“How could I look my grandchildren in the eye and say I knew about this – and I did nothing”. David Attenborough

Foulden Maar, ten kms southeast of Middlemarch, Central Otago, is a 23 million years old, small but deep volcanic crater. After becoming a lake, it gradually filled over the following 130,000 years with layers of microscopic silica-bearing plant life. It contains exceptional levels of fossilised organic material, ranging from microscopic algae, insects, fish, birds, mammals and reptiles.

It is considered by the Otago University Geology Department to be of international importance as a paleontological site from which it is possible to reconstruct entire ecosystems from the past. Its layers of strata provide one of the best records of prehistoric climate change in the world.(1) International geologists and scientists are currently studying invaluable fossils and geological samples that have been extracted from the Maar.  While it carries no legal weight, the Geoscience Society of New Zealand Geopreservation Index Ratingof Foulden Maar is being upgraded to A = international importance.(2)

Foreign Ownership Puts This Under Threat

Transnational corporation (TNC) Plaman Resources Ltd, is currently gearing up to opencast mine the reserve of an estimated 31 million tonnes of diatomite (microscopic algae and fossils) for the next 27 years. In 2014, the major shareholder of Plaman, Iris Corporation of Malaysia, announced plans to use Foulden Maar diatomite as a fertiliser on palm plantations in Southeast Asia. Sensitive, however, to the public condemnation, Plaman announced in May 2018, a new application for the diatomite as a unique animal feed additive(3), the market for which will be offshore factory farms and feedlots.

Back in 2014, under the National government, the Overseas Investment Office (OIO) granted Plaman permission to purchase the liquidated assets of former mine owners which included 42 hectares of Foulden Maar. The then Minister of Mining, Simon Bridges, extended their mining licence to 2033. At the time of writing, Plaman has an application with the OIO to buy the 400ha surrounding sensitive land, currently operating as an award-winning Merino and Hereford stud farm.

Who Is Plaman Resources?

Plaman Resources, trading as Plaman Global, is the brainchild of young Australian investment bankers Pete Plakidis and George Manolas. Plakidis previously worked for Deutsche Bank and Manolas for Goldman Sachs. Minority shareholder of Plaman Resources at 49.05%, is Burleigh Nominees, a company known for purchasing distressed assets.(4) Owned by the Manolas Family Trust and the Plakidis Family Trust(5), it is domiciled in the tax haven Isle of Man.(6) They also have other business interests domiciled in the British Virgin Islands tax haven.

The Malaysian Connection

The majority shareholder of Plaman Resources is Malaysian tech and agro giantIris Corporation (50.95%). Iris Corporation’s biggest shareholder is FELDA (Federal Land Development Authority). Through its subsidiary, Felda Global Ventures Holdings Berhad (FGVH), it is the world’s largest palm plantation owner (450,000 hectares plus) and the world’s third largest palm oil producer. (7)

FELDA and Iris directors have recently been implicated and arrested for corruption and graft. The Wall Street Journal reports FELDA has also been complicit in widespread human rights abuses of migrant workers on their Malaysian palm-oil plantations. Passports seized, and workers forced to work in slave-like conditions rife with abuse, no health and safety, subject to toxic sprays (Paraquat) with no protection, often earning less than the legal minimum wage, and even having wages withheld.(8)

On 20 March 2018, Rozabil Abdul Rahman, Executive Director of Iris Corporation, was appointed a director of Plaman Resources. It appears Rahman’s personal wealth was acquired through engineering company Destini Holdings Berhad (manufacturing trucks, trains, ships and airplanes), of which he owns a 25% shareholding.(9) Under his management, and with his close political contacts, Destini has successfully acquired many contracts with the Malaysian government, particularly the military.(10)

Until late June 2018, Rozabil was the Arau region Divisional Vice Chief of the political party United Malays National Organisation (UMNO),(11) a nationalist party that aspires to uphold, defend and expand conservative Islam across Malaysia. UMNO has moved far from its liberal roots, and in the words of former UMNO Supreme Council member and magistrate, Syed Hamid Syed Jaafar Albar, “… twisted to become intolerant, self-centred and even undemocratic… its leaders have grown elitist (and) have practised and condoned a denial syndrome… foregoing transparency and the rule of law in favour of their own excesses (and) allowed abuse of power and corruption to thrive.”(12)

Rozabil was recently summoned to court along with his close associate, Arau region UMNO politician, Shahidan Kassim, for the failure to pay for 60,000 custom made rice cookers. These cookers were stamped with the UMNO logo, and one can surmise it was to buy votes from poor Malays.(13) Shahidan is an extreme nationalist and leading proponent of Salafism, a puritanical Sunni Islamic movement. As a Member of Parliament in 2017, Shahidan demanded that atheists and atheist groups be identified and hunted down.(14) It was Rozibil whom Shahidan chose to take over from him as President of the professional football club, Perlis FA(15).

