Construction News June 2009
Posted in: Perspectives: Tuesday, 30 June 2009
Construction News June 2009
Richard Michael, Chief Executive, Straterra
New Zealand’s civil construction industry is one of the most aggregate hungry sectors in the world – current consumption is estimated at 50 million tonnes per year.
Yet, as demand grows, planners are increasingly closing off access to local quarrying resources, forcing suppliers to ship aggregates longer distances by road and substantially increasing both the carbon footprint of developments and the costs of infrastructure projects.
Aggregate is a very significant issue for the development and maintenance of infrastructure. The price of a load can double every 30km it has to be moved from quarry to end use point. Auckland already has to ship about 25 per cent of its supply of aggregates for infrastructure projects from Northland and Waikato.
The National Freight Demands Study 2008 revealed that over 40 million tonnes of aggregate was moved around New Zealand last year, the largest amount of material moved in the country – and 99 per cent of it was transported by road.
The continued annexation of our aggregates resources, with planning considerations having all but closed off access to local supplies for many areas, is a key issue for the civil construction and natural resources sectors.
In my new role as Chief Executive of Straterra, the industry group representing New Zealand’s natural resources industries, I aim to raise awareness of some of the misconceptions surrounding quarrying and other extraction industries.
Better solutions need to be found to the high environmental and financial cost of transporting aggregates substantial distances by road – and, hopefully, this can be achieved through co-operation with local government and encouraging sensible and realistic planning.
Straterra believes strongly that all natural resources should be identified in the local government planning processes so that future planning decisions are at least taken with the full knowledge of the trade offs that need to be made. If this does not happen then this issue will continue to push up construction costs, lower our already poor productivity rates and limit the ability of companies to improve their environmental credentials.
Natural resources underpin all economic activity in the world from aggregates for building roads and concrete manufacture to coal for industrial processors and oil for transport. New Zealand’s massive untapped sources have the potential to provide a steep increase in this country’s economic growth.
New Zealand currently produces minerals, coal and petroleum with a total value of about $4,500 million per year, contributing about $2,000 million to exports. The metallic mineral potential of New Zealand has a gross in-situ value of more than $140 billion with lignite alone adding an additional $100 billion. There is good potential for the discovery of new oil and gas resources and geothermal can make a significant economic contribution.
The South Australian State Government was facing up to a number of economic challenges in the mid part of the decade. Low growth, high unemployment and lack of investment were characteristics of the state economy.
Premier Mike Rann was looking for a way to energise economic performance and settled on the natural resources sector as the most likely to be able to provide this.
South Australia’s federal government has generally been supportive of the natural resource industry and state governments have fostered exploration and enhancement of natural resources. Minerals and manufactures exports for 2007-08 were $3.0 billion and royalties contributed $2.9 billion (4.4 per cent) to the state’s Gross Value Added.
If New Zealand’s rich mineral potential is to be released, with maximum benefits for the economy and the minimum environmental footprint, it is vital that all organisations work together, with full understanding and clear communication.
Straterra has been formed with the aim of bringing together the interests of the entire natural resources sector and related bodies. Its vision is of prosperity through one partnership, including engaging with Government whose responsibility for setting legal frameworks and environmental standards is a vital part of the equation.
Several groups currently represent different parts of the natural resource sector and do a good job in their respective industry spaces. Straterra will attempt to bring together the common interests of all these groups and ensure a unified industry voice.
Straterra’s short term objectives include increasing co-operation between private and public sectors. In the past there has been a perception that these two groups have been antagonistic rather than co-operating to generate maximum benefit for all New Zealanders.
We will be pressing for a national policy statement outlining long term goals for the sector. We would also like to see a whole of Government response to issues related to the natural resources industry. The industry can have significant effects in the areas in which they operate, from economy and employment to the environment. These many factors require careful coordination and co-operation between industry and multiple government agencies so projects can deliver widespread benefits while enhancing these communities.