Multimillion-dollar injection for Central mining

L&M Mining will spend more than $10 million a year in Central Otago for the next six years through its Earnscleugh gold-mining operation.

Gold recovery became a 24-hour, seven-day-a-week operation a year ago, and the company plans to extract a total of about 110,000 ounces of gold, worth $187 million based on yesterday's spot price.

Mine manager Mike Coleman gave an update on the project to an Otago Chamber of Commerce "Riding the Storm" business forum in Alexandra this week.

The second stage of the project, using a bigger mining plant processing more gravel, would begin next month, gearing up towards peak production, he said.

"Over the next six years, we'll be spending in excess of $10 million a year in this community. Our staff are all locals and the contracts and spending we do is in the local community."

Asked later for a breakdown of the spending, project manager Shirley Herridge said it included wages paid to staff and contractors, and services and products supplied by local businesses.

"We've made a point of employing locals rather than bringing in staff, and the contracts and services and fuel and everything is sourced locally where possible.

"It costs quite a lot to run a mine this size," she said.

Eighteen staff are employed on site, rising to about 40 at the height of the operation later this year.

The company would not disclose how much gold had been extracted so far, she said.

Central Otago District Council business development manager Jonno Gadd said all new investment was a positive thing for the district.

"Mining is not a major contributor, compared with the money generated by agriculture and viticulture, but it's still bringing in a significant amount, over a long period, and it's great to see the growth and the opportunity that it's bringing to the community.

"It's a good thing and we'd view it as a positive contribution.

"You only have to look at Island block [former L&M gold mining operation] to see how they improved the land and the condition they left it in, so their claim of improving the land is a very credible one," Mr Gadd said.

Mr Coleman said rehabilitation work had not started yet, but it would finish up as improved farmland once that was completed.

No decision had yet been made on the use of the land after mining was completed.

Suggestions included orchard replacement, grazing and cropping, or viticulture.

Resource consents for the operation granted by the Central Otago council included 73 conditions, while the Otago Regional Council consents included 59 conditions.

A liaison committee had been set up, comprising local residents, mining company representatives and an environmental consultant, which met quarterly to discuss air, soil and water monitoring results.

Earnscleugh project
Alluvial gold mine.-

• Seven-year project; mining began late 2009.
• 150ha of land will be mined.
• Total gold resource estimated at 110,000oz.
• Value of gold based on yesterday's price: $187 million.
• Mine operates 24 hours, seven days a week.
• Employs 18 staff; workforce will climb to 40.

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