The club was later bailed out by Malaysia’s disgraced former Prime Minister Najib Razak,(16) now facing a 20-year prison sentence for widespread corruption and money laundering. International investigators say, during his nine years in office, Najib and his associates looted billions from the Government-owned 1Malaysian Development Berhad (1MDB). (17) During this time, Iris Corporation entered into a shareholders’ agreement with Burleigh Nominees to form the New Zealand incorporated joint venture company, Plaman Resources Ltd(18) with the intention of mining diatomite from Foulden Maar.

New Ministerial Directives To The OIO

In light of Grant Robertson’s new Ministerial Directives to the OIO, (see Linda Hill’s “Overseas Investment Under The New Government”, in Watchdog 148, August 2018, http://www.converge.org.nz/watchdog/48/02.html), we were curious to see how this company stacks up.

“Generates High Level Of Benefits To New Zealand”

Mining companies pay relatively little tax. Royalty revenues run well below 1% of total output by value, and company tax is minimised by generous depreciation and the ability to carry tax losses forward. The much-lauded transnationals Oceana Gold and New Zealand Steel Mining paid no company tax at all between 2004-2009.(19)

Excluding oil and gas, all other mining activities – collectively labelled ‘mining and quarrying’ – account for around 0.4% of the gross domestic product (GDP). Due to the tourism industry’s large weight in the NZ GDP, the impact on GDP resulting from loss of brand image could easily outweigh the narrowly measured gains from a mining project.(20)

So how economically valuable is the Foulden Maar diatomite reserve? There is already more diatomite available than the world can use. The Minerals Yearbook Metals and Minerals 2010 Vol 1 estimates, “… world reserves to be more than 500 times the current [2010] estimated world production… Lompoc CA (USA) has deposits to meet all of the world’s current diatomite consumption for hundreds of years”.

Over the decades, total world diatomite production has shown little increase. By 2025, Plaman intends to export 500,000 metric tonnes of processed diatomite (diatomaceous earth) per year. This would be a 15% increase on current (2017) total world production and make New Zealand the second largest producer in the world, just behind the USA.(21)

Plaman is reported as expecting to earn “billions” from the Foulden Maar mine over the next three decades,(22) claiming that as a fertiliser, it is worth US$320 to $400 (NZ$500 to $600) per tonne, and significantly more as a stock feed supplement.(23) But on the world market, diatomaceous earth is a low value product. United States Geological Survey Mineral Commodity Summaries 2016, states prices per tonne vary from US$100 to more than $400 for speciality markets including art supplies, cosmetics and DNA extraction(24).

“Creates New Productive Assets”

There has been a small local quarry at Foulden Maar for 60 years, so this is not a new development. Former mine owner Graeme Thompson, whose family mined there for four generations, wrote in a letter to the Otago Daily Times, that due to organic impurities and high water content, the diatomite is of poor quality. (25) A 1999 Ministry of Economic Development report supports this, stating the diatomite is “… of too low a quality for many markets”.(26)

Because diatomaceous earth is an additive to many products, it is likely the value added to it happens offshore. The processing in New Zealand simply gets the diatomite into a transportable raw product. 

Plaman, sensitive to public condemnation of New Zealand diatomite being an additive to fertiliser on environmentally destructive palm plantations, came back in March 2017 with a new application. They now claim the diatomite at Foulden Maar is a globally rare and valuable ‘black’ diatomite, rich in organic content.(27) This is true only in the sense that it is rare in situ.(28) This black diatomite is wet diatomite found below the water table. When it is brought to the surface and dries out, it is an impure white diatomite.(29)

Trademarking it as Black Pearl,(30) they promote it as a green and organic(31) stock feed supplement which will reduce the use of antibiotics on factory farms and feedlots. Rob Aukerman, President of Plaman Animal Nutrition & Health (not a scientist), claims they are part of the "clean food movement... it’s the right time for our product. It’s natural, it’s non-antibiotic and it has broad applications."(32) Having commissioned short term efficacy trials in the US on Black Pearl as an animal supplement, Aukerman lauds the results as “off the charts.” (33)

This is however disputed by Simon M Shane, Adjunct Professor of Poultry Science at the College of Veterinary Medicine, North Carolina State University, who says: “Absent data and any details of the diets fed and housing of stock, [make] it not possible to evaluate any claims by Plaman Global. There is no published data in the peer-reviewed literature to support a claim that diatomaceous earth can serve as a growth promoter or enhance feed conversion efficiency in monogastric animals.”(34)

He further adds: “Why diatomaceous earth taken from the ground in Otago, New Zealand, should have growth promoting properties, has yet to be explained. Plaman Global should not only demonstrate efficacy and safety of Black Pearl, but also the biological basis on which benefits, if demonstrated, are obtained.”

