Development Potential
Doing the numbers: Minerals industry more than stacks up
In December last year, New Zealand for the first time earned $1 billion in dairy exports for a month. In that same month, the relatively small Tui oilfield, off the Taranaki coast, exported $254 million worth of oil.
Consultant geologist Richard Barker was somewhat struck by the comparison, in compiling his minerals industry report, The Natural Resource Potential of New Zealand.
“The export value from just one small oilfield is equivalent to a quarter of the value of the entire dairy industry,” he noted in the report, published this year and available on the NZMIA website www.minerals.co.nz.
“That really is just an indication of what the minerals and energy sector have to deliver to the New Zealand economy. The potential is huge, but the key to realising that potential is in maintaining a high level of exploration.
“In the end, if you don’t look, you don’t find. And if you don’t find new sources, you can’t maintain and expand the volume and range of the sector’s output,” Mr Barker said.
And that development potential runs across various parts of the industry:
- Oil and gas: at present, gas accounts for more than 20 percent of the country’s primary energy supply; further exploration stands to increase this
- Coal: New Zealand’s largest energy resource, and with large lignite feasibility investigations underway in Otago and Southland, with the energy content estimated at 20 times that of the Maui gas field before it was developed, and 35 times the country’s current natural gas reserves
- Non-metallic minerals: New Zealand is currently producing about $40 million a year worth of industrial minerals such as amorphous silica, bentonite, clay, diatomite, dolomite, perlite, pumice, serpentine, silica sand and zeolite
- Metals: Despite worldwide exploration activity increasing on the back of rising minerals prices, the rate of expenditure in New Zealand declined in the year to March 2007, with an unsupportive policy environment largely to blame
“New Zealand has huge potential to lift its exploration levels across the board – and the benefits are there to be had,” Mr Barker said.
Dr Don Elder, Chief Executive of New Zealand’s largest coal producer, Solid Energy, agreed.
“The potential in coal – but also across the minerals and energy sector – is huge. And the reality is that exploration and resource development today is all about doing it right with a real commitment to good corporate citizenship and environmental responsibility,” Dr Elder said.
As just one example he pointed to Solid Energy’s major investment in the Southern Hemisphere’s first Carbon Capture and Storage (CCS) project, which opened in Victoria, Australia, earlier this year.
“That’s a very important international level commitment from Solid Energy and a very significant step in global efforts to address risks associated with climate change – and it is also indicative of not just Solid Energy’s commitment, but the sector’s commitment to responsible mining and an environmentally sustainable future,” he said.
“That is what mining is all about today,” Dr Elder said.
Mr Barker cited the 2002 NZ Institute of Economic Research economic study of the New Zealand minerals industry. That report stated that within a decade the minerals sector could double its value to the New Zealand economy, create up to 25,000 jobs and lift overall exports by 4 percent.
Longer term, the report indicated the sector could help increase the country’s GDP by up to 2.9 percent, exports by 7 percent and create up to 35,000 new jobs.
“That is without accessing National Parks and other sensitive areas. It is with exploration and mining responsibly and with care for the environment. It is all there to be achieved,” Mr Barker said.