Taking Stock 29 January 2026

We should first acknowledge that the Fast Track consenting process is in its infancy. Accordingly, it is open to silliness, indeed childishness, as various parties test the boundaries of the process.

To be applauded is the convener of the Fast Track panel, Jane Borthwick, previously an environmental judge. 

She deserves great credit for her dignity and tolerance last Friday when her procedural meeting was hijacked by various parties. A process meeting was held to determine a time frame for the FTA panel to weigh the consent application of Santana's gold project at Bendigo-Ophir, near Cromwell, and to get advice on the required skills of the panel.

That meeting was crassly misused by some parties which conflated the time frame issue with their highly extravagant personal plans to disrupt the process. 

Their submissions at the timeline-setting meeting were often dishonest, irrelevant or misleading.

For example, the issues of the Treaty of Waitangi, the science behind modern mining, the engineering efficacy of Santana's infrastructural design, and the means by which the historic gold mining sites would be preserved had absolutely nothing to do with a time setting meeting, and little to do with choosing a panel.

The somewhat divided Otago Regional Council wanted the Fast Track maximum time laws to be ignored, claiming the need for 150 working days to process the aspects of the application that applied to the council. That would eat seven months from the start date.

Some appeared to want a right of veto based on the need to wish to preserve the “culture” of the Clutha River.

Santana believed that the huge quantum of science, prepared at a cost of nearly $10 million, provided the answers to all relevant issues of science. So they wanted the approval process to be done in 30 working days, 60 maximum. 

Santana would have noticed that the consent application was forwarded on November 30, and that January 23, the day of the time-setting meeting, was at least 25 working days into the time limit set by the Fast Track law.

Had the meeting discussed the time limits and found a workable compromise — say 60 or 90 more working days — and discussed none of the sometimes hocus pocus claims of opponents, then the meeting would have concluded and work could have started on setting the time frame and choosing the panel.

Remember that the point of the panel's assessment is to measure environmental risk against economic benefit.

The economics are pretty well unarguable.

The Fast Track panel will weigh the benefits against the risks to Santana's calculations of return, financial, social and environmental. (Santana proposes to enhance the value of the land it mines — its own land). It will include the benefits of some billions of tax paid to New Zealand, measured against perceived environmental risks which will be assessed with balance.

In essence, Santana must show that its mine would not poison the Clutha River or local water bores, that it would not create dust that poisons foliage, that it would not kill unique flora or fauna, that it would treat the water and sludge produced by the gold-extraction processes, and that it would not generate toxic levels of diesel fumes, or noise.

The panel will then deliver a verdict after the agreed time. Jane Borthwick’s ambition will be to leave no room for nuisance appeals. 

All the chatter about redistributing wealth being more acceptable than generating new wealth should not take up one minute of the process; no relevance to the process.

 Frankly, neither should Maori believe that private land projects are subject to an interpretation of the treaty.

Chairwoman Jane Borthwick showed immense patience and occasional glimpses of irony and humour during the more absurd presentations and claims made at her Zoom meeting. 

One hopes her experience and common sense will ensure the process is not abused by people seeking a platform to show off or enhance their public visibility.

Whether or not the project is consented is to be decided by a judgment of science and economics. 

I have no ability to forecast that outcome but would despair for NZ if the outcome was influenced by irrelevant chatter, or fee-chasing lawyers.

Borthwick's role is to prevent that, so science and economics can be applied. I have respect for her and confidence she will perform her role skilfully.

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The mayhem in Japanese bond markets is having a much more profound impact than causing losses to traders. 

Last week the 40-year Japanese bond, for so long yielding around 2%, was trading at double that rate, causing panic in the market.

The result that really mattered was that this very high Japanese rate incentivised Japanese investors to sell their US government bonds, repatriate the money to Japan, and invest locally at the highest rates that Japan has seen for decades. 

The implication for American investors, watching the money exit US bonds, would lead to a significant fall in the US dollar, inevitably leading to higher interest rates. Inflation links to falling currency.

The probability of higher rates in the USA, meaning even greater debt servicing costs, and consequently even higher fiscal deficits, spooked investors, everywhere.

Recall that in 2018 the long-term (10-year) Japanese bond rate was negative. That prevailed for at least two more years. 

By 2023 the (10-year) Japanese rate had reached 0.5%, still a figure so low that Japan, like New Zealand, should have filled its coffers for the next decade by ramping up its debt issues (at 0.5%). Grab the cheap money while you can.

Like New Zealand, Japan lacked political leaders with the gumption to capture the moment, costing their country through lost opportunity, tens of billions. The NZ cost was $10 billion, leaving a legacy that Ardern and Robertson, and the public sector, will not enjoy.

