Gold miner prosecuted over production records

Publish date: 04 March 2020

For the first time since the introduction of the Crown Minerals Act in 1991, a miner has been prosecuted for providing false or misleading information in relation to the amount of gold production declared.

A West Coast miner last year admitted four charges brought by the Ministry of Business, Innovation and Employment (MBIE) and in December was dealt with under the MBIE diversion scheme, which included paying reparations and making a sizable monetary contribution to a local community project.

In 2016 and 2017 the miner declared to MBIE that a substantial amount of gold he produced at one mine came from his other, inactive mine. This enabled the miner to reduce the amount of royalties payable to MBIE.   

Mining permit holders are required on an annual basis to provide MBIE with operational information for the preceding year. This includes accurately stating the amount of gold they have produced.

An investigation carried out by the compliance team within MBIE’s Energy and Resource Markets branch included visits to both mine sites with a MBIE geologist, and analysis of satellite images. It found that production from the active mine had been under-declared by around 250 per cent, and had been instead declared as coming from the inactive mine. The inactive mine carried a historic mining licence, which is not subject to royalty payments.

National Manager Compliance for Energy and Resource Markets, Jackie Adams said the Crown Minerals Act clearly states that annual gold mining returns must state the actual amount of gold produced from a mine and, where the miner holds multiple mining permits, the amounts for each mine must only be declared against the mine from which is was produced.

“If you are providing false or misleading information to the ministry in your annual summary returns, you cannot expect to get away with it. We will investigate instances of fraudulent returns and take enforcement action where appropriate,” said Mr Adams.

The maximum penalty for the offence is $800,000.

Mr Adams said his compliance team has recently increased its capacity and has put considerable resources into proactively engaging with miners to ensure they are aware of the obligations under the Act.

In 2019 the compliance team visited 108 mines and quarries across the country. A number of information evenings were also held with mining permit holders, to provide advice around compliance and to inform people how to become compliant.    

Mining permit holders are encouraged to check they understand their obligations which are set out in the Minerals Guidelines page on the NZPAM website. Miners can contact the compliance team with any questions, at ERMcompliance@mbie.govt.nz.

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