New Zealand’s minerals future

Introduction

Today, we are sharing a red-letter occasion. A Blackball event on hallowed ground. Today  we underscore the importance of our mineral estate. A reminder that our natural resource sector has much to offer.  Such a contribution will not come to pass without investment.

However, more than money is needed. Confidence, certainty and commitment are the building blocks. Consequently, I am here today to share my vision as to how this industry can create more jobs, increase regional incomes, improve our balance of payments and boost the economic resilience of our country.

Before I can talk to you about where we, the Government and the sector, can go together, we must talk about where we’ve come from and the barriers that are hindering our potential in the present.

A vehicle for New Zealand’s transformation

New Zealand boasts a long and rich history of mining, deeply interconnected with how our country has developed over the last 200 years.

Māori excavated pounamu, obsidian and adzite for use as tools, weapons and ornaments, followed by the increasing number of European settlers searching for valuable minerals, particularly gold, and coal.

By 1870, gold, silver, copper, lead and iron had all been discovered, and small-scale mining was under way. Our main goldfields and coalfields had been discovered, and coal was being mined in many areas of the country.

This new-found bounty was a catalyst for transformation – for our economy, for our development, for our technical skills and trades, and for our place on the world stage.

Legacies of the past live on today

Legacies of that transformation are everywhere – every road you drive on, every light switch you turn on, our schools, hospitals and homes. All enabled in some way by the extraction of our natural resources.

A number of our regions have been built on minerals development. Let’s talk about the West Coast for example.

Miners who were willing to put in the hard yards to make a go in the profession arrived from near and far. It was a decent living and communities were built around mining activity.

Today, 150 years later, some of the biggest employers on the Coast are coalmining operations. Around 280 workers rely on Stockton Mine to provide for their families.

Stockton produces around 80 per cent of our $300 million in sought-after premium coal exports, used in international steelmaking. This supply of premium coal for steelmaking is the future for our coal.

Around 200 people on the West Coast are involved in goldmining. Gold mined here represents 90 per cent of all alluvial gold mined in New Zealand, with an export value of around $80 million.

Alluvial gold mining crews in Westport work in forestry blocks between growing cycles. Others turn over poor quality farmland for improved production.

Targets of yesteryear are reinvigorated – like the nimble underground operation starting up at Reefton’s Snowy River which is mining a gold seam via a 3km tunnel under our conservation estate.

The legacy of mining is also generating new economic opportunities. The former Globe Progress open cast gold mine is rehabilitated, replanted with over a million trees, and will soon open as a recreation and tourism destination.

Economic contribution of the sector

So, if that’s where we have come from, where are we now?

Our GDP is $405 billion with modest growth. Sadly over the last three years our current account deficit has worsened, approximately 7 per cent of GDP.

Of equal concern is the state of our crown borrowings, $227b. Such sobering statistics show how important growth in all of our industries is. For those who doubt the wisdom of expanding the size of our mineral estate, answer me this.

Given our private debt has grown by 16 per cent over the past three years, how does our small trading nation meet these imposts without substantial growth?

So often natural resource debates are captured by resource management insiders. They conveniently overstate risk, understate cost, and rarely generate solutions for economic growth.

Well, the above numbers don’t lie.

Our minerals sector is a modest but integral part of New Zealand’s productive output, and we can't ignore the significant contributions it makes to regional economies.

The value of mineral exports in 2022 to New Zealand was $1.03b. This is about the same as the contribution made by fishing/aquaculture and seafood processing combined ($1.087b).

Mining generated 8.4 per cent of the West Coast region’s GDP in 2023. This is the third highest sector on the coast behind only dairy farming (10 per cent) and electricity and gas supply (12.6 per cent).

Mining provides high-paying jobs, supports local businesses, and generates substantial tax revenue that funds essential services like infrastructure, healthcare, and education in our regions.

Innovation, environment, and community at the forefront

The sector is now at the forefront of innovation. Precision has replaced guesswork, enabled by cutting-edge technology.

Robust environmental protections and rehabilitation is business as usual for New Zealand’s operators – something that is considered and planned for every step of the way.

Take OceanaGold for example, a company that has spent multiple millions of dollars on eco-sourcing, planting, and husbandry of the one million plants needed to revegetate the Globe Progress Mine mentioned earlier. The area, within the Victoria Forest Park, will be handed back to the community a restored and enhanced asset.

Federation Mining’s Snowy River, near Ikamatua, involves environmental work above and around its underground mine including onsite planting of 11,000 native plants and the establishment of passive water treatment ponds to ensure clean water is discharged into the Snowy River.