Between December 2024 and last week the Japanese 10-year bond rate doubled to 2.3%, and the 40-year rate soared to 4%. 

Japan is in the top bracket of indebted countries, its sovereign debt at 230% of GDP, worse even than that of Greece during its crisis years 15 years ago. 

Japan's nominal GDP is US $4.46 trillion, and grows at around 1.1% p.a. The new high interest rates there are sure to push up inflation, and eat Japan's tax revenues.

In these critical moments Japan’s new Prime Minister, Sanae Takaichi, (first woman to be elected PM) has called a snap election (in the next fortnight) and signalled some tax cuts, running an even bigger fiscal deficit and even higher sovereign debt levels, aping the formula of the very short-lived Liz Truss government in Britain.

The global bond market responded by selling Japanese bonds, in anticipation of higher rates when Japan raises more debt. 

Note that a 1% increase in funding costs slices US $44.6 billion from Japan’s government revenue.

In summary, these are the issues that led to a crisis resulting in Trump suggesting Japan and the US would combine to regularise the market in Japanese bonds. 

This may sound as if Trump has currency firepower. We shall watch what the bond market thinks of that and understand that a sceptical response might haunt Trump, who needs US interest rates to fall, and be less unaffordable.

Takaichi, and Trump, may be about to discover that the bond market, which funds the deficits of over-spending countries, have a bigger bazooka than any country head. 

Bond markets do not tolerate stupidity or those who cannot do arithmetic.

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The ODT (Otago Daily Times) editor, Paul MacIntyre, narrowly avoided a nasty clash with the Press Council when this week the ODT published a strong rebuttal of some very poor ODT journalism.

MacIntyre is one of the many ex-Brits who have retreated to NZ to climb the journalism ladder, advancing from roles in Radio NZ, Nelson’s paper and The Christchurch Press, to become Allied Press’s choice as editor of the ODT in 2023.

Until 2023 the ODT was my preferred NZ daily paper, largely because of its coverage of world news and the rural sector, and the absence of opinion-based columnists pretending to be journalists.

Whether MacIntyre is responsible or not for its current collapse into activist journalism, my judgement is that that collapse has occurred.

Central to that collapse is very poor editorial direction and a new, I consider careless, tolerance of some faux journalism from another ex-pat Brit, Mary Williams. 

The paper's coverage of the company that would transform Central Otago, Santana Minerals, has been atrocious, with Williams' sometimes unhinged, incorrect articles being part of a barrage of nonsense, including giving airtime to factually incorrect contributed columns from a local lawyer, a film star/property developer and a left wing Auckland academic.

The lack of balance reached its zenith last week when the ODT headlined a poor piece of reporting with the words that Santana's "consent application had 'faltered'". 

The poor reporting followed a Zoom meeting which debated whether Santana's consent application would take 30, 60, 90, 120, 140 or 150 days, Santana being pushed into recommending 60 days. 

The convener of the Zoom meeting did not make a decision on the suggested timeline, but fielded opinion.

Williams somehow mistook that deferral of a decision as an invitation to mislead readers with the claim of the consent bid "faltering".

The result was that one investor in Santana was spooked into selling some millions of shares on Monday of this week, a day when the Australian market and the Auckland brokers were closed, significantly reducing liquidity in the stock. 

The shares fell from $1.33 to $1.06, the spooked seller losing value of some hundreds of thousands of dollars. 

I have no idea who the seller might have been. Perhaps it was a bunch of investors from one nominee company.

But money was lost. There may well have been a link with a newspaper error that would not have occurred had the reporter and the editor performed their roles to the level of competence that I would expect. (Nobody would be spooked by the loonies on social media).

Two days later the ODT published a well-written response from Santana, which by implication highlighted the incompetence of what seems like an editor-approved campaign from an activist reporter.

My complaint to the Press Council had been drafted before I read what could reasonably be described as evidence of contrition, a Clayton’s apology, by the ODT.

The ODT’s chairman, Julian Smith, needs to investigate the paper’s mostly inaccurate and incompetent coverage of Santana’s project. The campaign is unintelligent.

The spooked share seller might not find it hard to link his loss to the silly reporting. The share price returned to $1.33, where it was before the ODT article, within hours of the appearance of the rebuttal on Wednesday. Publishing that rebuttal may have stopped a trip to the Press Council. 

The ODT would be lucky if there were no other repercussion.

Travel

12 February – Lower Hutt – David Colman

18 February – Christchurch – Johnny Lee

3 March – Ashburton – Chris Lee

4 March – Timaru – Chris Lee

Chris Lee 

Chris Lee & Partners Limited