Speech to Australian Institute of Mining and Metallurgy (AusIMM) New Zealand Branch Conference
It’s a pleasure to be here at the 2016 AusIMM New Zealand Annual Conference – my fourth since becoming Energy and Resources Minister - and to share in the 50th anniversary celebrations of the formation of the New Zealand Branch.
I would like to acknowledge AusIMM President, Rex Berthelsen, CEO Michael Catchpole and New Zealand Chair Rene Sterk. Thank you for the invitation and my sincere congratulations on your five-decade long contribution to New Zealand mining.
I would also like to acknowledge my parliamentary colleague Hon. Louise Upston, who will be speaking later at the Women in Mining session.
The theme for this year’s conference is “50 Years”. It’s a chance for you to reflect on the sector’s rich history and heritage and look to the future and what developments the next 50 years might bring.
In the 21st century, the minerals industry plays a major role in New Zealand’s economy, contributing more than $1 billion to our GDP, providing well-paid jobs, producing vital inputs for industry, and adding significantly to our exports. Building a more competitive economy is one of four main priorities of this Government and the minerals sector is an important part of achieving that goal.
I would like to reiterate why it has never been more important for us to have a shared vision for the industry. While it is widely known that the construction of our roads and buildings is reliant on minerals, there is less public awareness that the green and smart technologies, which are increasingly the hallmarks of life in the 21st century, are also heavily reliant on minerals. To continue to develop low emission electric cars, wind turbines, solar panels, phones, tablets and medical devices; the world needs to prospect, explore and develop mineral resources and we all have a role in communicating this.
As we emerge from a commodities downturn, it is a good time to remind ourselves again that this is a long-term, robust and strategic sector. Being clear about our goals and having plans in place lends us more certainty.
I would like to start today by talking about NZP&M’s work to improve transperancy and improve compliance with the Crown Minerals Act. Over the past year, they have had a focus on processing permits efficiently, while ensuring permit holders meet their reporting requirements, and pay fees and royalties on time.
NZP&M have also been working to raise awareness amongst permit holders about their responsibilities and encouraging them to do more forward planning to improve compliance levels across the sector. To help achieve this, 20 sets of minerals guidelines around applications and compliance have been published.
This focus on compliance is about getting the basics right. It is the foundation of better business practices that will help operators succeed.
The results so far have been impressive and show what can be archived when industry and regulators work together within a shared and transparent framework.
A great example of the success of this approach is the halving of the historical minerals permit processing backlog over the last year – from about 300 in July last year down to around 150. This is a result of an increasing number of higher quality applications and more applications being done on-line. You are also using online to manage payment and report processes. This has given NZP&M staff more time to focus on more complicated applications and the backlog.
NZP&M have also now recovered more than 90% of overdue fees in the last financial year, showing that this approach to compliance is working.
As you know, there is a review of permit fees, underway. Fees must reflect the actual cost of staff time spent in permitting. Some of you may question a fees review right now, but the fact is the fees regime has not been fully reviewed since 2006, while costs have broadly increased in line with inflation over that time. Treasury and the Auditor General expect fees to be cost recovered; and for fees to be reviewed every three years. A decision on the changes is expected later this month. The details will be communicated to all permit holders and stakeholders.
An area of the highest important is Health and Safety at work. Exploration and extraction of our mineral resources must be done safely. It has also been shown that good health and safety practices improve productivity.
People in safety critical roles have until 1 January 2017 to complete certificates of competency – there will be no extension to this deadline. This is not about imposing unnecessary requirements but ensuring from the start that we have the best operators in New Zealand who have the right systems in place. Not only does this help strengthen the standard of health and safety, but it improves the reputation of the mining industry as a whole.
Another good example of how regulators and industry can work together to share and make information available as well as improving standards is the Mine Plan Project to create a national catalogue of mine plans. This valuable resource will be used to protect people working in the industry and support informed mine planning. It’s expected that this will be launched early in 2017.
