Minerals Value Proposition
There’s gold and coal in them thar hills – and oil and gas at sea

There’s gold in them thar hills – well, actually there’s an awful lot more than gold and it’s worth a lot of money – an estimated $4.5 billion annually for New Zealand.

That’s the impressive figure calculated in The Natural Resource Potential of New Zealand, a report that is in effect a value proposition for the natural resources sector in this country, and which also points to how this wealth may be unlocked.

The document – at www.minerals.co.nz – published in March, estimates minerals, oil, gas and coal produced in New Zealand to be worth $4.5 billion a year, and contributing more than $2 billion annually in exports. The value of the country’s metallic minerals still in the ground is estimated at $140 billion.

The report sees plenty of upside and reason for optimism in a sector that increased in value by 93 percent between 1999 and 2006, the most recent year for which complete statistics are available.

“New Zealand has the potential to expand the range and value of what we produce. We have great mineral wealth potential, and there is room to increase the returns on that substantially,” the report says.

Much of the growing current and future demand for minerals will continue to come from the developing world, where many nations are still putting in place resource-intensive basic infrastructure.

“Roads, building and industrialisation in the developing world are going see these nations with a growing demand for resources. New Zealand is well placed to fill part of that demand.”

The document contrasts Australia’s approach to its minerals wealth – and the benefits it has gained and is gaining – to the approach taken over the years by New Zealand.

“Australia’s mineral wealth is often used to explain its higher living standards relative to New Zealand. Australia has worked hard to achieve this, and major government and industry initiatives are continuing in order to stay competitive.

By comparison, New Zealand has done little over the last 25 years to make the most of its resource potential,” consultant geologist Richard Barker said.