OnPoint: Rational, then
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Sustainable as long as we reseed the ground with gold every few years so that more gold can grow? Um, yeah...
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3410,
Was I mistaken when I heard someone from the government on Morning Report this morning describe mining as "sustainable"? If so, it's a pretty radical redefinition.
You're not wrong. He was saying not that the environment around mining was sustainable, but that the mining itself was! A big wtf here too.
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We're no Australia and our future has to lie somewhere else rather than drilling into high grade conservation land for God's sake.
Ernie Rutherford will be redlining in his grave. "We've got no money, so we've got to think."
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Was I mistaken when I heard someone from the government on Morning Report this morning describe mining as "sustainable"? If so, it's a pretty radical redefinition.
I had the same facepalm moment. We still have mines, so mining must be sustainable, right? Arrgh!
I take it he's never been to Charleston or Brighton or any of the other gold rush ghost towns.
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JLM,
Cecelia and others who are tearing their hairs out - you can download a petition here and get as many signatures as possible before mid-April to let Gerry know how you feel.
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Sustainable as long as we reseed the ground with gold every few years so that more gold can grow? Um, yeah...
That only works for oil (at least according to curent wacky right-wing dogma)
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That only works for oil (at least according to curent wacky right-wing dogma)
Not quite seeding, and sort of off-topic, but maybe the idea's not as dumb as it sounds
The coal link in the article is a bit of a side issue, the key of this research was that it can reproduce some fuel from CO2, which is the waste byproduct of burning fuel.
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Excellent prompt for me to recommend Idiot/Savant's brief piece on the actual mining economics from Statistics NZ.
even if we take the maximum values for each, we're still looking at $6.5 billion - around 20 times lower than the government suggests.
Together with Keith's work, let's prompt better informed conversations all around - because this shonky government's numbers sure don't stack up, regardless of the politics.
Has anyone modelled tourism and trade impacts yet?
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I've crossposted that onto Russell's new thread.
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That only works for oil (at least according to curent wacky right-wing dogma)
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re-route SH1 so that it winds through every single town in the country
You mean it doesn't already?
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the key of this research was that it can reproduce some fuel from CO2, which is the waste byproduct of burning fuel.
Yeah right. Because the first law of thermodynamics is just a piece of socialist red tape.
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Yeah right. Because the first law of thermodynamics is just a piece of socialist red tape.
well i guess the connection was rough...
was chatting to a client in US about this yesterday. Not much info out on this particular crowd at present. However one idea is as a possible alternative to energy stores for intermittent/renewable generation. Eg CO2 sequestered from existing fossil gen and then solar panels used for the heating of the CO2 which is converted to fuel oil. This is in contrast to other ideas behind how to capture the solar energy when its not needed (such as batteries, melting salts, compressing air in caverns).
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Excellent prompt for me to recommend Idiot/Savant's brief piece on the actual mining economics from Statistics NZ.
The figure that I/S cited was of the value of "economically utilised" resources - minerals with mine shafts already sticking out of them. Brownlee's figure was how much do we expect in the ground x current prices.
Obviously, the whole point of expansion and exploration is that we go beyond what is currently utilised. But Brownlee's is a theoretical - and purely theoretical - maximum. It is not based on what's been found, but on the probability of finding it in a given kind of terrain. And even if this estimate is correct, the "value" of the resource doesn't take into account the cost of extraction or the fact that most of it will never (in practical timescale) be cost effective to extract.
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... nor how much income will accrue to New Zealand.
From t'other thread, I/S noted a relevant regional economic impact paper (PDF 1.9MB), which ex-Conservation Minister Chris Carter has raised on Red Alert.
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3410,
Keith hits the Herald pages again.
Blogger Keith Ng last night looked at the Government's numbers on the Public Address website saying wages for miners weren't as lucrative as they appeared.
Ng said the median income for wage and salary earners in mining during 2008 was actually $57,660, a long way off the "output per worker" of $360,000 quoted by Energy and Resources Minister Gerry Brownlee.
"Wow, $360,000, that's heaps! If we were all miners, we'd all be rich!
"Here's what Gerry did. He took the total worth of the mining sector, then divided it by the number of people it employed. It does not mean that more mining = higher productivity. It just means that mining is very capital-intensive and employs relatively few people, which are fairly obvious facts," said Ng.
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The figure that I/S cited was of the value of "economically utilised" resources - minerals with mine shafts already sticking out of them.
Not quite. "Economically utilised" means "someone in NZ is digging it up". The actual value is based on the lifetime of the resource, i.e. total stocks. For minerals with "unknown but large" stocks (e.g. aggregate), they assume a lifetime of 100 or 1000 years, because it makes very little difference to the value.
