Hon Simon Bridges

Minister of Energy and Resources

23 July 2015 Speech

Minerals West Coast Forum 2015

It’s good to be back at the Minerals West Coast Forum to speak to you all again.

This is the third time I have spoken at the forum and it’s a special privilege to be here to mark the 150th year of mining on the West Coast. This region was founded on mining and the industry has a rich history which we should celebrate.

Let me begin by saying again how important the minerals industry is to the Government and to New Zealand.

Minerals make an important contribution to our economy

The sector plays an important and long-standing role in our national economy, contributing more than $1 billion to our GDP. You work in an industry that is highly productive, provides highly skilled and well paid jobs for New Zealanders, produces vital materials and products for industry, and adds significantly to our exports.

As you know, to prospect, explore and develop mineral resources can take decades. And it is a long term game that this Government continues to strongly support for the long term.

I know the minerals industry, and the West Coast in particular, is going through some challenging times.

But I think we can take heart from the industry’s strong overall growth over the last ten years, and the knowledge that, even in tough times, there are still more people working in the mining industry across the country than there was a decade ago.

And on the West Coast, mining remains a major contributor to your region’s economy - alongside dairy and tourism - and a significant employer.

I’m optimistic about the future of our minerals industry – nationally and here on the West Coast. I’m confident there will be a recovery in what is, like most sectors a cyclical and – as I’ve said – a long term game.

Though exports, particularly for coal, are down we can have confidence that in the medium to long term, demand will return.

And, of course, coal is still a major source of energy for industry in the South Island, including being used to heat schools and hospitals. The demand for coal to fuel more dairy processing has strengthened our domestic market.

I am encouraged by the fact that New Zealand Petroleum and Minerals continue to see healthy levels of permitting activity.

There are currently more than 900 (922) mineral prospecting, exploration and mining permits across the country with a further 163 permit applications being processed by NZP&M.

More than 400 (408) mineral permits or permit changes were granted last year.

It’s important to remember that with a downturn, comes opportunities. It is a chance for companies to take a breath, consolidate, improve efficiencies and develop better strategies for mineral development.

It’s good to see Stevenson Mining is working to develop the Te Kuha coal deposit, just north of Wesport. The coal is, of course, valuable for blending with other West Coast coals for export. Stevenson is currently in the process of obtaining land access arrangements prior to applying for resource consents. And the project has the support of Buller District Council, which is the main land owner, and – I’m sure – the community.

Gold prices are stable and gold production in New Zealand remains relatively steady.

New Zealand’s gold assets have recently attracted the significant Australian gold producers Newcrest Mining and Evolution Mining, and OceanaGold is increasing its presence through the proposed acquisition of the Waihi gold mine from Newmont.

Silver City, who were awarded a permit in the Bay of Plenty as a result of the 2013 Epithermal Gold tender, are “highly encouraged” by the geological work they have done so far - and there has been wider interest in exploring for gold in the central North Island.

The industry is resilient and adaptive

It’s also heartening to see New Zealand’s minerals industry remains resilient, adaptive and ready to seize opportunities.

We’re seeing this in Trans Tasman Resources’ application to explore for ironsands off the West Coast. This latest proposal shows continued interest in the offshore minerals domain.

Another example is the recent interest in garnets on the West Coast – which have huge potential to be used in manufacturing and industrial processes.

This year NZP&M have received close to 30 permits to prospect or explore for garnets in the West Coast’s mineral-rich sands.

Garnets are one of the only natural abrasives not being replaced with synthetic materials due to their superior hardness and ability to be recycled.

While most of the prospecting and exploration for garnets in New Zealand is still in its infancy, and it will take several years of work to understand if there are commercial viable quantities of garnet for mining, this interest is very promising for the West Coast.

Investment

There is no doubt the Government has a role to play in supporting the minerals industry. We cannot control international commodity prices but there are levers we can use.

One of the most important means of strengthening and growing our minerals industry, and our regional economies, is to attract more investment in exploration.

We have a stable political system, consistently high rankings for ease of doing business, and a fair royalty regime – all of which are solid drawcards.

But the fact remains that we are a small country competing for investment with other, more mature markets, and we have to try and do more.

High-quality data is vital to attracting investment

As explorers and miners, you know how important good quality data is for making business decisions.

Providing comprehensive information to potential investors helps New Zealand compete on the international stage for resources development. Good data can tip the balance of investment decisions in our favour.

That’s why collecting high-quality data about our resources has been a major focus for me, as Minister, and for the Government.

We have already invested more than $4 million in aeromagnetic surveys of Northland and the West Coast in 2011 and 2012.

Now we will be spending a further $6 million on regional aeromagnetic surveys over more than 23,000km² across Nelson, Marlborough, parts of Otago, and Southland.

Aeromagnetic survey over East Nelson/Marlborough

The aeromagnetic survey over East Nelson and Marlborough covers an area of more than 3,700km² (3,749km²).

You may be aware that this area has been previously mined on a small scale for base metals such as copper.

Despite this interest, and the potential for other metallic minerals including nickel and platinum group metals, there is very limited data over most of the area. We are seeking to change that.

Aeromagnetic surveys over North Otago and Otago/Southland

The aeromagnetic survey over Otago and Southland covers an area of more nearly 20,000km² (19,460km²).

There has been some aeromagnetic coverage over Otago in the past – the new surveys will help build a consistent picture of prospectivity over the whole region.

The Otago survey areas are prospective for gold and tungsten, similar to that found at Macreas large gold mine north of Dunedin.

The survey areas around Queenstown and Southland are prospective for chrome, nickel and platinum group metals.

These surveys are staged, with East Nelson-Marlborough and Otago-Southland surveys expected to begin in November. The North Otago survey is expected to begin in November next year.

The data also contributes to the geological understanding of New Zealand and has numerous other uses. It can be used to support geological mapping, forestry, agriculture and horticulture, geological hazard assessment, and engineering and construction investigations.

That is why we are working with councils who may want to contribute so that the surveys can be extended and we can gain as much as possible from the whole endeavour.

Data collected over 30 per cent of New Zealand

These surveys, when combined with the other surveys by Government and industry, will mean aeromagnetic data has been gathered over thirty per cent of New Zealand.

That’s a massive leap from where we were five years ago.

The Government has also allocated $400,000 to undertake a series of prospectivity studies, to better understand our resources and regional geology, which is useful for investors.

These studies and the aeromagnetic data will be put into a National Minerals Exploration Datapack, comparable to the datapack that is a key element of petroleum Block Offer promotions.

The point of gathering and packaging this high-quality data is to allow companies to begin their work at the more advanced level of exploration.

Supporting companies to explore more efficiently

This is about supporting companies with information so that they can explore and use their resources more efficiently. It should allow them to drill sooner, accelerating potential discoveries and mining.

This is positive for regions, for the industry, and for New Zealand.

Conclusion

As I mentioned earlier, I’m optimistic about the future of our minerals industry.

There can be no doubt times are tough right now but our industry is strong, resilient and adaptable. And there is a lot of potential for further discoveries to grow mining for New Zealand and our regions.

The Government has a role to play and we are taking real, practical steps to encourage the investment needed.

Mining has been a mainstay on the West Coast for the last 150 years, and long may that continue.

Thank you.

ends

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