pure”. What will Key do if activists — spurred on by the oddball jury acquittal of the Waihopai wreckers — slash tyres and worse?

If he gets the balance wrong he risks a cold shoulder from miners while upsetting moderate greenies, of whom significant numbers vote for him — remember the crossover vote to Green among National-leaners who didn’t want Don Brash. On top of that he has both to be a world leader on climate change (on research) and not be out in front (with a unique ETS) — and still keep the 100 per cent pure brand. Quite a challenge.

One way through the mining thicket might be to use a state-owned lever to marry private and public local and international expertise under local control and with international money. Key’s old trade as an investment banker could come in handy.

If he pulled that off he could go grandstanding — until the Economist has another crack.