The claims Plaman is making in New Zealand aboutBlack Pearl as a stock feed additive, (among them, that it increases average body weight gain and improves carcass yield and meat quality(35)) contravenes the ACM Act (Agricultural Compounds and Veterinary Medicines legislation). It means they can sell the product in NZ, but cannot promote its so-called benefits, making it unlikely to be available to NZ farmers. They have stated it will be trialling in large companies in the USA, Brazil, Mexico and Argentina.(36)

Diatomaceous earth is used by alternative holistic agricultural practitioners, adding it to stock feed at between 2% and 5% of bulk. It is unlikely that the international stock feed industry can absorb Plaman’s planned annual output of 500,000 tonnes.  Meanwhile a search of the New Zealand Trademark Register shows another Plaman Black Pearl trademark – as a fertiliser.(37) A logical conclusion is that while some of Plaman’s Black Pearl will be used as a stock feed supplement, most will be quietly used in bulk application fertiliser on the palm plantations of Iris Corporation’s shareholder company, FELDA.

Diatomaceous earth is also used as an anti-caking agent. Black Pearl will most likely be added to stock feeds containing molasses.(38) Remember Iris Corporation’s largest shareholder? Felda Global Ventures Holdings, in addition to its immense palm plantation interests, also has interests in sugar and intends to “…control the complete sugar value chain with the goal of becoming Southeast Asia’s premium sugar refining and trading company”.(39)

“Is Environmentally Sustainable”

Most diatomite mines process on site. Foulden Maar is in a drought prone area and there is insufficient water for processing which involves crushing then heating to remove moisture, prior to pelletising for export. The energy source will have to be coal given that “…there is no practical alternative to coal as a source of affordable, industrial process heat…especially in the South Island which has no online gas.”(40)

According to a Plaman document presented to the Strath Taieri Community Board by spokesperson and mine manager Craig Pilcher, processing will be happening at Awarua, near Bluff.(41) In the fourth year of the 27-year operation of the mine, 50 purpose-built dedicated bulk truck and trailer units will leave the mine at the rate of 4.5 trucks every hour, 24 hours a day, seven days a week.(42) This is 216 truck movements every day for the following 23 years. The diatomite from Foulden Maar has 60% moisture content, so the trucks are carrying mostly water on the 260km trip and returning empty.

A conservative estimate of total CO2 emissions from these truck movements is 91.80 tonnes per day, 642.60 tonnes per week, 33,415.20 tonnes per year, and 768,549.60 tonnes for the 23 years of maximum output.(43) This does not take into account CO2 emissions from the mine works itself, nor the coal burnt at the processing plant. Plaman Global on its Website states that: “Black Pearl® reduces greenhouse gas emissions, both directly and indirectly”(44) (my italics). This is at a time when New Zealand is working to become a low carbon economy and has obligations under the Paris Agreement to reduce carbon and greenhouse emissions.

There are significant costs associated with closing a mine, and whether those impacts are even known 27 years before the event, or can be monetised, is debatable. What is Plaman Global provisioning financially to cover those long-term future, and importantly, unpredictable and unknowable costs? The only indication given to date is that the large 180-metre deep hole will be left to fill with water.

“Provides Economic, Environmental, Social & Cultural Benefits To Regional Communities”

The world over, mining companies arrive in regions struggling economically, and woo politicians and local communities with the promise of jobs and economic development. Plaman Resources has said the mine site will provide 20-40 jobs (best case scenario). The processing plant in Awarua will employ up to 90.(45) In addition to this, there will be truck drivers delivering the raw diatomite to the plant.

Mining, however “… generates far fewer jobs, and less wages and salaries, per dollar of final output, than other sectors.”(46) It has not been a growth-leading sector, and its economic contribution is far more unstable (volatile) than national output, consistent with the sector being more boom-and-bust than the average. (47)

The broader costs of hosting a mine far outweigh the benefits of a few minimum wage jobs. The transport logistics alone of this mine come with a huge financial cost to the region. State Highway 87 between Middlemarch and Mosgiel (64 km), is winding and steep. It contains only one passing lane. The road in winter is icy and visibility is often very low. Increasing frustration from being stuck in car behind a fleet of slow-moving trucks is a recipe for disaster. Accidents are not infrequent on this road due in particular to icy winter conditions, and increasing the traffic volume by 40%, will increase the number of accidents.

