Business Rural / Summer 2013
SPECIAL REPORT: South Island Mining
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Gold price looks likely to remain depressed Hugh de Lacy Try as you like to talk up the price of gold, every new indication of the global financial recovery is trending it downwards in the medium term – and that’s having a direct impact on the activities of New Zealand’s two biggest goldminers. Certainly the price spiked briefly in July/August, topping $NZ1800 an ounce at the end of August as a result of the United States Federal Reserve delaying the winding down of its $US65 billion a month money-printing stimulation package. But because the Fed’s call was found to have been so close, that relief lasted barely a week, and through September the precious metal plummeted to around the $NZ1550/oz ($US1300/oz), the mark it reached after its long fall from a September 2011 peak of $NS2340 ($US1920). It bounced along in a narrow range at around that level over much of October, and was largely unaffected by the 16-day US Congress stalemate over raising the federal government’s debt ceiling. In the interim it became clear that Europe is
Gold’s appeal as a bolt-hole in times of uncertainty is diminishing.
definitely on the road to recovery at last – even the stricken Greek economy showed quarterly growth for the first time in years – and with emerging markets like India and China only chugging along, gold’s appeal as a bolt-hole in times of uncertainty is diminishing, and its reverse links to the value of the greenback are as rigid as ever.
New Zealand producers Newmont Waihi and OceanaGold have found themselves in similar positions, with the margins for their opencast mining now thin enough for them both to be looking at downsizing operations even as they discover enticing new prospects. Newmont has admitted shaving $NZ300 million
of its spending and shedding 200 jobs in the last two years. At the same time it has gained consent for its new billion-dollar Correnso underground mine directly below Waihi township, which is expected to yield 600,000oz over 12 years. Newmont is also mulling a drive for the estimated two million ounces sitting invitingly below the ageless Martha Pit, which has produced eight million ounces since it was broached in 1882. In the South Island the 260 jobs at Oceana’s Globe-Progress open pit on the West Coast are in jeopardy as the company considers mothballing it in 2015. But Oceana is not putting away the cheque book just yet, shelling out $11m in October to buy the 80% of Pacific Rim Mining Corporation it didn’t already own. Pacific Rim controls the disputed El Dorado project in El Salvador and has been battling the El Salvador government for eight years. Meanwhile, Oceana is doing a pre-feasibility study into its Birthday Reef on the West Coast where eight deep holes have indicated a 600,000oz resource at a startling grade of 21 grams of gold per tonne of ore.
Glenys – not afraid to give it a go
For West Coast identity Glenys Perkins, mining is in her blood. She talks to Jo Bailey about a lifetime spent in an industry she loves.
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hen Glenys Perkins and her late husband discovered evidence of old gold-mine workings on their farm, it was the beginning of a 40-year love affair with the mining and minerals sector. “We sold our new car at the time and purchased a gold screening plant. “It has certainly been an interesting journey from those initial tentative beginnings,” she says. Today, Glenys Perkins is recognised as one of the industry leaders on the West Coast, renowned for her vast project management experience and knowledge of the mining and minerals sector in the South Island. She is currently project manager for Titan Resources, manager of Taylor Coal, a director of Birchfield Coal, on the board of the Coal Association of New Zealand, and a trustee of West Coast Minerals. As if that isn’t enough to keep her busy, she continues to gold-mine with her son and daughter on the home farm, where they have also developed a dairy support unit and bed and breakfast tourist venture to complement the mining operations. In 2013 she Glenys was inducted into the Worldwide Who’s Who, for Excellence in Mining. “To be accepted by this prestigious organisation of professionals was a surprise and really satisfying,” she says. Perkins grew up in an “active family”, with a father who worked as a general contractor in land development, river protection, bush contracting and later as a coal miner throughout the West Coast. After his death, her mother asked for Glenys’ help to run the family coal mine, where she found herself bagging coal and answering the phone. “I quickly learned that coal is a very complex mineral and that every coal mine on the West Coast mines a different coal specification. “Understanding the dimensions of this coal chemistry from formation, mining and processing through to the combustion process has been an intriguing and challenging journey.” It was also around this time Perkins learned that while gold mining might be considered the “glamour industry, with the perceived romance of a quick fortune”, coal mining is for the steadier resource harvester, seeking a stable long term investment. She is still involved in the family business concentrating on sales, marketing and
Glenys Perkins: “It’s all about attitude and how motivated you are to succeed.” representation of the coal industry, “probably as my machine operator skills have diminished”. These days she mostly drives a laptop rather than a machine, working at the “marketing, innovation and management levels” within Titan Resources, Taylor Coal and Birchfield Coal to ensure their future development. She is also happy to serve on industry organisations, saying it is important the “grass roots voice of those in touch with the “coal face” is represented. “The day-to-day challenges facing these industries must be articulated so they are understood when policies are applied for the efficient extraction of any resource.” The “valuable and essential” contribution made by West Coast coals to the South Island economy shouldn’t be underestimated, she says. “Almost one million tonnes of coal per year are used in the processing of milk, meat, wool and horticulture. “The supermarket shelves would be very bare if it was not for coal used in the processing of these essential everyday products.”
The Australian mining industry is well supported, both politically and by the public, in comparison with our extractive industry in New Zealand.” Perkins says her gender has never been a barrier to working in the extractive industry. “It was not difficult for me because I was born into the industry. “However I established credibility early on because I was keen to learn new skills and give it a go. I don’t buy into the negative response to difficult challenges. It’s all about attitude and how motivated you are to succeed.” She would like to see more woman take advantage of the “myriad of opportunities” within the resource sector; and see a greater percentage of women moving into management and representation positions. “The women entering the industry whom I have met recently are brilliant women, who I hope will
go a very long way to furthering not only their own careers but expanding the opportunities for our minerals resource industries in New Zealand.” She is also keen to see some of the established initiatives from the Australian mining industry introduced here. “The Australian mining industry is well supported, both politically and by the public, in comparison with our extractive industry in New Zealand. “I believe our local mining industry would benefit from the introduction of initiatives such as the Australian ‘Minds in Mines’ programme, which supports not only the mining industry, but rural communities in promoting the wellbeing of our greatest resource – our people.”