Realising New Zealand's resource potential

Hon Simon Bridges

Minister of Energy and Resources

27 August 2013

Speech to Australasian Institute of Mining and Metallurgy Conference

It’s a pleasure to be here at your conference and to have the opportunity to speak to you all.

The minerals industry has traditionally played – and continues to play – an essential role in the New Zealand economy.

Our country’s abundance of natural resources provides unique opportunities for growth that ultimately benefit all New Zealanders.

Since becoming Energy and Resources Minister earlier this year, I have spent a lot of time talking about ‘opportunity’ – the opportunity that can be realised from developing our resource potential.

Mining generates over 7000 high-skilled, high-paid jobs and, in fact, the numbers employed are pushed out to almost 15,000 when all of the indirect jobs and support services are factored in.

Nationally, the sector contributes $20 million to the Government’s coffers in royalties and over $1 billion to GDP per annum.

The industry has copped some flack of late of being a ‘boom and bust’ sector, but this simply isn’t backed up by the facts.

Figures from Statistics New Zealand consistently show mining businesses are some of the longest lasting firms across all sectors.

As everyone in this room knows, exploration and investment expenditure can go up and down – but mining is a long-term industry with long-term gains.

This type of long-term approach is how the Government plans to realise our resources potential.

And it’s also this type of approach that puts the current market challenges in perspective.

Visiting the West Coast last month, I spoke with many of you here today about the testing times your industry is facing.

I hear you – now is not an easy time for the sector, both here in New Zealand or internationally.

But I’m also hearing good news – many of you are rising to face these challenges and are finding new opportunities.

Some examples include:

· Bathurst Resources’ resilience through a lengthy consenting process, on top of challenging market conditions

· Oceana Gold’s exploration success at the Blackwater gold prospect. This represents a large exploration spend for the company in a deep drilling programme that could extend the life of hard rock gold mining in the Reefton area.

While international investors are being more selective about where and with whom to invest, here in New Zealand we’ve been able to raise significant capital for minerals exploration and development over the last year.

Total exploration expenditure was almost $50 million in 2012 – a new record which reflects a growth trend in minerals exploration.

And New Zealand Petroleum & Minerals is continuing to experience high levels of permitting activity.

There are currently about 1000 mineral exploration and mining permits across the country, with a further 134 mineral permit applications currently being processed by NZP

Two of these are major offshore mineral applications;

· Trans-Tasman Resources, to extract iron sands in the South Taranaki Bight

· and Chatham Rock Phosphate, to extract rock phosphate on the Chatham Rise

It’s good to see applications like these being made.

As a Government, we are confident that the mining industry will experience future growth.

But what are we doing to ensure that?

Well, as you all know, it’s exploration that discovers new mineral resources that will grow this sector.

So, to attract new investment and new players, we need to get smarter about how we do business.

Why? Because the strategic management of our minerals resource ensures that we have the best capabilities, getting the best results for New Zealand.

NZP is working to unlock even more of New Zealand’s minerals potential and attract interest and competitive bids in exploration.

Northland 2012 was NZP’s first minerals competitive tender process, out of which five exploration permits have been offered to three companies in the tender area.

We’re pleased with this result.

It is proposed that two competitive mineral tenders be held in 2013:

· the Epithermal Gold Minerals Tender in the central North Island; and

· the Platinum Minerals Tender over parts of the South Island.

I’m pleased to announce that by the time I finish speaking today, the Epithermal Gold 2013 tender will be open – with the related data packs available on the NZP website.

The tender covers 8,040 square kilometres of the Central Volcanic Zone, across the Bay of Plenty and Waikato regions.

While the area is known to contain epithermal-style gold and silver deposits in both extinct and active geothermal fields, to date it has experienced low levels of investment.

We’re excited to promote this area for exploration.

It’ll allow us to identify economically viable minerals deposits that may offer far-reaching benefits to local communities, iwi and Māori economic development, and regional infrastructure.

The launch of this programme follows four months of consultation with 99 iwi and 13 local authorities in the proposed tender area.

The area excludes areas of significance and sensitivity – including around the Rotorua Lakes, Rotorua City and the Taupo township – along with land unavailable for mining under Schedule 4.

Companies interested in exploring for minerals have until the end of January next year to submit exploration work programme bids.

A company may apply for more than one exploration permit in the tender area, with the size of any one permit limited to 7,500 hectares.

NZP expects to offer exploration permits for an initial five-year period in April 2014.

Officials have also been consulting with iwi and councils in order to finalise the Platinum Minerals tender areas that’ll be opened up for exploration in the South Island.

I hope to be announcing these later this year.

I also want to highlight the Government’s on-going investment in improving our knowledge of the country’s resource potential.

I’m pleased that the results of the high quality aeromagnetic survey of the West Coast region are now available.

This survey represents a significant investment by the Government in the acquisition of data which will have a wide range of applications for the West Coast in areas such as:

· geological mapping

· forestry, agriculture and horticulture

· geological hazard assessment

· and mineral exploration

The survey also provides scientists with another insight on the South Island’s Alpine Fault, which is significant in light of the Christchurch earthquakes.

Finally today, I want to talk about the Government’s response to the Pike River tragedy.

As Energy and Resources Minister and Minister of Labour, I want to acknowledge the 29 men who lost their lives in the tragedy, and the families of those men.

The Government has made a commitment to the families to ensure we follow through on every recommendation of the Pike River Royal Commission.

There is a considerable work programme underway, and the Government intends to have implemented its response to the recommendations by the end of this year.

One of those responses is the introduction to Parliament of the Health and Safety (Pike River Implementation) Bill.

This Bill paves the way for a new set of mining regulations that will improve health and safety in the mining industry.

It will bring New Zealand’s regulation of mining health and safety in line with international best practice.

The new legislation also provides for the formation of WorkSafe New Zealand, a new stand-alone Crown agent focussed on health and safety which includes the High Hazards Unit.

The Bill is currently being considered by a Select Committee.

In closing, I want to thank you again for your invitation to speak today.

As I have said, your industry is built on strong traditions.

It has a proud history, it is an important contributor to New Zealand today, and it has a long-term future.

With a Government that is supportive of the mining sector, and a strong regulatory environment that is supportive of responsible exploration and development, New Zealand has never been a better place to operate.

ends