Other mines on the West Coast are involved in considerable environmental work to restore mined land with appropriate plantings native to the area, and to treat water with innovative means, including cleaning water through recycled waste mussel shells from Marlborough – a low-tech, highly effective way of working with nature.

This is what mining looks like in New Zealand.

The safety and wellbeing of our people and communities is non-negotiable. There have been times when we haven’t got it right. Our people haven’t come home to their families. Our communities have been left to deal with environmental consequences of unfinished jobs. Government and the sector carries both the weight of those failures and the lessons they taught us.

Social licence is becoming increasingly difficult to obtain due to these perceived environmental, safety and community impacts.

In my time as Minister, I have met operators who genuinely care about the communities that they are working in, and getting the best outcomes for their people and local environment. This is what builds social licence. This is what we must continue to demonstrate.

I know I’m talking to an industry that has no appetite for irresponsible practices.

The potential of the sector is being hindered by barriers

There are also other barriers to overcome – our regulatory systems.

The length of time it takes to deliver mining projects in New Zealand is costing us - in inflated costs, delays and in terms of our international reputation for doing business.

Much of this relates to the state of the Resource Management Act, but we have also suffered from negative signals through changes to Crown Minerals laws and unclear positions on conservation laws.

The past several decades have seen mining promoters sidelined or stigmatised. It is high time that the tables were turned and facts replaced tales of woe and exaggeration. We all want wealth and resilience. Trade-offs are necessary. Mitigation is key to achieving balance.

We have a vast estate of minerals opportunities due to our dynamic tectonic history, yet we currently don’t have a clear picture of what we possess and its economic potential, the minerals needs of our country, or what we could supply to global markets.

It is time for New Zealand to have an honest and considered debate on mining. The debate needs to acknowledge the criticality of minerals to our daily lives, the importance of maintaining a strong, independent economy and the emissions costs of importing materials we can perfectly adequately supply ourselves.

Some people argue against minerals extraction, but gladly rely on the conveniences of modern society that are enabled by those resources. ‘As long it’s not in my backyard’, it appears. The problem with that is we are relying on other countries to meet many of our minerals needs, and their supply can be fragile, volatile, unreliable, and sometimes without the regulatory rigour we apply to our own operators.

Are we really being honest and fair to ourselves and to the global community if we say ‘yes we want all the good things of a modern economy’, all of which need minerals and ‘yes we know we have lots of minerals that people need’ but ‘no thanks, we’d rather someone else does the hard work mining them’ and claim the moral high ground?

Mineral estates continue to be transformative foundations for economies around the world – the big question for us as a country is what could we achieve if we really enabled our minerals sector while still protecting the environment? Because in my view the opportunity is huge but it needs us as a country to get behind it.

Where we could go together

This Coalition Government is going to get New Zealand back on track. We will rebuild the economy, restore law and order, and deliver better public services.

My focus is on rebuilding the economy.

My vision for the minerals sector in New Zealand is that by 2040 we will have:

  • Grown our wealth base by utilising our mineral reserves to benefit all New Zealanders
  • Reduced our reliance on imported minerals and mineral products
  • Increased our contribution to global mineral supply chains.

I want to boost regional opportunities and jobs, increase our self-sufficiency, and position the industry as a critical part of our export-led focus, especially as we take advantage of the global opportunities for new minerals uses.

I want mining to be seen as a huge net positive for the country – a net positive not only economically but socially and environmentally.

My vision is also that we will have changed the prevailing mantra about mining to one which focuses on our mineral needs, economic opportunities, and our ability to deliver on this while acting responsibly.

Mining’s place in our future needs to be mapped out carefully and sustainably. It’s a journey we must not only agree together but walk together.

Growing our wealth and cutting barriers, not corners

My first focus area is growing our country’s wealth on the back of our minerals.

Minerals currently generate export earnings of $1 billion annually, $21 million in royalties and more than 5000 direct jobs for New Zealanders.

But we anticipate accelerated growth, through existing minerals like gold and coking coal, new minerals important to the clean energy technologies, and on top of this we expect increased domestic refining to add value to our raw minerals.

My goal is for the sector to double its export value to $2 billion by 2035, provide more than 7000 direct jobs across regional New Zealand, and support other sectors through the stable supply of essential minerals.

This is not out of reach. The establishment of 10 significant mining operations, each having the potential to generate $100m per annum, can lead this growth pathway.

To unlock that potential, mining needs to happen in the right place, in the right way, and in partnership with tangata whenua and local communities. But we don’t have the right settings to allow this at present.

In fact, New Zealand has long lacked clear policy direction on minerals extraction, making it harder to create enabling policies and creating investment uncertainty.

