<21st Century mining> <Facts and views on NZ mining>

Economic benefits of the NZ resource sector

NZ minerals production (excluding oil & gas and geothermal) by value was close to $2 billion in 2009, divided between: coal ($710 million), gold and silver ($673m), aggregates ($425m) and ironsands ($163m).

Notes: The term “aggregates” includes limestone and other industrial minerals, information provided by Crown Minerals and the AQA. Information on coal was provided by the Coal Association of NZ. Information on gold and silver was sourced from the NZ Companies Office and Crown Minerals. The figures for ironsands were sourced from the Crown Minerals web site, and assume a value of $US60/tonne, on the advice of FMG Pacific Ltd.

New Zealand has a bright future in prospecting, exploration and mining of minerals, aggregates, geothermal and other resources. This is because our country is resource rich but relatively underexplored. Our resources will only increase in strategic importance and value to NZ and to the world. Here are some examples:

Oil and gas in New Zealand’s vast Exclusive Economic Zone, the world’s fifth largest, are likely to have great potential. This is because our best-known field, the Taranaki Basin, is relatively under-explored compared to, say, the North Sea, and the broad-scale geology is favourable. The Government introduced a Petroleum Action Plan in 2009 to help industry explore and develop this potential. Oil and gas contribute directly $1.9 billion a year to the NZ economy, and employ 3730 FTEs. The inclusion of indirect effects boosts these figures to $2.5 billion and 7700. 

Coal of coking quality is sought after for steel making in New Zealand and abroad, e.g. India and China. Our sub-bituminous coal is used in electricity generation, for the national grid and energy-intensive industries such as dairy processing, and also for domestic use. Total coal production is close to 5 million tonnes a year.

Lignite reserves, if extracted at 20 million tonnes a year, could provide energy and feedstock for much of New Zealand’s fuel (diesel, briquettes) and petrochemical and fertiliser requirements for the next 300 years or more. The estimated resource of 12 billion tonnes, if recovered, holds the energy equivalent of up to 40 Maui gas fields.

Carbon capture and storage (CCS) technology is a focus for government and industry research spending, with the prospect of “clean coal” for New Zealand, and worldwide. As much as $US36 billion has been invested in the last two years worldwide in 80 large-scale CCS projects. New Zealand and Australia are part of this important effort towards reducing global greenhouse gas emissions, via the CO2CRC. 

Ironsands are found offshore of New Zealand’s western coastlines from Northland southwards. Byproducts of titanomagnetite processing include titanium and vanadium. Properly managed for environmental effects, the value of the extractable resources is likely to run into the billions or even trillions of dollars, over time.

Gold is currently attracting high prices, exceeding $1300/oz, with good prospects for more resources to be found and developed over time. Aside from traditional uses, gold is used routinely in electronics and is essential to satellite telecommunications.

Geothermal resources development has been given new impetus with recent clarification of property rights in the Central North Island.

The resource sector makes a significant contribution to the New Zealand economy

• 6800 people directly employed, and 8000 indirectly employed

• Median wage for a resource sector worker was $57,320 in 2008, cf. the national median of $33,530

• Oil, gas, coal, gold and other minerals, and aggregates contributed $2.15 billion to GDP in 2008

• Minerals exports in 2009 earned $3.6 billion (8.2% of goods exports)

• Properly encouraged and managed, the resource sector’s contribution to the economy over time could triple

Further information is available in Straterra’s submission of May 2010 to the Ministry of Economic Development on “Maximising our mineral potential: stocktake of Schedule 4 of the Crown Minerals Act 1991 and beyond: discussion paper”