Diversion agreement reached over Millers Flat mining without a permit

A diversion agreement over an illegal gold mining operation at Millers Flat, Otago has delivered a resolution that benefits all parties, including reparation to the local community.

In April, the Ministry of Business, Innovation and Employment (MBIE) filed charges in the Dunedin District Court against Hawkeswood Mining Limited when the company was found to have conducted gold mining on a permit that only allowed exploration activities – an offence under the Crown Minerals Act 1991.

“The vast majority of our mining operators here in New Zealand understand and meet their responsibilities but unfortunately, as with every sector, there are a few exceptions,”  MBIE's national manager of compliance for New Zealand Petroleum and Minerals Phil Latimer says.

“An exploration permit grants the right to explore for identified minerals to evaluate the viability of mining those resources. Typically, the types of activities involved aren’t significantly invasive.

“We became aware that Hawkeswood Mining had been mining prior to being granted a mining permit when we saw satellite imagery of the site showing large-scale opencast mining. At the time Hawkeswood Mining had an exploration permit.

“Following an investigation, which included detailed site analysis by Ministry geologists, we discovered the company had screened a large volume of material and recovered a considerable amount of gold. The work was of a nature and scale not authorised by an exploration permit.”

New Zealand Petroleum and Minerals is seeing an increasing number of operators undertaking mining activity under exploration permits. Three operators are currently before the courts on charges related to illegal mining.

“We are a fair regulator, and we are focused on supporting the sector to get to work but make no mistake, there is no room for cowboys in our sector,” Mr Latimer says.

“To their credit, once MBIE became involved Hawkeswood Mining took no further action at the mine, and engaged positively with the investigation, and has now accepted responsibility for the offending. Hawkeswood Mining has applied for, and has been granted, diversion after agreeing to repay the royalties it owes to the Crown and make a sizable donation to a local charity.”

Diversion is a restorative process that allows mostly first-time offenders to deal with the matter outside of the court system, to take responsibility for their offending and to avoid a criminal conviction.

“This is a good outcome for all parties and a really good reminder for operators that, just like regulators, the communities you are working in are watching you and will not tolerate bad behaviour,” Mr Latimer says.