Speech to West Coast Minerals ForumEnergy and Resources
It’s a pleasure to be here at the West Coast Minerals Forum and to have the opportunity to speak to you all.
Since becoming Energy and Resources Minister in January, I have spent a lot of time talking about ‘opportunity’ – the opportunity that can be realised from developing our resource potential.
And New Zealand has never been a better place to explore.
We are recognised as one of the world’s most promising regions, but we remain relatively unexplored.
We have a strong regulatory environment that is supportive of responsible exploration and development.
As a Government, we have been talking about how to make the most of this country’s potential.
Yet while we spend a lot of time on the potential of future development, it’s important to stop and acknowledge that our minerals industry has a strong history and is today a significant contributor to the national and local economies.
Nationally, the sector contributes $20 million to the Government’s coffers in royalties and over $1 billion to GDP.
Mining provides over 7000 direct 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.
But it’s here, regionally on the West Coast, that mining companies and operators make the biggest contribution to the minerals industry.
Here, the mining sector:
- directly employs over 4,000 people
- generates around one third of household incomes; and
- contributed $629 million in local GDP in 2012.
As you all know, there are both large and small coal mines successfully operating here and a range of gold mining operations.
In terms of production, I’m told that the region usually produces about:
- 2.5 million tonnes of coal – that’s half of our typical annual production nationally;
- 2.9 tonnes of gold per annum; and
- 700 kg of alluvial gold per annum.
But despite this, we need to acknowledge it is not an easy time for this industry, both around the world and here in New Zealand.
It is true that in the current market, investors are being selective about which companies to invest in.
However, not all countries are faring the same, and in New Zealand over the last year companies have been able to raise significant capital for minerals exploration and development.
Of course, it is exploration that discovers new mineral resources and that grows this sector.
On this front, it is calculated that in 2012 total exploration expenditure in New Zealand was almost $50 million. This is a new record and reflects a growth trend in mineral exploration expenditure.
Again, the West Coast was the standout in 2012 due to the interest in gold and coal exploration.
So, while there are ups and downs, the Government is confident that the mining industry will experience future growth. Just as it has a great heritage so it has a strong long- term future.
I don’t say that lightly.
It’s backed by the fact that New Zealand Petroleum and 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&M.
In the year 2012 alone, there were 50 permits granted on the West Coast and there are a further 48 West Coast applications currently with NZP&M.
But, how do we build on this and get new players and investment, both here on the West Coast and at the national level?
Well, the answer is that to attract new investment, we need to get smarter about how we do business.
Within Government, we are doing just that.
We are getting smarter about how we do business in order to lift investment.
NZP&M is undertaking innovative and ground-breaking work to unlock even more of New Zealand’s mineral potential, and attract interest and competitive bids in the area of minerals exploration that could bring significant benefits to the New Zealand economy.
It is proposed that two 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.
Officials are currently consulting with iwi and councils prior to finalising the areas that will be opened up for exploration.
The proposed Gold Minerals Tender is a real opportunity for my neck of the woods, and the proposed Platinum Minerals Tender could bring significant benefits to the West Coast and other South Island communities.
I hope to be announcing the tender areas later this year.
I am pleased however to announce that long awaited data from the high quality aeromagnetic survey of the West Coast region will soon be available from NZP&M.
The 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 fields such as:
- geological mapping,
- forestry, agriculture and horticulture,
- geological hazard assessment, and
- mineral exploration.
The survey will also provide scientists with another insight on the South Island’s Alpine Fault, which is significant in light of the Christchurch earthquakes.
This is a milestone achievement, worked on for over two years.
It was commissioned and managed by NZP&M, and carried out using local helicopters.
Nearly 92- thousand line kilometres of data were collected for the survey, providing coverage of approximately 16,000 square kilometres of the West Coast.
All land listed under Schedule 4 of the Crown Minerals Act 1991 as unavailable for mining was excluded.
Finally today, I want to talk about the Government’s response to the Pike River tragedy.
But before I do, noting that this is my first time on the West Coast as Minister of Energy and Resources and Minister of Labour, I want to acknowledge the 29 men who lost their lives in the tragedy, and the families of those men.
In responding to the tragedy, the Government has made a commitment to the families to ensure we follow through on every recommendation of the Pike River Royal Commission.
Many of you will be aware that the Government intends to have implemented its response to these recommendations by the end of this year.
Good progress is being made, but there is still a considerable work programme underway.
As you will know, the Government’s High Hazard Unit has been established and changes to the Crown Minerals Act came into force in May this year. The amended Act introduces an initial assessment of the permit applicants’ health and safety and environmental management capability up front in the permitting process.
Recently I also introduced the Health and Safety (Pike River Implementation) Bill to Parliament.
This paves the way for a new set of mining regulations that will improve health and safety in the mining industry, and bring New Zealand’s regulation of mining health and safety in line with international best practice
And it provides for the formation of WorkSafe New Zealand, a new stand-alone Crown agent focussed on health and safety which will include the High Hazard Unit
The Bill is currently being considered by a Select Committee and I would encourage you to make a submission if you wish to.
The Government has also recently been consulting on a range of proposals for a new regulatory regime for mining health and safety.
Most of these concern the new set of mining regulations that we plan to have in place by the end of the year. Others are addressed in the Health and Safety (Pike River Implementation) Bill.
Some of you have told us that you have concerns about the scope of the mining operations that will be affected. Concerns have also been raised about whether all operations would need to comply with all of the new requirements.
For example, would a small mine need to employ people to fill all the proposed safety critical roles, such as site senior executive and electrical engineering manager.
I want to assure you that the Government is listening to your feedback. What we have in mind for the new regulatory regime is not a one-size-fits-all approach.
We are working through your submissions at the moment and considering a number of changes to the proposals.
I would like to close as I opened by saying thank you for the opportunity to speak to you all. It’s great to be here on the Coast.
The mining industry has a proud history, it is a strong contributor to New Zealand today and it has a long-term future here.