Mining and the NZ economy

In the same way that mining supports the way we live, it also underpins much of our economy.

Here’s how mining contributes to New Zealand’s economic wealth:

Jobs

There are around 4,290 people employed directly in the minerals sector (excluding quarries). These are high-paying jobs earning more than $105,000 on average – almost twice the national average wage of $59,000. Many of these jobs supports a family and a household in regions and communities that often don’t have the job opportunities that are found in our cities.

Regional development

In areas such as the West Coast, Coromandel and Taranaki, mining plays a substantial role in underpinning regional economies. For example, on the West Coast, a 2010 study by BERL calculated 40% of regional GDP is earned directly and indirectly from mining, mainly gold and coal. Because of the high incomes associated with the mining industry, regions that can exploit their natural resources have relatively high household incomes for a very small footprint – no other land use earns nearly as much per hectare. The high household incomes on the West Coast come from a mining footprint of 14km2, compared to the region’s total area of 23,000km2.

Mining’s economic contribution is concentrated in a handful of places in New Zealand.  Nationally, its contribution is important, but it is the lifeblood for some regions.   The districts most dependent on mining (in terms of employment) are Buller, Hauraki, Waitomo and Waitaki.  The region most dependent is the West Coast (Buller, Westland and Grey). Mining and exploration directly employs 339 people in the Buller District.  This is 8.12% of its total workforce.  Mining directly contributed $202 million of GDP or 22.9% of Hauraki District’s total in 2017 (according to Infometrics)


 

Sector Statistics

A 2017 Infometrics report identified the significant economic contribution of the mining and exploration sector to the NZ economy:

  • GDP contribution $2.6 billion or 1 per cent of NZ total GDP
  • Average wage: $105,000 a year
  • Labour productivity: $568,700 per FTE (cf. NZ average of $108,200)

These statistics demonstrate that mining is a high-value sector producing very good incomes for New Zealand workers and their families, mostly in regions and communities that don’t have large manufacturing industries to provide jobs.

 

Most revenue stays in New Zealand

An independent report by KPMG for OceanaGold New Zealand Ltd found, in 2016, $330 million, or 88% of the company’s expenditure on its domestic operations, reached people and businesses in New Zealand through wages and procurement. 

 

Exports

Mining is a $2 billion industry and more than half of that – $1 billion – earns export dollars for New Zealand. In 2018 the largest goods export to Australia was gold. Other exports include coking coal, iron sands, helyosite. Potential exists in NZ for increased gold exports and development of resources of rutile, REE, (refer to GNS work).

 

Domestic

Coal also plays a very important part in fuelling our domestic industrial processes and to a lesser extent in electricity generation. Coal contributes directly to our global competitiveness in the agricultural sector – Fonterra have stated that a study carried out on their Edendale plant showed that converting from coal to electricity would require capital investment of $160m and annual operating costs would increase by at least 50%.

 

Updated Oct 2018