As well as paying for medical care, hospital stays and rehabilitation, the people of New Zealand via rates and taxes, will be footing the bill of increasing road maintenance, repairs and upgrading. Traffic noise from 216 trucks 24/7 will have a dramatic and unwelcome impact in this quiet rural environment. The costs of dealing with the impact of noise on health and well-being must be included in the economic equation.

In the immediate vicinity of the mine, locals will no longer have proper and safe use of bridges and surrounding roads.  The volume of trucks means farmers who have traditionally moved stock by foot will no longer be able to. Current farm-stay accommodation businesses will become unviable. Movement of local residents, heritage tours, school bus, rural post and emergency services will be dangerously compromised.

Cycling is out of the question, and further development of the Otago Rail Trail towards Sutton no longer realistic. Road widening will force people out of their homes. Middlemarch will no longer be a feasible destination for one day visits. The promotion of State Highway 87 as an alternative scenic route to Queenstown will be unviable and the burgeoning tourist industry will be severely curtailed. Rather than meeting the Ministerial Directive, this mine does the opposite, impacting severely on current economic activities, on the quality of life of the specific Strath Taieri area, the broader regional community, and all people living on the trucking route.

“Provides For Significant Participation And Oversight By New Zealanders”

It is unclear how many or how few employees Plaman currently has, nor does the company appear to have any experience in mining. Since the beginning of 2018, Plaman has made a series of press releases announcing key appointments. The one local is New Zealand General Manager, Craig Pilcher, formerly of Bathhurst Resources where he secured all resource and council consents, negotiated the freight & logistic contracts and the mining services agreement for the coal pit at Takitimu.(48) He is the only public face for the company and has been meeting with local politicians. Founding directors Manolas and Plakidis are very publicity-shy, and to date have refused to talk to media.

Plaman makes much of having headhunted recent US-based appointments from animal drug transnational, Elanco, recently called the “Monsanto of the animal drug industry”.(49)  Professor Shane from North Carolina State University had this to say: “The commercial component of the company (Plaman) will be headed by personnel previously employed by Elanco Animal Health. Recruitment of these marketing managers and representatives is understandable given that Eli Lilly, the parent of Elanco Animal Health, has announced that the subsidiary will be either sold, spun off or dismembered and has commenced downsizing”.

Aside from (more than likely) minimum wage production-line jobs at the processing plant in Awarua, and up to 50 truck drivers working for between minimum wage to $26 per hour, the opportunity for New Zealanders to have significant participation and oversight, is nil. On the Plaman Website, between images of newly hatched chicks and another of many hands coming together in unity, it declares:

“… we are committed to being an approachable and socially responsible neighbour who shares the benefits of our projects with stakeholders within the communities in which we operate.”(50) To date there have been promises of community consultation which have failed to happen. The September 2018 meeting did not eventuate and has been postponed until “sometime next year”. (51)

“Significantly Increases Value Added Activities In New Zealand”

It is not a case of the mine or nothing. There are much more sustainable alternatives that augment rather than destroy the resources of Foulden Maar and the Strath Taieri region. Otago’s night skies are world renowned for exceptional darkness and lack of light pollution. Otago Museum Director, Dr Ian Griffin, has described the Otago region as “… excellent for astronomy, arguably beating Tekapo in terms of its clear night sky”. (52) Naseby, just 52 kms from Foulden Maar, is already working to develop itself as New Zealand’s first Dark Skies Community town. Why not expand this? Why not develop the Strath Taieri alongside the Maniototo, as a stargazing region par excellence?

What if Foulden Maar was preserved as a geopark and museum? What if the Strath Taieri set itself the task of combining geo-science with geo-tourism? What about a permanent research facility in conjunction with the Otago University Geology Department based in the area? The region would become an international centre of scientific, geological, astronomical and climate change research. Such models are already working in Europe. The Vulkaneifel Geopark and Museum in Germany is a great example. Attracting scientists and geo-tourists from all over the world, its significance has been recognised by UNESCO (United Nations Educational, Scientific and Cultural Organisation).(53)

Focus On Area’s Natural Heritage

By focusing on the area’s natural heritage, such a park could contribute significantly to the sustainable development of the region, combining ecological land use with green tourism and downstream economic development. There is already the Otago Rail Trail, the Taieri Gorge Railway, heritage bus tours, Sutton Salt Lake walk and the marvellous Rock and Pillar Range. We need to augment rather than pillage the treasures in our part of the country, for our children and our children’s children.  

One hopes that central Government through its agencies such as the Overseas Investment Office take action to protect New Zealand against such rapacious exploitation of our natural and finite resources. The Ministerial Directives need to be taken seriously and acted upon. It should not be left to local communities to fight a rearguard action.

So many of our dreams at first seem impossible, then they seem improbable, and then, when we summon the will, they soon become inevitable. Christopher Reeves.