This changes now.

This Government will develop a long-term strategic approach for minerals that sets clear policy direction, identifying the actions needed to secure and increase minerals supply and their potential for use and export to maximise economic and Crown benefit from our mineral estate.

This strategy will include actions to clarify where mining can occur. I’ll say this now, Schedule 4 land is off the table under my watch – but not all conservation land is equal.

I support sustainable and environmentally approved mining on stewardship land and other categories of DOC land. A major priority is to clarify access arrangements for mineral extraction.

To allow efficient mining development we need to remove red tape.

The sector is impacted by the revolving list of regulatory barriers which currently exist, because we’ve never had a solid plan that we stick to.

This Government has already taken huge steps to speed up consenting processes to reduce unnecessary costs and inefficiencies hindering projects.

Ultimately, we want to enable major projects by improving decision making timeframes and giving greater investment certainty, with well-designed projects having a clear and fast path to consent.

The Fast-track Approvals Bill is already before Parliament, but there is more work needed across all of the legislation and approvals required by miners when they are working outside the fast-track process.

That doesn’t mean we can drop the ball on environmental protections, rehabilitation or our people – all these things need to coexist together.

I want to see mining making a positive difference to our iwi and hapū across the country, enabling better access to cultural minerals, creating more jobs and ensuring long-term benefits flow to our community.

I want us to demonstrate a net benefit to environments and communities in which we work.

Increasing our domestic resilience

My second focus area is to improve our domestic resilience for the minerals our country needs.

New Zealand has a wealth of mineral resources and I would rather we extract from our own backyard than be left with no choice but to import from places with lower environmental and employment standards.

We have critical shortages of aggregates in Auckland, and we’re importing phosphate from the Sahara.

Increasing our domestic resilience will create more jobs and ensure our minerals come with high environmental credentials.

To do this, we first need to improve our understanding of what minerals we have, where they are and what we need.

What are the minerals needs of New Zealand now and in the future, and are those supplies secure and affordable?

We will develop a list of critical minerals for New Zealand to answer these questions. Developing actions to secure a better supply of these minerals will start in our own back yard. This Government will invest in geological modelling and resource potential mapping of our mineral resources so we can answer these questions.

Increase our contributions to global mineral supply chains

My last focus area for the minerals sector is to increase New Zealand’s contributions to global supply chains.

The International Energy Agency estimates that to reach net-zero emissions by 2050, the world will need six times more minerals for low emissions technology than are currently being extracted.

I want New Zealand to be part of the solution.

There is no energy transition without minerals - no batteries, no electric cars, no wind turbines and no solar panels.

New Zealand has a choice to contribute to and benefit from this growing market, or to become the recipients of other people’s economic effort and output.

The transition to a low emissions economy provides us with an opportunity to trade our mineral reserves, but we need to act now.

Our trade partners are asking us to contribute to secure, resilient, and sustainable global supply chains, because current supply chains are vulnerable to disruption.

This fits with our history as a nation – New Zealand is a small country whose prosperity has always been driven by exports.

We have strong potential continuing in this vein by developing minerals critical for low emissions and digital technologies.

This provides us with an opportunity to supply our international partners with clean-tech minerals, reducing volatility and increasing the reliability of minerals supply chains.

Open for business

New Zealand is once again open for business.

I will be working hard to illustrate this by providing the right conditions and policy settings, and activating promotional activities and programmes to attract international investors to New Zealand, showcasing what we have to offer.

Increased investment will allow those high-value critical mineral and rare earth element minerals to be developed at the scale required to make the most of this opportunity.

I also want to see us growing our downstream capabilities and realising the benefits from value-adding by enabling more processing and refining of minerals in New Zealand.

This might extend to utilising mineral waste, improving efficiency of resource extraction, and recycling minerals.

To unlock this, we need to drive new investment in minerals research, development and innovation.

We will investigate whether the current funding of minerals research projects is sufficient, or whether targeted research funding and support is required.

Although oil and gas are not the same as the minerals we are talking about, the story of opening up our economy and generating economic returns applies to both fields. New Zealand cannot afford to ignore this potential. We are at an inflection point. Developing greater resilience means moving away from hysteria and fear-mongering.

Conclusion

I consider the resources sector to be critical to the economic prosperity of New Zealand. The sector has been a transformative agent in the past, and I expect it to play a transforming role into the future.

With the right direction and settings, mining will boost regional opportunities and jobs, increase our self-sufficiency, and be a critical part of our export-led focus, especially as we take advantage of the global opportunities for new minerals uses.

I’m looking forward to being the steward for the sector that will bring wealth to our economy in a responsible and enduring manner.