McArthur River Mine economic benefits of $1.5B dismissed as ‘Wishful Zincking’
The Australia Institute has released a scathing criticism of economic modelling in the Environmental Impact Statement (EIS) for Glencore’s zinc mine expansion.
“Glencore claim up front that the expansion of McArthur River would generate taxes and royalties of over $1.5 billion,” said Rod Campbell, Research Director of The Australia Institute.
“But it’s not until you get to Appendix Z that you find out that this is based on the most fanciful modelling assumptions I’ve seen as a professional economist.
“Glencore’s consultants, Aurecon, assume that Glencore will be paying millions in payroll tax for a period of 1,000 years, out to the year 3017.
“Economists are usually hesitant to forecast anything more than a few years into the future, let alone 1,000 years.
“This is the equivalent of an economist in the year 1017 assuming that England would still be paying King Canute’s tax on animal hides in 2017, or that Chinese citizens would still do forced labour as tax as they did in the Northern Song Dynasty.
“Worse still, Aurecon ignore McArthur River’s record on royalties. They assume $435 million in royalties will be generated over 20 years, while in the first 20 years of the mine, it is only known to have paid a royalty once - $13 million after record zinc prices in 2008.
“Aurecon also ignore Glencore’s recent record of not paying company tax. The claim that McArthur River alone would generate $1 billion in company tax is not supported by analysis.
“Perhaps most spectacularly, the modellers assume technology and the structure of industries will not change for a millennium.
“A hypothetical economic modeller in 1017 doing the same thing would have assumed away the invention of the printing press, the steam engine, antibiotics and the economic consulting industry itself.
“The mine’s Community Benefit Fund does bring local benefit. However, Aurecon’s claim that the mine funds ‘vital public services’ is misleading. Most services are funded by government.