Part of this project is work to align standards between the regulators, in consultation with the mining industry. This will make it easier for permit holders to meet their obligations to supply plans that are accessible and easily shared between regulators. NZP&M and WorkSafe will be publishing new joint guidelines in the coming months.
This sector creates high-skill high wage jobs, supports our regions and provides a solid investment for future generations of New Zealanders.
Generally we are seeing alluvial gold mining growing, thanks to higher gold prices and lower diesel prices. And it is good to see general minerals exploration increasing - $12 million in 2015, up from $8 million in 2014. Though still well below the record $42 million spent on exploration in 2013, it’s a promising start.
I am very pleased to see two of the biggest Australian gold mining companies – Newcrest and Evolution Mining - have started respective drilling campaigns in Hauraki and in Northland, and that that Oceana Gold has had encouraging results from their drilling campaigns in Otago’s Coronation mine.
Oceana has planned more drilling this year than ever before, particularly with 30,000 metres of drilling planned around Waihi.
These are all positive signs for the industry.
The Government continues to support the minerals sector through gathering high-quality data and making this freely available.
New Zealand remains relatively under-explored and has real potential for further mineral discoveries. To encourage exploration we need to de-risk investment – and proving prospectivity is the key.
This is why the Government has funded aeromagnetic surveys in Northland, on the West Coast, and more recently, set aside $6.4 million for more minerals data work, including aeromagnetic surveys in Nelson/Marlborough, Otago and Southland.
There is a clear role for government in collecting information about the Crown’s resources as a pre-commercial investment to attract mineral explorers, but basic scientific information is also an investment in our land.
The aeromagnetic projects have wider applications for the regions – from better understanding soil types to mapping underground water resources. This is smart information for government to obtain.
That is why it was great to see that the Marlborough District Council and Venture Southland (representing Environment Southland, Southland District Council, Invercargill City Council and Gore District Council) partnered with NZP&M on the respective aeromagnetic projects which began last year.
As you will be aware, the first phase of aeromagnetic surveying across Nelson and Marlborough was completed in June on time. The 84,000 kilometres flown amount to circumnavigating the globe twice! This data has today become available to download from NZP&M’s Online Exploration Database.
Almost half of the Otago and Southland surveys were completed by May, and they will recommence this month.
The aeromagnetic data acquisition that has been carried out to date has gone very well. We’ve managed to achieve more survey coverage than originally planned with less money.
As a result, I’m very pleased to announce today that we will be expanding the aeromagnetic survey programme to include the Murchison area.
This survey extension will cover 4,600sqkm, and once complete we will have a seamless dataset linking Nelson and Marlborough with the 2013 Government funded survey of the West Coast.
The Murchison area has much potential for copper, gold, chromium, platinum and nickel prospecting and the aeromagnetic data will reveal more about its prospectivity.
I am expecting all of the aeromagnetic surveys to be completed by mid-2017. Once done, high-quality aeromagnetic data will have been gathered over more than 30 per cent of New Zealand – which is a big step from where we were only five years ago.
I am also pleased to announce today that cost-savings have allowed us to invest in regional soil geochemistry surveys across Southland, Otago, Nelson and Murchison.
Geochemical surveying will give us a comprehensive picture of the elements in the soil. Teams will be sent out to collect samples across the region over the 2016-17 summer.
The geochemical survey results, when combined with the corresponding aeromagnetic data, will build a more comprehensive picture of prospectivity and be an excellent tool for industry.
In closing, I would like to thank you again for inviting me to speak to you today.
The Government backs the minerals industry and has taken an active approach to pursuing sector development. This has involved a sharper focus on investment attraction and regulatory reform to help ensure the success of the sector over the long term.
The direction and settings are delivering results - although it is important not to be complacent. The global market is changeable and international competition is strong.
I’m optimistic about the future of the minerals industry in New Zealand. Yours is a resilient and adaptive industry that knows how to make the best of opportunities.
The minerals sector and its people make an important contribution to New Zealand’s economy - it has the potential to deliver more good jobs and help our communities thrive.
We are building on the strong foundations that were laid 50 years ago here in Wellington at the first New Zealand Branch meeting of AusIMM.