Platinum minerals tender opens in South Island

Media release
20 September 2013

Platinum minerals tender opens in South Island

Platinum New Zealand 2013, the Government’s third competitive minerals tender, has opened today across five areas of the South Island.

Companies interested in exploring for platinum group elements are invited to submit work programme-based bids for Platinum New Zealand 2013. The tender areas are:

- Longwood (Southland) – four defined blocks totalling 333.40 square kilometres
- Grey River (West Coast) – 419.26 square kilometres
- Murchison West (West Coast) – 730.89 square kilometres
- Murchison East (Tasman) – 629.98 square kilometres
- East Nelson (Nelson-Marlborough) – 1700.88 square kilometres

Land listed as unavailable for mining under Schedule 4 of the Crown Minerals Act, World Heritage Sites and land currently permitted is automatically excluded from the tender.

“Platinum New Zealand 2013 presents an exciting opportunity for New Zealand,” says David Binnie, General Manager of New Zealand Petroleum & Minerals, a branch of the Ministry of Business, Innovation and Employment. “Due to the nature of exploration and mining activities for platinum, we can expect interest in this tender from companies with a high degree of experience, understanding and advanced technologies.”

“The world demand for platinum is likely to move higher in the future because supply is currently quite constrained. The improving global economy is boosting demand for platinum as falling supply from other producer countries, such as South Africa, is leaving a shortage. About 60 percent of platinum demand is for industrial applications.”

New Zealand has few areas with platinum prospectivity and much of this has been subject to ad-hoc exploration over the last several decades. However, the government wants to manage all minerals exploration interest strategically. Competitive tenders, where work-programme based bids are submitted and assessed by NZP&M across a number of criteria, ensures the best operators capable of carrying out safe and responsible exploration activities are granted exploration permits.

The launch of Platinum New Zealand 2013 follows consultation with 17 iwi and hapū, and engagement with 10 local authorities between 6 June and 1 August 2013. Eight submissions were received by NZP&M to the Platinum New Zealand 2013 proposals, with the feedback helping shape the make-up of the final tender areas.

“The Government is committed to ongoing engagement with iwi and ensuring that areas of sensitivity are respected,” says Mr Binnie. “As part of the tender process we encourage information sharing with iwi for the protection of cultural sites. The terms and conditions of the tender also require permit holders to engage with iwi and to report back to NZP&M annually.”

Companies interested in exploring for minerals have until April 2014 to submit staged exploration work programme bids. NZP&M expects to grant exploration permits, which will be issued under the Crown Minerals Act in December 2014 for an initial five-year period.

More information on Platinum New Zealand 2013 and Media Maps for Platinum NZ 2013 at:
http://www.nzpam.govt.nz/cms/minerals/competitive-tender/2013/platinum-2013

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Background

A minerals competitive tender involves a number of steps:

1. Consultation with iwi and hapu, and notification to local authorities – to seek feedback on
2. The tender – when companies provide a work programme based bid to explore in a certain area; companies can put in multiple bids.
3. Assessment of bids – undertaken by New Zealand Petroleum & Minerals, it includes a rigorous assessment of all bids against the criteria, terms and conditions of the tender.
4. Granting of exploration permits – up to a certain limit.

If successful, a company will be granted an exploration permit for five years but this may be extended for a period up to, but not exceeding, 10 years from the commencement date of the permit.

An exploration permit gives the permit holder the exclusive right to explore minerals over the area specified in the permit only. It does not give the permit holder automatic access to the land – this must be negotiated with the landholder (who could be a council or private landowner).

Companies must meet strict health and safety obligations and any environmental requirements set by a regional authority under the Resource Management Act consenting process.

Exploration activities typically include land based and aerial surveys, geological mapping, geochemical sampling of rocks, and exploratory drilling. This work helps to build understanding of the geology of the permit area and to identify mineral deposits. Any discoveries are then evaluated for their commercial feasibility. Exploratory drilling would proceed on a small footprint within an exploration permit area.

An exploration permit does not include mining rights – any company that wishes to start mining will have to apply for a new permit and meet additional health and safety and environmental requirements. A mining permit is awarded for a much smaller land area than an exploration permit, with the actual mine footprint at any one time is much smaller again.

The minerals sector in New Zealand contributes around $20 million each year in government royalties and over $1.1 billion to the New Zealand economy. This goes towards funding of public services including health, education and roading.

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