What they're doing is that instead of going "x tons at $y per ton", they're treating the "resource rent" of a particular mineral - the net operating surplus of all companies extracting it minus cost of capital - as an annual income stream for the lifetime of the resource, and then taking the NPV. Which tells you why the analysis doesn't include unutilised resources - there's no way of computing the resource rent.
Brownlee's BOTE method treats minerals as a bank account. StatsNZ treats them as an annuity. The latter reflects reality far better than assuming we can extract them all at once.
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Keith hits the Herald pages again.
They are outsourcing their intelligence again.
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To have a discussion that was in any way 'rational', you'd need to have sufficient information available on both sides of the argument.
Regardless of the truth in any of the claims, the mining debate so far has been couched entirely in terms defined by the government: i.e. the economic value of the mining proposals. Even the voices against it have focused on economic issues such as the effects on tourism and NZ's international reputation.
To really get 'rational', we'd need to look in detail at the other side of the story - the ecological and environmental values at stake.
Some examples of the pertinent information that say, the Minister for Conservation, Kate Wilkinson, could usefully contribute to the 'discussion' include:
- What percentage of NZ's lowland ecosystems have been destroyed or significantly modified?
- What percentage of NZ's lowland ecosystems enjoy legal and physical protection; sufficient to maintain their ecosystem processes and the viability of the populations of native species which inhabit them?
- Populations of what native species occupy the areas proposed to be mined?
- Which of these species is classified as threatened?
- Which native species populations (and ecosystem interactions) would be vulnerable to the effects of the proposed mining?
- What are the values of nearby natural areas, or ecological features in the catchments of the areas identified that could be adversely affected by the proposed mining? (In the cases of the Great Barrier Island and Coromandel Peninsula sites, the Hauraki Gulf Marine Park springs to mind).
- What other environmental, cultural, historical and landscape features and values may be affected by the proposed mines?
Until coherent and detailed information on these kinds of issues is brought into the mining 'discussion', it will remain far from rational.
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This is exactly the kind of diversification we ought to be considering if NZ is to grow to the point where young New Zealanders decide they can build a future here.
I hate to break it to her, but "in the future, you can grow up to be....miners!" is hardly the sort of inspirational call that will keep me in the country. Or, more to the point, most of the people I know with actual geology degrees.
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Background geologists reports for the areas on Great barrier Island and Coromandel are here. Short version:
* The Parakawai Ecological Area only has aggregate (in other words, they want to destroy a reserve for a fucking quarry)
* They have no idea what is in the Otahu Ecological Area, but there's gold nearby, so obviously it must be valuable (this is how geologists "think").
* they think there's 14 tons of gold and 550 tons of silver still on Great Barrier, but gettign it would require digging up, crushing, and pouring cyanide over 4.3 million tons of rock (which is a pretty big hole). The value of this is estimated by the dumbfuck method at over $1 billion, but as noted above, that's the wrong method, and its not how a mining company would do it. -
These calculations of the value of minerals assume they'll never increase in price (in real terms).
For some minerals (like iron) that's possibly true - the world could actually get along with no new iron ore just by recycling (gold and silver are a special case because of the huge stockpiles relative to production).
But for anything that's being depleted (coal for instance, or Gerry's deleted unobtainium) the value is likely to increase faster than inflation. So we're actually better off leaving the stuff in the ground as an investment than digging it up and selling it.
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Rich: that's certainly what mining companies think. Mining economics is all about optimising extraction to maximise your long-term rate of return.
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Not quite. "Economically utilised" means "someone in NZ is digging it up". The actual value is based on the lifetime of the resource, i.e. total stocks. For minerals with "unknown but large" stocks (e.g. aggregate), they assume a lifetime of 100 or 1000 years, because it makes very little difference to the value.
What they're doing is that instead of going "x tons at $y per ton", they're treating the "resource rent" of a particular mineral - the net operating surplus of all companies extracting it minus cost of capital - as an annual income stream for the lifetime of the resource, and then taking the NPV. Which tells you why the analysis doesn't include unutilised resources - there's no way of computing the resource rent.
Brownlee's BOTE method treats minerals as a bank account. StatsNZ treats them as an annuity. The latter reflects reality far better than assuming we can extract them all at once.
Aye. Just like to confirm that, after our back and forth on Twitter, you are correct.
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Rich: that's certainly what mining companies think. Mining economics is all about optimising extraction to maximise your long-term rate of return.
Not sure about that. It's what the resource *owner* thinks. Doesn't matter to the mining companies, as the more valuable the material becomes, the more royalties they'll have to pay.
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